TRANSFER AND ADMINISTRATION AGREEMENT

                  TRANSFER   AND    ADMINISTRATION    AGREEMENT   (as   amended,
supplemented  or  otherwise  modified  and in  effect  from  time to time,  this
"Agreement"),  dated as of December 9, 1998,  by and among METRIS ASSET  FUNDING
CO., a Delaware corporation, as transferor (in such capacity, the "Transferor"),
DIRECT  MERCHANTS  CREDIT CARD BANK,  NATIONAL  ASSOCIATION,  a national banking
association  with its principal  offices  located in Arizona  (together with its
successors  and assigns,  "DMCCB"),  as  Collection  Agent,  ENTERPRISE  FUNDING
CORPORATION,  a Delaware corporation  (together with its successors and assigns,
"Enterprise"),  as a Purchaser, PARK AVENUE RECEIVABLES CORPORATION,  a Delaware
corporation (together with its successors and assigns, "PARCO"), as a Purchaser,
SHEFFIELD  RECEIVABLES  CORPORATION,  a Delaware corporation  (together with its
successors  and assigns,  "Sheffield"),  as a Purchaser,  BARCLAYS  BANK PLC, an
English  banking   corporation   (together  with  its  successors  and  assigns,
"Barclays"),  as a Bank Investor and the Sheffield  Agent,  THE CHASE  MANHATTAN
BANK, a New York banking corporation  (together with its successors and assigns,
"Chase"), as a Bank Investor and the PARCO Agent, NATIONSBANK,  N.A., a national
banking association  (together with its successors and assigns,  "NationsBank"),
as a Bank Investor and the Enterprise  Agent, and NationsBank,  as the agent for
the Enterprise Agent, the PARCO Agent and the Sheffield Agent (in such capacity,
the "Administrative Agent").

                             PRELIMINARY STATEMENTS

                  WHEREAS,  the  Transferor  may desire to convey,  transfer and
assign, from time to time,  undivided  percentage  interests in certain accounts
receivable,  and the  Purchasers  may  desire  to,  and the Bank  Investors,  if
requested,  shall,  accept such  conveyance,  transfer  and  assignment  of such
undivided  percentage  interests,  subject to the terms and  conditions  of this
Agreement.

                  NOW, THEREFORE, the parties hereby agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

                    Certain Defined Terms.

                  As used in this Agreement,  the following terms shall have the
following meanings:

                  "Account"  shall  mean  each  VISA or  MasterCard  account  in
existence  as of the  Cut-Off  Date  pursuant  to an  Account  Agreement,  which
accounts were sold by PNC to the Seller pursuant to the PNC Agreement,  which is
identified by account  number and by the  outstanding  balance as of the Cut-Off
Date and referred to in the Account  Schedule  delivered to the Purchaser Agents
on the Closing Date pursuant to Section 2.8, including any Related Account,  and
any Related Account established after the Cut-Off Date and any Account converted
to the Seller's systems,  shall be identified on the Account  Schedule,  as such
schedule is delivered from time to time pursuant to Section 2.8 hereof.

                  "Account  Agreement" shall mean the cardholder  agreements and
Federal  Truth in Lending  Statement  for  Accounts,  between  an  Obligor  and,
originally,  PNC, or to which the Seller has become a party,  as such agreements
or statement may be amended, modified or otherwise changed from time to time.

                  "Account  Schedule" shall mean the schedule of Accounts (which
schedule may be in the form of a computer file or  microfiche) of the Transferor
delivered to the Purchaser Agents on the Closing Date, as delivered from time to
time pursuant to the terms of this Agreement.

                  "Accrued Interest Component" means, for any Collection Period,
that  portion  of  the  Interest  Component  of  all  Related  Commercial  Paper
outstanding at any time during such Collection Period which has accrued from the
first day through  the last day of such  Collection  Period  whether or not such
Related  Commercial  Paper matures during such Collection  Period,  based on the
actual  number of days in such  Collection  Period that such Related  Commercial
Paper was outstanding.

                  "Additional  Investment  Certificate" means a certificate,  in
substantially  the form attached hereto as Exhibit A or in such other form as is
mutually agreed to by the Transferor and the Purchaser Agents,  furnished by the
Collection Agent pursuant to Section 2.11 hereof.

                  "Adjusted  LIBOR  Rate"  means,  with  respect to any  funding
period during which the return to any Bank Investor or any Liquidity Provider is
to be calculated by reference to the London interbank offered rate, a rate which
is 0.875% in excess of a rate per annum equal to the sum  (rounded  upwards,  if
necessary,  to the next higher 1/100 of 1%) of (A) the rate obtained by dividing
(i) the  applicable  LIBOR  Rate by (ii) a  percentage  equal to 100%  minus the
reserve percentage, if any, used for determining the maximum reserve requirement
as specified in  Regulation D  (including,  without  limitation,  any  marginal,
emergency,  supplemental,  special or other  reserves) that is applicable to the
applicable  Purchaser  Agent  during such period in respect of  eurocurrency  or
eurodollar  funding,  lending or  liabilities  (or, if more than one  percentage
shall be so applicable,  the daily average of such  percentage for those days in
such period during which any such percentage  shall be applicable)  plus (B) the
then daily net annual  assessment rate (rounded  upwards,  if necessary,  to the
nearest  1/100  of 1%)  as  estimated  by the  applicable  Purchaser  Agent  for
determining the current annual  assessment  payable by the applicable  Purchaser
Agent to the Federal Deposit Insurance Corporation in respect of eurocurrency or
eurodollar funding, lending or liabilities.

                  "Adjustment Payment" has the meaning assigned to that term in
Section 2.9(a).

                  "Administrative   Agent"  means  NationsBank,   N.A.,  in  its
capacity  as agent  for the  Purchaser  Agents,  together  with its  successors,
including any successor thereto appointed pursuant to Article IX.

                  "Administrative  Fee" means the fee payable by the  Transferor
to Enterprise  pursuant to Section 2.7 hereof,  the terms of which are set forth
in the Fee Letter.

                  "Adverse  Claim" means a lien,  security  interest,  charge or
encumbrance,  or other  right or  claim  in,  of or on any  Person's  assets  or
properties in favor of any other Person  (including any UCC financing  statement
or any similar  instrument  filed against such Person's  assets or  properties),
excluding  any liens created under this  Agreement or the  Receivables  Purchase
Agreements or liens against the Initial  Purchaser or the Seller that secure the
payment of taxes,  assessments and governmental charges or levies, if such taxes
are  either  (a)  not  delinquent  or (b)  being  contested  in  good  faith  by
appropriate  legal  or  administrative  proceedings  and  as to  which  adequate
reserves in accordance with generally accepted accounting  principles shall have
been established.

                  "Affected Assets" means, collectively,  the Receivables,
the Related Security, the Collections and Proceeds relating thereto.

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person  directly or indirectly  controlling,  controlled  by, or under direct or
indirect common control with,  such Person.  A Person shall be deemed to control
another Person if the controlling Person possesses,  directly or indirectly, the
power to direct or cause the  direction  of the  management  or  policies of the
controlled  Person,  whether  through  ownership of voting stock, by contract or
otherwise.

                  "Agency  Fee" means the fee payable by the  Transferor  to the
Administrative  Agent pursuant to Section 2.7 hereof, the terms of which are set
forth in the Fee Letter.

                  "Aggregate  Interest  Component"  means  aggregate  sum of the
Interest Components of all issued and outstanding Related Commercial Paper.

                  "Aggregate Unpaids" means, at any time, an amount equal to the
sum of (i) the aggregate  accrued and unpaid  Carrying Costs at such time,  (ii)
all amounts of the type included in the  definition of Carrying Costs which will
accrue after such time,  (iii) the Net  Investments  at such time,  and (iv) all
other amounts owed (whether due or accrued)  hereunder by the  Transferor or the
Collection  Agent to the Purchasers,  the  Administrative  Agent,  the Purchaser
Agents or the Bank Investors at such time.

                  "Applicable  Purchaser  Percentage"  means (i) with respect to
Enterprise,  37.50%, (ii) with respect to PARCO,  31.25%, and (iii) with respect
to Sheffield, 31.25%.

                  "Asset Purchase  Agreement"  means that certain Asset Purchase
Agreement, dated as of December 9, 1998, by and among the PARCO Agent, the PARCO
Bank  Investors  and  PARCO,  as the  same  may  from  time to time be  amended,
supplemented or otherwise modified and in effect.

                  "Assigned Rights" means all right, title and interest of DMCCB
in and to any payment from PNC arising from any (i) breach of any representation
or warranty,  (ii)  repurchase  obligation or (iii) indemnity in each case under
the PNC Agreement.

                  "Assignment" has the meaning specified in Section 4.1(dd)
hereof.

                  "Assignment Amount" with respect to a Bank Investor shall mean
at any time an amount  equal to the lesser of (i) such Bank  Investor's  Special
Pro Rata Share of the  applicable  Net  Investment at such time,  (ii) such Bank
Investor's Special Pro Rata Share of the aggregate outstanding principal balance
of Receivables  (other than Defaulted  Receivables as shown on the most recently
delivered  Investor  Report  hereunder)  at  such  time,  and  (iii)  such  Bank
Investor's unused Commitment.

                  "Assignment and Assumption  Agreement"  means (i) with respect
to  any  Enterprise  Bank  Investor,  an  Assignment  and  Assumption  Agreement
substantially in the form of Exhibit B attached hereto, (ii) with respect to any
PARCO Bank Investor,  the Asset Purchase Agreement and (iii) with respect to any
Sheffield Bank Investor, the Sheffield Agreement.

                  "Bank Investors" shall mean, collectively, the Enterprise Bank
Investors, the PARCO Bank Investors and the Sheffield Bank Investors.

                  "Bankruptcy Code" has the meaning assigned to that term in
Section 3.1(k) hereof.

                  "Barclays" shall have the meaning set forth in the preamble
to this Agreement.

                  "Base Rate" or "BR" means (x) with respect to  Enterprise  and
the Enterprise Bank Investors,  a rate per annum equal to the greater of (i) the
prime rate of interest announced by the Liquidity Provider (or, if more than one
Liquidity Provider, then by NationsBank) from time to time, changing when and as
said prime rate changes (such rate not necessarily being the lowest or best rate
charged by the Liquidity  Provider (or NationsBank,  as applicable) and (ii) the
sum of (a) 1.50% and (b) the rate equal to the weighted  average of the rates on
overnight Federal funds  transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding  Business Day) by the Federal Reserve
Bank of New York,  or, if such  rate is not so  published  for any day that is a
Business Day, the average of the quotations  for such day for such  transactions
received by the Liquidity  Provider  (or, if more than one  Liquidity  Provider,
then by NationsBank) from three (3) Federal funds brokers of recognized standing
selected by it; (y) with respect to PARCO and the PARCO Bank  Investors,  a rate
per annum equal to the greater of (i) the prime rate of  interest  announced  by
the PARCO Agent from time to time,  changing when and as said prime rate changes
(such rate not  necessarily  being the lowest or best rate  charged by the PARCO
Agent)  and (ii) the sum of (a)  1.50%  and (b) the rate  equal to the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers,  as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal  Reserve  Bank of New York,  or, if such rate is not so published
for any day that is a Business Day, the average of the  quotations  for such day
for such  transactions  received by the PARCO Agent from three (3) Federal funds
brokers of recognized standing selected by it; and (z) with respect to Sheffield
and the Sheffield Bank  Investors,  a rate per annum equal to the greater of (i)
the prime rate of interest  announced by the Sheffield  Agent from time to time,
changing  when and as said prime rate changes (such rate not  necessarily  being
the lowest or best rate charged by the Sheffield  Agent) and (ii) the sum of (a)
1.50% and (b) the rate equal to the  weighted  average of the rates on overnight
Federal funds  transactions  with members of the Federal Reserve System arranged
by Federal  funds  brokers,  as published for such day (or, if such day is not a
Business Day, for the next preceding  Business Day) by the Federal  Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such  transactions  received
by the  Sheffield  Agent  from three (3)  Federal  funds  brokers of  recognized
standing selected by it.

                  "Benefit  Plan" means any employee  benefit plan as defined in
Section 3(3) of ERISA in respect of which the Transferor, the Initial Purchaser,
the Seller or any ERISA Affiliate of the Transferor,  the Initial Purchaser,  or
the Seller is, or at any time during the immediately preceding six years was, an
"employer" as defined in Section 3(5) of ERISA.

                  "Business  Day" means any day excluding  Saturday,  Sunday and
any day on which banks in New York,  New York,  Charlotte,  North Carolina or in
the States of Minnesota or Arizona are  authorized  or required by law to close,
and, when used with respect to the  determination  of any Adjusted LIBOR Rate or
any notice with respect thereto, any such day which is also a day for trading by
and between  banks in United  States  dollar  deposits  in the London  interbank
market.

                  "Buyer's  Percentage  Factor" shall mean,  with respect to any
Collection Period, the fraction (expressed as a percentage) computed at any time
of determination as follows:

                                            NI
                                            ---
                                            PRB

Where:

                  NI = the Net Investments at the time of such computation.

                  PRB = the amount of Principal  Receivables minus all Defaulted
Receivables  for  such  Collection  Period  (which  were not  excluded  from the
calculation of "Principal  Receivables"  used herein) plus the amount on deposit
in the Excess Funding Account at the time of such computation.


                  Notwithstanding  the  foregoing  computation,  (i) the Buyer's
Percentage Factor shall not exceed 100%, and (ii) the Buyer's  Percentage Factor
with  respect to Principal  Collections  at any time on and after the earlier of
the  Termination  Date and a Special  Termination  Date shall be the  percentage
equivalent  of a fraction the  numerator of which is the Net  Investments  as of
such  earlier  date  and the  denominator  of  which  is the  lesser  of (x) the
Principal  Receivables  plus the amount on deposit in the Excess Funding Account
on the last day of the Collection Period  immediately prior to such earlier date
or (y) the  Principal  Receivables  plus the  amount on  deposit  in the  Excess
Funding Account on the last day of the immediately preceding Collection Period.

                  "Carrying  Costs" means, for a Collection  Period,  the sum of
(i) the  sum of the  dollar  amount  of the  Purchasers'  obligations  for  such
Collection  Period  determined  on an  accrual  basis in  accordance  with  GAAP
consistently  applied (a) as to  Enterprise,  to pay  interest  with  respect to
Purchased  Interests  pursuant  to the  provisions  of each  Liquidity  Provider
Agreement  (such  interest to be  calculated  based on the Adjusted  LIBOR Rate,
provided that if a Termination Event shall have occurred, such interest shall be
calculated at the Base Rate with respect to Enterprise  plus 2.00%)  outstanding
at any time during such Collection Period accrued from the first day through the
last day of such  Collection  Period  whether  or not such  interest  is payable
during  such  Collection  Period  and to pay  interest  with  respect to amounts
disbursed by each Credit  Support  Provider  pursuant to the  applicable  Credit
Support Agreement  outstanding at any time during such Collection Period accrued
from the first day through the last day of such Collection Period whether or not
such interest is payable during such Collection Period, (b) as to the PARCO Bank
Investors,  to pay interest on such Bank Investors' Net Investment funded at the
Base Rate and the Adjusted LIBOR Rate which were  outstanding at any time during
such Collection  Period which accrued from the first day through the last day of
such  Collection  Period,  whether or not such  interest is payable  during such
Collection  Period,  (c) as to the Sheffield Bank Investors,  to pay interest on
funding periods during which the applicable  interest rate is the Base Rate with
respect to  Sheffield  and the  Adjusted  LIBOR Rate with  respect to  Sheffield
outstanding at any time during such  Collection  Period,  accrued from the first
day through the last day of such Collection Period, whether or not such interest
is payable  during  such  Collection  Period,  (d) to pay the  Accrued  Interest
Component  of Related  Commercial  Paper with respect to any  Collection  Period
(and, for purposes of this clause (d),  Related  Commercial  Paper shall include
Commercial  Paper  issued to fund the Net  Investments  even if such  Commercial
Paper is  issued in an  amount  in  excess  of the Net  Investments),  (e) as to
Enterprise,  to pay the Dealer Fee with  respect  to  Related  Commercial  Paper
issued during such Collection  Period and (f) to pay the costs of the Purchasers
with respect to the  operation  of Sections  8.1,  8.2, 8.3 and 8.4;  (ii) as to
Enterprise, the Program Fee, the Administrative Fee and the Facility Fee accrued
from the first day through the last day of such Collection Period whether or not
such amount is payable during such Collection Period;  (iii) all amounts due the
Bank Investors in accordance with Section 2.3(c),  (d), (e) and (f) hereof which
accrued  during  such  Collection  Period,  whether or not  payable  during such
Collection Period;  (iv) as to PARCO, the fees specified in the PARCO Fee Letter
which accrued during such Collection Period,  whether or not payable during such
Collection Period; (v) as to Sheffield,  the fees specified in the Sheffield Fee
Letter  and (vi) any of the  foregoing  amounts  which have not been paid in any
prior Collection Period.

                  "Certificates"  means the certificates issued to the Purchaser
Agents for the  benefit  of their  related  Purchasers  and their  related  Bank
Investors pursuant to Section 2.2(g) hereof.

                  "Chase" shall have the meaning set forth in the preamble to
this Agreement.

                  "Closing Date" means December 9, 1998.

                  "Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time.

                  "Collateral  Agent" means  NationsBank,  N.A.,  as  collateral
agent for each Liquidity Provider,  each Credit Support Provider, the holders of
Commercial Paper and certain other parties.

                  "Collection Account" shall have the meaning assigned to that
term in Section 2.12(a).

                  "Collection   Agent"   means  at  any  time  the  Person  then
authorized  pursuant to Section 6.1 hereof to  service,  administer  and collect
Receivables, and its successors and permitted assigns.

                  "Collection Agent Default" has the meaning specified in
Section 6.4 hereof.

                  "Collection  Period"  means the calendar  month  preceding the
Remittance  Date,  or in the case of the first  Collection  Period,  the  period
commencing  on the Cut-Off Date to the end of the calendar  month  preceding the
first Remittance Date.

                  "Collections" means, with respect to any Receivable,  all cash
collections  and other cash  proceeds  of such  Receivable,  including,  without
limitation,  all Recoveries and  collections on Finance Charge  Receivables,  if
any, and cash proceeds of Related Security with respect to such Receivable.

                  "Commercial  Paper" means the promissory notes,  having a
maturity date of 270 days or less, issued by the Purchasers in the commercial
paper market.

                  "Commitment"  (i) means with respect to each  Enterprise  Bank
Investor party hereto,  (A) the Commitment of such  Enterprise  Bank Investor to
make acquisitions from the Transferor or Enterprise in accordance herewith in an
amount not to exceed the dollar amount set forth opposite such  Enterprise  Bank
Investor's signature on the signature page hereto under the heading "Commitment"
minus the dollar amount of any Commitment or portion thereof  assigned  pursuant
to an Assignment and Assumption Agreement plus the dollar amount of any increase
to such Enterprise Bank  Investor's  Commitment  consented to by such Enterprise
Bank  Investor  prior to the time of  determination,  (B)  with  respect  to any
assignee of such  Enterprise  Bank Investor  party hereto taking  pursuant to an
Assignment  and  Assumption  Agreement,  the Commitment of such assignee to make
acquisitions  from the  Transferor  or  Enterprise  not to exceed the amount set
forth in such Assignment and Assumption Agreement minus the dollar amount of any
Commitment or portion thereof assigned  pursuant to an Assignment and Assumption
Agreement  prior  to such  time of  determination  and (C) with  respect  to any
assignee  of an  assignee  referred to in clause  (B),  the  Commitment  of such
assignee to make  acquisitions  from the  Transferor or Enterprise not to exceed
the amount set forth in an  Assignment  and  Assumption  Agreement  between such
assignee  and its assign;  (ii) with respect to each PARCO Bank  Investor  party
hereto,  has the meaning  specified in the Asset Purchase  Agreement;  and (iii)
with respect to each Sheffield  Bank Investor party hereto,  means an amount not
to exceed the dollar amount set forth opposite such  Sheffield  Bank  Investor's
signature on the signature page of the Sheffield Agreement.

                  "Commitment  Termination Date" means December 8, 1999, or such
later  date to which the  Commitment  Termination  Date may be  extended  by the
Transferor,  the Administrative  Agent, the Purchaser Agents, the Purchasers and
the Bank  Investors not later than 60 days prior to the then current  Commitment
Termination Date.

                  "Conduit  Assignee"  shall mean,  as to  Enterprise,  PARCO or
Sheffield,  any commercial paper conduit administered by (a) NationsBank or Bank
of America N.T. & S.A. ("BofA"),  (b) Chase or (c) Barclays,  respectively,  and
designated by NationsBank or BofA, Chase or Barclays, respectively, from time to
time to accept an assignment from a related Purchaser of all or a portion of the
applicable Net Investment.

                  "Conversion/Continuation Notice" shall have the meaning
specified in Section 2.3(e) hereof.

                  "Credit and Collection  Policy" means the written policies and
procedures  of the Seller  relating to the  operation of its consumer  revolving
credit card business,  including,  without limitation,  the written policies and
procedures for determining the  creditworthiness  of credit card customers,  the
extension of credit to credit card customers and relating to the  maintenance of
credit card accounts and collection of receivables with respect thereto, as such
policies and procedures are amended,  modified or otherwise changed from time to
time.

                  "Credit  Support  Agreement"  means  any  agreement  between a
Purchaser and a Credit Support Provider evidencing the obligation of such Credit
Support  Provider to provide credit support to such Purchaser in connection with
the issuance by such Purchaser of Commercial Paper.

                  "Credit  Support  Provider"  means the Person or  Persons  who
provides  credit support to a Purchaser in connection  with the issuance by such
Purchaser of Commercial Paper.

                  "Cut-Off Date" means December 8, 1998.

                  "Date of Processing"  means,  with respect to any  transaction
giving  rise to a  Receivable,  the date on which  such  transaction  is settled
according to the Collection Agent's computer master file of Accounts.

                  "Dealer Fee" means the fee payable by the  Transferor  to
Enterprise,  pursuant to Section 2.5 hereof,  the terms of
                   ----------
which are set forth in the Fee Letter.

                  "Default  Rate" means the ratio  (expressed  as a  percentage)
computed  as of the last  day of each  Collection  Period  by  dividing  (i) the
aggregate  outstanding  balance of all Defaulted  Receivables as of such date by
(ii) the aggregate outstanding balance of all Receivables as of such date.

                  "Defaulted  Receivable"  means a Receivable in an Account with
respect to which,  in accordance  with the Credit and  Collection  Policy or the
Collection  Agent's  customary and usual  servicing  procedures,  the Collection
Agent has charged off such Receivable as  uncollectible,  and in any event shall
include,  by the last day of the month in which it became 180 days past due, any
Receivable  that is more than 180 days past due;  a  Receivable  shall  become a
Defaulted  Receivable  on the day on  which it is  recorded  as  charged  off as
uncollectible on the Collection  Agent's computer master file of consumer credit
card  revolving  accounts.  Notwithstanding  any  other  provision  hereof,  any
Defaulted Receivables that were not Eligible Receivables on the date on which an
ownership  interest  hereunder was initially  purchased by the Purchasers or the
Bank Investors  hereunder shall be treated as Receivables which are not Eligible
Receivables rather than as Defaulted Receivables.

                  "Defaulting Bank Investor" has the meaning specified in
Section 2.2(d)(iii) hereof.

                  "Determination Date" shall mean with respect to any Collection
Period, the date which is two Business Days before the related Remittance Date.

                   "Discount Percentage" means the Percentage designated by the
Transferor pursuant to Section 2.5(e).

                  "Discount Receivables" shall have the meaning specified in
Section 2.5(e) hereof.

                  "Discount  Receivables  Collections"  means,  for any day, the
product of (a) the Discount  Percentage  and (b) Principal  Collections  on such
day.

                   "DMCCB"  means Direct  Merchants  Credit Card Bank,  National
Association,  a national banking  association,  and its successors and permitted
assigns.

                  "Document  Agent Fee" means the fee payable by the  Transferor
to the Enterprise  Agent pursuant to Section 4.1 hereof,  the terms of which are
set forth in the Fee Letter.

                  "Early  Collection  Fee" means,  for any funding period during
which the  portion of any Net  Investment  that was  allocated  to such  funding
period is reduced  for any reason  whatsoever,  the  excess,  if any, of (i) the
additional  interest that would have accrued  during such funding period if such
reductions  had not  occurred,  minus (ii) the income,  if any,  received by the
recipient of such reductions from investing the proceeds of such reductions.

                  "Eligible  Account"  means,  as of the Cut-Off Date (or,  with
respect to Accounts arising after the Cut-Off Date, as of the date of creation),
each Account in existence and owned by the Seller:

(i)      the credit card or cards related thereto have not been reported lost or
stolen or designated fraudulent;

(ii)     the Obligor on which has provided,  as its most recent billing address,
         an  address  located  in  the  United  States  or  its  territories  or
         possessions, or Canada, or which is a United States military address;

(iii)  which is not an  Account  as to  which  any of the  Receivables  existing
thereunder are Defaulted Receivables;

(iv)     which was  purchased  by the Seller from PNC (or is a Related  Account)
         and to which the Seller has good  title,  free and clear of all Adverse
         Claims; and

(v) as to which no Event of  Bankruptcy  shall have occurred with respect to the
Obligor of any Receivable with respect thereto.

                  "Eligible   Investments"   means  any  of  the  following  (a)
negotiable  instruments  or securities  represented  by instruments in bearer or
registered or in book-entry form which evidence (i) obligations fully guaranteed
by the United States of America;  (ii) time deposits in, or bankers  acceptances
issued by, any depositary  institution or trust company  incorporated  under the
laws of the  United  States of  America  or any state  thereof  and  subject  to
supervision   and   examination  by  Federal  or  state  banking  or  depositary
institution  authorities;  provided,  however, that at the time of investment or
contractual  commitment  to invest  therein,  the  certificates  of  deposit  or
short-term deposits, if any, or long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depository  institution or
trust  company shall have a credit rating from Moody's and S&P of at least "P-1"
and  "A-1",  respectively,  in  the  case  of the  certificates  of  deposit  or
short-term  deposits,  or a  rating  not  lower  than  one  of the  two  highest
investment  categories  granted by Moody's  and by S&P;  (iii)  certificates  of
deposit  having,  at the time of investment or contractual  commitment to invest
therein,   a  rating  from  Moody's  and  S&P  of  at  least  "P-1"  and  "A-1",
respectively;  or (iv)  investments  in money  market funds rated in the highest
investment  category or otherwise  approved in writing by the applicable  rating
agencies;  (b) demand  deposits in any  depositary  institution or trust company
referred to in (a)(ii) above; (c) commercial paper (having original or remaining
maturities  of no more  than 30  days)  having,  at the  time of  investment  or
contractual  commitment to invest therein,  a credit rating from Moody's and S&P
of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits having a
credit  rating from  Moody's and S&P of at least "P-1" and "A-1",  respectively;
and  (e)  repurchase  agreements  involving  any  of  the  Eligible  Investments
described in clauses (a)(i),  (a)(iii) and (d) hereof so long as the other party
to the repurchase agreement has at the time of investment therein, a rating from
Moody's and S&P of at least "P-1" and "A-1", respectively.

                  "Eligible Receivable" means, at any time, any Receivable:

                           (i)      with respect to which the related Account is
an Eligible Account;

                           (ii) to which, immediately prior to the transfer to a
Purchaser, the Transferor has good title thereto,
free and clear of all Adverse Claims;

                           (iii)  which  (together  with the  Related  Security,
Collections and proceeds related thereto) has been the
subject of either a valid  transfer and sale from the  Transferor to each of the
Purchaser  Agents,  on behalf of the  applicable  Purchaser and its related Bank
Investors,  of all of the Transferor's  right, title and interest therein or the
grant  of a first  priority  perfected  security  interest  therein  (and in the
Related Security, Collections and proceeds related thereto), effective until the
termination of this Agreement;

                           (iv)     the Obligor of which is not a government or
a government subdivision or agency;

                           (v)      which is not a  Defaulted  Receivable  at
the time of the initial  creation of an interest  therein
hereunder;

                           (vi) which is an "eligible  asset" as defined in Rule
3a-7 under the Investment Company Act of 1940, as
amended;

                           (vii) a  purchase  of  which  with  the  proceeds  of
Commercial Paper would constitute a "current transaction"
within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

                           (viii)   which is an  "account"  or "general
intangible"  within the meaning of Article 9 of the UCC of the
applicable jurisdiction;

                           (ix)     which is denominated and payable only in
United States dollars;
                           (x) which arises under an Account that, together with
the Receivable related thereto, is in full force
and effect  and  constitutes  the legal,  valid and  binding  obligation  of the
related  Obligor  enforceable  against such Obligor in accordance with its terms
and is not, at the time of transfer hereunder,  subject to any litigation, right
of recission, dispute, offset, counterclaim or other defense;

                           (xi)  which,   together  with  the  Account   related
thereto, complies in all material respects with all laws,
rules or regulations  applicable thereto (including,  without limitation,  laws,
rules and regulations  relating to truth in lending,  fair credit billing,  fair
credit reporting,  equal credit opportunity,  fair debt collection practices and
privacy) and with respect to which the Account  Agreement related thereto is not
in violation of any such law, rule or regulation in any material respect;

                           (xii) which is assignable  without the consent of, or
notice to, the Obligor thereunder;

                           (xiii) the  transfer of which  under the  Receivables
Purchase Agreements by the Seller and the Initial
Purchaser and hereunder by the Transferor does not violate, breach or contravene
any applicable laws, rules,  regulations,  orders or writs or any contractual or
other restriction, limitation or encumbrance;

                           (xiv) which, at the time of transfer  hereunder,  has
not been compromised, adjusted or modified
(including  the granting of any  discounts,  allowances  or credits);  provided,
however,  that only such portion of such  Receivable that is the subject of such
compromise, adjustment or modification shall be deemed to be ineligible pursuant
to the terms of this clause (xiv);

                           (xv) as to which no effective  financing statement or
other instrument similar in effect covering such
Receivable, any interest therein, Account or Collections with respect thereto is
on file in any  recording  office  except  such as may be  filed in favor of the
Initial  Purchaser  or the  Transferor,  pursuant  to the  Receivables  Purchase
Agreements, or a Purchaser hereunder;

                           (xvi) with  respect to which all  material  consents,
licenses, approvals or authorizations of, or
registrations or declarations  with, any governmental  authority  required to be
obtained,  effected or given by the Initial Purchaser,  Transferor or the Seller
in connection with the creation of such  Receivable or the execution,  delivery,
creation and performance by the Initial  Purchaser,  Transferor or the Seller of
the Account Agreement  pursuant to which such Receivable was created,  have been
duly obtained, effected or given and are in full force and effect; and

                           (xvii) which was  originated by PNC or (as to Related
Accounts) the Seller in the ordinary course of its
business and was validly assigned to the Transferor under the Receivables
Purchase Agreements.

                  "Enterprise" shall have the meaning set forth in the preamble
to this Agreement.

                  "Enterprise Agent" means NationsBank or any other entity which
has  been  appointed  as the  administrator  of  Enterprise  and  agent  for the
Enterprise Bank Investors.

                  "Enterprise  Bank Investors"  shall mean  NationsBank and each
other  financial  institution  that becomes a Bank  Investor with respect to any
Transferred  Interest  held  by  Enterprise,   pursuant  to  an  Assignment  and
Assumption Agreement, together with its successors and permitted assigns.

                  "Enterprise   Majority   Investors"  shall  have  the  meaning
specified in Section 9.7(h) hereof.

                  "Enterprise Wind-Down Event" means the occurrence of any of
the following events:

                           (a) any Liquidity Provider with respect to Enterprise
         or any Credit  Support  Provider with respect to Enterprise  shall have
         given notice that an event of default has  occurred  and is  continuing
         under  any  of  its  respective  agreements  with  Enterprise,  or  the
         Commitment of such  Liquidity  Provider  under its  Liquidity  Provider
         Agreement  or such Credit  Support  Provider  under its Credit  Support
         Agreement shall have terminated;

                           (b) the short-term unsecured debt of Enterprise shall
         not be rated at least  "A-2" by Standard & Poor's and at least "P-2" by
         Moody's, respectively;

                           (c) a  Termination  Event  or  Potential  Termination
Event shall have occurred and be continuing;

                           (d) Enterprise  has notified the Transferor  that, in
         its sole discretion, it (i) no longer wishes to, or is unable to, issue
         Commercial  Paper  with  respect  to this  Agreement,  (ii)  elects  to
         commence a  Reinvestment  Termination  Date or (iii) elects to amortize
         its Net  Investment  or elects  not to make an  additional  Incremental
         Transfer; and

                           (e) the date which is five Business Days prior to the
Commitment Termination Date shall have occurred.

                  "ERISA" means the U.S. Employee Retirement Income Security Act
of 1974,  as amended  from time to time,  and the  regulations  promulgated  and
rulings issued thereunder.

                  "ERISA Affiliate"  means, with respect to any Person,  (i) any
corporation  which is a  member  of the same  controlled  group of  corporations
(within the meaning of Section 414(b) of the Code) as such Person;  (ii) a trade
or business  (whether or not  incorporated)  under  common  control  (within the
meaning of Section  414(c) of the Code) with such  Person;  or (iii) a member of
the same  affiliated  service group (within the meaning of Section 414(n) of the
Code) as such Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above; provided,  however, that none of FCI
and its Affiliates (other than the Initial Purchaser and its Subsidiaries) shall
be an ERISA Affiliate.

                  "Event of Bankruptcy"  means, with respect to any Person,  (i)
that such Person (a) shall generally not pay its debts as such debts become due,
(b) shall admit in writing its inability to pay its debts generally or (c) shall
make a general  assignment  for the benefit of  creditors;  (ii) any  proceeding
shall be  instituted  by or against  such  Person  seeking to  adjudicate  it as
bankrupt or  insolvent,  or seeking  liquidation,  winding  up,  reorganization,
arrangement,  adjustment,  protection,  relief or composition of it or its debts
under any law relating to bankruptcy,  insolvency or reorganization or relief of
debtors,  or seeking  the entry of an order for relief or the  appointment  of a
receiver,  trustee or other similar  official for it or any substantial  part of
its property,  and in the case of any such  proceeding  instituted  against such
Person (other than the Transferor),  such proceeding shall continue  undismissed
for a period of 30 days; or (iii) if such Person is a  corporation,  such Person
or any  Subsidiary  shall  take any  corporate  action to  authorize  any of the
actions set forth in the preceding clauses (i) or (ii).

                  "Excess  Funding  Account" shall have the meaning  assigned to
that term in Section 2.12(c).

                  "Excess Spread" means, with respect to any Collection  Period,
the  annualized  percentage  equivalent  of a fraction the numerator of which is
equal to the Buyer's  Percentage  Factor of Finance Charge  Collections for such
Collection  Period minus the Carrying Costs for such Collection Period minus the
Buyer's Percentage Factor of the aggregate amount of Principal Receivables which
became  Defaulted  Receivables  during such Collection  Period minus the Buyer's
Percentage  Factor of the Servicing Fee with respect to such Collection  Period,
and  the  denominator  of  which  is  equal  to the  average  amount  of the Net
Investments during such Collection Period.

                  "Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.

                  "Facility  Fee" means the fee payable by the Transferor to the
Enterprise Agent for distribution to the Bank Investors  pursuant to Section 2.7
hereof, the terms of which are set forth in the Fee Letter.

                  "Facility  Limit" means  $640,000,000,  as reduced (unless the
Purchaser  Agents notify the Transferor in writing that such reduction shall not
occur,  which notice must be given by each Purchaser  Agent),  by the cumulative
percentage  set forth below on the dates set forth below.  Following the earlier
of the Termination Date and Special Termination Date the Facility Limit shall at
all times equal the Net Investments outstanding as of such date.


                                    Cumulative Percent of Initial
Date                             Facility Limit Reduced on such Date

18-month anniversary of the Closing Date      10%

21-month anniversary of the Closing Date      20%

24-month anniversary of the Closing Date      30%

27-month anniversary of the Closing Date      40%

30-month anniversary of the Closing Date    100% (Facility Limit
                                            is reduced to zero)



                 "FCI" means Fingerhut Companies, Inc., a Minnesota corporation.

                  "Fee Letter" means the letter  agreement dated the date hereof
between the Transferor and Enterprise with respect to the fees to be paid by the
Transferor hereunder, as amended, modified or supplemented from time to time.

                  "Finance Charge  Collections"  shall mean, with respect to any
Business  Day,  Collections  received by the  Collection  Agent with  respect to
Finance Charge  Receivables  and unless  otherwise  specified  herein,  Discount
Receivables Collections on such Business Day.

                  "Finance Charge Receivables" shall mean the sum of all amounts
billed  from time to time to the  Obligors  on any  Account  in  respect  of (i)
Periodic  Finance  Charges,  (ii) over  limit  fees,  (iii) late  charges,  (iv)
returned check fees, (v) annual  membership fees and annual service charges,  if
any, (vi) transaction  charges,  (vii) cash advance fees and (viii) similar fees
and  charges,  excluding  fees and  charges for  insurance  and  insurance  type
products, plus (x) Recoveries and (y) Discount Receivables, if any.

    "Fitch" means Fitch Investors Service, L.P., and its successors and assigns.

                  "GAAP" means  generally  accepted  accounting  principles  set
forth in the opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements by such accounting profession, which are in effect from time to time.

                  "Incremental Transfer" means a Transfer which is made pursuant
to Section 2.2(a) hereof.

          "Indemnified Amounts" has the meaning specified in Section 8.1 hereof.

          "Indemnified Parties" has the meaning specified in Section 8.1 hereof.

          "Initial Purchaser" means MCI.

          "Interest Component" means (i) with respect to Enterprise, (a)
with respect to any Commercial  Paper issued on an  interest-bearing  basis, the
interest payable on such Commercial Paper at its maturity  (including any Dealer
Fee) and (b) with respect to any  Commercial  Paper issued on a discount  basis,
the  portion  of the face  amount  of such  Commercial  Paper  representing  the
discount  incurred in respect  thereof  (including  any Dealer Fee to the extent
included as part of such discount),  (ii) with respect to PARCO, with respect to
any funding  period with  respect to PARCO  during which all or a portion of its
Net Investment is funded by Commercial  Paper of PARCO,  the rate  equivalent to
the rate (or, if more than one rate, the weighted average of the rates) at which
such  Commercial  Paper  outstanding  during such funding period with respect to
PARCO's Net  Investment may be sold by any placement  agent or commercial  paper
dealer  selected  by PARCO,  which  rates  shall  reflect and give effect to the
commissions of placement agents and dealers in respect of such Commercial Paper,
to the extent  such  commissions  are  allocated,  in whole or in part,  to such
Commercial  Paper by the PARCO  Agent (on behalf of PARCO);  provided,  however,
that if the rate (or rates) as agreed between any such agent or dealer and PARCO
is a  discount  rate,  then the rate (or if more  than one  rate,  the  weighted
average of the rates)  resulting from PARCO's  converting such discount rate (or
rates) to an  interest-bearing  equivalent rate per annum and (iii) with respect
to  Sheffield,  with  respect to any funding  period with  respect to  Sheffield
during  which all or a portion  of its Net  Investment  is funded by  Commercial
Paper of Sheffield,  the rate equivalent to the rate (or, if more than one rate,
the weighted  average of the rates) at which such Commercial  Paper  outstanding
during such funding period with respect to its Net Investment may be sold by any
placement agent or commercial  paper dealer  selected by Sheffield,  which rates
shall reflect and give effect to the commissions of placement agents and dealers
in  respect  of such  Commercial  Paper,  to the  extent  such  commissions  are
allocated,  in whole or in part, to such Commercial Paper by the Sheffield Agent
(on  behalf of  Sheffield);  provided,  however,  that if the rate (or rates) as
agreed between any such agent or dealer and Sheffield is a discount  rate,  then
the rate (or if more than one rate, the weighted average of the rates) resulting
from Sheffield's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.

            "Interest Rate Caps" shall have the meaning specified in
Section 5.1(n)(i).

            "Interest Rate Cap Agreement"  means each agreement  providing
for an  Interest  Rate Cap  between  the  Transferor  and an  Interest  Rate Cap
Provider,  which is satisfactory in form and substance to the Purchaser  Agents,
together with any amendment, modification or supplement thereto.

            "Interest  Rate Cap Provider"  means a provider of an Interest
Rate Cap,  which has a  short-term  rating  from  Standard  & Poor's of at least
"A-1+"  or a  long-term  rating  from  Standard  & Poor's  of at least "A" and a
short-term  rating of at least "P-1" from  Moody's or a  long-term  rating of at
least "A2" from Moody's.

             "Investor  Report" means a report,  in substantially  the form
attached  hereto as Exhibit D or in such other form as is mutually  agreed to by
the  Transferor  and the Purchaser  Agents,  furnished by the  Collection  Agent
pursuant to Section 2.11 hereof.

             "Law"  means any law  (including  common  law),  constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.

             "LIBOR Cap Rate" means for any Collection Period, the rate per
annum (rounded upwards,  if necessary,  to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank  offered rate
for  deposits in U.S.  dollars at  approximately  11:00 a.m.  (London  time) two
London Business Days prior to the first day of such Collection Period for a term
of one month.

              "LIBOR  Rate" means:  (a) with respect to any funding  period,
for the Net Investment of Enterprise and the Enterprise Bank Investors,  and the
Net Investment of Sheffield and the Sheffield Bank Investors, the rate per annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100 of 1%)  appearing  on
Telerate Page 3750 (or any successor page) as the London interbank  offered rate
for  deposits in U.S.  dollars at  approximately  11:00 a.m.  (London  time) two
London  Business  Days prior to the first day of each such funding  period for a
term of one month. If for any reason such rate is not available, the term "LIBOR
Rate" shall mean, for any funding period,  the rate per annum (rounded  upwards,
if necessary,  to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London  interbank  offered rate for deposits in dollars at  approximately
11:00 a.m. (London time) two London Business Days prior to the first day of such
funding period for a term of one month; provided, however, if more than one rate
is specified on the Reuters Screen LIBO Page,  the applicable  rate shall be the
arithmetic  mean of all  such  rates  and (b) with  respect  to the  PARCO  Bank
Investors and any portion of the related Net  Investment  funded at the Adjusted
LIBOR Rate, the rate at which deposits in dollars are offered to the PARCO Agent
in the London interbank market at approximately 11:00 A.M. (London time) two (2)
Business Days before the first day of the applicable funding period in an amount
approximately equal to the amount of such portion of such Net Investment and for
a period  of time  approximately  equal to the  number  of days in such  funding
period;  provided that if such funding period would expire on (i) a day which is
not a Business  Day,  such funding  period  shall expire on the next  succeeding
Business  Day,  (ii) a day which is not a Business Day but is a day of the month
after which no further  Business Day occurs in such month,  such funding  period
shall  expire on the next  preceding  Business  Day or (iii) a Business  Day for
which there is no numerically  corresponding  day in the  applicable  subsequent
calendar  month,  such funding  period shall expire on the last  Business Day of
such month.

            "Liquidity  Provider"  means the  Person or  Persons  who will
provide liquidity support to a Purchaser in connection with the issuance by such
Purchaser of Commercial Paper.

            "Liquidity  Provider  Agreement"  means  (i) with  respect  to
Enterprise, the agreement between Enterprise and a Liquidity Provider evidencing
the  obligation  of such  Liquidity  Provider  to provide  liquidity  support to
Enterprise  in connection  with the issuance by Enterprise of Commercial  Paper,
(ii) with respect to PARCO, the Asset Purchase  Agreement and (iii) with respect
to Sheffield, the Sheffield Agreement.

             "Material  Adverse  Effect" means any event or condition which
could  reasonably  be  expected  to have a  material  adverse  effect on (i) the
collectibility  of  the  Receivables,  taken  as a  whole,  (ii)  the  condition
(financial  or  otherwise),  businesses or  properties  of the  Transferor,  the
Collection Agent, the Initial Purchaser or the Seller,  (iii) the ability of the
Transferor, the Collection Agent, the Initial Purchaser or the Seller to perform
its  respective  obligations  under the  Transaction  Documents to which it is a
party and (iv) the legality,  binding effect or  enforceability  of any material
provision  of the  Transaction  Documents  or on the rights and  remedies of the
Administrative Agent, the Purchaser Agents, the Purchasers or the Bank Investors
under the Transaction Documents.

             "Maximum Buyer's Percentage Factor" means 82.75%.

             "MCI" means Metris Companies Inc., a Delaware corporation, and
its successors and permitted assigns.

             "Metris  Direct"  means  Metris  Direct,   Inc.,  a  Minnesota
corporation and its successors and permitted assigns.

             "Moody's" means Moody's Investors Service, Inc., and its successors
and assigns.

                  "Multiemployer Plan" means a "multi-employer  plan" as defined
in Section  4001(a)(3)  of ERISA  which is or was at any time during the current
year or the immediately  preceding five years  contributed to by the Transferor,
the Initial Purchaser the Seller or any ERISA Affiliate of the Transferor or the
Seller on behalf of its employees.

                  "NationsBank" shall have the meaning set forth in the preamble
to this Agreement.

                  "Net  Investments"  means the sum of the cash  amounts paid to
the Transferor for each Incremental Transfer by each of the Purchaser Agents, on
behalf  of its  related  Purchaser  or its  related  Bank  Investors,  less  the
aggregate amount of Collections received and applied by the applicable Purchaser
Agent to reduce the applicable  Net  Investment  pursuant to Section 2.5, 2.6 or
2.9 hereof;  provided,  however,  that each Net Investment shall be restored and
reinstated  in the amount of any  Collections  so received and applied if at any
time the  distribution  of such  Collections  is rescinded or must  otherwise be
returned  for any  reason;  and,  provided,  further,  that,  in the case of the
Enterprise  Bank  Investors,  the related Net Investment may be increased by the
amount described in Section 9.7(d) hereof as described therein.

                  "Non-Defaulting Bank Investor" has the meaning specified in
Section 2.2(d)(iii) hereof.

                  "Obligor" means a Person  obligated to make payments  pursuant
to an Account, including any guarantor thereunder.

                  "Official Body" means any government or political  subdivision
or any agency,  authority,  bureau,  central  bank,  commission,  department  or
instrumentality of any such government or political  subdivision,  or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

                  "Other  Transferor" means any Person other than the Transferor
that  has  entered  into  a  receivables  purchase  agreement  or  transfer  and
administration agreement with a Purchaser.

                  "PARCO" shall have the meaning set forth in the preamble to
this Agreement.

                  "PARCO  Agent"  means Chase or any other entity which has been
appointed as the administrator of PARCO and agent for the PARCO Bank Investors.

                  "PARCO Bank  Investors"  means Chase and each other  financial
institution  that  becomes  a Bank  Investor  with  respect  to any  Transferred
Interest held by PARCO,  pursuant to an  Assignment  and  Assumption  Agreement,
together with its successors and permitted assigns.

                  "PARCO Fee Letter" means that certain Fee Letter,  dated as of
December 9, 1998,  between the Transferor  and the PARCO Agent,  as the same may
from time to time be amended, supplemented or otherwise modified and in effect.

                  "PARCO Wind-Down Event" means the occurrence of any of the
following events:

                           (a)      the fifth (5th) Business Day prior to the
Commitment Termination Date;

                           (b) any provider of PARCO's program  liquidity and/or
         letter of credit  facilities  shall have given  notice that an event of
         default has occurred and is continuing under its agreement with PARCO;

                           (c)  PARCO has  notified  the  Transferor  that it no
         longer wishes to, or is unable to, issue  Commercial Paper with respect
         to this Agreement;

                           (d)  PARCO's  Commercial  Paper shall not be rated at
         least A-1/P-1 by Standard & Poor's and Moody's, respectively; and

                           (e) a  Termination  Event  or  Potential  Termination
Event shall have occurred and be continuing.

                  "Payment  Rate"  means,   for  any  Collection   Period,   the
percentage  equivalent  of a fraction,  the  numerator  of which is equal to the
amount of all cash Collections during such Collection Period and the denominator
of which is equal to the average  amount of Receivables  outstanding  during the
prior Collection Period.

                  "Periodic  Finance  Charges"  shall have,  with respect to any
Account,  the meaning  specified  in the Account  Agreement  applicable  to such
Account for finance charges (due to periodic rate) or any similar term.

                  "Person" means any  corporation,  limited  liability  company,
natural  person,  firm,  joint  venture,   partnership,   trust,  unincorporated
organization,  enterprise,  government  or  any  department  or  agency  of  any
government.

                  "PNC" means PNC National Bank, a national banking association,
and shall  include,  with respect to the  origination or creation of any Account
sold pursuant to the PNC  Agreement,  any  predecessor  in interest to PNC which
actually originated such Account.

                  "PNC  Agreement"  means the  Purchase  Agreement,  dated as of
September 4, 1998, by and between PNC and DMCCB,  and all schedules and exhibits
thereto,  together with all agreements,  instruments  and documents  executed in
connection  therewith,  including,  without  limitation,  the Interim  Servicing
Agreement  with  respect  thereto,   as  they  may  be  modified,   amended  and
supplemented from time to time.

                  "PNC Consent" shall have the meaning set forth in Section
4.1(ff).

                  "Potential Termination Event" means an event which but for the
lapse of time or the giving of notice,  or both,  would constitute a Termination
Event.

                  "Principal  Collections" means, with respect to any Collection
Period,  all  Collections  received during such period other than Finance Charge
Collections.

                  "Principal  Receivables" means amounts shown on the Collection
Agent's  records  as amounts  payable  by  Obligors  with  respect  to  Eligible
Receivables  on any Account  other than such  amounts  that are  Finance  Charge
Receivables  or Defaulted  Receivables  and shall include,  without  limitation,
amounts  payable  for  purchases  of  goods  or  services  or cash  advances.  A
Receivable  shall be deemed to have  been  created  at the end of the day on the
Date of Processing of such  Receivable.  In calculating the aggregate  amount of
Principal  Receivables on any day, the amount of Principal  Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
                  "Pro Rata Share" means, with respect to each Purchaser and its
related Bank Investors, the percentage obtained by dividing such Purchaser's and
its related Bank  Investors' Net Investment by the aggregate Net  Investments of
the Purchasers and the Bank Investors.

                  "Proceeds" means "proceeds" as defined in Section 9-306(1) of
the UCC.

                  "Program  Fee" means the fee payable by the  Transferor to
Enterprise  pursuant to Section 2.7 hereof,  the terms of
                   ------------
which are set forth in the Fee Letter.

                  "Purchase  Termination  Date"  means the date  upon  which the
Transferor or the Initial Purchaser shall cease, for any reason  whatsoever,  to
make  purchases  of  Receivables  under  the  applicable   Receivables  Purchase
Agreement or either  Receivables  Purchase  Agreement  shall  terminate  for any
reason whatsoever.

                  "Purchased  Interest"  means the  interest in the  Receivables
acquired by a Liquidity  Provider through purchase  pursuant to the terms of the
Liquidity Provider Agreement to which it is a party.

                  "Purchaser"  means any of Enterprise,  PARCO or Sheffield,  as
the  context  requires,  and  "Purchasers"  means all of  Enterprise,  PARCO and
Sheffield.  "Applicable  Purchaser"  means (a)  Enterprise,  with respect to the
Enterprise Bank Investors and the Enterprise  Agent, (b) PARCO,  with respect to
the PARCO Bank Investors and the PARCO Agent and (c) Sheffield,  with respect to
the Sheffield Bank Investors and the Sheffield Agent.

                  "Purchaser Agent" means any of the Enterprise Agent, the PARCO
Agent or the Sheffield Agent, as the context requires.  "Purchaser Agents" means
all of the Enterprise Agent, the PARCO Agent and the Sheffield Agent.

                  "Rating Agencies" means, collectively, Standard & Poor's,
Moody's and Fitch.

                  "Receivable"  means all of the  indebtedness of any Obligor to
the Transferor  under an Account,  including the right to receive payment of any
interest or finance  charges and other  obligations of such Obligor with respect
thereto,  which Indebtedness was sold by the Seller to the Initial Purchaser and
by the  Initial  Purchaser  to the  Transferor  pursuant,  respectively,  to the
Receivables Purchase Agreements.  Each Receivable includes,  without limitation,
all rights of the Transferor under the applicable Account Agreement.

                  "Receivable Systems" shall have the meaning set forth in
Section 3.1(v)(ii) hereof.

                  "Receivables Purchase Agreements" means, collectively, the (a)
Amended and Restated Bank Receivables  Purchase Agreement,  dated as of July 30,
1998, between the Seller, as seller,  and the Initial  Purchaser,  as buyer, and
(b) the  Receivables  Purchase  Agreement,  dated as of the date hereof,  by and
between the Initial Purchaser,  as seller, and the Transferor,  as purchaser, as
such agreements may be amended, modified or supplemented and in effect from time
to time.

                  "Records"  means all right,  title and interest of the Seller,
the Initial  Purchaser and the  Transferor in and to all Account  Agreements and
other  documents,  books,  records  and other  information  (including,  without
limitation,  computer  programs,  tapes,  discs,  punch cards,  data  processing
software and related property and rights) maintained with respect to Receivables
and the related Obligors.

                  "Recoveries"  means all amounts  received or  collected by the
Collection Agent with respect to Defaulted Receivables.

                  "Reinvestment  Termination Date" means the second Business Day
after the delivery by a Purchaser to the  Transferor of written notice that such
Purchaser elects to assign its Net Investment to the Bank Investors  pursuant to
(i) Section 9.7, in the case of Enterprise,  (ii) the Asset Purchase  Agreement,
in the  case  of  PARCO,  or  (iii)  the  Sheffield  Agreement,  in the  case of
Sheffield.

                  "Related  Account"  shall mean an Account  having  each of the
following  characteristics:  (i) such Related  Account is being  established  in
accordance with the Credit and Collection  Policy;  (ii) the Obligor or Obligors
with  respect  to such  Related  Account  are the same  Person or Persons as the
Obligor or Obligors of an Account; (iii) such Related Account is originated as a
result of (x) the credit card with respect  thereto  being lost or stolen or (y)
the  Obligor's  requesting a VISA account  rather than a MasterCard  account and
(iv) such Related Account can be traced or identified as a successor  account to
an Account by  reference  to or by way of the  computer or other  records of the
Collection Agent or the Transferor.

                  "Related  Commercial Paper" shall mean Commercial Paper issued
by a Purchaser  the  proceeds of which were used to acquire,  or  refinance  the
acquisition of, its interest in Receivables with respect to the Transferor.

                  "Related Security" means all of the Transferor's right, title
and interest in, to and under:

                           (i)   all   guarantees,   indemnities,    warranties,
         insurance  (and  proceeds  and  premium   refunds   thereof)  or  other
         agreements or  arrangements of any kind from time to time supporting or
         securing  payment of a  Receivable,  whether  pursuant  to the  Account
         related to such Receivable or otherwise;

                           (ii) all Records related to the  Receivables  (which,
         if necessary to comply with applicable law applicable to the Collection
         Agent or  Transferor,  the  Transferor or  Collection  Agent may remove
         therefrom  the  names,  addresses,  Social  Security  numbers  or other
         personal identifiers of Obligors);

                           (iii) all rights and remedies of the Transferor under
         or in connection with the Receivables  Purchase  Agreements,  including
         all financing  statements  filed in  connection  therewith on which the
         Purchaser Agents are listed as assignees;

                           (iv) all right,  title and interest of the Transferor
under each Interest Rate Cap Agreement; and

                           (v)      all Proceeds of any of the foregoing.

                  "Remittance  Date" means the  twentieth  day of each  calendar
month, or if such day is not a Business Day, the next  succeeding  Business Day;
provided, however, that the first Remittance Date shall be January 20, 1999.

                  "Required  Purchaser  Agents"  means,  for so long as (i) only
three  Purchaser  Agents  are  parties to this  Agreement,  at least two of such
Purchaser  Agents,  (ii) fewer than three  Purchaser  Agents are parties to this
Agreement,  at least one of such  Purchaser  Agents and (iii) greater than three
Purchaser  Agents  become  parties to this  Agreement,  the number of  Purchaser
Agents or percentage  of holders of the Net  Investment  which shall  constitute
"Required  Purchaser  Agents" shall be as agreed to by all Purchaser Agents then
party to this  Agreement,  but shall be at least fifty percent of the holders of
the Net Investment at the time of any determination thereof.

                  "Section 8.2 Costs" has the meaning specified in Section
8.2(d) hereof.

                  "Seller" means DMCCB and its successors and permitted assigns.

                  "Servicing Fee" means the fee payable to the Collection  Agent
in an amount equal to 2% per annum on the average  daily amount of the Principal
Receivables.  Such fee shall accrue from the date of the initial  purchase of an
interest in the Receivables to the date on which the Buyer's  Percentage  Factor
is reduced to zero. Such fee shall be payable only from Collections pursuant to,
and subject to the priority of payments set forth in, Section 2.5 hereof.

                   "Sheffield" shall have the meaning set forth in the preamble
to this Agreement.

                  "Sheffield Agent" means Barclays or any other entity which has
been  appointed as  administrator  of Sheffield and agent for the Sheffield Bank
Investors.

                  "Sheffield  Agreement"  means  that  certain  Revolving  Asset
Purchase  Agreement,  dated as of December 9, 1998,  by and among the  Sheffield
Agent, the Sheffield Bank Investors and Sheffield,  as the same may from time to
time be amended, supplemented or otherwise modified and in effect.

                  "Sheffield Bank Investors"  shall mean Barclays and each other
financial  institution  that  becomes  a  Bank  Investor  with  respect  to  any
Transferred Interest held by Sheffield, pursuant to an Assignment and Assumption
Agreement, together with its successors and permitted assigns.

                  "Sheffield Fee Letter" means that certain Fee Letter, dated as
of December 9, 1998, between the Transferor and the Sheffield Agent, as the same
may from time to time be amended,  supplemented  or  otherwise  modified  and in
effect.

                  "Sheffield Wind-Down Event" means the occurrence of any of the
following events:

                  (a)      the fifth (5th) Business Day prior to the Commitment
Termination Date;

                  (b) any  provider  of  Sheffield's  liquidity  and/or  program
enhancement shall have given notice that an event of default has occurred and is
continuing under its agreement with Sheffield;

                  (c)  Sheffield has notified the  Transferor  that it no longer
wishes  to, or is  unable  to,  issue  Commercial  Paper  with  respect  to this
Agreement;

                  (d) Sheffield's  Commercial  Paper shall not be rated at least
A-1+/P-1 by Standard & Poor's and Moody's, respectively; and

                  (e) a Termination  Event or Potential  Termination Event shall
have occurred and be continuing.

                  "Special  Pro Rata  Share"  means,  for a Bank  Investor,  the
Commitment of such Bank Investor  divided by the sum of the  Commitments  of all
Bank Investors related to the same Purchaser.

                  "Special   Termination   Date"  means  (a)  with   respect  to
Enterprise or the related Bank  Investors,  (i) the date of  termination  of the
Commitment of the Liquidity Provider under the Liquidity Provider Agreement with
respect to Enterprise's commercial paper program or (ii) the date of termination
of the  Commitment  of the Credit  Support  Provider  under the  Credit  Support
Agreement with respect to Enterprise's  commercial  paper program,  and (b) with
respect to any Purchaser and related Bank Investors, five Business Days prior to
the  Commitment  Termination  Date if such  Purchaser or Bank  Investor does not
agree to extend the Commitment Termination Date.

                  "Spread  Account" shall have the meaning assigned to that term
in Section 2.12(b).

                  "Spread   Account   Cap   Percentage   Amount",   as  of   any
Determination   Date,   means  the  product  of  the  Net  Investments  on  such
Determination Date and the applicable "Spread Account Cap Percentage" determined
as set forth in the chart immediately below,  subject to the following:  (a) any
decrease in the Spread Account Cap Percentage  will take effect only after three
consecutive  Determination  Dates  during  which such  decrease  (or any greater
decrease)  shall have  prevailed;  (b) any  calculation  of the "Spread  Account
Percentage" based on the Collection  Periods ending in October 1998 and November
1998 shall assume that, for each such Collection  Period,  (x) Excess Spread was
5.10% and 6.18%,  respectively,  (y) the  Payment  Rate was  11.29% and  11.49%,
respectively,  and (z) the Default Rate was 9.47% and 9.57%,  respectively,  and
(c) in the event that, as of any  Determination  Date, the average  Default Rate
for any of the three Collection Periods immediately preceding such Determination
Date exceeds 14%, the applicable  Spread Account  Percentage shall be the amount
determined below, plus 2%.

                  The Spread  Account Cap  Percentage  Amount  applicable on the
Closing Date shall be $0.



<PAGE>


Average Excess Spread for the three
consecutive Collection Periods immediately    Spread Account     Spread Account
immediately preceding the                  Cap Percentage (1) Cap Percentage (2)
Determination Date

Greater than 4.50%                               0%                     1%
Greater than 4.00% and less than or equal        1%                     2%
to 4.50%
Greater than 3.00% and less than or equal        2%                     3%
to 4.00%
Greater than 2.00% and less than or equal        3%                     4%
to 3.00%
2.00% and less                                   4%                     5%


                  (1) Spread Account Cap Percentage in effect if average Payment
Rate for the three  consecutive  Collection  Periods  immediately  preceding the
Determination Date is greater than 10%.

                  (2) Spread Account Cap Percentage in effect if average Payment
Rate for the three  consecutive  Collection  Periods  immediately  preceding the
Determination Date is less than or equal to 10%.

                  "Standard & Poor's" or "S&P" means  Standard & Poor's  Ratings
Services, a division of The McGraw-Hill Companies,  Inc., and its successors and
assigns.

                  "Structuring  Fee" means the fee payable by the  Transferor to
the Enterprise Agent pursuant to Section 4.1 hereof,  the terms of which are set
forth in the Fee Letter.

                  "Subsidiary" of a Person means any Person more than 50% of the
outstanding  voting interests of which shall at any time be owned or controlled,
directly or indirectly,  by such Person or by one or more  Subsidiaries  of such
Person or any similar business organization which is so owned or controlled.

                 "Taxes" shall have the meaning specified in Section 8.3 hereof.

                  "Termination  Date" means the earliest of (i) the Business Day
designated by the Transferor to the Purchaser  Agents as the Termination Date at
any time following 60 days' written notice to the Purchaser Agents, (ii) the day
upon which the Termination Date is declared or automatically  occurs pursuant to
Section 7.2(a) hereof or (iii) the Purchase Termination Date.

                  "Termination Event" means an event described in Section 7.1
hereof.

                  "Transaction Costs" has the meaning specified in Section
8.4(a) hereof.

                  "Transaction Documents" means,  collectively,  this Agreement,
the Receivables Purchase  Agreements,  the Fee Letter, the PARCO Fee Letter, the
Sheffield Fee Letter, the Certificates,  the Transfer Certificate, each Interest
Rate  Cap  Agreement,  the  Assignment,  the PNC  Consent  and all of the  other
instruments, documents and other agreements executed and delivered by the Seller
or the Transferor in connection with any of the foregoing,  in each case, as the
same may be amended,  restated,  supplemented or otherwise modified from time to
time.

                  "Transfer" means a conveyance,  transfer and assignment by the
Transferor  to a Purchaser  or the Bank  Investors  of an  undivided  percentage
ownership interest in Receivables hereunder (including, without limitation, as a
result of any reinvestment of Collections in Transferred  Interests  pursuant to
Sections 2.2(e) and 2.5 hereof).

                  "Transfer Certificate" has the meaning specified in Section
2.2(c) hereof.

                  "Transfer  Date"  means,  with respect to each  Transfer,  the
Business Day on which such Transfer is made.

                  "Transfer   Price"  means  with  respect  to  any  Incremental
Transfer, the amount paid to the Transferor by a Purchaser or the Bank Investors
as described in the applicable Transfer Certificate.

                  "Transfer Price Deficit" has the meaning specified in Section
2.2(d)(iii) hereof.

                  "Transferor"  means  Metris  Asset  Funding  Co.,  a  Delaware
corporation, and its successors and permitted assigns.

                  "Transferor's  Percentage  Interest"  means (i) 100% (1) minus
(ii) the Buyer's Percentage Factor,  provided, that, after the occurrence of the
Termination Date, the Transferor's  Percentage  Interest shall not fall below an
amount equal to 3% of the Facility Limit on the Termination Date.

                  "Transferred Interest" means, at any time of determination, an
undivided  percentage  ownership interest in (i) each and every then outstanding
Receivable,  (ii) all  Related  Security,  (iii) all  Collections  with  respect
thereto,  and (iv) other Proceeds of the foregoing,  which  undivided  ownership
interest shall be equal to the Buyer's  Percentage Factor at such time, and only
at such time (without regard to prior calculations). The Transferred Interest in
each  Receivable,  together with  Collections and Proceeds with respect thereto,
shall  at all  times  be  equal  to  the  Transferred  Interest  in  each  other
Receivable,  together with Collections and Proceeds with respect thereto. To the
extent  that  the  Transferred   Interest  shall  decrease  as  a  result  of  a
recalculation of the Buyer's Percentage Factor, each of the Purchaser Agents, on
behalf  of each of  their  respective  Purchasers  or Bank  Investors  shall  be
considered  to  have  reconveyed  to the  Transferor  its  undivided  percentage
ownership  interest in each  Receivable,  together with Collections and Proceeds
with respect thereto,  in an amount equal to its Pro Rata Share of such decrease
such that in each case the  Transferred  Interest  in each  Receivable  shall be
equal to the Transferred Interest in each other Receivable.

                  "UCC" means, with respect to any state, the Uniform Commercial
Code as from time to time in effect in such state.

                  "U.S." or "United States" means the United States of America.

                  "Year  2000  Compliant"  shall have the  meaning  set forth in
Section 3.1(v)(i) hereof.

                  "Year  2000  Problem"  shall  have the  meaning  set  forth in
Section 3.1(v)(i) hereof.

SECTION 1.2.        Other Terms.

                  All accounting terms not specifically  defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New York,  and not  specifically  defined  herein,  are used  herein as
defined in such Article 9.

SECTION 1.3.        Computation of Time Periods.

                  Unless otherwise stated in this Agreement,  in the computation
of a period of time from a specified  date to a later  specified  date, the word
"from" means "from and including", the words "to" and "until" each means "to but
excluding", and the word "within" means "from and excluding a specified date and
to and including a later specified date".


                                   ARTICLE II

                            PURCHASES AND SETTLEMENTS

                    Facility.

                  Upon the terms and subject to the conditions herein set forth,
(x) the  Transferor  may,  at its  option,  convey,  transfer  and assign to the
Purchaser  Agents, on behalf of their related  Purchasers or Bank Investors,  as
applicable,  and (y) (i) each of the Enterprise  Agent,  on behalf of and at the
option of Enterprise (prior to an Enterprise  Wind-Down Event), the PARCO Agent,
on behalf of and at the option of PARCO (prior to a PARCO Wind-Down Event),  and
the  Sheffield  Agent,  on behalf of and at the option of Sheffield  (prior to a
Sheffield Wind-Down Event), may or (ii) the Purchaser Agents, on behalf of their
respective  Bank  Investors   shall,   unless  a  Termination  Date  or  Special
Termination  Date with  respect  to such Bank  Investors  shall  have  occurred,
severally but not jointly, accept such conveyance,  transfer and assignment from
the  Transferor,  without  recourse except as provided  herein,  of an undivided
percentage  ownership  interest in the Receivables,  together with  Collections,
Proceeds  and Related  Security  with  respect  thereto,  from time to time.  By
accepting  any  conveyance,  transfer  and  assignment  hereunder,  none  of the
Purchasers,  any Bank Investor, the Administrative Agent or any of the Purchaser
Agents  assumes  or shall have any  obligations  or  liability  under any of the
Accounts,  all of which shall  remain the  obligations  and  liabilities  of the
Transferor, the Initial Purchaser and the Seller.

SECTION 2.2.        Transfers; Certificates; Eligible Receivables.

(a) Upon the terms and  subject to the  conditions  herein  set  forth,  (x) the
Transferor  may, at its option,  convey,  transfer  and assign to the  Purchaser
Agents, on behalf of their related Purchasers or Bank Investors,  as applicable,
and (y) the Enterprise  Agent,  on behalf of Enterprise  (prior to an Enterprise
Wind-Down  Event),  the  PARCO  Agent,  on  behalf  of PARCO  (prior  to a PARCO
Wind-Down  Event),  and the Sheffield  Agent, on behalf of Sheffield (prior to a
Sheffield  Wind-Down  Event),  may, at each such Purchaser's  option, or (z) the
Purchaser Agents,  on behalf of their related Bank Investors,  provided that the
Termination  Date or a  Special  Termination  Date  with  respect  to such  Bank
Investors  shall  not have  occurred  and that the  Bank  Investors  shall  have
previously  accepted the  assignment by the  applicable  Purchaser of all of its
interest in the Affected  Assets,  shall,  if so  requested  by the  Transferor,
accept such  conveyance,  transfer and assignment from the  Transferor,  without
recourse except as provided herein, of undivided  percentage ownership interests
in the  Receivables,  together with  Collections,  Proceeds and Related Security
with respect thereto (each, an "Incremental Transfer");  provided, however, that
after giving effect to the payment to the  Transferor  of the Transfer  Price by
each Purchaser Agent, (i) the sum of the Net Investments plus, in the case where
the  Transferred  Interest  is held on behalf of the  Purchasers,  the  Interest
Component of all  outstanding  Related  Commercial  Paper,  would not exceed the
Facility Limit; (ii) a Purchaser's applicable Net Investment,  plus, in the case
where the Transferred Interest is held on behalf of the Purchasers, the Interest
Component of all outstanding  Related Commercial Paper issued by such Purchaser,
would not exceed its Applicable  Purchaser Percentage of the Facility Limit, and
the share of any Bank  Investor  therein  would not exceed its  Special Pro Rata
Share of such amount,  and (iii) the Buyer's  Percentage Factor shall not exceed
the  Maximum  Buyer's  Percentage  Factor;  and,  provided  further,   that  the
representations and warranties set forth in Article III hereof shall be true and
correct both immediately  before and immediately after giving effect to any such
Incremental  Transfer and the payment to the  Transferor  of the Transfer  Price
related  thereto  and an  Additional  Investment  Certificate  shall  have  been
delivered  with  respect to such  Incremental  Transfer  as  required by Section
2.11(b) hereof.

(b) The Transferor  shall,  by notice to the Purchaser  Agents given by no later
than 11:00 a.m.  (New York City time) at least one (1) Business Day (and, in the
case of any  Incremental  Transfer for which the initial  funding period will be
based on the Adjusted LIBOR Rate, three (3) Business Days) prior to the proposed
date of any  Incremental  Transfer by  telecopy,  offer to convey,  transfer and
assign to the Purchaser  Agents,  on behalf of their  related  Purchasers or the
Bank Investors,  as applicable,  undivided percentage ownership interests in the
Receivables  and the other Affected Assets  relating  thereto.  Each such notice
shall  specify  (w) the  Purchaser  Agents to which such  request is being made,
which shall make a Transfer, at the sole discretion of such Purchaser Agents, on
behalf of the applicable Purchaser or on behalf of the applicable Bank Investors
(it being understood and agreed that once any Transferred  Interest hereunder is
acquired on behalf of any group of Bank  Investors,  each  Purchaser  Agent,  on
behalf of the applicable group of Bank Investors,  shall be required to purchase
all  Transferred  Interests  held  by the  Purchaser  Agents  on  behalf  of the
applicable  Purchaser in accordance with Section 9.7 hereof,  the Asset Purchase
Agreement or the Sheffield  Agreement,  as applicable,  and  thereafter  that no
additional  Incremental  Transfers shall be acquired on behalf of the Purchasers
hereunder),  (x) the desired Transfer Price (which shall be, for each Purchaser,
at least $1,000,000 or integral  multiples of $250,000 in excess thereof) or, to
the extent that the then available  unused portion of the Facility Limit is less
than such  amount,  such lesser  amount equal to such  available  portion of the
Facility Limit), (y) the desired date of such Incremental  Transfer and (z) with
respect to PARCO and Sheffield,  the desired  funding periods and allocations of
its Net Investment of such  Incremental  Transfer thereto as required by Section
2.3. The Purchaser Agents will promptly notify the applicable  Purchaser or each
of the applicable  Bank  Investors,  as the case may be, of any of the Purchaser
Agents' receipt of any request for an Incremental  Transfer to be made to any of
the  Purchaser  Agents on behalf of such  Person.  To the  extent  that any such
Incremental  Transfer is requested of any of the Purchaser  Agents, on behalf of
the Purchasers,  the Purchasers shall instruct the applicable Purchaser Agent to
accept or reject such offer by notice given to the Transferor and the applicable
Purchaser  Agents by  telephone  or  telecopy  by no later than the close of its
business on the Business Day  following  its receipt of any such  request.  Each
notice of proposed  Transfer shall be irrevocable  and binding on the Transferor
and the Transferor shall indemnify the Purchasers and each Bank Investor against
any loss or expense  incurred by the  Purchasers  or any Bank  Investor,  either
directly or indirectly  (including,  in the case of the Purchasers,  through the
Liquidity  Provider  Agreement) as a result of any failure by the  Transferor to
complete such  Incremental  Transfer  including,  without  limitation,  any loss
(including loss of anticipated profits) or expense incurred by the Purchasers or
any Bank Investor,  either directly or indirectly (including, in the case of the
Purchasers,  pursuant  to the  Liquidity  Provider  Agreement)  by reason of the
liquidation  or  reemployment  of  funds  acquired  by the  Purchasers  (or  the
Liquidity Providers) or any Bank Investor (including,  without limitation, funds
obtained by issuing  commercial paper or promissory notes or obtaining  deposits
as loans from third  parties) for the  Purchasers  or any Bank  Investor to fund
such Incremental Transfer.

(c) On the date of the initial  Incremental  Transfer,  each Purchaser Agent, on
behalf of its  applicable  Purchaser or Bank  Investors,  as  applicable,  shall
deliver  written  confirmation  to the  Transferor of its Transfer Price and the
Transferor shall deliver to each of the Purchaser Agents a Transfer  Certificate
in the form of Exhibit F hereto (each, a "Transfer Certificate"). Each Purchaser
Agent  shall  indicate  the Pro Rata  Share  of the  related  Purchaser  or Bank
Investor,  as  applicable,  of the amount of the  initial  Incremental  Transfer
together with the date thereof on the grid attached to its Transfer Certificate.
On the date of each subsequent  Incremental Transfer, the Purchaser Agents shall
(i) with respect to Enterprise,  send written  confirmation to the Transferor of
its Transfer Price applicable to such Incremental Transfer, (ii) with respect to
PARCO,  send written  confirmation to the Transferor of its Transfer Price,  the
Transfer Date and the funding period(s)  applicable to such Incremental Transfer
and (iii) with respect to Sheffield, send written confirmation to the Transferor
of its Transfer Price, the Transfer Date and the funding period(s) applicable to
such  Incremental  Transfer.  Each Purchaser Agent shall indicate the applicable
Pro Rata Share of the amount of the Incremental  Transfer together with the date
thereof  as well as the Pro Rata Share of any  decrease  in the  applicable  Net
Investment  on the grid  attached  to its  Transfer  Certificate.  The  Transfer
Certificates   shall  evidence  the   Incremental   Transfers.   Following  each
Incremental  Transfer,  each Purchaser  Agent shall deposit to the  Transferor's
account at the  location  indicated  in Section  10.3  hereof,  on behalf of the
applicable  Purchaser or Bank Investor,  in  immediately  available  funds,  its
Transfer Price for such Incremental Transfer.

(d) (i) By no later than 11:00 a.m. (New York time) on any Transfer  Date,  each
Purchaser  shall remit an amount equal to its Transfer  Price for such  Transfer
(and, in the case of a Bank Investor, such Bank Investor shall remit its Special
Pro Rata  Share of such  amount)  to the  account  of the  applicable  Purchaser
Agents, specified therefor from time to time by the Purchaser Agent by notice to
the applicable  Persons;  provided,  that,  the face amount of Commercial  Paper
issued by any Purchaser  (minus the Interest  Component  thereon with respect to
such  Purchaser) to fund its Transfer Price shall not exceed  $1,000,000 more or
less than its  Applicable  Purchaser  Percentage of the aggregate  amount of all
Commercial  Paper issued on such  Transfer  Date (minus the  Interest  Component
thereon with respect to such Purchaser) to fund such Transfer. The obligation of
each  Purchaser and Bank  Investor to remit its Transfer  Price shall be several
from that of each other  Purchaser  and Bank  Investor,  and the  failure of any
Purchaser or Bank  Investor to so make such amount  available to the  applicable
Purchaser  Agent shall not relieve any other  Purchaser or Bank  Investor of its
obligation  hereunder.  Following each  Incremental  Transfer and each Purchaser
Agent's  receipt of funds from the  applicable  Purchaser  or Bank  Investors as
aforesaid,   each  Purchaser  Agent  shall  remit  the  Transfer  Price  to  the
Transferor's  account at the  location  indicated  in Section  10.3  hereof,  in
immediately  available  funds,  an amount equal to its  Transfer  Price for such
Incremental Transfer. Unless a Purchaser Agent shall have received notice from a
related Purchaser or Bank Investor,  that such Person will not make its Transfer
Price relating to any Incremental  Transfer available on the applicable Transfer
Date therefor,  such Purchaser  Agent may (but shall have no obligation to) make
such  Purchaser's or any such Bank  Investor's  Transfer Price  available to the
Transferor in anticipation of the receipt by such Purchaser Agent of such amount
from such Purchaser or such Bank  Investor.  To the extent such Purchaser or any
such Bank Investor  fails to remit any such amount to the  applicable  Purchaser
Agent after any such advance by such Purchaser Agent on such Transfer Date, such
Purchaser or such Bank  Investor,  on the one hand, and the  Transferor,  on the
other hand, shall be required to pay such amount, together with interest thereon
at a per annum rate equal to the Federal funds rate (as determined in accordance
with clause (ii) of clause (x), (y) or (z), as applicable,  of the definition of
"Base Rate"),  in the case of such  Purchaser,  any such Bank  Investor,  or the
Transferor, to the applicable Purchaser Agent upon its demand therefor (provided
that such Purchaser shall have no obligation to pay such interest amounts except
to the extent that it shall have sufficient  funds to pay the face amount of its
Commercial Paper in full). Until such amount shall be repaid,  such amount shall
be deemed to be Net Investment paid by the applicable  Purchaser  Agent, and the
applicable  Purchaser  Agent  shall be deemed  to be the owner of a  Transferred
Interest hereunder.  Upon the payment of such amount to the applicable Purchaser
Agent (x) by the Transferor, the amount of the aggregate Net Investment shall be
reduced by such  amount or (y) by such  Purchaser  or such Bank  Investor,  such
payment shall  constitute  such Person's  payment of its share of the applicable
Transfer Price for such Transfer.

                  (ii) Notwithstanding anything contained in this Section 2.2(d)
or  elsewhere in this  Agreement  to the  contrary,  no Bank  Investor  shall be
obligated  to  provide  its  related  Purchaser  Agent  or the  Transferor  with
aggregate  funds in connection  with an  Incremental  Transfer in an amount that
would exceed such Bank Investor's unused Commitment then in effect.  The failure
of any Bank  Investor to make its Special Pro Rata Share of the  Transfer  Price
available  to the  applicable  Purchaser  Agent shall not relieve any other Bank
Investor of its obligations hereunder.

                  (iii) If, by 2:00 p.m.  (New York time) on any Transfer  Date,
one or more Enterprise Bank Investors (each, a "Defaulting  Bank Investor",  and
each  Enterprise  Bank Investor  other than the  Defaulting  Bank Investor being
referred to as a  "Non-Defaulting  Bank Investor") fails to make its Special Pro
Rata Share of the Transfer Price  available to the Enterprise  Agent pursuant to
Section  2.2(d) or the  Assignment  Amount payable by it pursuant to Section 9.7
(the aggregate amount not so made available to the Enterprise Agent being herein
called in either case the "Transfer Price  Deficit"),  then the Enterprise Agent
shall, by no later than 2:30 p.m. (New York time),  instruct each Non-Defaulting
Bank Investor to pay, by no later than 3:00 p.m. (New York time), in immediately
available  funds, to the account  designated by the Enterprise  Agent, an amount
equal to the lesser of (x) such  Non-Defaulting  Bank  Investor's  proportionate
share (based upon the relative Commitments of the Non-Defaulting Bank Investors)
of the Transfer Price Deficit and (y) its unused  Commitment.  A Defaulting Bank
Investor  shall  forthwith,  upon demand,  pay to the  Enterprise  Agent for the
ratable  benefit of the  Non-Defaulting  Bank Investors all amounts paid by each
Non-Defaulting  Bank  Investor  on  behalf  of such  Defaulting  Bank  Investor,
together with interest thereon, for each day from the date a payment was made by
a Non-Defaulting  Bank Investor until the date such Non-Defaulting Bank Investor
has been paid such amounts in full,  at a rate per annum equal to the sum of the
Federal  funds rate (as  determined  in  accordance  with clause  (x)(ii) of the
definition of "Base Rate").

(e) On each  Business  Day  occurring  after the  initial  Incremental  Transfer
hereunder,  the Transferor  hereby agrees to convey,  transfer and assign to the
Purchaser Agents, on behalf of their related  Purchasers or Bank Investors,  and
the Purchaser Agents, on behalf of their related Purchasers, may, provided there
is no Enterprise  Wind-Down Event, PARCO Wind-Down Event or Sheffield  Wind-Down
Event, as applicable,  and the Purchaser Agents, on behalf of their related Bank
Investors,  shall,  provided there is no Termination Date or applicable  Special
Termination Date, agree to purchase from the Transferor an undivided  percentage
ownership  interests in each and every  Receivable,  together with  Collections,
Proceeds  and  Related  Security  with  respect  thereto,  to  the  extent  that
Collections  are  available  for such  Transfer in  accordance  with Section 2.5
hereof,  such that after giving effect to such  Transfer,  (i) the amount of the
Net  Investments at the close of business on such Business Day shall be equal to
the amount of the Net  Investments  at the close of the business on the Business
Day  immediately  preceding such Business Day plus the aggregate  Transfer Price
paid by the  Purchaser  Agents (on behalf of their  Purchasers  or related  Bank
Investors)  of any  Incremental  Transfer made on such day, if any, and (ii) the
Transferred Interest in each Receivable, together with Collections, Proceeds and
Related  Security  with  respect  thereto,  shall be  equal  to the  Transferred
Interest in each other  Receivable,  together  with  Collections,  Proceeds  and
Related Security with respect thereto.

(f) Each Transfer shall constitute a transfer to the Purchaser Agents, on behalf
of their related Purchasers or Bank Investors, of undivided percentage ownership
interests in each and every Receivable, together with Collections,  Proceeds and
Related  Security with respect  thereto,  then existing,  as well as in each and
every Receivable, together with Collections,  Proceeds and Related Security with
respect thereto,  which arises at any time after the date of such Transfer.  The
Purchaser  Agents'  aggregate  undivided  percentage  ownership  interest in the
Receivables,  together  with  Collections,  Proceeds and Related  Security  with
respect  thereto,  held on behalf of the  Purchasers or the Bank  Investors,  as
applicable,  shall  equal the Buyer's  Percentage  Factor in effect from time to
time.  The Purchaser  Agents shall hold the  Transferred  Interests on behalf of
each  applicable  Purchaser and each applicable Bank Investor in accordance with
each of the  Purchaser's  and each Bank  Investor's  percentage  interest in the
Transferred  Interest  (determined  on the  basis of the  relationship  that the
portion of the  applicable  Net  Investment  funded by such Person  bears to the
aggregate Net  Investments  of the  Purchasers  and all of the Bank Investors at
such time).

(g) The  Transferor  shall issue to each Purchaser  Agent a Certificate,  in the
form of Exhibit E, on or prior to the date hereof.

(h) The Buyer's  Percentage Factor shall be initially computed as of the opening
of  business  of the  Collection  Agent on the date of the  initial  Incremental
Transfer  hereunder.  Thereafter  until  the  later of the  Termination  Date or
Special  Termination Date, the Buyer's  Percentage Factor shall be automatically
recomputed  as of the  close of  business  of the  Collection  Agent on each day
(other than a day after the later of the Termination Date or Special Termination
Date). The Buyer's  Percentage  Factor shall remain constant from the time as of
which any such  computation or  recomputation is made until the time as of which
the next such recomputation, if any, shall be made.

SECTION 2.3.        Selection of Interest Rates and Interest Periods; LIBOR
Protection; Illegality.

(a)  Prior to a  Wind-Down  Event;  Transferred  Interest  held on behalf of the
Purchasers. At all times hereafter, but prior to the occurrence of an Enterprise
Wind-Down  Event,  PARCO  Wind-Down  Event  or  Sheffield  Wind-Down  Event,  as
applicable, and not with respect to any portion of the Transferred Interest held
on behalf of the Bank Investors (or any of them), the Transferor may, subject to
the approval of each Purchaser and the limitations described below, request that
the applicable  Net Investment of such Purchaser be allocated  among one or more
funding periods,  so that the aggregate  amounts so allocated at all times shall
equal the Net Investments held on behalf of the Purchasers. The Transferor shall
give the Purchaser Agents  irrevocable  notice by telephone of the new requested
funding  period(s)  by 11:00  a.m.  at least one (1)  Business  Day prior to the
expiration of any then existing funding period; provided,  however, that each of
the Purchaser Agents may select,  in its sole  discretion,  any such new funding
period with respect to its  respective  Purchaser's  Net  Investment  if (i) the
Transferor fails to provide such notice on a timely basis or (ii) the applicable
Purchaser  Agent  determines,  in its sole  discretion,  that the funding period
requested  by the  Transferor  is  unavailable  or for any  reason  commercially
undesirable.  Each  Purchaser  confirms  that it is its intention to fund all or
substantially all of its Net Investment by issuing Related  Commercial Paper (in
the case of (A) Enterprise,  prior to an Enterprise  Wind-Down Event, (B) PARCO,
prior  to a PARCO  Wind-Down  Event  and (C)  Sheffield,  prior  to a  Sheffield
Wind-Down Event); provided that a Purchaser may determine, from time to time, in
its sole  discretion,  that  funding  its Net  Investment  by  means of  Related
Commercial  Paper is not  possible  or is not  desirable  for any  reason.  If a
Liquidity  Provider acquires from a Purchaser a Purchased  Interest with respect
to the  Receivables  pursuant  to the terms of a Liquidity  Provider  Agreement,
NationsBank,  Chase or  Barclays,  as  applicable,  on behalf  of the  Liquidity
Provider,  may exercise the right of selection granted to such Purchaser hereby.
The initial funding period applicable to any such Purchased  Interest shall be a
period of not greater than 14 days and shall accrue  Carrying Costs on the basis
of the Base Rate.  Thereafter,  provided that the Termination  Date or a Special
Termination  Date shall not have  occurred,  Carrying  Costs shall accrue on the
basis of either the Base Rate or the  Adjusted  LIBOR  Rate,  as  determined  by
NationsBank, Chase or Barclays, as applicable. In the case of any funding period
outstanding  upon the  Termination  Date or a  Special  Termination  Date,  such
funding  period  shall end on such date.  Any funding made by PARCO or Sheffield
hereunder by issuing its  Commercial  Paper shall accrue  Carrying  Costs on the
basis of the Interest Component with respect thereto.

(b)  After  a  Wind-Down  Event;  Transferred  Interest  Held on  behalf  of the
Purchasers.  At all times on and after an Enterprise  Wind-Down  Event,  a PARCO
Wind-Down Event or a Sheffield  Wind-Down Event,  with respect to any portion of
the Transferred  Interest which shall be held by the Purchaser  Agents on behalf
of the  Purchasers,  the  affected  Purchaser  Agent,  shall  select all funding
periods and rates applicable thereto.

(c) Prior to the  Termination  Date or  Special  Termination  Date;  Transferred
Interest  Held on Behalf of Bank  Investors.  At all times  with  respect to any
portion of the Transferred  Interest held on behalf of the Bank  Investors,  but
prior to the earlier of a  Termination  Date or Special  Termination  Date,  the
initial  funding  period  applicable  to  such  portion  of the  applicable  Net
Investment  allocable thereto shall be a period of not greater than (i) 14 days,
with respect to the Enterprise Bank Investors,  (ii) 3 days, with respect to the
PARCO  Bank  Investors,  or (iii) 3 days  with  respect  to the  Sheffield  Bank
Investors,  and  shall  accrue  Carrying  Costs on the  basis of the Base  Rate.
Thereafter,  with respect to such portion, and with respect to any other portion
of the  Transferred  Interest  held on behalf of the Bank  Investors  (or any of
them),  provided that the Termination Date or Special Termination Date shall not
have occurred,  Carrying  Costs shall accrue with respect  thereto at either the
Base Rate or the Adjusted LIBOR Rate, at the Transferor's option. The Transferor
shall give the  Purchaser  Agents  irrevocable  notice by  telephone  of the new
requested  funding  period  at  least  three  (3)  Business  Days  prior  to the
expiration  of any then  existing  funding  period.  In the case of any  funding
period  outstanding  upon the  occurrence  of the  Termination  Date or  Special
Termination Date, such funding period shall end on the date of such occurrence.

(d) After the Termination Date or Special Termination Date; Transferred Interest
Held on behalf of Bank Investor.  At all times on and after the Termination Date
or Special  Termination  Date,  with  respect to any portion of the  Transferred
Interest  held by any of the Purchaser  Agents on behalf of the Bank  Investors,
the  affected  Purchaser  Agent  shall  select  all  funding  periods  and rates
applicable thereto.

(e) Conversion and  Continuation  of Outstanding  Funding  Periods Funded by the
Bank Investors. Subject to paragraph (c) of this Section 2.3, the Transferor may
(a) convert each funding period during which the applicable interest rate is the
Base Rate  hereunder to a funding  period during which the  applicable  interest
rate is the Adjusted  LIBOR Rate and (b)(i)  continue each funding period during
which the  applicable  interest  rate is the  Adjusted  LIBOR  Rate as a funding
period during which the  applicable  interest rate is the Adjusted LIBOR Rate or
(ii) convert each funding  period during which the  applicable  interest rate is
calculated  at the  Adjusted  LIBOR Rate to a funding  period  during  which the
applicable interest rate is the Base Rate. If a Termination Event or a Potential
Termination  Event  has  occurred  and is  continuing,  then (x) no  outstanding
funding  period  funded by the Bank  Investors may be converted to, or continued
as, a funding period during which the  applicable  interest rate is the Adjusted
LIBOR  Rate  and (y)  unless  repaid,  each  funding  period  during  which  the
applicable  interest  rate is the  Adjusted  LIBOR Rate shall be  converted to a
funding period during which the applicable interest rate is the Base Rate on the
last day of the funding period related thereto. The Transferor shall give any of
the   Purchaser   Agents,   as   applicable,   irrevocable   notice   (each,   a
"Conversion/Continuation Notice") of such request not later than 12:30 p.m. (New
York time) (i) in the case of a conversion  described in clause (a) above,  or a
continuation  described in clause (b)(i)  above,  three (3) Business Days before
the date of such conversion or continuation,  as applicable,  and (ii) following
the occurrence and continuation of a Termination Event or Potential  Termination
Event,  in the case of a conversion  as described in clause  (b)(ii)  above or a
continuation  of a funding period during which the  applicable  interest rate is
the Base Rate as a funding period during which the  applicable  interest rate is
the   Base   Rate,   on   the   Business   Day   of   such   conversion.   If  a
Conversion/Continuation Notice has not been timely delivered with respect to any
funding  period  during which the  applicable  interest rate is the Base Rate or
funding period during which the  applicable  interest rate is the Adjusted LIBOR
Rate,  such funding  shall be  automatically  continued  as, or converted  to, a
funding period during which the applicable  interest rate is the Base Rate. Each
Conversion/Continuation Notice shall specify (a) the requested date (which shall
be a Business Day) of such conversion or continuation,  (b) the aggregate amount
and rate option  applicable  to the funding  period  which is to be converted or
continued and (c) the amount and rate option(s) of funding  period(s) into which
such funding period is to be converted or continued.

(f)      LIBOR Rate Protection; Illegality.

                           (i)  Notwithstanding  any other  provision of this
Section 2.3, if any of the Purchaser  Agents is unable to obtain on a timely
basis the information necessary to determine the applicable LIBOR Rate for
any proposed funding period, then

                           (A) such Purchaser Agent shall  forthwith  notify the
                  applicable Purchaser or Bank Investors, as applicable, and the
                  Transferor  that the Adjusted  LIBOR Rate cannot be determined
                  for such funding period, and

                           (B)  while  such  circumstances  exist,  none  of the
                  affected  Purchasers,   the  Bank  Investors  or  any  of  the
                  Purchaser  Agents  shall  allocate its Net  Investment  of any
                  additional  Transferred Interests purchased during such period
                  or  reallocate  its  Net  Investment  allocated  to  any  then
                  existing  funding  period  ending  during  such  period,  to a
                  funding  period which accrues  Carrying  Costs on the basis of
                  the Adjusted LIBOR Rate.

                           (ii) If,  with  respect  to any  outstanding  funding
period which accrues Carrying Costs on the basis of
the Adjusted  LIBOR Rate, a Purchaser or any of the Bank  Investors on behalf of
which  any of the  Purchaser  Agents  holds  any  Transferred  Interest  therein
notifies the  applicable  Purchaser  Agent that it is unable to obtain  matching
deposits in the London  inter-bank market to fund its purchase or maintenance of
such  Transferred  Interest or that the Adjusted  LIBOR Rate  applicable to such
Transferred  Interest  will not  adequately  reflect  the cost to the  Person of
funding or  maintaining  its  respective  Transferred  Interest for such funding
period  then the  applicable  Purchaser  Agent  shall  forthwith  so notify  the
Transferor,  whereupon  none of the  affected  Purchaser  Agents,  the  affected
Purchasers or the affected Bank  Investors,  as  applicable,  shall,  while such
circumstances exist,  allocate its Net Investment of any additional  Transferred
Interest   purchased  during  such  period  or  reallocate  the  applicable  Net
Investment  allocated to any funding  period  ending  during such  period,  to a
funding  period which accrues  Carrying Costs on the basis of the Adjusted LIBOR
Rate.

                  (iii)  Notwithstanding  any other provision of this Agreement,
if a Purchaser or any of the Bank  Investors  shall notify any of the  Purchaser
Agents that such Person has  determined  (or has been  notified by any Liquidity
Provider) that the introduction of or any change in or in the  interpretation of
any law or regulation  after the Closing Date makes it unlawful (either for such
Purchaser,  such Bank Investor, or such Liquidity Provider,  as applicable),  or
any central bank or other  governmental  authority  asserts that it is unlawful,
for  such  Purchaser,   such  Bank  Investor  or  such  Liquidity  Provider,  as
applicable, to fund the purchases or maintenance of Transferred Interests at the
Adjusted LIBOR Rate,  then (x) as of the effective date of such notice from such
Person to the  applicable  Purchaser  Agent,  the  obligation or ability of such
Purchaser  or such  Bank  Investor  to  fund  its  purchase  or  maintenance  of
Transferred  Interests at the Adjusted LIBOR Rate shall be suspended  until such
Person notifies the applicable  Purchaser Agent that the  circumstances  causing
such suspension no longer exist and (y) the applicable Net Investment  allocated
to each funding period which accrues Carrying Costs on the basis of the Adjusted
LIBOR Rate in which such Person owns an interest shall either (1) if such Person
may  lawfully  continue to maintain  such  Transferred  Interest at the Adjusted
LIBOR Rate until the last day of the applicable  funding period,  be reallocated
on the last day of such funding  period to another  funding period in respect of
which the  applicable Net Investment  allocated  thereto which accrues  Carrying
Costs on a basis other than the Adjusted  LIBOR Rate or (2) if such Person shall
determine  that  it may not  lawfully  continue  to  maintain  such  Transferred
Interest  at the  Adjusted  LIBOR Rate until the end of the  applicable  funding
period,  such Person's Net Investment  allocated to such funding period shall be
deemed to accrue Carrying Costs on the basis of the Base Rate from the effective
date of such notice until the end of such funding period.

SECTION 2.4.        Carrying Costs, Fees and Other Costs and Expenses.

                  The  Transferor  agrees to pay, as and when due in  accordance
with this  Agreement,  each  Early  Collection  Fee and all  Carrying  Costs and
Servicing  Fees.  On each  Remittance  Date,  the  Transferor  shall  pay to the
Purchaser  Agents, on behalf of their related  Purchasers or Bank Investors,  as
applicable,  an amount  equal to the accrued and unpaid  Carrying  Costs of such
Purchasers or Bank Investors for the related  Collection  Period;  provided that
(i) in the event of any repayment or prepayment of a funding period during which
the  applicable  interest rate is the Base Rate or a funding period during which
the  applicable  interest  rate is the  Adjusted  LIBOR  Rate,  interest  on the
principal  amount  repaid  or  prepaid  shall  be  payable  on the  date of such
repayment or prepayment, (ii) in the event of any conversion of a funding period
during which the  applicable  interest rate is the Base Rate or a funding period
during which the applicable  interest rate is the Adjusted  LIBOR Rate,  accrued
interest on such  funding  periods  shall be payable by the  Transferor  to each
Purchaser  Agent on the effective date of such  conversion and (iii) on the last
day of each funding period,  the Transferor shall pay to each Purchaser Agent an
amount equal to accrued and unpaid  interest for such funding  period  (together
with the Interest  Component  accrued on any Commercial Paper issued to fund any
transfer  hereunder,  including the Interest Component in excess of any Transfer
Price of an  Incremental  Transfer).  Interest shall accrue with respect to each
funding period on each day occurring during such funding period.  The Transferor
shall pay to the Enterprise Agent, on behalf of Enterprise, on each day on which
Related Commercial Paper is issued by Enterprise, the Dealer Fee with respect to
such Related Commercial Paper. All payments referred to in this Section shall be
made solely out of Collections,  and amounts paid to the Transferor  pursuant to
each Interest  Rate Cap  Agreement,  except for the amounts  described in clause
(i)(f) of the  definition  of "Carrying  Costs," which shall be paid directly by
the Transferor to the extent Collections are not available therefor.  Payment of
the  amounts  described  herein  may be made  from  amounts  on  deposit  in the
Collection Account at the time payment of such amounts is due.

SECTION 2.5.        Allocations of Collections; Non-Liquidation Settlement and
Reinvestment Procedures.

(a) On  each  Determination  Date,  the  Collection  Agent  shall  allocate  all
Collections  received  during  the  preceding  Collection  Period  as  Principal
Collections  or  Finance  Charge  Collections.  Principal  Collections  shall be
applied by the Collection  Agent as described in subsection  (d) below.  On each
Remittance  Date,  (A) the  product  of (i) the  daily  average  of the  Buyer's
Percentage  Factor over the preceding  Collection  Period and (ii) the aggregate
Finance  Charge  Collections  for such  preceding  Collection  Period  (plus any
investment  earnings  on the  Excess  Funding  Account)  plus  (B)  any  amounts
deposited in the  Collection  Account  with respect to proceeds  received by the
Transferor  under an  Interest  Rate Cap  Agreement,  shall  be  applied  by the
Collection  Agent,  without  duplication,  in the  following  order of priority,
provided,  that, if there shall be insufficient  funds on deposit to pay in full
the amounts  specified in any clause below, then payments shall be made pursuant
to each such clause as between each group of Purchasers,  and their related Bank
Investors,  on a pro rata basis:

(i)    first,  an amount equal to any accrued and unpaid Carrying Costs
       (except for the costs described in clause (f) of the
       definition  thereof) for such  Collection  Period, shall be paid, as
       applicable, to each  Purchaser Agent for the account of the applicable
       Purchasers and the Bank Investors;

(ii)   second, to the payment to the Collection Agent of the Buyer's
       Percentage Factor of any Servicing Fee due and owing;

(iii)  third,  an amount  equal to each  Purchaser's  Pro
       Rata  Share of the  Buyer's  Percentage  Factor of
       Defaulted  Receivables for the related  Collection
       Period  plus an amount  equal to such  Purchaser's
       Pro Rata Share of the Buyer's Percentage Factor of
       any unpaid amount of Principal  Receivables  which
       are Defaulted  Receivables  from prior  Collection
       Periods shall be applied as Principal  Collections
       in accordance with Section 2.5(d) hereof;

(iv)   fourth, to the payment of any Adjustment  Payments
       which the Transferor was required,  but failed, to
       make under Section 2.9(a) or any payment which the
       Transferor was required, but failed, to make under
       Section  2.9(b),  in each case  during the related
       Collection Period or any prior Collection  Period,
       which   payment  shall  be  applied  as  Principal
       Collections  in  accordance  with  Section  2.5(d)
       below;

(v)    fifth,  an amount equal to any accrued and unpaid Carrying Costs
       pursuant to clause (f) of the definition thereof; and

(vi)   sixth,   to  the   extent   any   Finance   Charge
       Collections remain after application in accordance
       with  clauses (i) through (v) above,  (A) if prior
       to the earlier of the Termination Date and Special
       Termination Date, such excess amounts shall be (i)
       deposited in the Spread Account,  up to the Spread
       Account Cap Percentage Amount and (ii) thereafter,
       paid to the  Transferor and (B) if on or after the
       earlier  of  the  Termination   Date  and  Special
       Termination  Date,  such excess  amounts  shall be
       paid to each Purchaser  Agent,  in accordance with
       such  Purchaser's  Pro  Rata  Share  thereof,   in
       reduction of the applicable Net Investment,  until
       the  applicable Net Investment has been reduced to
       zero and thereafter to the Transferor.

(b) On each Remittance Date,  subject to Section 2.5(c),  the product of (A) the
daily  average of the  Transferor's  Percentage  Interest  during the  preceding
Collection  Period and (B) the  aggregate  Finance  Charge  Collections  for the
preceding Collection Period shall be applied as follows:

(i)      first, to the payment to the Collection Agent of the Transferor's
         Percentage Interest of any Servicing Fee due and owing;

(ii)     second, an amount equal to the Transferor's  Percentage Interest of any
         Defaulted  Receivables for the related  Collection  Period and any such
         amount  unpaid  for  prior  Collection  Periods  shall  be  applied  as
         Principal Collections in accordance with Section 2.5(d) below; and

(iii) third, any remaining amounts shall be remitted to the Transferor.

(c) In the event that, on any Remittance Date, the Buyer's  Percentage Factor of
Finance Charge Collections is insufficient to pay the sum of the amounts due and
payable  pursuant  to  Section  (a)(i)  above,  then,  in  such  event,  on such
Remittance Date the entire amount of Finance Charge Collections distributable or
allocable to the Transferor,  up to the amount of any such insufficiency,  shall
be  reduced  by the  amount of such  insufficiency,  and to the  extent any such
insufficiency  continues  to remain,  the amounts  then on deposit in the Spread
Account, then the amounts on deposit in the Excess Funding Account, and then the
amounts  distributable  to the Transferor  pursuant to Section 2.5(d),  shall be
reduced  by the  amount  of  such  insufficiency.  In  the  event  that,  on any
Remittance Date, the Buyer's  Percentage Factor of Finance Charge Collections is
insufficient  to pay the sum of the amounts due and payable  pursuant to clauses
(a)(ii)  through  (a)(vi) of Section 2.5 above,  then,  in such  event,  on such
Remittance  Date the  amount of  Finance  Charge  Collections  distributable  or
allocable to the Transferor  pursuant to clauses (b)(ii) and (b)(iii) of Section
2.5  above,  up to the amount of any such  insufficiency,  and to the extent any
such  insufficiency  continues  to remain,  the  amounts  then on deposit in the
Spread Account,  then the amounts on deposit in the Excess Funding Account,  and
then the amounts  distributable  to the Transferor  pursuant to Section  2.5(d),
shall be reduced by the amount of such insufficiency,  in each case after giving
effect to the  application  of funds in the  preceding  sentence.  All amount(s)
against  which any  insufficiency  described in this  paragraph is to be applied
shall be applied as Finance  Charge  Collections  and  distributed in accordance
with the priority set forth in clauses (i) through (vi) of Section 2.5(a).

(d)  On  each  Remittance  Date  prior  to the  Termination  Date  or a  Special
Termination  Date (i) the  Collection  Agent shall  allocate  to the  applicable
Purchasers  and/or  the  Bank  Investors  their  Pro Rata  Share of the  Buyer's
Percentage  Factor  of  Principal   Collections   received  during  the  related
Collection   Period  and  not   previously   accounted  for  or  applied  toward
reinvestment  in new  Receivables or reduction of the applicable Net Investment,
and, at the Transferor's option, (A) pay such amount to the Transferor,  for the
benefit  of the  applicable  Purchasers  and/or  the  Bank  Investors,  and  the
Transferor  shall apply such amount toward the purchase of additional  undivided
percentage  interests in each Receivable  pursuant to Section 2.2(b), or (B) pay
such amount plus, at the Transferor's  option,  subject to Section 2.5(f) below,
all or a portion of the amount on deposit in the Excess Funding Account, to each
of the Purchaser Agents in reduction of the related  Purchaser's  applicable Net
Investment and (ii) the Collection Agent shall pay to the Transferor the portion
of such  Principal  Collections  not allocated to the  Transferred  Interest and
remaining after any reallocations pursuant to Section 2.5(c) above.

                  On each  Remittance  Date on or subsequent to the  Termination
Date or a Special  Termination  Date, the Collection Agent shall allocate to the
applicable Purchasers or the Bank Investors, as applicable, their respective Pro
Rata  Shares  of the  Buyer's  Percentage  Factor of all  Principal  Collections
received  during the related  Collection  Period and not  previously  applied or
accounted  for, plus all amounts on deposit in the Excess Funding  Account,  and
pay such  amount to each of the  Purchaser  Agents in  reduction  of the related
Purchaser's  applicable  Net  Investment.  In the  event  the  Termination  Date
occurred  as a result of a  Termination  Event,  the  portion of such  Principal
Collections  not allocated to the  Transferred  Interest and remaining after any
reallocations  pursuant to Section  2.5(c) above shall be distributed to each of
the  Purchaser  Agents in reduction of the related  Purchaser's  applicable  Net
Investment  and,  in the  case  of  any  other  Termination  Date  or a  Special
Termination Date, the portion of such Principal Collections not allocated to the
Transferred  Interest and remaining  after any  allocations  pursuant to Section
2.5(c) above shall be distributed to the Transferor.

(e) The  Transferor  shall  have the  option to  designate  a fixed or  variable
percentage  (the  "Discount  Percentage")  of all  Principal  Receivables  to be
treated as Finance Charge  Receivables  ("Discount  Receivables")  in accordance
with the provisions of this Section  2.5(e),  and shall be applied in accordance
with Section  2.5(a),  which  percentage  shall remain fixed and in effect until
such  time as the  Transferor  has  provided  a  subsequent  designation  to the
Purchaser Agents and all shall consent thereto.  The initial Discount Percentage
shall equal 4.75%,  and such  percentage  shall not be increased or decreased by
more than 2% unless the Transferor shall have obtained written confirmation from
each Rating Agency then rating the  Commercial  Paper of any Purchaser that such
change will not result in a reduction or withdrawal of any such rating.

(f) On any  Business  Day prior to the  Termination  Date on which  the  Buyer's
Percentage Factor of the aggregate Principal  Receivables is equal to or greater
than the Net  Investments,  the Transferor or Collection  Agent may request that
any  or  all  amounts  in the  Excess  Funding  Account  be  distributed  to the
Transferor.

SECTION 2.6.        Liquidation Settlement Procedures.

                  On each Remittance Date occurring on and following the earlier
of a Termination Date or a Special Termination Date, Principal Collections shall
be  applied  in  accordance  with  Section  2.5(d).  Each  Purchaser  Agent,  as
applicable,  upon its receipt of such amounts in its account,  shall  distribute
such amounts to the applicable Purchasers and/or Bank Investors entitled thereto
as  set  forth  above;   provided  that  if  the  Collection  Agent  shall  have
insufficient funds to pay all of the above amounts in full on any such date, the
Collection Agent shall pay such amounts in the order of priority set forth above
and,  with respect to any such  category  above for which the  Collection  Agent
shall have  insufficient  funds to pay all amounts  owing on such date,  ratably
(based on the amounts in such  categories  owing to such Persons) among all such
Persons entitled to payment thereof.

                  Following  the date on which  the Net  Investments  have  been
reduced to zero and all other Aggregate  Unpaids have been paid in full, (i) the
Collection Agent shall recompute the Buyer's Percentage Factor as zero, (ii) the
Purchaser Agents, on behalf of their related Purchasers and Bank Investors shall
be deemed to have  reconveyed to the  Transferor  all of the  Purchaser  Agents'
right,  title  and  interest  in and  to  the  Affected  Assets  (including  the
Transferred  Interest),  (iii) the Collection  Agent shall pay to the Transferor
any remaining  Collections held by any of the Purchaser Agents or the Collection
Agent pursuant to Section 2.5 or 2.12 and (iv) the Purchaser  Agents,  on behalf
of their related  Purchasers and Bank Investors shall execute and deliver to the
Transferor,  at the Transferor's  expense,  such documents or instruments as are
necessary to terminate the applicable Purchase Agent's interests in the Affected
Assets. Any such documents shall be prepared by or on behalf of the Transferor.

SECTION 2.7.        Fees.

                  On each  Remittance  Date  the  Transferor  shall  pay  (which
payments  shall be made from  Collections  in the order of priority set forth in
Section 2.5), with respect to the preceding Collection Period, (i) to Enterprise
solely for its own account,  the Program Fee and the Administrative  Fee, and to
the Enterprise  Agent,  for  distribution to the Enterprise Bank Investors,  the
Facility Fee,  (ii) to PARCO,  the fees  specified in the PARCO Fee Letter,  and
(iii) to Sheffield,  the fees  specified in the  Sheffield  Fee Letter.  On each
anniversary of the Closing Date, the Transferor shall pay to the  Administrative
Agent, solely for its own account, the Agency Fee set forth in the Fee Letter.

SECTION 2.8.        Protection of Ownership Interest of the Purchasers and the
Bank Investors.

(a) The Transferor agrees that it will, and will cause the Initial Purchaser and
the Seller to, from time to time, at Transferor's expense,  promptly execute and
deliver all  instruments  and documents and take all actions as may be necessary
or as the  Administrative  Agent or any of the Purchaser  Agents may  reasonably
request in order to perfect or protect the Transferred Interest or to enable the
Administrative  Agent, each of the Purchaser Agents,  the Purchasers or the Bank
Investors  to  exercise  or enforce any of their  respective  rights  hereunder.
Without  limiting the foregoing,  the Transferor will, and will cause the Seller
and Initial Purchaser to, upon the request of the  Administrative  Agent, any of
the  Purchaser  Agents,  a Purchaser or any of the Bank  Investors,  in order to
accurately  reflect this  purchase and sale  transaction,  execute and file such
financing  or  continuation  statements  or  amendments  thereto or  assignments
thereof (as permitted, as applicable,  pursuant to Section 9.7 hereof, the Asset
Purchase  Agreement  or the  Sheffield  Agreement)  as may be  requested  by the
Administrative  Agent,  any of the Purchaser  Agents,  a Purchaser or any of the
Bank Investors.  The Transferor shall, and shall cause the Initial Purchaser and
the Seller to, upon request of the Administrative  Agent or any of the Purchaser
Agents  (on behalf of the  related  Purchaser  or Bank  Investors)  obtain  such
additional search reports as the  Administrative  Agent or such Purchaser Agents
shall reasonably request. To the fullest extent permitted by applicable law, the
Administrative  Agent and the  Purchaser  Agents  shall be permitted to sign and
file continuation statements and assignments thereof without the Transferor's or
the Seller's  signature.  Carbon,  photographic  or other  reproduction  of this
Agreement  or  any  financing  statement  shall  be  sufficient  as a  financing
statement.  The Transferor shall not, and shall not permit the Initial Purchaser
or Seller to,  change its  respective  name,  identity  or  corporate  structure
(within the meaning of Section 9-402(7) of the UCC as in effect in the States of
New York, Arizona and Minnesota, as applicable) or relocate its respective chief
executive  office unless it shall have: (i) given the  Administrative  Agent and
the  Purchaser  Agents at least  ten (10) days  prior  notice  thereof  and (ii)
prepared at Transferor's  expense and delivered to the Administrative  Agent and
the Purchaser Agents all financing  statements,  instruments and other documents
necessary  to  preserve  and protect the  Transferred  Interest or as  otherwise
requested by the  Administrative  Agent and the  Purchaser  Agents in connection
with such change or relocation.  Any filings under the UCC or otherwise that are
occasioned  by such change in name or  location  shall be made at the expense of
Transferor.  The Transferor shall notify the Administrative Agent promptly after
it, the Initial  Purchaser or the Seller  relocates any office where Records are
kept of any such new location.

(b) The Transferor agrees that it will, and will cause the Seller and each other
Person having possession of any Records to, at Transferor's expense, on or prior
to the  Closing  Date  indicate  clearly  and  unambiguously  in its master data
processing  records and on any storage  containers  containing  Records that the
Receivables  created in  connection  with the Accounts have been conveyed to the
Transferor  and  transferred  to the  Purchaser  Agents,  for the benefit of the
Purchasers and the Bank Investors.  The Transferor  further agrees to deliver or
to cause the Collection Agent to deliver to the Administrative  Agent a computer
file or  microfiche  list  containing  a true  and  complete  list  of all  such
Accounts,  identified  by  account  number and by  Receivable  balance as of the
Cut-Off  Date.  Such  file or list  shall  be  marked  as the  Account  Schedule
delivered to the  Administrative  Agent as confidential and proprietary,  and is
hereby  incorporated  into and  made a part of this  Agreement.  The  Transferor
agrees  to  deliver  or  to  cause  the  Collection  Agent  to  deliver  to  the
Administrative  Agent within five (5) Business  Days of the request  therefor by
any of the Purchaser  Agents and in any event  promptly  after any conversion of
record-keeping  and servicing  functions  related to the ongoing activity of the
Accounts from PNC to the Collection  Agent,  a computer file or microfiche  list
containing  a true and  complete  list of all  Accounts,  including  all Related
Accounts  created on or after the Cut-Off  Date, in existence as of the last day
of the prior Collection  Period,  identified by account number and by Receivable
balance  as of the last day of the prior  Collection  Period.  Such file or list
shall be marked as the Account Schedule delivered to the Administrative Agent as
confidential and  proprietary,  shall replace the previously  delivered  Account
Schedule and shall be incorporated  into and made a part of this Agreement.  The
Collection Agent agrees, on behalf of the Transferor, at its own expense, by the
end of each  Collection  Period in which any Accounts or Related  Accounts  have
been  originated  to  indicate  clearly  and  unambiguously  in its master  data
processing  records  and any  storage  containers  containing  Records  that the
Receivables  created in connection  with such Accounts have been conveyed to the
Transferor  and  transferred  to the  Purchaser  Agents,  for the benefit of the
Purchasers and the Bank Investors, pursuant to this Agreement.

SECTION 2.9.        Application of Payments.

(a) If on any day any  Receivable  is either (x) reduced or canceled as a result
of any defective,  rejected or returned  merchandise or services,  any discount,
credit, rebate, dispute, warranty claim, chargeback, allowance or any billing or
other  adjustment,  or (y) reduced or canceled as a result of a setoff or offset
in respect of any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated  transaction and whether such reduction
or  cancellation  is  effected  through  the  granting  of credits  against  the
applicable Receivables or by the issuance of a check or other payment in respect
of, and as payment for, such reduction) or (z) any other downward adjustments to
the balance of such Receivable without receiving  Collections therefor and prior
to such  Receivable  becoming a Defaulted  Receivable,  then such  amount  shall
thereafter  be deducted from the aggregate  balance of the  Receivables  and the
Principal  Receivables.  If such reduction would result in a Buyer's  Percentage
Factor greater than the Maximum Buyer's  Percentage Factor, the Transferor shall
pay  (or  direct  the  Collection  Agent  to  pay  from  Collections   otherwise
distributable  to the Transferor) to each of the Purchaser Agents its respective
Purchaser's or Bank  Investor's Pro Rata Share of an amount (the payment of such
amount is herein  referred to as an  "Adjustment  Payment")  equal to the amount
that,  when (A)  deposited  into the Excess  Funding  Account or (B)  applied in
reduction of the related Purchaser's applicable Net Investment, will result in a
Buyer's  Percentage Factor less than or equal to the Maximum Buyer's  Percentage
Factor.  At the Transferor's  election,  such amount shall be (A) deposited into
the Excess Funding  Account or (B) applied by the applicable  Purchaser Agent to
the reduction of the related Purchaser's applicable Net Investment.

(b) If on any day any of the  representations  or  warranties  set  forth in (x)
Section 3.1 (d),  (j), (l) or (s) or Section  3.3(f) was or becomes  untrue with
respect to a Receivable or (y) Section  3.1(e) or Section  3.3(d) was or becomes
untrue with respect to the existence or amount of any  Receivable  (whether,  in
any case, on or after the date of any transfer of an interest  therein to any of
the  Purchaser  Agents,  the  Purchasers or the Bank  Investors as  contemplated
hereunder),  then  such  Receivable  shall  thereafter  not be  included  in any
calculation  of  the  outstanding  Receivables  or  the  Principal  Receivables;
provided,  however, that if such representations and warranties shall on any day
thereafter  be true and correct in all material  respects as if such  Receivable
had then been created, such Receivable shall be eligible for purchase hereunder.
If such reduction would result in a Buyer's  Percentage  Factor greater than the
Maximum  Buyer's  Percentage  Factor,  the  Transferor  shall pay (or direct the
Collection  Agent  to  pay  from  Collections  otherwise  distributable  to  the
Transferor) to each of the Purchaser  Agents its respective  Purchaser's or Bank
Investor's  Pro Rata  Share of an  amount  equal to the  amount  that,  when (A)
deposited  into the Excess  Funding  Account or (B) applied in  reduction of the
applicable Net Investment,  will result in a Buyer's Percentage Factor less than
or equal to the Maximum Buyer's Percentage Factor. At the Transferor's election,
such  amount  shall be (A)  deposited  into the  Excess  Funding  Account or (B)
applied by the applicable Purchaser Agent to the reduction of the applicable Net
Investment.

SECTION 2.10.       Payments and Computations, Etc.

                  All amounts to be paid or deposited by the  Transferor  or the
Collection  Agent  hereunder  shall be paid or deposited in accordance  with the
terms  hereof no later than 11:00 a.m.  (New York City time) on the day when due
in  immediately  available  funds;  if such amounts are payable to the Purchaser
Agents (whether on behalf of a Purchaser or any Bank Investor or otherwise) they
shall be paid or  deposited  in the account  indicated  in Section  10.3 hereof,
until otherwise  notified by the Purchaser Agents.  The Transferor shall, to the
extent  permitted by law, pay to the  Purchaser  Agents,  for the benefit of the
Purchasers and the Bank Investors upon demand,  interest on all amounts not paid
or  deposited  when due  hereunder at a rate equal to 2% per annum plus the Base
Rate. All  computations  of interest and all per annum fees  hereunder  shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed, provided, that any interest which
accrues at the Base Rate shall be  computed on the basis of a year of 365 or 366
days, as applicable, for such actual number of days elapsed. Any computations by
the  Administrative  Agent or any of the Purchaser  Agents of amounts payable by
the Transferor hereunder shall create a rebuttable presumption of correctness.

SECTION 2.11.       Reports.

(a) Prior to each Determination Date after the Closing Date,  beginning with the
January 1999 Determination  Date, the Collection Agent shall prepare and forward
to the Purchaser  Agents (i) an Investor Report as of the end of the last day of
the  immediately  preceding  month,  (ii) if requested  by any of the  Purchaser
Agents, a listing by Obligor Account Number of all Receivables  together with an
aging of such Receivables for any month and (iii) such other  information as any
of the Purchaser Agents may reasonably request.

(b) On or before  the date of an  Incremental  Transfer,  the  Transferor  shall
prepare  and  forward  to  the  Purchaser   Agents  an   Additional   Investment
Certificate, reporting the Principal Receivables, the Buyer's Percentage Factor,
the most recent Spread Account Cap Percentage  Amount,  the amount on deposit in
the Spread Account and such other information as any of the Purchaser Agents may
request as of the close of business on the  Business Day  preceding  the date of
the requested Incremental Transfer.

SECTION 2.12.       Collection Account, Spread Account and Excess Funding
Account.

(a) There shall be  established on the day of the initial  Incremental  Transfer
hereunder and maintained  with the  Administrative  Agent, a segregated  account
(the "Collection  Account"),  bearing a designation  clearly indicating that the
funds deposited therein are held for the benefit of the Administrative Agent and
the Purchaser  Agents.  The Collection  Agent shall remit daily but in any event
within forty-eight hours of receipt to the Collection  Account,  (a) if prior to
the  occurrence of a Termination  Event,  the Buyer's  Percentage  Factor of all
Finance  Charge  Collections,  and  (b)  if  on or  after  the  occurrence  of a
Termination Event, all Collections received with respect to any Receivables.  In
addition,  the Transferor  shall remit or cause to be remitted to the Collection
Account all proceeds  received by it under each Interest Rate Cap Agreement,  on
the same Business Day received by it pursuant to such agreement. For purposes of
this Section 2.12(a), the Buyer's Percentage Factor during any Collection Period
shall be the Buyer's  Percentage  Factor at the opening of business on the first
day of such Collection Period. Funds on deposit in the Collection Account (other
than  investment  earnings)  shall be  invested by the  Administrative  Agent in
Eligible Investments that will mature so that such funds will be available prior
to the Remittance  Date following such  investment (or any earlier date on which
such funds are needed pursuant to Section 2.4 hereof).  On each Remittance Date,
all interest and earnings  (net of losses and  investment  expenses) on funds on
deposit in the  Collection  Account shall be applied as if such amounts were the
Buyer's Percentage Factor of Finance Charge Collections. In addition, amounts on
deposit in the  Collection  Account  may be applied  toward  payments to be made
pursuant  to  Section  2.4.  On the date on which  the Net  Investments  and all
Aggregate  Unpaids have been paid in full, any funds remaining on deposit in the
Collection Account shall be paid to the Transferor.

(b) (i) There shall be  established on the Closing Date hereunder and maintained
with the  Administrative  Agent a segregated  account  (the  "Spread  Account"),
bearing a designation  clearly  indicating that the funds deposited  therein are
held for the benefit of the  Administrative  Agent and the Purchaser  Agents. On
each  Determination  Date,  the Spread  Account Cap  Percentage  Amount for such
Determination  Date shall be calculated by the Purchaser Agents. If the funds on
deposit  in the  Spread  Account  on such  Determination  Date are less than the
Spread Account Cap Percentage  Amount,  Collections  shall be deposited into the
Spread Account on the next succeeding Remittance Date in accordance with Section
2.5 up to the Spread Account Cap Percentage Amount.

                  (ii)  Funds on  deposit  in the  Spread  Account  (other  than
investment  earnings) shall be invested by the Administrative  Agent in Eligible
Investments  that  will  mature so that  funds  will be  available  prior to the
Remittance Date following such investment. On each Remittance Date, all interest
and earnings (net of losses and investment  expenses) on funds on deposit in the
Spread  Account shall be applied as if such amounts were the Buyer's  Percentage
Factor of Finance Charge  Collections.  On the date on which the Net Investments
and all Aggregate Unpaids have been paid in full, any funds remaining on deposit
in the Spread Account shall be paid to the Transferor.

(c) (i) There shall be  established on the Closing Date hereunder and maintained
with  the  Administrative  Agent  either a  separate,  segregated  account  or a
subaccount of the Collection Account (the "Excess Funding  Account"),  bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Administrative  Agent and the Purchaser Agents. In the event that
on any day the Buyer's  Percentage Factor exceeds the Maximum Buyer's Percentage
Factor, the Collection Agent shall remit to the Excess Funding Account an amount
of Principal  Collections which would cause the Buyer's Percentage Factor not to
exceed the Maximum Buyer's Percentage Factor.

                  (ii) Funds on deposit in the  Excess  Funding  Account  (other
than investment  earnings) shall be invested by the Administrative  Agent at the
direction of the Collection  Agent in Eligible  Investments  that will mature so
that  funds  will be  available  prior to the  Remittance  Date  following  such
investment.  On each Remittance Date, all funds on deposit in the Excess Funding
Account  shall be available  to make any  payments  required to be made from the
Excess Funding  Account in accordance with Section 2.5. On the date on which the
Net  Investments  and all  Aggregate  Unpaids have been paid in full,  any funds
remaining  on  deposit  in the  Excess  Funding  Account  shall  be  paid to the
Transferor.

(d) All payments to be made out of funds on deposit in the  Collection  Account,
Spread Account and Excess Funding Account  pursuant to Sections 2.4, 2.5 and 2.6
shall be remitted by the  Administrative  Agent  pursuant  to  instructions  and
computations  provided  by  the  Collection  Agent,  including  pursuant  to the
Investor  Reports.   The  Administrative  Agent  shall  have  no  responsibility
whatsoever for the accuracy of any such  computations  or  information  provided
pursuant to the Investor Reports.

SECTION 2.13.       Sharing of Payments, Etc.

                  If a  Purchaser  or any Bank  Investor  (for  purposes of this
Section only, being a "Recipient") shall obtain any payment (whether  voluntary,
involuntary,  through the  exercise  of any right of setoff,  or  otherwise)  on
account of Transferred Interest owned by it (other than pursuant to Section 2.7,
or Article VIII and other than as a result of the  differences  in the timing of
the applications of Collections pursuant to Section 2.5 or 2.6) in excess of its
ratable  share of payments on account of  Transferred  Interest  obtained by the
Purchasers  and/or the Bank Investors  entitled  thereto,  such Recipient  shall
forthwith  purchase from the Purchasers and/or the Bank Investors  entitled to a
share of such amount  participations  in the Percentage  Interests owned by such
Persons  as shall be  necessary  to cause  such  Recipient  to share the  excess
payment ratably with each such other Person entitled thereto; provided, however,
that if all or any portion of such excess  payment is thereafter  recovered from
such Recipient, such purchase from each such other Person shall be rescinded and
each such other Person shall repay to the Recipient  the purchase  price paid by
such Recipient for such  participation to the extent of such recovery,  together
with an amount equal to such other  Person's  ratable  share  (according  to the
proportion of (a) the amount of such other Person's  required payment to (b) the
total amount so recovered  from the  Recipient)  of any interest or other amount
paid or payable by the Recipient in respect of the total amount so recovered.

SECTION 2.14.       Right of Setoff.

(a) Without in any way  limiting the  provisions  of Section  2.13,  each of the
Purchasers and the Bank Investors is hereby authorized (in addition to any other
rights it may have) at any time after the occurrence of the earlier of a Special
Termination  Date or Termination  Date or during the  continuance of a Potential
Termination Event to setoff, appropriate and apply (without presentment,  demand
or protest,  which are hereby  expressly  waived,  but with notice (which may be
given after such  setoff,  provided  that  failure to give such notice shall not
impair  any  right of  setoff,  appropriation  or  application  hereunder))  any
deposits held by such Purchaser or such Bank Investor in the Collection Account,
the Excess Funding  Account or the Spread Account to, or for the account of, the
Transferor  against the amount of the Aggregate  Unpaids owing by the Transferor
to such Person or to any Purchaser Agent, on behalf of such Person.

(b) Each of the Transferor  and the Collection  Agent hereby waives any right of
setoff it may have or to which it may be entitled  under this  Agreement  or the
other  Transaction  Documents from time to time against any of the other parties
to this Agreement or any of their assets.

SECTION 2.15.       Special Termination Date with Respect to a Particular
Purchaser.

                  Notwithstanding  anything to the  contrary  contained  in this
Agreement,  if there shall occur a Special  Termination  Date with  respect to a
Purchaser or related Bank Investors, then, from and after such Termination Date,
(a) no further  Transfers shall be made to such Purchaser or Bank Investor,  (b)
the Pro Rata Share of such Purchaser or Bank Investor of the Buyer's  Percentage
Factor shall remain constant until the Net Investment owing to such Purchaser or
Bank Investor has been reduced to zero and the  Aggregate  Unpaids owing to such
Purchaser or Bank  Investor  have been paid in full,  (c) the  Collection  Agent
shall  distribute  Collections  to such Purchaser or Bank Investor in accordance
with the  provisions of Sections 2.5 and 2.6  applicable to a Termination  Date,
(d) in all  respects,  the  provisions  of  this  Agreement  with  respect  to a
Termination  Date  shall be  deemed  to  apply  only to such  Purchaser  or Bank
Investor,  and (e) all provisions of this  Agreement  shall continue to apply to
the other  Purchasers and Bank Investors as if no Termination  Date has occurred
with respect thereto unless and until a Termination  Date shall occur separately
with respect thereto.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                    Representations and Warranties of the Transferor.

                  The Transferor  represents and warrants to the  Administrative
Agent, Purchaser Agents, each Purchaser and the Bank Investors that:

(a)      Corporate Existence and Power.

The Transferor is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction  of  incorporation  and has all
corporate  power and all  material governmental licenses, authorizations,
consents and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Transferor  is duly  qualified  to do
business  in, and is in good  standing in, every other  jurisdiction in which
the nature of its business  requires it to be so  qualified,  except where the
failure to be so qualified or in good  standing would not have a Material
Adverse Effect.

(b)      Corporate and Governmental Authorization; Contravention.

                           The execution,  delivery and  performance  by the
Transferor of this  Agreement,  the  Receivables  Purchase
Agreement  to which it is a party,  the Fee Letter,  the PARCO Fee  Letter,  the
Sheffield Fee Letter,  the Certificate,  the Transfer  Certificate and the other
Transaction  Documents  to  which  the  Transferor  is a party  are  within  the
Transferor's  corporate  powers,  have been  duly  authorized  by all  necessary
corporate  action,  require no action by or in respect of, or filing  with,  any
Official  Body or  official  thereof  (except as  contemplated  by  Section  2.8
hereof), and do not contravene,  or constitute a default under, any provision of
applicable  law, rule or regulation or of the  Certificate of  Incorporation  or
Bylaws of the Transferor or of any agreement, judgment, injunction, order, writ,
decree or other instrument binding upon the Transferor or result in the creation
or imposition of any Adverse Claim on the assets of the Transferor or any of its
Subsidiaries (except as contemplated by Section 2.8 hereof).

(c)      Binding Effect.

                           Each of this Agreement,  the Receivables  Purchase
Agreements to which it is a party,  the Fee Letter,  the PARCO Fee Letter,
the  Sheffield  Fee Letter,  the  Certificates  and the other Transaction
Documents to which the Transferor is a party  constitutes,  and the
Transfer  Certificates  upon payment of the Transfer  Price set forth therein by
each Purchaser Agent will constitute, the legal, valid and binding obligation of
the Transferor,  enforceable against it in accordance with its terms, subject to
applicable  bankruptcy,  insolvency,  moratorium or other similar laws affecting
the rights of creditors  generally and as such  enforceability may be limited by
general  principles of equity  (whether  considered in a proceeding at law or in
equity).

(d)      Perfection.

                           Immediately  preceding  each  Transfer  hereunder,
the  Transferor  shall be the lawful owner of all of the
Receivables,  free and clear of all Adverse Claims. On or prior to each Transfer
and each recomputation of the Transferred Interest, all financing statements and
other documents required to be recorded or filed in order to perfect and protect
the  Transferred  Interest  against all  creditors  of and  purchasers  from the
Transferor,  the Initial  Purchaser  and the Seller will have been duly filed in
each filing office  necessary for such purpose and all filing fees and taxes, if
any, payable in connection with such filings shall have been paid in full.

(e)      Accuracy of Information.

                           All information  heretofore  furnished by or on
behalf of the Seller, the Collection Agent or the Transferor
(including without limitation,  the Account Schedule,  the Investor Reports, any
reports delivered pursuant to Section 2.11 hereof and the Transferor's financial
statements) to a Purchaser,  any Bank Investors, the Administrative Agent or any
of the Purchaser  Agents for purposes of or in connection with this Agreement or
any  transaction  contemplated  hereby  is, and all such  information  hereafter
furnished  by  the  Transferor  to  a  Purchaser,   any  Bank   Investors,   the
Administrative  Agent or any of the Purchaser Agents will be, true, accurate and
complete in every material  respect,  on the date such  information is stated or
certified.

(f)      Tax Status.

                           The Transferor  has filed all tax returns  (federal,
state and local)  required to be filed and has paid or
made  adequate  provision  for the payment of all taxes,  assessments  and other
governmental charges,  except to the extent it is contesting any such payment in
good faith, through appropriate  proceedings and after having set aside adequate
reserves therefor.

(g)      No Actions, Suits.

                           There are no actions,  suits or  proceedings  pending
or, to the  knowledge  of the  Transferor,  threatened
against or  affecting  the  Transferor,  the Seller or the Initial  Purchaser or
their respective properties,  in or before any court,  arbitrator or other body,
which question the validity of the  transactions  contemplated  hereby or which,
individually or in the aggregate, have or could reasonably be expected to have a
Material Adverse Effect.

(h)      Use of Proceeds.

                           No proceeds of any Transfer will be used by the
Transferor to acquire any security in any transaction  which
is subject to Section 13 or 14 of the Securities Exchange Act of 1934,
as amended.

(i)      Place of Business.

                           The principal place of business and chief  executive
office of the Transferor are located at the address of
the  Transferor  indicated  in Section  10.3  hereof and the  offices  where the
Transferor keeps all its Records, are located in Arizona, Nebraska, Oklahoma and
Minnesota  and such other  addresses as are described on Exhibit G or such other
locations  notified to the  Purchasers in accordance  with Section 2.8 hereof in
jurisdictions where all action required by Section 2.8 hereof has been taken and
completed. (j) Good Title.

                           Upon each Transfer and each recomputation of the
Transferred Interest,  the Purchaser Agents shall acquire a
valid and perfected first priority  undivided  percentage  ownership interest to
the extent of the Transferred  Interest or a first priority  perfected  security
interest  in each  Receivable  that  exists  on the  date of such  Transfer  and
recomputation  and in the Collections with respect thereto free and clear of any
Adverse Claim.

(k)      Tradenames, Etc.

                           Except as set forth on  Exhibit  H, as  amended  from
time to time, (i) the Transferor's chief executive office
is located at the address for notices set forth in Section 10.3 hereof; (ii) the
Transferor has no  subsidiaries;  and (iii) the Transferor  has, within the last
five (5) years,  operated only under its legal name,  and,  within the last five
(5) years,  has not changed its name,  merged with or into or consolidated  with
any other  corporation  or been the  subject of any  proceeding  under Title 11,
United  States Code (as  amended,  supplemented  or  otherwise  modified  and in
effect, the "Bankruptcy Code").

(l)      Nature of Receivables.

                           Each  Receivable (x)  represented by the  Transferor
or the  Collection  Agent to be an Eligible  Receivable
(including in any Investor Report or other report delivered  pursuant to Section
2.11 hereof) or (y) included in the calculation of Principal Receivables in fact
satisfies at such time the definition thereof.

(m)      Coverage Requirement; Amount of Receivables.

                           The  Buyer's  Percentage  Factor  does not exceed
the  Maximum  Buyer's  Percentage  Factor.  As of the day
preceding the Cut-Off Date, the aggregate  outstanding  balance of the Principal
Receivables in existence was $803,461,210.

(n)      Collections and Servicing.

                           Since  September 8,  1998,  there has been no
material adverse change in the ability of the Collection Agent
(to the extent it is the Seller,  the  Transferor or any  Subsidiary  or
Affiliate of any of the  foregoing) to service and collect the
Receivables.

(o)      No Termination Event.

                           No event has occurred and is continuing and no
condition exists which  constitutes a Termination  Event or a
Potential Termination Event.

(p)      Not an Investment Company.

                           The  Transferor  is not,  and is not  controlled  by,
an  "investment  company"  within  the  meaning of the
Investment Company Act of 1940, as amended,  or is exempt from all provisions of
such Act.

(q)      ERISA.

                           Each of the Transferor and its ERISA Affiliates is in
compliance in all material  respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.

(r)      Bulk Sales.

                           No transaction  contemplated  hereby or by the
Receivables  Purchase Agreements requires compliance with any
bulk sales act or similar law.

(s)      Transfers under Receivables Purchase Agreements.

                           Each  Receivable  which has been  transferred to the
Transferor by the Initial  Purchaser and to the Initial
Purchaser by the Seller has been purchased, respectively, by the Transferor from
the Initial  Purchaser and by the Initial Purchaser from the Seller pursuant to,
and in  accordance  with,  the  terms  of the  respective  Receivables  Purchase
Agreements.  The  Affected  Assets  have been  conveyed  by DMCCB to the Initial
Purchaser  pursuant to the Receivables  Purchase Agreement between DMCCB and the
Initial Purchaser.

(t)      Preference; Voidability.

                           The  Transferor  and the  Initial  Purchaser  shall
have given  reasonably  equivalent  value to the Initial
Purchaser and the Seller, respectively, in consideration for the transfer to the
Transferor  and the  Initial  Purchaser  of the  Receivables  from  the  Initial
Purchaser and the Seller,  respectively,  and each such transfer  shall not have
been made for or on account of an antecedent debt owed by the Initial  Purchaser
to the Transferor or Seller to the Initial Purchaser,  respectively, and no such
transfer is or may be voidable under any Section of the Bankruptcy Code.

(u)      Representations and Warranties of the Seller.

                           Each of the  representations and warranties of the
Seller and Initial Purchaser set forth in the Receivables
Purchase  Agreements and of the Seller,  Initial Purchaser and the Transferor in
each other  Transaction  Document are true and correct in all material  respects
and the Transferor  hereby remakes all such  representations  and warranties for
the benefit of the Purchasers,  the Bank Investors and the Purchaser Agents. Any
document,  instrument,   certificate  or  notice  delivered  to  the  Purchasers
hereunder shall be deemed a representation and warranty by the Transferor.

(v)      Year 2000 Compliance.

                           (i)      The  Transferor  has (x) initiated a review
and  assessment of all areas within its and each of its
Subsidiaries'  business and operations  (including  those affected by suppliers,
vendors  and  customers)  that  could be  adversely  affected  by the "Year 2000
Problem" (that is, the risk that computer applications used by the Transferor or
any of its Subsidiaries  (or suppliers,  vendors and customers) may be unable to
recognize and perform properly date-sensitive  functions involving certain dates
prior to and any  date  after  December  31,  1999),  (y)  developed  a plan and
timeline  for  addressing  the Year 2000 Problem on a timely  basis,  and (z) to
date,  implemented  that plan in accordance  with that  timetable.  Based on the
foregoing,  the Transferor  believes that all computer  applications  (including
those of its suppliers,  vendors and customers)  that are material to its or any
of its Subsidiaries' business and operations are reasonably expected on a timely
basis to be able to  perform  properly  date-sensitive  functions  for all dates
before and after January 1, 2000 (that is, be "Year 2000 Compliant"),  except to
that extent that a failure to do so could not reasonably be expected (A) to have
a Material Adverse Effect or (B) to result in a Termination Event.

                           (ii) The  Transferor  (x) has  completed a review and
assessment of all computer applications (including,
but not  limited to those of its  suppliers,  vendors,  customers  and any third
party  servicers),  which  are  related  to  or  involved  in  the  origination,
collection,   management  or  servicing  of  the  Receivables  (the  "Receivable
Systems") and (y) has  determined in its  reasonable  judgment  based on current
information that such Receivable Systems are Year 2000 Compliant or will be Year
2000  Compliant on or before June 1, 1999 and  thereafter,  except to the extent
that a failure to be Year 2000 Compliant could not reasonably be expected (A) to
have a Material Adverse Effect or (B) to result in a Termination Event.

                           (iii)  The  costs  of  all  assessment,  remediation,
testing and integration related to the Transferor's plan
for becoming Year 2000 Compliant will not have a Material Adverse Effect.

SECTION 3.2.        Reaffirmation of Representations and Warranties by the
Transferor.

                  On each day that a Transfer is made hereunder, the Transferor,
by accepting the proceeds of such Transfer,  whether delivered to the Transferor
pursuant  to  Section  2.2(a) or  Section  2.5  hereof,  shall be deemed to have
certified  that all  representations  and  warranties  described  in Section 3.1
hereof are  correct on and as of such day as though  made on and as of such day.
Each Incremental  Transfer shall be subject to the further conditions  precedent
that (a) prior to the date of such  Incremental  Transfer,  the Collection Agent
shall have  delivered to each of the  Purchaser  Agents,  in form and  substance
satisfactory  to  the  Purchaser  Agents,  a  completed  Additional   Investment
Certificate,  together  with such  additional  information  as may be reasonably
requested by any of the Purchaser Agents;  and the Transferor shall be deemed to
have  represented  and  warranted  that  such  conditions  precedent  have  been
satisfied and (b) all  representations  and warranties of the  Collection  Agent
shall be true and correct on and as of the date of such Incremental Transfer.

SECTION 3.3.        Representations and Warranties of the Collection Agent.

                  The   Collection   Agent   represents   and  warrants  to  the
Administrative  Agent,  Purchaser Agents,  each Purchaser and the Bank Investors
that:

(a)      Corporate Existence and Power.

                           The  Collection  Agent is a national  banking
association  duly  organized,  validly  existing  and in good
standing under the laws of the United States and has all corporate power and all
material governmental licenses, authorizations,  consents and approvals required
to carry on its  business  in each  jurisdiction  in which its  business  is now
conducted.  The Collection  Agent is duly qualified to do business in, and is in
good standing (or is exempt from such requirements) in, every other jurisdiction
in which the nature of its business requires it to be so qualified, except where
the failure to be so  qualified  or in good  standing  would not have a Material
Adverse Effect.

(b)      Corporate and Governmental Authorization; Contravention.

                           The execution,  delivery and performance by the
Collection Agent of this Agreement are within the Collection
Agent's corporate powers,  have been duly authorized by all necessary  corporate
action, require no action by or in respect of, or filing with, any Official Body
or official thereof,  and do not contravene,  or constitute a default under, any
provision  of  applicable  law,  rule  or  regulation  or  of  the  Articles  of
Association  or Bylaws of the Collection  Agent or of any  agreement,  judgment,
injunction,  order, writ, decree or other instrument binding upon the Collection
Agent or result in the creation or imposition of any Adverse Claim on the assets
of the Collection  Agent or any of its  Subsidiaries  (except as contemplated by
Section 2.8).

(c)      Binding Effect.

                           This Agreement and each other Transaction  Document
to which the Collection Agent is a party constitutes the
legal,  valid and binding  obligation of the  Collection  Agent,  enforceable in
accordance  with  its  terms,  subject  to  applicable  bankruptcy,  insolvency,
moratorium or other  similar laws  affecting the rights of creditors and as such
enforceability   may  be  limited  by  general  principles  of  equity  (whether
considered in a proceeding at law or in equity).

(d)      Accuracy of Information.

                           All  information  heretofore  furnished by the
Collection  Agent to a  Purchaser,  any Bank  Investor,  the
Administrative  Agent  or any of the  Purchaser  Agents  for  purposes  of or in
connection  with this Agreement or any transaction  contemplated  hereby is, and
all such information hereafter furnished by the Collection Agent to a Purchaser,
any Bank Investor,  the  Administrative  Agent and the Purchaser Agents will be,
true and accurate in every  material  respect,  on the date such  information is
stated or certified.

(e)      Actions, Suits.

                           There are no actions,  suits or proceedings pending,
or to the knowledge of the Collection Agent threatened,
against or affecting the Collection  Agent or its respective  properties,  in or
before any court,  arbitrator or other body,  which have or could  reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

(f)      Nature of Receivables.

                           Each Receivable included in the calculation of the
Principal  Receivables in fact satisfies at such time the
definition of "Eligible Receivable".  Each Account is either a VISA or
MasterCard account.

(g)      Amount of Receivables.

                           As of the day preceding the Cut-Off Date, the
aggregate  outstanding balance of the Principal Receivables in
existence was $803,461,210.

(h)      Collections and Servicing.

                           Since  September 8,  1998,  there has been no
material adverse change in the ability of the Collection Agent
to service and collect the Receivables.

(i)      Not an Investment Company.

                           The Collection  Agent is not, and is not controlled
by, an "investment  company"  within the meaning of the
Investment Company Act of 1940, as amended,  or is exempt from all provisions of
such Act.

(j)      Tax Status.

                           The Collection Agent has filed all tax returns
(federal,  state and local) required to be filed and has paid
or made adequate  provision for the payment of all taxes,  assessments and other
governmental charges,  except to the extent it is contesting any such payment in
good faith, through appropriate  proceedings and after having set aside adequate
reserves therefor.

(k)      ERISA.

                           The Collection Agent is in compliance in all material
respects with ERISA.

(l)      Chief Executive Office.

                           Its chief  executive  office for purposes of Article
9 of the UCC is located as specified  below its name in
Section 10.3.

(m)      Year 2000 Compliance.

                           (i)      The Collection  Agent has (x) initiated a
review and assessment of all areas within its and each of
its  Subsidiaries'   business  and  operations   (including  those  affected  by
suppliers,  vendors and customers) that could be adversely  affected by the Year
2000  Problem,  (y) developed a plan and timeline for  addressing  the Year 2000
Problem on a timely basis, and (z) to date,  implemented that plan in accordance
with that timetable.  Based on the foregoing, the Collection Agent believes that
all  computer  applications  (including  those  of its  suppliers,  vendors  and
customers)  that are  material to its or any of its  Subsidiaries'  business and
operations are reasonably  expected on a timely basis to be Year 2000 Compliant,
except to the extent  that a failure to do so could not  reasonably  be expected
(A) to have a Material Adverse Effect or (B) to result in a Termination Event.

                           (ii) The Collection  Agent (x) has completed a review
and assessment of all its Receivable Systems and
(y) has determined in its reasonable  judgment based on current information that
such  Receivable  Systems are Year 2000 Compliant or will be Year 2000 Compliant
on or before June 1, 1999 and thereafter, except to the extent that a failure to
be Year 2000 Compliant  could not be reasonably  expected (A) to have a Material
Adverse Effect or (B) to result in a Termination Event.

                           (iii)  The  costs  of  all  assessment,  remediation,
testing and integration related to the Collection
Agent's plan for becoming Year 2000 Compliant  will not have a Material  Adverse
Effect.


                                   ARTICLE IV

                              CONDITIONS PRECEDENT

                    Conditions to Closing.

                  On or prior to the date of execution  hereof,  the  Transferor
shall deliver to the Administrative Agent and the Purchaser Agents the following
documents,  instruments  and fees, all of which shall be in a form and substance
acceptable to the Administrative Agent and the Purchaser Agents:

(a) A copy of the  resolutions  of the  Board  of  Directors  of the  Transferor
certified by its Secretary approving the execution,  delivery and performance by
the Transferor of this Agreement, the Receivables Purchase Agreement to which it
is a party and the other Transaction Documents to be delivered by the Transferor
hereunder or thereunder.

(b) A copy of the  resolutions  of the Board of  Directors of each of the Seller
and the Initial Purchaser,  certified by its Secretary, approving the execution,
delivery  and  performance  by the  Seller  and the  Initial  Purchaser  of this
Agreement,  the  Receivables  Purchase  Agreements  and the  other  Transactions
Documents to be delivered by the Seller and the Initial  Purchaser  hereunder or
thereunder.

(c)  The  Certificate  of  Incorporation  of  the  Transferor  certified  by the
Secretary of State or other similar official of the Transferor's jurisdiction of
incorporation.

(d) The  Articles  of  Association  of the  Seller,  certified  by the  Seller's
corporate  secretary,  and  the  Certificate  of  Incorporation  of the  Initial
Purchaser,  certified by the Secretary of State or other similar official of the
Initial Purchaser's jurisdiction of incorporation.

(e) A Good Standing  Certificate  for the Transferor  issued by the Secretary of
State or a similar official of the Transferor's  jurisdiction of  incorporation,
dated a date reasonably prior to the Closing Date.

(f) A  Good  Standing  Certificate  for  the  Initial  Purchaser  issued  by the
Secretary of State or a similar official of its  jurisdiction of  incorporation,
dated a date reasonably prior to the Closing Date.

(g) A Certificate of an officer of the Transferor,  Seller and Initial Purchaser
as to the truth of  representations  and  warranties on the Closing Date,  and a
certificate of the Secretary of each of the  Transferor,  Seller and the Initial
Purchaser as to the incumbency of all officers signing Transaction  Documents on
their behalf,  with such attachments,  and including such other matters,  as are
requested by the Administrative Agent or any of the Purchaser Agents.

(h) Copies of proper financing  statements (Form UCC-1), dated a date reasonably
near to the date of the initial  Incremental  Transfer  naming the Transferor as
the debtor in favor of the Purchaser  Agents,  for the benefit of the Purchasers
and the  Bank  Investors,  as  secured  party or other  similar  instruments  or
documents  as may be  necessary or in the  reasonable  opinion of the  Purchaser
Agents  desirable  under  the  UCC  of  all  appropriate  jurisdictions  or  any
comparable law to perfect the Purchaser Agents' undivided percentage interest in
all Receivables, Related Security, Collections and Proceeds relating thereto.

(i) Copies of proper financing statements (Form UCC-1), (x) naming the Seller as
the debtor in favor of the Initial Purchaser as secured party,  which were filed
in respect of the Receivables  Purchase Agreement between such parties,  and (y)
dated a date  reasonably near to the date of the initial  Incremental  Transfer,
naming the Initial Purchaser as the debtor in favor of the Transferor as secured
party,  or other similar  instruments or documents as may be necessary or in the
reasonable  opinion  of  the  Administrative  Agent  and  the  Purchaser  Agents
desirable under the UCC of all appropriate  jurisdictions  or any comparable law
to perfect the Transferor's and the Initial  Purchaser's  ownership  interest in
all Receivables, Related Security, Collections and Proceeds.

(j) Copies of proper  financing  statements (Form UCC-3),  if any,  necessary to
terminate all security  interests and other rights of any person in  Receivables
previously granted by Transferor.

(k) Copies of proper  financing  statements (Form UCC-3),  if any,  necessary to
terminate all security  interests and other rights of any person in  Receivables
previously granted by PNC, the Seller or the Initial Purchaser.

(l)  Certified  copies of request for  information  (Form  UCC-11) (or a similar
search report certified by parties  acceptable to the  Administrative  Agent and
the  Purchaser  Agents)  dated a date  reasonably  near the date of the  initial
Incremental  Transfer listing all effective financing  statements which name the
Transferor,  the Seller or the Initial Purchaser (under their respective present
names and any previous names) as debtor and which are filed in  jurisdictions in
which the filings  were made  pursuant to items (h) or (i) above  together  with
copies of such financing  statements  (none of which shall cover any Receivables
or Accounts except for those referred to in clause (i)(x) above).

(m) An opinion of in-house counsel to the Transferor,  the Collection Agent, the
Seller  and  the  Initial  Purchaser,  covering  the  matters  requested  by the
Administrative Agent and the Purchaser Agents.

(n) A copy of an executed  notice to Bank of New York excluding the  Receivables
from being conveyed pursuant to a certain receivables purchase agreement between
the Initial Purchaser and Metris Receivables, Inc.

(o) An  opinion  of Dorsey & Whitney  LLP,  counsel  to the  Transferor  and the
Initial  Purchaser,  covering  certain  bankruptcy and insolvency  matters (i.e.
"true sale" and "non-consolidation").

(p) An  opinion of  O'Connor,  Cavanagh,  Anderson,  Killingsworth  &  Beshears,
special Arizona counsel to the Seller,  as to the perfection and priority of the
ownership or security interests created under the Receivables Purchase Agreement
between the Seller and the Initial Purchaser and the Assignment.

(q) (i) An opinion of Dorsey & Whitney  LLP,  counsel to the  Seller,  as to the
enforceability  of  any  security  interest  referred  to in  clause  (p)  above
notwithstanding  any insolvency of the Seller and (ii) an officer's  certificate
delivered  by  an  officer  of  PNC  as  to  certain   facts   relevant  to  the
enforceability  of  the  security  interest  created  under  the  PNC  Agreement
notwithstanding any insolvency of PNC.

(r) Opinions of Dorsey & Whitney LLP,  counsel to the Initial  Purchaser and the
Transferor,  covering  the (i)  perfection  and  priority  of the  ownership  or
security  interests under this Agreement,  the PNC Agreement and the Receivables
Purchase  Agreement  between  the Initial  Purchaser  and the  Transferor,  (ii)
creation of the ownership or security  interests under the Receivables  Purchase
Agreement between DMCCB and the Initial Purchaser and (iii) the characterization
of the Receivables as accounts or general intangibles.

(s) Opinions of counsel to PNC and the Seller  regarding the  enforceability  of
the PNC Agreement against PNC and the Seller, respectively.

(t) A computer tape (to the  Administrative  Agent only) setting forth as of the
Cut-Off Date all Receivables and the Receivables balances thereon and such other
information as the  Administrative  Agent or any Purchaser  Agent may reasonably
request.

(u) An executed copy of this Agreement, the Receivables Purchase Agreements, the
Fee Letter, the PARCO Fee Letter, the Sheffield Fee Letter, the Assignment,  the
Asset  Purchase  Agreement,  the  Sheffield  Agreement  and  each  of the  other
Transaction Documents to be executed by the Seller, the Initial Purchaser or the
Transferor.

(v)      The Transfer Certificates, duly executed by the Transferor.

(w)      The Certificates, duly executed by the Transferor and appropriately
completed.

(x)      The Additional Investment Certificate, duly executed by the Transferor.

(y)  Evidence  that the fees due and  owing on the  Closing  Date  under the Fee
Letter, the PARCO Fee Letter and the Sheffield Fee Letter have been paid.

(z)  Evidence  that the Spread  Account,  the  Excess  Funding  Account  and the
Collection  Account have been  established  in accordance  with Section  2.12(b)
hereof.

(aa)     All documents pursuant to which the Receivables have been sold by PNC
to the Seller.

(bb) PARCO shall have received  letters from each of the Rating  Agencies (other
than Fitch) confirming the rating of PARCO's  Commercial Paper after taking into
effect PARCO's execution and performance of this Agreement.

(cc) Sheffield  shall have received a letter from Moody's  confirming the rating
of Sheffield's  Commercial Paper after taking into effect Sheffield's  execution
and performance of this Agreement.

(dd)     Assignment by DMCCB to MCI, by MCI to the Transferor and by the
Transferor to  NationsBank,  as  Administrative  Agent, of the
Assigned Rights.

(ee) Substantially  simultaneously with the execution hereof,  evidence that the
proceeds of a cash capital  contribution in the amount of at least  $200,000,000
made to the Initial  Purchaser by Thomas H. Lee Equity Fund IV, L.P. and certain
of its  affiliates  have been  transferred  by wire  transfer  to PNC in partial
payment of the purchase price payable by DMCCB under the PNC Agreement.

(ff) A letter  agreement (the "PNC  Consent")  pursuant to which PNC consents to
the assignment by DMCCB of the Assigned Rights.

(gg)     A draft confirmation with respect to the Interest Rate Cap in effect
on the Closing Date.

(hh)  Such  other  documents,  instruments,  certificates  and  opinions  as the
Administrative Agent and the Purchaser Agents shall reasonably request.


                                    ARTICLE V

                                    COVENANTS

                    Affirmative Covenants of Transferor.

                  At all times from the date hereof to the later to occur of (i)
the Termination Date (ii) a Special  Termination Date or (iii) the date on which
the Net Investments  have been reduced to zero and all other  Aggregate  Unpaids
shall  have  been paid in full,  in cash,  unless  the  Purchaser  Agents  shall
otherwise consent in writing:

(a)      Financial Reporting.

                           The Transferor will maintain,  for itself and each of
its Subsidiaries,  a system of accounting  established
and administered in accordance with GAAP, and furnish or cause to be furnished
to the Purchaser Agents:

(i)      Annual Reporting.

         Within one hundred  (100) days after the close of the Initial
         Purchaser's  fiscal  years,  audited financial   statements,
         prepared  in   accordance   with  GAAP  on  a
         consolidated  basis for the Initial Purchaser and its Subsidiaries,  in
         each  case,  including  balance  sheets  as of the end of such  period,
         related statements of income and cash flows,  accompanied by an opinion
         (which shall not be qualified in any material  respect) of a "Big Five"
         independent  certified public  accounting firm,  prepared in accordance
         with generally accepted auditing standards and by a certificate of said
         accountants that, in the course of the foregoing, they have obtained no
         knowledge of any Termination Event or Potential  Termination  Event, or
         if,  in the  opinion  of such  accountants,  any  Termination  Event or
         Potential  Termination Event shall exist, stating the nature and status
         thereof.

(ii)     Quarterly Reporting.

         Within  fifty  (50) days  after  the close
         of the first  three  quarterly  periods  of the  Initial
         Purchaser's   fiscal   years,   for  the  Initial   Purchaser  and  its
         Subsidiaries, in each case, consolidated unaudited balance sheets as at
         the close of each such period and  consolidated  related  statements of
         income and cash flows for the period from the  beginning of such fiscal
         year  to the end of  such  quarter,  all as  contained  in the  Initial
         Purchaser's filing with the Securities and Exchange  Commission on Form
         10-Q.

(iii)    Compliance Certificate.

         Together with the financial statements required hereunder,  a
         compliance  certificate signed by the
         Initial  Purchaser's  chief  financial  officer  stating  that  (x) the
         attached  financial  statements  have been prepared in accordance  with
         GAAP and  accurately  reflect the  financial  condition  of the Initial
         Purchaser  and its  Subsidiaries  and (y) to the best of such  Person's
         knowledge,  no Termination Event or Potential Termination Event exists,
         or if any  Termination  Event or Potential  Termination  Event  exists,
         stating the nature and status thereof.

(iv)     Notice of Termination Events or Potential Termination Events.

         As soon as possible  and in any event
         within two (2) Business  Days after the  occurrence  of each
         Termination Event or each Potential  Termination  Event, a statement of
         the  chief  financial  officer  or  chief  accounting  officer  of  the
         Transferor setting forth details of such Termination Event or Potential
         Termination Event and the action which the Transferor  proposes to take
         with respect thereto.

(v)      Debt Ratings.

         Within five (5) days after the date of any
         change in the Transferor's,  the Seller's or the Initial
         Purchaser's  public  or  private  debt  ratings,   if  any,  a  written
         certification  of  the  Transferor's,   the  Seller's  or  the  Initial
         Purchaser's  public and private debt ratings after giving effect to any
         such change.

(vi)     ERISA.

         Promptly after the filing or receiving
         thereof,  copies of all reports and notices with respect to
         any  Reportable  Event (as  defined in  Article IV of ERISA)  which the
         Transferor, the Initial Purchaser, the Seller or any ERISA Affiliate of
         the Transferor,  the Initial  Purchaser or the Seller files under ERISA
         with  the  Internal  Revenue  Service,  the  Pension  Benefit  Guaranty
         Corporation  or the U.S.  Department of Labor or which the  Transferor,
         the  Initial  Purchaser,  the  Seller  or any ERISA  Affiliates  of the
         Transferor,  the Initial  Purchaser,  or the Seller  receives  from the
         Internal Revenue Service,  the Pension Benefit Guaranty  Corporation or
         the U.S. Department of Labor.

(vii) Year 2000 Reporting.

         The  certificate  referred to in Section
         5.1(m)(ii) as and when required to be delivered and shall
         cause the Collection  Agent to deliver the  certificate  referred to in
         Section 5.3(e) as and when required to be delivered.

(viii) Litigation.

         Promptly upon the commencement thereof, notice of all legal or arbitral
         proceedings and of all proceedings by or before any  governmental  or
         regulatory  authority or agency,  and  (promptly  upon the  occurrence
         thereof) of any material development  in respect of such legal or other
         proceedings,  affecting the Transferor.

(ix)     Other Information.

         Such other information  (including  non-financial  information) as
         the Administrative Agent and the Purchaser Agents may from time to time
         reasonably  request with respect to the Seller, the Initial Purchaser,
         the Transferor or any Subsidiary of any of the foregoing.

(b)      Conduct of Business.

The Transferor will carry on and conduct its business in substantially  the same
manner and in substantially the same fields of  enterprise  as it is presently
conducted,  and will do, and cause the Initial Purchaser and the Seller to do,
all things necessary to remain duly  incorporated,  validly  existing  and  in
good  standing  as  a  domestic corporation  in its  jurisdiction  of
incorporation  and maintain all requisite authority to conduct its business in
each  jurisdiction in which its business is conducted.

(c)      Compliance with Laws.

The Transferor will, and will cause each of the Seller and the Initial
Purchaser to, comply in all material respects  with  all  laws,  rules,
regulations,   orders,  writs,   judgments, injunctions,  decrees or awards to
which it or its respective  properties may be subject,  where the failure to
comply  with the  foregoing  could be  reasonably expected to have a Material
Adverse Effect.

(d)      Furnishing of Information and Inspection of Records.

The  Transferor  will,  and  will  cause  each of the  Seller  and the  Initial
Purchaser,  furnish  to the Administrative Agent and the Purchaser Agents from
time to time such information with  respect  to the  Receivables  as the
Administrative  Agent  or any of the Purchaser Agents may reasonably request,
including, without limitation, listings identifying the Obligor and the
outstanding  balance for each  Receivable.  The Transferor will, and will cause
each of the Seller and the Initial Purchaser to, at any time and from  time to
time  during  regular  business  hours  and  after reasonable notice permit the
Administrative  Agent and the Purchaser Agents, or their respective  agents or
representatives,  (i) to examine and make copies of and take abstracts from all
Records and (ii) to visit the offices and properties
of the Transferor,  the Initial Purchaser or the Seller, as applicable,  for the
purpose  of  examining  such  Records,   and  to  discuss  matters  relating  to
Receivables  or the  Transferor's,  the  Initial  Purchaser's  or  the  Seller's
performance  hereunder and under the other  Transaction  Documents to which such
Person is a party with any of the officers, directors,  employees or independent
public  accountants of the Transferor,  the Initial  Purchaser or the Seller, as
applicable, having knowledge of such matters.

(e)      Keeping of Records and Books of Account.

The  Transferor  will,  and will cause the  Initial  Purchaser  and the Seller
to,  maintain  and  implement administrative  and operating  procedures
(including,  without  limitation,  an ability  to  recreate  records  evidencing
Receivables  in  the  event  of  the
destruction  of the originals  thereof),  and keep and maintain,  all documents,
books,  records and other information  reasonably necessary or advisable for the
collection of all Receivables (including,  without limitation,  records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).

(f) Performance and Compliance with Receivables and Accounts.

The Transferor,  at its expense,  will, and will cause the Seller and
Initial Purchaser to, timely and fully
perform and comply with all material  provisions,  covenants and other  promises
required to be observed by the Transferor, Initial Purchaser or the Seller under
the Accounts related to the Receivables.

(g)      Credit and Collection Policies.

                           The  Transferor  will,  and will  cause  the  Seller,
Initial Purchaser and the Collection Agent to, comply with
the Credit and Collection  Policy in regard to the  Receivables  and the related
Accounts,  except  insofar as any failure to so comply  could not be  reasonably
expected to impair the  collectibility  of the  Receivables,  on the whole, or a
substantial amount thereof, or otherwise have a Material Adverse Effect.

(h)      Collections Received.

                           The Transferor  shall,  and shall cause the Seller
and the Collection  Agent to, hold in trust, and deposit,
immediately,  but in any event  not later  than  forty-eight  (48)  hours of its
receipt thereof, to the Collection Account all Collections received from time to
time by the Transferor,  Initial Purchaser or the Seller, as the case may be, in
accordance with Section 2.12(a).

(i)      Sale Treatment.

                           The  Transferor  will not (i) and will not permit the
Seller or the Initial  Purchaser  to,  account for, or
otherwise  treat,  the  transactions  contemplated by the  Receivables  Purchase
Agreements  in any manner other than as a sale of  Receivables  by the Seller to
the Initial  Purchaser or by the Initial  Purchaser to the  Transferor,  or (ii)
account for (other than for tax  purposes) or otherwise  treat the  transactions
contemplated  hereby in any manner  other than as a sale of  Receivables  by the
Transferor  to the  Purchaser  Agents,  on behalf of the  Purchasers or the Bank
Investors, as applicable. In addition, the Transferor shall, and shall cause the
Seller and the Initial  Purchaser  to,  disclose (in a footnote or otherwise) in
all of their  respective  financial  statements  (including  any such  financial
statements  consolidated  with any  other  Persons'  financial  statements)  the
existence  and  nature  of  the  transaction  contemplated  hereby  and  by  the
Receivables  Purchase Agreements and the interest of the Transferor (in the case
of the Initial  Purchaser's  financial  statements) and the Purchaser Agents, on
behalf of the Purchasers and the Bank Investors, in the Affected Assets.

(j)      Separate Existence

The  Transferor  shall at all times (a) to the extent
the  Transferor's  office is located in the offices of
the Seller,  Metris Direct,  or any Affiliate of Metris Direct,  pay fair market
rent for its executive office space located in the offices of the Seller, Metris
Direct,  or any Affiliate of Metris  Direct,  (b) have at all times at least two
members of its board of directors  which are not and have never been  employees,
officers or directors of the Seller,  Metris Direct,  or any Affiliate of Metris
Direct,  or of any creditor of the Seller,  Metris  Direct,  or any Affiliate of
Metris  Direct  (other than any  special  purpose  corporations  which have been
established  by the Initial  Purchaser or any of its  Affiliates in  conjunction
with the  securitization  by the Initial  Purchaser or any of its  Affiliates of
credit card  receivables)  and are persons who are familiar and have  experience
with asset  securitization,  (c)  maintain  the  Transferor's  books,  financial
statements,  accounting  records  and  other  corporate  documents  and  records
separate  from  those of the  Seller,  Metris  Direct,  or any other  entity and
maintain separate accounts, (d) not commingle the Transferor's assets with those
of the  Seller or any other  entity,  (e) act solely in its  corporate  name and
through its own authorized officers and agents, (f) make investments directly or
by brokers  engaged and paid by the  Transferor or its agents  (provided that if
any such agent is an Affiliate of the  Transferor it shall be  compensated  at a
fair market  rate for its  services),  (g)  separately  manage the  Transferor's
liabilities from those of the Seller, Metris Direct, or any Affiliates of Metris
Direct, and pay its own liabilities, including all administrative expenses, from
its own  separate  assets,  except  that the Seller  may pay the  organizational
expenses of the Transferor, (h) pay from the Transferor's assets all obligations
and indebtedness of any kind incurred by the Transferor, and (i) take no actions
which may mislead  third  parties as to the separate  corporate  identities  and
separate  assets and  liabilities  of the  Seller,  Metris  Direct,  the Initial
Purchaser,  and the  Transferor.  The  Transferor  shall abide by all  corporate
formalities,  including  the  maintenance  of  current  minute  books,  and  the
Transferor  shall cause its  financial  statements  to be prepared in accordance
with  generally  accepted  accounting  principles in a manner that indicates the
separate  existence  of the  Transferor  and its  assets  and  liabilities.  The
Transferor shall (i) pay all its liabilities, (ii) not assume the liabilities of
the Seller,  Metris Direct,  or any Affiliate of Metris  Direct,  (iii) not lend
funds or extend credit to the Seller and (iv) not guarantee the  liabilities  of
the Seller,  Metris Direct, or any Affiliates of Metris Direct. The officers and
directors of the Transferor (as  appropriate)  shall make decisions with respect
to the business and daily  operations of the  Transferor  independent of and not
dictated  by any  controlling  entity.  The  Transferor  shall not engage in any
business not permitted by its Certificate of Incorporation.

(k)      Corporate Documents.

                           The Transferor  shall not amend,  alter or change (i)
Article III, VI, X, XI, XII or XIV of its Certificate
of Incorporation, (ii) any provision of the agreement mentioned in clause (b) of
the  definition  of  "Receivables  Purchase  Agreements"  or (iii) the agreement
mentioned in clause (a) of the definition of "Receivables  Purchase  Agreements"
if such amendment,  alteration,  or change to such agreement referred to in such
clause  (a)  could  have  an  adverse  effect  on  the   collectibility  of  the
Receivables,  the interests of the  Administrative  Agent,  any of the Purchaser
Agents, the Purchasers or the Bank Investors,  without,  in each case, the prior
written  consent of the  Administrative  Agent and the Purchaser  Agents,  which
consent shall not be unreasonably withheld.

(l)      Payment to the Initial Purchaser.

                           With respect to any Receivable sold by the Initial
Purchaser to the Transferor,  the Transferor  shall, and
shall cause the Initial  Purchaser to,  effect such sale under,  and pursuant to
the terms of, the applicable Receivables Purchase Agreement,  including, without
limitation,  the payment by the  Transferor to the Initial  Purchaser and by the
Initial  Purchaser to the Seller of the purchase  price for such  Receivable  as
required by the terms of the applicable Receivables Purchase Agreement.

(m)      Year 2000 Compliance.

                           (i)      The Transferor will promptly notify the
Administrative  Agent and the Purchaser Agents in the event
the Transferor discovers or determines that any computer application  (including
those of its  suppliers,  vendors and  customers)  (x) that is necessary for the
origination, collection, management, or servicing of the Receivables will not be
Year 2000  Compliant  on or before June 1, 1999 and  thereafter,  or (y) that is
otherwise  material to its or any of its  Subsidiaries'  business and operations
will not be Year 2000 Compliant on a timely basis, except to the extent that, in
the case of (y) above, such failure could not reasonably be expected (A) to have
a Material Adverse Effect or (B) to result in a Termination Event.

                           (ii)   Further,    the   Transferor    will   deliver
simultaneously with any quarterly or annual financial
statements or reports to be delivered under this Agreement, a certificate signed
by its chief financial  officer that no material  event,  problems or conditions
have occurred which in the opinion of management would (x) prevent or materially
delay the  Transferor's  plan to become Year 2000  Compliant  or (y) cause or be
likely to cause the Transferor's  representations and warranties with respect to
being or becoming Year 2000 Compliant no longer to be true.

(n)      Interest Rate Caps.

                           (i)      The Transferor will obtain and at all times
prior to a date (the "Cap  Termination  Date") which is
twenty-seven   months  after  the  later  of  a  Special  Termination  Date  and
Termination  Date,  as each may be extended,  maintain one or more interest rate
caps  (collectively,  "Interest  Rate  Caps"),  the  notional  amounts of which,
individually or in the aggregate,  shall equal or exceed the outstanding balance
of the Net  Investments.  Pursuant to the Interest Rate Caps, on each Remittance
Date on which the LIBOR Cap Rate for a related  Collection Period exceeds 7.35%,
the  Interest  Rate Cap  Provider  will make a payment to the  Transferor  in an
amount equal to the product of (i) such excess,  (ii) the notional  amount as of
such  Remittance  Date  and  (iii)  the  actual  number  of days in the  related
Collection  Period  divided by 360. The Interest Rate Caps will terminate on the
Cap  Termination  Date;  provided,  however,  that the Interest Rate Caps may be
terminated  at an earlier  date if the  Transferor  has  obtained  a  substitute
interest rate cap or entered into an alternative arrangement satisfactory to the
Purchaser  Agents and each Rating Agency then rating the Commercial Paper of any
Purchaser,  which in each case will not result in the reduction or withdrawal of
the rating of any such Commercial  Paper (such  substitute  interest rate cap, a
"Replacement  Interest Rate Cap";  such  alternative  arrangement,  a "Qualified
Substitute Arrangement").

                           (ii) In the event  that the  rating  of the  Interest
Rate Cap Provider is reduced or withdrawn, as
specified in the Interest Rate Caps,  the  Transferor  will obtain for each such
Interest  Rate Cap a  Replacement  Interest  Rate Cap, or enter into a Qualified
Substitute Arrangement. It shall be a condition to any such Replacement Interest
Rate Cap or  Qualified  Substitute  Arrangement  that there be  delivered to the
Purchaser  Agents an Officer's  Certificate by the  Transferor  stating that the
conditions  to such  substitution  set forth in this  Section  5.1(n)  have been
satisfied.

                           (iii) Each Interest  Rate Cap Agreement  will provide
that payments due to the Transferor shall be
deposited into the Collection Account.

                           (iv) The  Transferor  agrees  to  notify  the  Rating
Agencies rating the Commercial Paper of any Purchaser
of any assignment by an Interest Rate Cap Provider and shall,  prior to amending
any  Interest  Rate Cap  Agreement,  obtain  confirmation  from each such Rating
Agency that such amendment will not result in the reduction or withdrawal of the
rating of any such Commercial Paper.

                           (v) Within five Business Days after the Closing Date,
the Transferor shall deliver to the Purchaser
Agents and the Rating  Agencies a fully  executed  Interest  Rate Cap  Agreement
satisfactory  to the Rating  Agencies  and all fees  payable  by the  Transferor
thereunder to the Interest Rate Cap Provider shall have been  contributed to the
capital of the Transferor by MCI and paid by the Transferor to the Interest Rate
Cap Provider.

SECTION 5.2.        Negative Covenants of the Transferor.

                  At all times from the date hereof to the later to occur of (i)
the Termination Date, (ii) a Special Termination Date or (iii) the date on which
the Net Investments  have been reduced to zero and all other  Aggregate  Unpaids
shall  have  been paid in full,  in cash,  unless  the  Purchaser  Agents  shall
otherwise consent in writing:

(a)      No Sales, Liens, Etc.

                           Except as otherwise  provided herein and in the
Receivables  Purchase  Agreements,  the Transferor will not,
and will not permit the Initial  Purchaser  or the Seller to,  sell,  assign (by
operation of law or otherwise)  or otherwise  dispose of, or create or suffer to
exist any Adverse Claim upon (or the filing of any financing  statement) or with
respect to any of the Affected Assets,  or assign any right to receive income in
respect thereof.

(b)      No Extension or Amendment of Receivables.

                           The  Transferor  will not,  and will not  permit  the
Seller or Initial Purchaser to, extend, amend or otherwise
modify  the  terms of any  Receivable,  or  amend,  modify  or waive any term or
condition  of any Account  related  thereto if such action could have a Material
Adverse  Effect.  The Transferor  further  covenants  that,  except as otherwise
required  by law (or as is  deemed  by the  Seller or  Initial  Purchaser  to be
necessary in order to maintain its credit card business on a competitive basis),
it shall not, and shall not cause or otherwise  permit the  Collection  Agent or
Initial Purchaser at any time to reduce the periodic finance charges assessed on
any  Receivable or other fees on any Account if, as a result of such  reduction,
the  reasonable  expectation  of the Excess Spread as of such date would be less
than 2.00% and unless (i) such  reduction is made  applicable to the  comparable
segment of the  consumer  revolving  credit  accounts  owned and serviced by the
Collection Agent that have characteristics the same as, or substantially similar
to, the Accounts  that are the subject of such change or (ii) if it does not own
such a comparable  segment,  it will not make any such change with the intent to
materially benefit itself over the Purchasers and the Bank Investors.

(c)      No Change in Business or Credit and Collection Policy.

                           The  Transferor  will not make any change in the
character of its business or in the Credit and  Collection
Policy,  which change would, in either case,  impair the  collectibility  of the
Receivables or otherwise have a Material Adverse Effect.

(d)      No Mergers, Etc.

                            The  Transferor  will  not,  and  except  as
otherwise  permitted  pursuant  to the  Receivables  Purchase
Agreements, will not permit the Seller to, (i) consolidate or merge with or into
any other Person,  or (ii) sell, lease or transfer all or  substantially  all of
its assets to any other Person,  except that the Seller may consolidate or merge
with or into any other Person if (a) the Seller is the surviving corporation, or
the entity or Person formed by or surviving any such consolidation or merger (if
other than the Seller) or to which such sale,  lease or transfer shall have been
made is a corporation organized or existing under the laws of the United States,
any state  thereof or the District of Columbia;  (b) the entity or Person formed
by or surviving any such  consolidation  or merger (if other than the Seller) or
the entity or Person to which such sale, lease, or transfer shall have been made
assumes all the  obligations of the Seller,  respectively,  under this Agreement
and the  other  Transaction  Documents  pursuant  to an  agreement  in form  and
substance  satisfactory to the Purchaser Agents;  and (c) immediately after such
transaction,  no Potential  Termination  Event or Termination  Event will result
therefrom.

(e)      Change of Name, Etc.

                           The  Transferor  will not, and will not permit the
Seller to, change its name,  identity or structure or the
location  of its chief  executive  office,  unless at least 10 days prior to the
effective date of any such change the  Transferor or the Seller,  as applicable,
delivers to the  Administrative  Agent and the Purchaser  Agents such documents,
instruments  or  agreements,  executed  by  the  Transferor  or the  Seller,  as
applicable,  as are  necessary  to  reflect  such  change  and to  continue  the
perfection of the Purchaser Agents' ownership interests or security interests in
the Affected Assets.

(f)      Amendment to Transaction Documents.

                           The Transferor  will not, and will not permit the
Seller to, amend,  modify,  or supplement the  Transaction
Documents  or waive any  provision  thereof,  in each case except with the prior
written  consent of the  Administrative  Agent and the  Purchaser  Agents (which
shall not be unreasonably  withheld);  nor shall the Transferor  take, or permit
the Seller to take, any other action under the Transaction  Documents that shall
have a material adverse affect on the Administrative Agent, any of the Purchaser
Agents, a Purchaser or any Bank Investor or which is inconsistent with the terms
of this Agreement.

(g)      Other Debt.

                           Except as  provided  for  herein,  the  Transferor
will not  create,  incur,  assume or suffer to exist any
indebtedness,  whether current or funded,  or any other liability other than (i)
indebtedness  of the  Transferor  representing  fees,  expenses and  indemnities
arising hereunder or under the Receivables  Purchase  Agreement to which it is a
party for the purchase price of such Receivables under the Receivables  Purchase
Agreements,  and (ii) other indebtedness  incurred in the ordinary course of its
business in an amount not to exceed $9,750 at any time outstanding.

(h)      ERISA Matters.

                           The  Transferor  will not, and will not permit the
Seller or the Initial  Purchaser to, (i) engage or permit
any of its respective ERISA  Affiliates to engage in any prohibited  transaction
(as  defined in Section  4975 of the Code and Section 406 of ERISA) for which an
exemption is not  available or has not  previously  been  obtained from the U.S.
Department of Labor; (ii) permit to exist any accumulated funding deficiency (as
defined in Section  302(a) of ERISA and  Section  412(a) of the Code) or funding
deficiency  with  respect to any Benefit Plan other than a  Multiemployer  Plan;
(iii) fail to make any payments to any  Multiemployer  Plan that the Transferor,
the Seller, the Initial Purchaser or any ERISA Affiliate of the Transferor,  the
Initial Purchaser or the Seller is required to make under the agreement relating
to such  Multiemployer  Plan or any law pertaining  thereto;  (iv) terminate any
Benefit  Plan so as to  result  in any  liability;  or (v)  permit  to exist any
occurrence  of any  reportable  event  described  in  Title  IV of  ERISA  which
represents a material  risk of a liability to the  Transferor,  the Seller,  the
Initial  Purchaser  or any  ERISA  Affiliate  of  the  Transferor,  the  Initial
Purchaser or the Seller under ERISA or the Code.

(i)      Performance of Account Agreements.

                           The  Transferor  shall not,  and shall not permit the
Seller or Initial Purchaser to fail to comply with and
perform its obligations under the applicable Account Agreements  relating to the
Accounts and the Credit and Collection Policy except insofar as any such failure
to comply or perform would not materially  and adversely  affect the rights of a
Purchaser,  the  Administrative  Agent,  any of the Purchaser Agents or any Bank
Investor  in the  Receivables  or the  collectibility  of the  Receivables.  The
Transferor  shall not, and shall not permit the Seller or Initial  Purchaser to,
change  the terms and  provisions  of the  Account  Agreement  or the Credit and
Collection Policy in any respect (including, without limitation, the calculation
of the amount, and the timing, of uncollectible  Receivables) with the intent to
materially benefit itself over a Purchaser, the Administrative Agent, any of the
Purchaser  Agents or any Bank  Investor,  unless such change does not materially
and adversely affect the rights of a Purchaser, the Administrative Agent, any of
the  Purchase   Agents  or  any  Bank  Investor  in  the   Receivables   or  the
collectibility of the Receivables.

SECTION 5.3.        Affirmative Covenants of the Collection Agent.

                  At all times from the date hereof to the later to occur of (i)
the Termination Date, (ii) a Special Termination Date or (iii) the date on which
the Net Investments  have been reduced to zero and all other  Aggregate  Unpaids
shall  have  been paid in full,  in cash,  unless  the  Purchaser  Agents  shall
otherwise consent in writing:

(a)      Conduct of Business.

                           The  Collection  Agent  shall carry on and conduct
its  business  in  substantially  the same manner and in
substantially the same fields of enterprise as it is presently  conducted and do
all things  necessary  to remain duly  chartered,  validly  existing and in good
standing as a national banking  association and maintain all requisite authority
to conduct its business in each jurisdiction in which its business is conducted.

(b)      Compliance with Laws.

                           The  Collection  Agent shall  comply in all  material
respects with all laws, rules, regulations, orders,
writs, judgments,  injunctions,  decrees or awards to which it or its properties
may be subject  which  pertain to its duties  hereunder  and shall  maintain  in
effect all material  qualifications  required by law to service the  Receivables
and Accounts properly.

(c)      Furnishing of Information and Inspection of Records.

                           The   Collection   Agent   shall   furnish   to   the
Administrative Agent and the Purchaser Agents from time to time
such information with respect to the Receivables as the Administrative Agent and
the Purchaser  Agents may reasonably  request,  including,  without  limitation,
listings  identifying the Obligor by Account number and the outstanding  balance
for each  Receivable.  The Collection  Agent shall, at any time and from time to
time  during  regular  business  hours and upon  reasonable  notice  permit  the
Administrative   Agent,  any  of  the  Purchaser   Agents,   or  its  agents  or
representatives,  (i) to examine and make copies of and take  abstracts from all
Records and (ii) to visit the offices and properties of the Collection Agent for
the  purpose of  examining  such  Records,  and to discuss  matters  relating to
Receivables or the Transferor's,  the Seller's,  the Initial  Purchaser's or the
Collection  Agent's  performance  hereunder  and  under  the  other  Transaction
Documents to which such Person is a party with any of the  officers,  directors,
employees or  independent  public  accountants  of the  Collection  Agent having
knowledge of such matters.

(d)      Keeping of Records and Books of Account.

                           The Collection Agent shall maintain and implement
operating procedures  (including,  without limitation,  an
ability  to  recreate  records  evidencing  Receivables  in  the  event  of  the
destruction  of the originals  thereof),  and keep and maintain,  all documents,
books,  records and other information  reasonably necessary or advisable for the
collection of all Receivables (including,  without limitation,  records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).

(e)      Year 2000 Compliance.

                           (i)      The Collection Agent will promptly notify
the Administrative  Agent and the Purchaser Agents in the
event the Collection Agent discovers or determines that any computer application
(including those of its suppliers,  vendors and customers) (x) that is necessary
for the  origination,  collection,  management,  or servicing of the Receivables
will not be Year 2000 Compliant on or before June 1, 1999 and thereafter, or (y)
that is  otherwise  material  to its or any of its  Subsidiaries'  business  and
operations  will not be Year 2000  Compliant  on a timely  basis,  except to the
extent that,  in the case of (y) above,  such failure  could not  reasonably  be
expected (A) to have a Material Adverse Effect or (B) to result in a Termination
Event.

                           (ii)  Further,  the  Collection  Agent  will  deliver
simultaneously with any quarterly or annual financial
statements or reports to be delivered under this Agreement, a certificate signed
by its chief financial  officer that no material  event,  problems or conditions
have occurred which in the opinion of management would (x) prevent or materially
delay the  Transferor's  plan to become Year 2000  Compliant  or (y) cause or be
likely to cause the Transferor's  representations and warranties with respect to
being or becoming Year 2000 Compliant no longer to be true.

(f)      Credit and Collection Policies.

                           The Collection  Agent shall comply with the Credit
and Collection  Policy in regard to the  Receivables  and
each related  Account,  except  insofar as any failure to so comply could not be
reasonably  expected to impair the  collectibility  of the  Receivables,  on the
whole,  or a substantial  amount thereof,  or otherwise have a Material  Adverse
Effect.

(g)      No Rescission or Cancellation.

                           The Collection Agent shall not permit any rescission
or cancellation of a Receivable  except as ordered by a
court of  competent  jurisdiction  or  other  governmental  authority  or in the
ordinary course of its business and in accordance with the Credit and Collection
Policy.

(h)      Protection of Purchasers' Rights.

                           The Collection  Agent shall take no action,  nor omit
to take any action, which would impair the rights of
the Purchasers in the Receivables or the related Accounts.

(i)      Litigation.

                           Promptly upon the  commencement  thereof,  the
Collection Agent shall give to the Purchaser Agents notice of
all legal or  arbitral  proceedings  and of all  proceedings  by or  before  any
governmental or regulatory authority or agency,  affecting the Collection Agent,
Seller, Initial Purchaser or any of their respective  Subsidiaries (i) involving
amounts in excess of  $10,000,000,  (ii) which could  reasonably  be expected to
have a Material  Adverse  Effect,  or (iii)  which could  otherwise  result in a
Termination  Event  or  Potential  Termination  Event,  and  (promptly  upon the
occurrence  thereof)  notice of any material  development in respect of any such
legal or other proceedings.

(j)      Notice of Termination Events, Potential Termination Events or
Collection Agent Default.

                           As soon as possible and in any event within two (2)
Business Days after the  occurrence of each  Termination
Event,  Potential  Termination Event or Collection Agent Default, the Collection
Agent  shall  deliver to the  Administrative  Agent and the  Purchaser  Agents a
statement  of the chief  financial  officer or chief  accounting  officer of the
Collection  Agent  setting forth details of such  Termination  Event,  Potential
Termination  Event  or  Collection  Agent  Default  and  the  action  which  the
Collection Agent proposes to take with respect thereto.

(k)      [Reserved].

(l)      Notices under the PNC Agreement.

                           The Collection  Agent shall deliver to the Purchaser
Agents copies of all notices and other  communications
delivered  by or to the  Collection  Agent  under  the PNC  Agreement  after the
Closing Date,  promptly upon such delivery or receipt  thereof,  as the case may
be, (i) in  connection  with the Assigned  Rights and (ii)  involving  any claim
against PNC in excess of  $1,000,000.  The  Collection  Agent  shall  notify the
Purchaser  Agents of any  breach by PNC of any term of the PNC  Agreement  which
involves an amount in excess of $1,000,000, upon its knowledge thereof.

(m)      PNC Agreement.

                           (i) The Collection  Agent shall take all commercially
         reasonable  actions  necessary to collect  payments due to it under the
         PNC Agreement and shall exercise diligently and promptly all its rights
         and  remedies  thereunder  unless  and until the  Administrative  Agent
         provides the notice to PNC under the PNC Consent and pursuant to clause
         (ii) below.

                           (ii) The Administrative Agent may, in its discretion,
         provide  to PNC a  notice  as  described  in the PNC  Consent  upon the
         occurrence of any one or more of the following: (A) the occurrence of a
         Potential  Termination  Event  which  involves  an  amount in excess of
         $5,000,000 or a Termination Event which involves an amount in excess of
         $1,000,000  that,  in each case, is caused by or related to a breach by
         PNC under the PNC  Agreement or would be cured by a payment made by PNC
         under  the  PNC  Agreement,  or  (B)  a  Collection  Agent  Default  or
         Termination  Event with respect to the Collection  Agent which involves
         an amount in excess of $1,000,000

                           (iii)  In the  event  that the  Administrative  Agent
         delivers to PNC a notice as  described in the PNC Consent and agrees to
         settle  any  claim  against  PNC for an  amount  that is less  than the
         original  amount of the claim (the  difference  between  such  original
         amount and the amount of such settlement being the "Claim Amount"), the
         Administrative  Agent and the  Purchaser  Agents agree that DMCCB shall
         not be liable for the Claim Amount with respect to such claims, but the
         Transferor  and MCI,  to the extent they were  liable  therefor,  shall
         remain liable for the payment thereof.

(n)      Remittance to Collection Account.

                           The Collection  Agent shall,  within one Business Day
after the Collection Agent's receipt thereof, remit to
the Collection  Account any payment received by the Collection Agent pursuant to
the PNC Agreement which relates to an amount due and owing under this Agreement,
unless otherwise previously paid by the Collection Agent or Transferor hereunder
or by PNC directly to the Administrative Agent.

SECTION 5.4.        Negative Covenants of the Collection Agent.

                  At all times from the date hereof to the later to occur of (i)
the Termination Date, (ii) a Special Termination Date or (iii) the date on which
the Net Investments  have been reduced to zero and all other  Aggregate  Unpaids
shall  have  been paid in full,  in cash,  unless  the  Purchaser  Agents  shall
otherwise consent in writing.

(a)      No Sales, Liens, Etc.

                           Except as otherwise  provided herein,  the Collection
Agent shall not sell,  assign (by operation of law or
otherwise)  or  otherwise  dispose  of, or create or suffer to exist any Adverse
Claim upon (or the filing of any financing statement) or with respect to (x) any
of the  Affected  Assets  or (y) any  account  to which any  Collections  of any
Receivable are sent, or assign any right to receive income in respect thereof.

(b)      No Change in Business or Credit Collection Policy.

                           The  Collection  Agent  shall not make any  change in
the  character  of its  business  or in the Credit and
Collection Policy, which change would, in either case, impair the collectibility
of the Receivables, on the whole, or otherwise have a Material Adverse Effect.

(c)      No Extension or Amendment of Receivables.

                           Except as  otherwise  permitted  in Section  6.2
hereof,  the  Collection  Agent shall not extend,  amend or
otherwise modify the terms of any Receivable, or amend, modify or waive any term
or condition of any Account related thereto if such action could have a Material
Adverse Effect.

(d)      No Mergers, Etc.

                           The  Collection  Agent shall not (i)  consolidate  or
merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially  all of its assets to any other Person,  unless
(a) the Collection Agent is the surviving  corporation,  or the entity or Person
formed by or  surviving  any such  consolidation  or merger  (if other  than the
Collection  Agent) or to which such sale, lease or transfer shall have been made
is a corporation  or a national bank organized or existing under the laws of the
United States, any state thereof or the District of Columbia;  (b) the entity or
Person  formed by or surviving any such  consolidation  or merger (if other than
the  Collection  Agent) or the  entity or Person to which  such  sale,  lease or
transfer  shall have been made  assumes all the  obligations  of the  Collection
Agent under this Agreement and the other  Transaction  Documents  pursuant to an
agreement in form and substance  satisfactory  to the  Administrative  Agent and
each Purchaser Agent; and (c) immediately after such  transaction,  no Potential
Termination Event or Termination Event will result therefrom.

(e)      Amendment to PNC Agreement.

                           The  Collection  Agent  will  not  amend,  modify  or
supplement the PNC Agreement or waive any provision thereof
regarding or relating to the Assigned Rights, in each case except with the prior
written consent of the Administrative  Agent and the Purchaser Agents; nor shall
the  Collection  Agent take any other action under the PNC Agreement  that could
reasonably  be  expected  to  have  a  Material   Adverse  Effect  or  which  is
inconsistent with the terms of this Agreement.


                                   ARTICLE VI

                         ADMINISTRATION AND COLLECTIONS

                    Appointment of Collection Agent.

                  The servicing, administering and collection of the Receivables
shall be conducted by such Person (the  "Collection  Agent") so designated  from
time to time in accordance with this Section 6.1. Until the Administrative Agent
gives notice to the Seller of the designation of a new Collection  Agent,  under
the  circumstances  set forth  below,  the Seller is hereby  designated  as, and
hereby agrees to perform the duties and  obligations  of, the  Collection  Agent
pursuant to the terms hereof.  The Collection  Agent may not delegate any of its
material  rights,  duties or obligations  hereunder  without prior notice to the
Administrative  Agent  and  the  Purchaser  Agents  or  designate  a  substitute
Collection Agent,  without the prior written consent of the Administrative Agent
and the Purchaser  Agents,  and provided that in all events the Collection Agent
shall  continue to remain  solely  liable for the  performance  of the duties as
Collection Agent hereunder  notwithstanding any such delegation  hereunder.  The
Administrative  Agent shall,  after the occurrence of a Collection Agent Default
or any other Termination Event, and at the direction of the Required Purchasers,
designate as Collection  Agent any Person  (including  itself)  approved by such
Required  Purchaser  Agents to succeed  the Seller or any  successor  Collection
Agent,  on the condition in each case that any such Person so  designated  shall
agree to perform the duties and obligations of the Collection  Agent pursuant to
the terms hereof. The Collection Agent may notify any Obligor of the Transferred
Interest.

SECTION 6.2.        Duties of Collection Agent.

(a) The Collection  Agent shall take or cause to be taken all such action as may
be necessary or advisable to collect each  Receivable  from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence,  and in accordance with the Credit and Collection Policy. Each of the
Transferor,  the Purchasers,  the Purchaser Agents and the Bank Investors hereby
appoints  as its  agent  the  Collection  Agent,  from  time to time  designated
pursuant to Section 6.1 hereof,  to enforce its respective  rights and interests
in and under the Affected  Assets.  To the extent  permitted by applicable  law,
each of the  Transferor  and the  Seller  (to the  extent  not  then  acting  as
Collection  Agent  hereunder)  hereby grants to any Collection  Agent  appointed
hereunder  an  irrevocable  power of  attorney  to take any and all steps in the
Transferor's  and/or the Seller's  name and on behalf of the  Transferor  or the
Seller necessary or desirable, in the reasonable determination of the Collection
Agent,  to collect  all amounts  due under any and all  Receivables,  including,
without  limitation,  endorsing  the  Transferor's  and/or the Seller's  name on
checks  and  other  instruments  representing  Collections  and  enforcing  such
Receivables and the related Account  Agreements.  The Collection Agent shall set
aside  for  the  account  of the  Transferor  and  the  Purchaser  Agents  their
respective allocable shares of the Collections of Receivables in accordance with
Sections 2.5 and 2.6 hereof. The Collection Agent shall segregate and deposit to
each of the Purchase  Agent's  account its  allocable  share of  Collections  of
Receivables  when required  pursuant to Article II hereof.  The Transferor shall
deliver to the Collection  Agent or its designee(s) and the Collection  Agent or
its designees  shall hold in trust for the Transferor and the Purchaser  Agents,
on behalf of their related  Purchasers and Bank  Investors,  in accordance  with
their respective interests, all Records which evidence or relate to Receivables.
The  Collection  Agent  shall  not make  the  Administrative  Agent,  any of the
Purchaser  Agents,  a  Purchaser  or any of the  Bank  Investors  a party to any
litigation with respect to the Receivables  without the prior written consent of
such  Person,  unless such  joinder is required by law and such Person would not
become subject to any liability for which it is not indemnified hereunder.

(b)  The  Collection  Agent  shall,  as soon as  practicable  following  receipt
thereof,  turn over to the Transferor any collections of any indebtedness of any
Person which is not on account of a Receivable.  If the Collection  Agent is not
the  Transferor  or the Seller or an Affiliate of the  Transferor or the Seller,
the Collection Agent, by giving three Business Days' prior written notice to the
Purchaser Agents,  may revise the percentage used to calculate the Servicing Fee
so long as the  revised  percentage  will not  result  in a  Servicing  Fee that
exceeds 110% of the reasonable and appropriate  out-of-pocket costs and expenses
of such  Collection  Agent  incurred in connection  with the  performance of its
obligations  hereunder  as  documented  to the  reasonable  satisfaction  of the
Purchaser  Agents;  provided,  however,  that  at any  time  after  the  Buyer's
Percentage  Factor equals or exceeds 100%,  any  compensation  to the Collection
Agent in excess of the Servicing  Fee initially  provided for herein shall be an
obligation of the Transferor and shall not be payable, in whole or in part, from
Collections  allocated to the Purchasers or the Bank  Investors,  as applicable.
The Collection Agent, if other than the Transferor or the Seller or an Affiliate
of the  Transferor  or the Seller,  shall as soon as  practicable  upon  demand,
deliver to the Seller all Records in its possession  which evidence or relate to
indebtedness of an Obligor which is not a Receivable.

(c) On or before 100 days after the end of each  fiscal  year of the  Collection
Agent,  beginning with the fiscal year ending  December 31, 1998, the Collection
Agent shall cause a firm of nationally recognized independent public accountants
(who may also render other services to the Collection Agent, the Transferor, the
Seller or any  Affiliates  of any of the  foregoing)  to furnish a report to the
Purchaser  Agents to the effect that they have (i) applied  certain  procedures,
agreed upon with the Collection Agent and the Purchaser Agents and substantially
as set forth in Exhibit C hereto,  which  would  re-perform  certain  accounting
procedures  performed by the Collection Agent pursuant to certain  documents and
records  relating to the  servicing of the  Accounts  under this  Agreement;  in
addition,  each report shall set forth the agreed upon procedures  performed and
the results of such  procedures;  and (ii) compared the amounts and  percentages
set forth in the Investor Reports  forwarded by the Collection Agent pursuant to
Section 2.11 during the period covered by such report with the computer  reports
(which may include personal computer  generated reports that summarize data from
the computer  reports  generated by either the  Transferor or  Collection  Agent
which are used to prepare the  Investor  Reports)  which were the source of such
amounts and percentages and that on the basis of such  comparison,  such amounts
and percentages are in agreement except as shall be set forth in such report.

(d)  Notwithstanding  anything to the contrary contained in this Article VI, the
Collection  Agent,  if not the  Transferor,  the Seller or any  Affiliate of the
Transferor or the Seller,  shall have no obligation to collect,  enforce or take
any other action  described in this Article VI with respect to any  indebtedness
that is not included in the  Transferred  Interest  other than to deliver to the
Transferor the collections  and documents with respect to any such  indebtedness
as described in Section 6.2(b) hereof.

SECTION 6.3.        Rights After Designation of New Collection Agent.

                  At any time following the  designation  of a Collection  Agent
(other than the Transferor, the Seller or any Affiliate of the Transferor or the
Seller) pursuant to Section 6.1 hereof:

(i)      The  Administrative  Agent  may  or  shall,  at  the  direction  of the
         Purchaser Agents,  direct that payment of all amounts payable under any
         Receivable  be  made  directly  to  the  Administrative  Agent  or  its
         designee,  to be applied  in  accordance  with  Sections  2.5,  2.6 and
         2.12(d), as applicable.

(ii)     In the event that a  Termination  Event has  occurred,  the  Transferor
         shall, at the  Administrative  Agent's request and at the  Transferor's
         expense,  direct that  payments be made directly by each Obligor to the
         Administrative Agent or its designee, and, if necessary, give notice of
         any  of  the  Purchaser  Agents',  the  Transferor's  and/or  the  Bank
         Investors' ownership of Receivables to each Obligor.

(iii)    The  Transferor  shall,  at the  Administrative  Agent's  request,  (A)
         assemble all of the Records,  and shall make the same  available to the
         Administrative  Agent  or  its  designee  at a  place  selected  by the
         Administrative  Agent or its  designee,  and (B)  segregate  all  cash,
         checks  and  other  instruments  received  by  it  from  time  to  time
         constituting  Collections of Receivables in a manner  acceptable to the
         Administrative Agent and shall,  promptly upon receipt,  remit all such
         cash,  checks and  instruments,  duly  endorsed  or with duly  executed
         instruments of transfer, to the Administrative Agent or its designee.

(iv)     The Transferor and the Seller hereby authorize the Administrative Agent
         to take any and all lawful steps in the  Transferor's  or Seller's name
         and on behalf of the Transferor  and the Seller  necessary or desirable
         and reasonable,  in the determination of the  Administrative  Agent, to
         collect  all  amounts  due  under any and all  Receivables,  including,
         without  limitation,  endorsing  the  Transferor's  or Seller's name on
         checks and other  instruments  representing  Collections  and enforcing
         such Receivables and the related Account Agreements, and the Transferor
         and the Seller  shall  request any third  party  holding any Records to
         provide the  Administrative  Agent with access to such  Records to same
         extent as the Transferor and Seller have such access.

SECTION 6.4.        Collection Agent Default.

                  The  occurrence  of any one or more  of the  following  events
shall constitute a Collection Agent Default:

(a) the Collection  Agent or, to the extent that the  Transferor,  the Seller or
any  Affiliate  of the  Transferor,  the Seller,  the Initial  Purchaser is then
acting as Collection Agent, the Transferor, the Seller, the Initial Purchaser or
such  Affiliate,  as applicable,  shall fail to (i) observe or perform any term,
covenant or agreement to be observed or performed under Section 5.3(a), (f), (g)
or (h) or Section  5.4(b),  (c) or (d), and any such failure to observe  Section
5.3(a),  (g) or (h) or Section 5.4(c) shall have a Material  Adverse Effect,  or
(ii) observe or perform any term, covenant or agreement hereunder (other than as
referred to in clause (i) or (iii) of this  Section  6.4(a)) or under any of the
other  Transaction  Documents  to which such  Person is a party or by which such
Person is bound,  which failure shall have a Material  Adverse  Effect and shall
remain  unremedied  for ten (10)  days,  or (iii)  make any  payment  or deposit
required to be made by it hereunder when due or the Collection  Agent shall fail
to observe or perform any term,  covenant or agreement on the Collection Agent's
part to be performed under Section 2.8(b) hereof; or

(b)  any  representation,  warranty,  certification  or  statement  made  by the
Collection Agent (in the event that the Transferor, the Seller or such Affiliate
is then  acting as the  Collection  Agent) in this  Agreement,  the  Receivables
Purchase  Agreements  or in any of the  other  Transaction  Documents  or in any
certificate  or report  delivered by it pursuant to any of the  foregoing  shall
prove to have been incorrect in any material adverse respect when made or deemed
made; or

(c) any event of default by the Collection  Agent or any of its  Subsidiaries in
the performance of any term,  provision or condition  contained in any agreement
under  which  any  Indebtedness  greater  than  $10,000,000  was  created  or is
governed,  if the effect of such event of default is to cause that  Indebtedness
to become or be  declared  due and payable  prior to its stated  maturity or the
stated maturity of any underlying obligation, as the case may be; or

(d) any Event of Bankruptcy  shall occur with respect to the Collection Agent or
any of its Subsidiaries; or

(e) there shall have occurred any material  adverse  change in the operations of
the  Collection  Agent since the end of the last fiscal year ending prior to the
date of its appointment as Collection Agent hereunder which, in the commercially
reasonable  judgment of the Required Purchaser Agents,  materially and adversely
affects the Collection  Agent's  ability to either collect the Receivables or to
perform under this Agreement; or

(f) a final  judgment  or  judgments  for the  payment  of  money in  excess  of
$10,000,000  individually  or in the aggregate  shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction against the
Collection Agent and the same shall not be discharged (or provision shall not be
made for such discharge),  or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof.

SECTION 6.5.        Responsibilities of the Transferor and the Seller.

                  Anything   herein  to  the   contrary   notwithstanding,   the
Transferor  shall,  and/or  shall  cause the Seller to, (i)  perform  all of the
Seller's  obligations  under the Accounts related to the Receivables to the same
extent as if interests in such Receivables had not been sold hereunder and under
the  Receivables  Purchase  Agreements  and the  exercise by the  Administrative
Agent,  the Purchaser  Agents,  the  Purchasers  and the Bank Investors of their
rights hereunder and under the Receivables Purchase Agreements shall not relieve
the  Transferor  or the Seller from such  obligations  and (ii) pay when due any
taxes, including without limitation,  any sales taxes payable in connection with
the Receivables and their creation and satisfaction.  Neither the Administrative
Agent, any of the Purchaser Agents, the Purchasers nor any of the Bank Investors
shall have any obligation or liability with respect to any Receivable or related
Accounts,  nor shall it be  obligated to perform any of the  obligations  of the
Seller thereunder.


                                   ARTICLE VII

                               TERMINATION EVENTS

                    Termination Events.

                  The  occurrence  of any one or more  of the  following  events
shall constitute a Termination Event:
(a) the Transferor,  the Seller,  the Initial  Purchaser or the Collection Agent
shall fail to make any  payment or deposit to be made by it  hereunder  or under
the Receivables  Purchase Agreements when due hereunder or thereunder,  and such
failure shall continue for 2 Business Days; or

(b)  any  representation,  warranty,  certification  or  statement  made  by the
Transferor in this Agreement,  any other  Transaction  Document to which it is a
party or in any other document  delivered pursuant hereto or thereto shall prove
to have been incorrect in any material  adverse respect when made or deemed made
and, if  susceptible  of being  remedied,  has not been remedied  within 30 days
thereafter; or

(c) the Transferor or the Collection Agent,  shall default in the performance of
any payment,  covenant or  undertaking  (other than those  covered by clause (a)
above):  (i) to be  performed or observed  under  Sections  5.1(a)(iv),  5.1(b),
5.1(f),  5.1(g),  5.1(i), 5.1(k), 5.1(l), 5.2(a), 5.2(c), 5.2(d) or 5.2(g); (ii)
to be performed or observed  under  Section  5.1(a)(vi) or Section 5.3, and such
default in the case of this  clause  (ii) shall  continue  for two (2)  Business
Days; and (iii) to be performed or observed under any other provision  hereof or
any other Transaction Document and such default in the case of this clause (iii)
shall continue for ten (10) days; or

(d) any event of default by the Transferor, the Seller, the Initial Purchaser or
any Subsidiary of the Transferor,  the Seller,  or the Initial  Purchaser in the
performance  of any term,  provision or condition  contained in any agreement to
which any such  Person is a party or under which any  Indebtedness  owing by the
Transferor,  the  Seller,  the  Initial  Purchaser  or  any  Subsidiary  of  the
Transferor,  the Initial  Purchaser or the Seller greater than  $10,000,000  was
created or is  governed  if the effect of such event of default is to cause that
Indebtedness  to become  or be  declared  due and  payable  prior to its  stated
maturity or the stated  maturity of any underlying  obligation,  as the case may
be; or

(e) an Event of  Bankruptcy  shall  occur with  respect to the  Transferor,  the
Collection  Agent,  the Initial  Purchaser or the Seller,  Metris  Direct or any
Subsidiary of any of the foregoing (which, in the case of such Subsidiary, could
reasonably be expected to have a Material Adverse Effect); or

(f) the  Transferor  shall,  for  any  reason,  fail  to have a valid  ownership
interest in the Affected  Assets or any of the  Purchaser  Agents,  on behalf of
their related Purchasers and Bank Investors shall, for any reason, fail or cease
to have a valid and perfected first priority  ownership or security  interest in
the Affected Assets free and clear of any Adverse Claims; or

(g)      a Collection Agent Default shall have occurred; or

(h) (x) either of the Receivables  Purchase  Agreements shall have terminated or
(y) a default shall occur under either of the  Receivables  Purchase  Agreements
which has a Material Adverse Effect; or

(i) the  Transferor,  the  Collection  Agent (except as permitted  under Section
5.4(d), the Initial Purchaser, or the Seller shall enter into any transaction or
merger whereby it is not the surviving entity; or

(j) there shall have occurred any material  adverse  change in the operations of
the  Transferor  or the Seller  since  September  8, 1998 or any other  Material
Adverse Effect shall have occurred; or

(k) on any date (i) the  Buyer's  Percentage  Factor  shall  exceed the  Maximum
Buyer's  Percentage  Factor  and  shall not be cured  within  one  Business  Day
thereafter or (ii) the Buyer's  Percentage  Factor shall equal or exceed 100% at
any time; or

(l) on any Remittance  Date,  the Spread Account  balance shall be less than the
Spread Account Cap Percentage Amount and such deficiency shall continue to exist
unremedied at the close of business on the fifth Remittance Date thereafter; or

(m)      the average Excess Spread for any three rolling  consecutive
Collection Periods shall be less than or equal to 2% but greater
than 0%; or

(n)  the  Initial  Purchaser  shall  at any  time  cease  to  own,  directly  or
indirectly, all of the outstanding capital stock of the Seller; or

(o) any  failure by the  Initial  Purchaser  or any of its ERISA  Affiliates  to
maintain its Benefit  Plans in  accordance  with ERISA or the  occurrence of any
event of the type set forth in clauses (i)  through  (v) of Section  5.2(h) with
respect  to any  such  entity  which,  in any  case,  results  in a lien  on the
Receivables or otherwise has a Material Adverse Effect; or

(p) (i) the Net Investments plus, in the case where the Transferred  Interest is
held  by  a  Purchaser,  the  Interest  Component  of  all  outstanding  Related
Commercial  Paper,  shall  exceed  the  Facility  Limit or (ii) any  Purchaser's
applicable  Net  Investment  (together  with the  Interest  Component of all its
outstanding  Related  Commercial  Paper) shall exceed its  Applicable  Purchaser
Percentage of the Facility Limit; provided, that, in the event that the Facility
Limit is  reduced  by the  Purchasers  pursuant  to the  definition  thereof,  a
Termination  Event  shall  occur  hereunder  if the Net  Investments  (plus  the
Interest  Component of outstanding  Related  Commercial Paper to the extent that
the Transferred Interest is held by a Purchaser) exceeds such Facility Limit, as
reduced,  for a period of up to two months after the date of any such reduction;
or

(q) a final  judgment  or  judgments  for the  payment  of  money in  excess  of
$10,000,000  individually (in the case of the Collection Agent, Seller,  Initial
Purchaser or any of their respective  Subsidiaries other than the Transferor) or
in the  aggregate  shall  be  rendered  by one or  more  courts,  administrative
tribunals or other bodies  having  jurisdiction  against the  Collection  Agent,
Seller,  Initial Purchaser or any of their respective  Subsidiaries and the same
shall not be discharged (or provision shall not be made for such discharge),  or
a stay of execution thereof shall not be procured,  within 30 days from the date
of entry thereof; or

(r) the Interest Rate Cap Agreement shall not be in full force and effect and no
substitute shall have been obtained  therefor within 10 days  thereafter,  or an
Event of  Bankruptcy  shall have  occurred with respect to the Interest Rate Cap
Provider or the Interest Rate Cap Provider shall repudiate the Interest Rate Cap
Agreement or refuse to make a payment thereunder; or

(s) the Interest Rate Cap Provider is downgraded below the ratings  specified in
the definition thereof by either Standard & Poor's or Moody's, respectively, and
is not replaced with a substitute Interest Rate Cap Provider within 10 days; or

(t)      the average Excess Spread for any three rolling consecutive Collection
Periods shall be 0% or less.

SECTION 7.2.        Termination.

(a) Upon the occurrence of any Termination  Event, the Required Purchaser Agents
may,  by notice  to the other  Purchaser  Agent  and to the  Transferor  and the
Collection  Agent,  declare the  Termination  Date to have  occurred;  provided,
however,  that in the case of any event  described  in Section  7.1(e),  7.1(f),
7.1(k)(ii),  7.1(p),  7.1(r), 7.1(s) or 7.1(t) above, the Termination Date shall
be deemed to have occurred automatically upon the occurrence of such event. Upon
any such declaration or automatic  occurrence,  the Purchaser Agents shall have,
in addition to all other rights and remedies  under this Agreement or otherwise,
all  other  rights  and  remedies  provided  under  the  UCC of  the  applicable
jurisdiction and other applicable laws, all of which rights shall be cumulative.

(b)  At  all  times  after  the  declaration  or  automatic  occurrence  of  the
Termination  Date  pursuant to Section  7.2(a),  interest  shall  thereafter  be
calculated on the basis of the Base Rate plus 2.00% and all other Carrying Costs
shall accrue  interest on the basis of the Base Rate plus 2.00%  until,  in each
case, such interest and Carrying Costs are paid in full.


                                  ARTICLE VIII

                   INDEMNIFICATION; EXPENSES; RELATED MATTERS

                    Indemnities by the Transferor.

                  Without  limiting any other  rights  which the  Administrative
Agent,  any of the Purchaser  Agents,  the  Purchasers or the Bank Investors may
have  hereunder  or  under  applicable  law,  each  of the  Transferor  and  the
Collection Agent hereby  severally agrees to indemnify the Purchasers,  the Bank
Investors, the Administrative Agent, the Purchaser Agents, the Collateral Agent,
each Liquidity  Provider and each Credit Support Provider and any successors and
permitted  assigns  and  their  respective  officers,  directors  and  employees
(collectively,  "Indemnified  Parties")  from and against  any and all  damages,
losses, claims, liabilities,  costs and expenses, including, without limitation,
reasonable attorneys' fees (which such attorneys may be employees of a Liquidity
Provider,  a Credit  Support  Provider,  the  Administrative  Agent,  any of the
Purchaser Agents or the Collateral Agent, as applicable) and disbursements  (all
of the  foregoing  being  collectively  referred  to as  "Indemnified  Amounts")
awarded  against or incurred by any of them in any action or proceeding  between
the Transferor,  the Initial Purchaser or the Seller (including, in its capacity
as the  Collection  Agent,  except  for  indemnification  which is being  sought
against the Collection Agent) and any of the Indemnified  Parties or between any
of the Indemnified Parties and any third party or otherwise arising out of or as
a result of this Agreement,  the other Transaction  Documents,  the ownership or
maintenance,  either directly or indirectly, by the Administrative Agent, any of
the  Purchaser  Agents,  a Purchaser  or any Bank  Investor  of the  Transferred
Interest  or any of the  other  transactions  contemplated  hereby  or  thereby,
excluding,  however,  (i) Indemnified Amounts to the extent resulting from gross
negligence  or willful  misconduct on the part of an  Indemnified  Party or (ii)
recourse  (except as  otherwise  specifically  provided in this  Agreement)  for
uncollectible  Receivables.  Notwithstanding the foregoing, the indemnity of the
Collection  Agent  pursuant  to this  Section  shall be limited  to  Indemnified
Amounts  relating to or resulting from any of the following  which relate to the
failure,  breach or other action of the Collection Agent or the Seller,  whether
in  its  individual  capacity  or as  Collection  Agent.  Without  limiting  the
generality of the foregoing,  the Transferor  shall  indemnify each  Indemnified
Party for  Indemnified  Amounts  relating to or  resulting  from all matters set
forth below (other than those described in the preceding sentence):

(i)      any  representation  or  warranty  made  by  the  Transferor,   Initial
         Purchaser or the Seller  (including,  in its capacity as the Collection
         Agent) or any officers of the Transferor,  the Initial Purchaser or the
         Seller (including, in its capacity as the Collection Agent) under or in
         connection with this Agreement, the Receivable Purchase Agreements, any
         of the other  Transaction  Documents,  any Investor Report or any other
         information  or  report  delivered  by the  Transferor,  Seller  or the
         Collection  Agent  pursuant  hereto,  which  shall  have been  false or
         incorrect in any material respect when made or deemed made;

(ii)     the  failure by the  Transferor,  the Initial  Purchaser  or the Seller
         (including, in its capacity as the Collection Agent) to comply with any
         applicable  law, rule or regulation  with respect to any  Receivable or
         the related  Account,  or the  nonconformity  of any  Receivable or the
         related Account with any such applicable law, rule or regulation;

(iii)    the  failure  (x) to vest and  maintain  vested  in the  Purchaser
         Agents,  on behalf of their  related  Purchasers  and Bank
         Investors,  an undivided first priority,  perfected percentage
         ownership interest (to the extent of the Transferred  Interest)
         in the Affected  Assets free and clear of any Adverse Claim or (y) to
         create or maintain a valid and perfected  first priority
         security interest in favor of the Purchaser  Agents,  for the benefit
         of their related  Purchasers and Bank Investors,  in the
         Affected  Assets as  contemplated  pursuant to Section  10.11  hereof,
         free and clear of any Adverse  Claim,  except that any
         ownership  interest  or security  interest  created  hereunder  with
         respect to Related  Security  shall be a first  priority
         perfected  interest only to the extent possible by filing the financing
         statements  contemplated to be filed hereunder on the
         Closing Date (and any amendments thereto or continuations thereof);

(iv)     the  failure  to file,  or any delay in filing,  financing  statements,
         continuation  statements,  or other  similar  instruments  or documents
         under the UCC of any applicable  jurisdiction or other  applicable laws
         with respect to any of the Affected Assets;

(v)      any  dispute,  claim,  offset  or  defense  (other  than  discharge  in
         bankruptcy) of the Obligor to the payment of any Receivable (including,
         without  limitation,  a defense based on such Receivable or the related
         Account  not being the  legal,  valid and  binding  obligation  of such
         Obligor enforceable against it in accordance with its terms);

(vi) any failure of the Collection Agent to perform its duties or obligations in
accordance with the provisions hereof;

(vii)    any products liability claim or personal injury or property damage suit
         or other  similar or related  claim or action of whatever  sort arising
         out of or in  connection  with  merchandise  or services  which are the
         subject of any Receivable;

(viii) the transfer of an  ownership  interest in any  Receivable  other than an
Eligible Receivable;

(ix)     the  failure  by the  Transferor  or  the  Seller  (individually  or as
         Collection  Agent)  to  comply  with any term,  provision  or  covenant
         contained in this Agreement or any of the other  Transaction  Documents
         to which it is a party or to perform any of its respective duties under
         the Account Agreements;

(x)      [Reserved]

(xi)     the failure of PNC, the Seller or Initial Purchaser to pay when due any
         taxes, including without limitation, sales, excise or personal property
         taxes payable in connection with any of the Receivables;

(xii)    any  repayment  by  any  Indemnified  Party  of any  amount  previously
         distributed  in reduction  of Net  Investments  which such  Indemnified
         Party believes in good faith is required to be made;

(xiii)   the commingling by the Transferor, the Seller, the Collection Agent, or
         Initial  Purchaser of Collections of Receivables at any time with other
         funds;

(xiv)    any investigation,  litigation or proceeding related to this Agreement,
         any of  the  other  Transaction  Documents,  the  use  of  proceeds  of
         Transfers by the Transferor or the Seller, the ownership of Transferred
         Interests, or any Receivable or Account;

(xv)     any  inability  to obtain any judgment in or utilize the court or other
         adjudication system of, any state in which an Obligor may be located as
         a result of the failure of the  Transferor  or the Seller to qualify to
         do  business  or file any  notice of  business  activity  report or any
         similar report;

(xvi)    any failure of the Transferor or Initial  Purchaser to give  reasonably
         equivalent value to the Initial Purchaser or Seller,  respectively,  in
         consideration  of  the  transfer  by the  Transferor  and  the  Initial
         Purchaser from the Initial Purchaser and the Seller,  respectively,  of
         any  Receivable,  or any attempt by any Person to void,  rescind or set
         aside any such  transfer  under  statutory  provisions or common law or
         equitable action, including,  without limitation,  any provision of the
         Bankruptcy Code; or

(xvii)   any action taken by the Transferor,  the Seller,  the Initial Purchaser
         or the Collection Agent (if the Transferor, the Seller or any Affiliate
         or designee of the  Transferor  or the  Seller) in the  enforcement  or
         collection of any Receivable;

provided,  however,  that if a Purchaser enters into agreements for the purchase
of interests in receivables from one or more Other  Transferors,  such Purchaser
shall  allocate  such  Indemnified  Amounts  which  are in  connection  with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished  by the  Credit  Support  Provider  to the  Transferor  and each Other
Transferor;  and,  provided,  further,  that if  such  Indemnified  Amounts  are
attributable  to the  Transferor,  the  Seller,  the  Initial  Purchaser  or the
Collection  Agent and not attributable to any Other  Transferor,  the Transferor
shall be solely  liable  for such  Indemnified  Amounts  or if such  Indemnified
Amounts  are  attributable  to Other  Transferors  and not  attributable  to the
Transferor,  the Seller,  the Initial  Purchaser or the Collection  Agent,  such
Other Transferors shall be solely liable for such Indemnified Amounts.

SECTION 8.2.        Indemnity for Taxes, Reserves and Expenses.

(a) If  after  the  date  hereof,  the  adoption  of any Law or bank  regulatory
guideline or any  amendment or change in the  interpretation  of any existing or
future Law or bank  regulatory  guideline by any Official  Body charged with the
administration,  interpretation or application  thereof,  or the compliance with
any  directive  of any  Official  Body  (in  the  case  of any  bank  regulatory
guideline,  whether  or not  having  the force of Law):  (i) shall  subject  any
Indemnified  Party to any tax, duty or other charge (other than Excluded  Taxes)
with respect to this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Transferred  Interest,  the Receivables or
payments of amounts  due  hereunder,  or shall  change the basis of  taxation of
payments to any Indemnified Party of amounts payable in respect of this
Agreement, the other Transaction Documents, the ownership,  maintenance
or financing of the Transferred  Interest,  the Receivables or payments
of amounts due hereunder or its obligation to advance funds  hereunder,
under a Liquidity Provider Agreement or the credit support furnished by
a Credit  Support  Provider or otherwise in respect of this  Agreement,
the  other  Transaction  Documents,   the  ownership,   maintenance  or
financing of the Transferred  Interest or the  Receivables  (except for
changes  in the rate of  general  corporate,  franchise,  net income or
other income tax imposed on such Indemnified  Party by the jurisdiction
in  which  such  Indemnified  Party's  principal  executive  office  is
located);

(ii) shall impose, modify or deem applicable any reserve,  special deposit or
similar requirement  (including,  without limitation, any such  requirement
imposed by the Board of Governors of the Federal Reserve  System)  against
assets of, deposits with or for the account of, or credit  extended by, any
Indemnified  Party or shall impose on any  Indemnified  Party or on the United
States market for  certificates of deposit or the London interbank
market any other condition  affecting this Agreement,  the
other  Transaction  Documents,  the  ownership,  maintenance  or financing
of the  Transferred  Interest,  the  Receivables or
payments of amounts due hereunder or its obligation to advance funds
hereunder under the Liquidity  Provider  Agreement or the
credit  support  provided by a Credit  Support  Provider or  otherwise
in respect of this  Agreement,  the other  Transaction
Documents, the ownership, maintenance or financing of the Transferred
Interest or the Receivables; or

(iii)    imposes  upon any  Indemnified  Party  any  other  expense  (including,
without  limitation,  reasonable  attorneys'  fees  and  expenses,  and
expenses of litigation or preparation therefor in contesting any of the
foregoing)  with  respect  to this  Agreement,  the  other  Transaction
Documents,  the ownership,  maintenance or financing of the Transferred
Interest,  the  Receivables or payments of amounts due hereunder or its
obligation  to  advance  funds  hereunder  under a  Liquidity  Provider
Agreement or the credit support  furnished by a Credit Support Provider
or  otherwise  in  respect  of this  Agreement,  the other  Transaction
Documents,  the ownership,  maintenance or financing of the Transferred
Interests or the Receivables,

and  the  result  of any of the  foregoing  is to  increase  the  cost  to  such
Indemnified  Party  with  respect  to  this  Agreement,  the  other  Transaction
Documents, the ownership,  maintenance or financing of the Transferred Interest,
the  Receivables,  the  obligations  hereunder,  the  funding  of any  purchases
hereunder,  the Liquidity Provider Agreement or the Credit Support Agreement, by
an amount deemed by such Indemnified Party to be material, then, within ten (10)
days after demand by such  Indemnified  Party,  the Transferor shall pay to such
Indemnified  Party,  such  additional  amount or amounts as will compensate such
Indemnified Party for such increased cost or reduction.

(b) If any  Indemnified  Party shall have determined that after the date hereof,
the  adoption  of any  applicable  Law or bank  regulatory  guideline  regarding
capital  adequacy,  or any change therein,  or any change in the  interpretation
thereof by any Official Body, or any directive  regarding  capital  adequacy (in
the case of any bank  regulatory  guideline,  whether or not having the force of
law) of any such  Official  Body,  has or would have the effect of reducing  the
rate of  return on  capital  of such  Indemnified  Party  (or its  parent)  as a
consequence of such Indemnified  Party's  obligations  hereunder or with respect
hereto to a level below that which such Indemnified  Party (or its parent) could
have achieved but for such adoption,  change,  request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such  Indemnified  Party to be material,  then from time to time,  within ten
(10) days after demand by such  Indemnified  Party  through any of the Purchaser
Agents,  the Transferor  shall pay to the applicable  Purchaser  Agent,  for the
benefit of such  Indemnified  Party,  such additional  amount or amounts as will
compensate such Indemnified Party (or its parent) for such reduction.

(c) The applicable  Purchaser  Agent will promptly  notify the Transferor of any
event of which it has  knowledge,  occurring  after the date hereof,  which will
entitle an  Indemnified  Party to  compensation  pursuant to this Section 8.2. A
notice  by any of the  Purchaser  Agents  or the  applicable  Indemnified  Party
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it  hereunder  shall be  conclusive  in the  absence of
manifest error. In determining  such amount,  any of the Purchaser Agents or any
applicable  Indemnified  Party may use any reasonable  averaging and attributing
methods.

(d) Anything in this Section 8.2 to the contrary notwithstanding, if a Purchaser
enters into agreements for the acquisition of interests in receivables  from one
or more Other  Transferors,  such Purchaser shall allocate the liability for any
amounts  under  this  Section  8.2 which are in  connection  with the  Liquidity
Provider Agreement,  the Credit Support Agreement or the credit support provided
by the Credit Support Provider  ("Section 8.2 Costs") to the Transferor and each
Other  Transferor;  provided,  however,  that  if such  Section  8.2  Costs  are
attributable  to the  Transferor,  the  Seller or the  Collection  Agent and not
attributable to any Other Transferor,  the Transferor shall be solely liable for
such  Section 8.2 Costs or if such Section 8.2 Costs are  attributable  to Other
Transferors and not attributable to the Transferor, the Seller or the Collection
Agent, such Other Transferors shall be solely liable for such Section 8.2 Costs.

SECTION 8.3.        Taxes.

                  All  payments  made   hereunder  by  the   Transferor  or  the
Collection  Agent  (each,  a "payor") to a  Purchaser,  any Bank  Investor,  the
Administrative  Agent or any of the Purchaser Agents (each, a "recipient") shall
be made  free and  clear of and  without  deduction  for any  present  or future
income,  excise,  stamp or franchise  taxes and any other taxes,  fees,  duties,
withholdings  or other  charges of any nature  whatsoever  imposed by any taxing
authority on any recipient (or any assignee of such parties)  (such  nonexcluded
items being called "Taxes"),  but excluding franchise taxes and taxes imposed on
or measured by the recipient's net income or gross receipts  ("Excluded Taxes").
In the event that any  withholding  or  deduction  from any payment  made by the
payor hereunder is required in respect of any Taxes, then such payor shall:

(a)      pay directly to the relevant authority the full amount required to be
so withheld or deducted;

(b)  promptly  forward  to the  Purchaser  Agents an  official  receipt or other
documentation  satisfactory to the Purchaser  Agents  evidencing such payment to
such authority; and

(c) pay to the recipient  such  additional  amount or amounts as is necessary to
ensure that the net amount  actually  received by the  recipient  will equal the
full  amount such  recipient  would have  received  had no such  withholding  or
deduction been required.

Moreover,  if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder,  the recipient may pay such
Taxes and the payor will promptly pay such  additional  amounts  (including  any
penalties,  interest or  expenses)  as shall be  necessary in order that the net
amount received by the recipient after the payment of such Taxes  (including any
Taxes on such  additional  amount) shall equal the amount such  recipient  would
have received had such Taxes not been asserted.

                  If  the  payor  fails  to  pay  any  Taxes  when  due  to  the
appropriate  taxing  authority or fails to remit to the  recipient  the required
receipts or other required documentary  evidence,  the payor shall indemnify the
recipient for any  incremental  Taxes,  interest,  or penalties  that may become
payable by any recipient as a result of any such failure.

SECTION 8.4.        Other Costs, Expenses and Related Matters.

(a) The Transferor agrees, upon receipt of a written invoice, to pay or cause to
be paid, and to save the  Purchasers,  the Bank  Investors,  the  Administrative
Agent and the Purchaser  Agents harmless  against  liability for the payment of,
all  reasonable   out-of-pocket   expenses   (including,   without   limitation,
attorneys',  accountants',  rating  agencies' and other third  parties' fees and
expenses,  any filing fees and expenses incurred by officers or employees of the
Purchasers,  the Bank  Investors,  the  Administrative  Agent  and/or any of the
Purchaser  Agents) or intangible,  documentary or recording taxes incurred by or
on behalf of a Purchaser,  any Bank Investor,  the Administrative  Agent and the
Purchaser Agents (i) in connection with the negotiation, execution, delivery and
preparation of this Agreement, the other Transaction Documents and any documents
or  instruments  delivered  pursuant  hereto and  thereto  and the  transactions
contemplated hereby or thereby (including, without limitation, the perfection or
protection  of  the  Transferred  Interest)  whether  or  not  the  transactions
contemplated  hereby are  consummated and (ii) from time to time (a) relating to
any  amendments,  waivers  or  consents  under  this  Agreement  and  the  other
Transaction  Documents,  (b) arising in connection with a Purchaser's,  any Bank
Investor's,  the  Administrative  Agent's,  any of the Purchaser  Agents' or the
Collateral  Agent's  enforcement or preservation of rights  (including,  without
limitation, the perfection and protection of the Transferred Interest under this
Agreement), or (c) arising in connection with any audit, dispute,  disagreement,
litigation or preparation for litigation  involving this Agreement or any of the
other  Transaction  Documents (all of such amounts,  collectively,  "Transaction
Costs").

(b) The  Transferor  shall pay the  Purchaser  Agents,  for the  account  of the
Purchasers and the Bank Investors, as applicable, on demand any Early Collection
Fee, including interest thereon, due on account of the receipt by a Purchaser or
any Bank  Investor of any amounts  applied in  reduction of the  applicable  Net
Investment on any day other than the next Remittance Date or the last day of any
applicable funding period (in the case of any LIBOR-based funding).

SECTION 8.5.        Reconveyance Under Certain Circumstances.

                  The  Transferor  agrees to accept  the  reconveyance  from the
Purchaser Agents,  on behalf of the applicable  Purchaser and/or applicable Bank
Investors,  of the Transferred  Interest if any of the Purchaser Agents notifies
Transferor  of a breach of any  representation  or warranty  made or deemed made
pursuant to Sections  3.1(a),  (b), (c), (d) or (j) hereof and Transferor  shall
fail to cure such breach  (including,  without  limitation,  pursuant to Section
2.9(b)) within 15 days (or, in the case of the representations and warranties in
Sections 3.1(d) and 3.1(j) hereof 3 days) of such notice. The reconveyance price
shall  be paid by the  Transferor  to the  applicable  Purchaser  Agent  for the
account of the related  Purchasers and the Bank  Investors,  as  applicable,  in
immediately  available  funds on such 15th day (or 3rd day, if applicable) in an
amount equal to the Aggregate Unpaids.


                                   ARTICLE IX

                   THE ADMINISTRATIVE AGENT; BANK COMMITMENT;
                                PURCHASER AGENTS

                    Authorization and Action of Administrative Agent.

(a)  Each  of  the  Purchaser   Agents  hereby   appoints  and   authorizes  the
Administrative  Agent to take such action as agent on its behalf and to exercise
such powers  under this  Agreement  and the other  Transaction  Documents as are
expressly delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably  incidental thereto. In furtherance,
and without  limiting the  generality,  of the foregoing,  each of the Purchaser
Agents  hereby  appoints  the  Administrative  Agent as its agent to execute and
deliver all further instruments and documents,  and take all further action that
the Administrative Agent may deem necessary or appropriate or that the Purchaser
Agents  may  reasonably  request  in order to  perfect,  protect  or more  fully
evidence the interests transferred or to be transferred from time to time by the
Transferor  hereunder,  or to enable any of them to  exercise  or enforce any of
their respective rights hereunder,  including, without limitation, the execution
by the  Administrative  Agent as secured  party/assignee  of such  financing  or
continuation statements,  or amendments thereto or assignments thereof, relative
to all or any of the  Receivables  now existing or hereafter  arising,  and such
other  instruments  or  notices,  as may be  necessary  or  appropriate  for the
purposes  stated herein above.  With respect to any actions which are incidental
to the actions specifically delegated to the Administrative Agent hereunder, and
in  any  event  with  respect  to  any  action  taken  or to  be  taken  by  the
Administrative  Agent with respect to the Assigned  Rights,  the  Administrative
Agent shall not be required to take any such incidental  action  hereunder,  but
shall be required to act or to refrain from acting (and shall be fully protected
in acting or refraining from acting) upon the direction of the Purchaser Agents;
provided,  however,  that the Administrative Agent shall not be required to take
any  action  hereunder  if  the  taking  of  such  action,   in  the  reasonable
determination  of  the  Administrative  Agent,  shall  be in  violation  of  any
applicable  law,  rule  or  regulation  or  contrary  to any  provision  of this
Agreement or shall  expose the  Administrative  Agent to liability  hereunder or
otherwise.

(b) The Administrative  Agent shall exercise such rights and powers vested in it
by this Agreement and the other Transaction  Documents,  and use the same degree
of care and skill in their  exercise,  as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.

SECTION 9.2.        Administrative Agent's Reliance, Etc.

                  Neither  the  Administrative  Agent nor any of its  directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them as Administrative  Agent under or in connection with this
Agreement or any of the other Transaction Documents, except for its or their own
gross  negligence or willful  misconduct.  Without  limiting the foregoing,  the
Administrative  Agent: (i) may consult with legal counsel (including counsel for
the Transferor or the Seller),  independent public accountants and other experts
selected  by it and shall not be liable  for any  action  taken or omitted to be
taken  in good  faith  by it in  accordance  with the  advice  of such  counsel,
accountants or experts; (ii) makes no warranty or representation,  and shall not
be responsible for, any statements,  warranties or representations made in or in
connection with this Agreement; (iii) shall not have any duty to ascertain or to
inquire as to the  performance  or observance of any of the terms,  covenants or
conditions of this  Agreement or any of the other  Transaction  Documents on the
part of the  Transferor,  the  Collection  Agent or the Seller or to inspect the
property  (including  the books and records) of the  Transferor,  the Collection
Agent or the  Seller;  (iv)  shall  not be  responsible  for the due  execution,
legality, validity,  enforceability,  genuineness,  sufficiency or value of this
Agreement,  any of the other  Transaction  Documents or any other  instrument or
document furnished pursuant hereto or thereto;  and (v) shall incur no liability
under or in respect of this Agreement or any of the other Transaction  Documents
by acting upon any notice (including notice by telephone),  consent, certificate
or other  instrument  or writing  (which may be by telex)  believed  by it to be
genuine and signed or sent by the proper party or parties.

SECTION 9.3.        Credit Decision With Respect to Administrative Agent.

                  Each  of the  Purchaser  Agents,  and  each of  their  related
Purchasers  and Bank  Investors,  acknowledges  that it has,  independently  and
without  reliance upon the  Administrative  Agent, or any of the  Administrative
Agent's  Affiliates,  and based upon such  documents and  information  as it has
deemed  appropriate,  made its own  evaluation  and  decision to enter into this
Agreement and the other Transaction  Documents to which it is a party and, if it
so determines, to accept the transfer of any undivided ownership interest in the
Affected  Assets  hereunder.  Each of the  Purchaser  Agents,  and each of their
related  Purchasers  and  Bank  Investors,   also  acknowledges  that  it  will,
independently and without reliance upon the  Administrative  Agent or any of the
Administrative  Agent's Affiliates,  and based on such documents and information
as it shall deem appropriate at the time,  continue to make its own decisions in
taking or not taking  action  under  this  Agreement  and the other  Transaction
Documents to which it is a party.

SECTION 9.4.        Indemnification of the Administrative Agent.

                  Each of the  Purchaser  Agents  and Bank  Investors  agrees to
indemnify the Administrative Agent (to the extent not reimbursed by or on behalf
of the Transferor or the Collection Agent under the Transaction  Documents,  and
without  limiting the obligation of such Persons to do so in accordance with the
Transaction Documents),  ratably in accordance with its Pro Rata Share, from and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits,  costs,  expenses or  disbursements  of any kind or
nature  whatsoever which may be imposed on, incurred by, or asserted against the
Administrative  Agent in any way relating to or arising out of this Agreement or
any  action  taken or  omitted  by the  Administrative  Agent,  any of the other
Transaction Documents hereunder or thereunder;  provided,  however, that none of
the  Purchaser  Agents  shall be liable  for any  portion  of such  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses  or  disbursements  resulting  from the  Administrative  Agent's  gross
negligence or willful misconduct.  Without limitation of the foregoing,  each of
the Purchaser Agents agrees to reimburse the  Administrative  Agent,  ratably as
above described,  promptly upon demand for any out-of-pocket expenses (including
counsel  fees)  incurred  by the  Administrative  Agent in  connection  with the
administration,   modification,   amendment  or  enforcement   (whether  through
negotiations,  legal proceedings or otherwise) of, or legal advice in respect of
rights or  responsibilities  under,  this  Agreement  and the other  Transaction
Documents,  to the extent that such expenses are incurred in the interests of or
otherwise in respect of the Purchaser Agents hereunder and/or  thereunder and to
the extent that the Administrative  Agent is not reimbursed for such expenses by
the Transferor.

SECTION 9.5.        Successor Administrative Agent.

                  The Administrative Agent may resign at any time by giving five
(5) days' prior written notice  thereof to each of the Purchaser  Agents and the
Transferor,  such resignation to be effective when the  Administrative  Agent is
discharged  from its  duties  and  obligations  as set forth  below,  and may be
removed  at any  time  with  cause  by  the  Purchaser  Agents.  Upon  any  such
resignation  or  removal,   the  Purchaser  Agents  shall  appoint  a  successor
Administrative  Agent.  Each of the  Purchaser  Agents  agrees that it shall not
unreasonably  withhold or delay its approval of the  appointment  of a successor
Administrative Agent. If no such successor  Administrative Agent shall have been
so appointed, and shall have accepted such appointment, within 30 days after the
retiring  Administrative  Agent's giving of notice of resignation or the removal
of the retiring  Administrative  Agent, then the retiring  Administrative  Agent
may, on behalf of the Purchaser Agents, appoint a successor Administrative Agent
which  successor  Administrative  Agent  shall be either (i) a  commercial  bank
organized under the laws of the United States or of any state thereof and have a
combined  capital and surplus of at least  $50,000,000  or (ii) an  Affiliate of
such a bank.  Upon the  acceptance of any  appointment as  Administrative  Agent
hereunder by a successor  Administrative  Agent,  such successor  Administrative
Agent shall thereupon succeed to and become vested with all the rights,  powers,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative  Agent shall be discharged from its duties and obligations  under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder  as  Administrative  Agent,  the  provisions  of this Article IX shall
continue to inure to its benefit as to any actions  taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.

SECTION 9.6.        Payments by the Administrative Agent.

                  Unless specifically allocated to the Purchaser Agents pursuant
to  the  terms  of  this  Agreement,  all  amounts  (if  any)  received  by  the
Administrative  Agent on behalf  of the  Purchaser  Agents  shall be paid by the
Administrative  Agent to the  Purchaser  Agents  (at their  respective  accounts
specified  in  their  respective   Assignment  and  Assumption   Agreements)  in
accordance  with their  respective  related pro rata interests in the applicable
Net Investment on the Business Day received by the Administrative  Agent, unless
such amounts are received  after 12:00 noon on such  Business Day, in which case
the Administrative Agent shall use its reasonable efforts to pay such amounts to
the Purchaser  Agents on such  Business  Day, but, in any event,  shall pay such
amounts to the Purchaser Agents in accordance with their respective  related pro
rata  interests in the  applicable  Net  Investment not later than the following
Business Day.

SECTION 9.7.        Bank Commitment; Assignment to Bank Investors.

(a)      Bank Commitment.

                           At any time on or prior to the Commitment
Termination Date, in the event that Enterprise does not effect an
Incremental  Transfer as requested under Section  2.2(a),  then at any time, the
Transferor  shall  have the  right  to  require  Enterprise  to  assign  its Net
Investment in whole to the Enterprise  Bank  Investors  pursuant to this Section
9.7. In addition, at any time on or prior to the Commitment Termination Date (i)
upon the occurrence of an Enterprise Wind-Down Event or (ii) upon the occurrence
of a  Termination  Event  that  results  in  the  Termination  Date  or  Special
Termination Date with respect to Enterprise or (iii)  Enterprise  elects to give
notice  to the  Transferor  of a  Reinvestment  Termination  Date or (iv)  after
Enterprise  elects to  amortize  its Net  Investment  or  elects  not to make an
additional Incremental Transfer, the Transferor hereby requests and directs that
Enterprise  assign its Net Investment in whole to the Enterprise  Bank Investors
pursuant to this Section 9.7 and the Transferor hereby agrees to pay the amounts
described in Section  9.7(d) below.  Upon any such election by Enterprise or any
such  request by the  Transferor,  Enterprise  shall be deemed to have made such
assignment to the Enterprise  Bank  Investors and the Enterprise  Bank Investors
shall be deemed to have accepted such  assignment  from  Enterprise  and to have
assumed all of  Enterprise's  obligations  hereunder,  in each case  without any
further  action  on  the  part  of  either  Enterprise  or the  Enterprise  Bank
Investors.  In connection  with any assignment from Enterprise to the Enterprise
Bank  Investors  pursuant to this Section 9.7,  each  Enterprise  Bank  Investor
shall, on the date of such assignment,  pay to Enterprise an amount equal to its
Assignment  Amount.  If such  Assignment  Amount is not paid on such date,  such
Enterprise  Bank  Investor  shall pay interest  thereon to Enterprise at the per
annum rate of 2% in excess of clause (x) of the definition of the Base Rate from
such date until such amount is paid in full.  Upon any  assignment by Enterprise
to the Enterprise Bank Investors contemplated hereunder,  Enterprise shall cease
to make any additional Incremental Transfers hereunder.

(b)      Assignment.

                           No Enterprise  Bank Investor may assign all or a
portion of its interests in the applicable Net  Investment,
the  Receivables,  and  Collections,  Proceeds and Related Security with respect
thereto and its rights and  obligations  hereunder to any Person unless approved
in writing by the  Transferor,  the  Administrative  Agent,  and the  Enterprise
Agent.  In connection with any such assignment by an Enterprise Bank Investor to
another Person,  the assignor shall deliver to the assignee(s) an Assignment and
Assumption  Agreement,  duly  executed,  assigning  to the  assignee  a pro rata
interest in its Net Investment, the Receivables,  and Collections,  Proceeds and
Related Security with respect thereto and the assignor's  rights and obligations
hereunder  and the  assignor  shall  promptly  execute  and  deliver all further
instruments and documents,  and take all further  action,  that the assignee may
reasonably  request,  in order to protect, or more fully evidence the assignee's
right,  title and interest in and to such interest and to enable the  Enterprise
Agent, on behalf of such assignee,  to exercise or enforce any rights  hereunder
and  under  the  other  Transaction  Documents  to which  such  assignor  is or,
immediately prior to such assignment, was a party. Upon any such assignment, (i)
the  assignee  shall  have all of the  rights and  obligations  of the  assignor
hereunder  and under the other  Transaction  Documents to which such assignor is
or,  immediately  prior to such  assignment,  was a party  with  respect to such
interest  for all  purposes of this  Agreement  and under the other  Transaction
Documents to which such assignor is or,  immediately  prior to such  assignment,
was a party (it being  understood that the Bank Investors,  as assignees,  shall
(x) be obligated to fund  Incremental  Transfers  under Section 2.2(a) hereof in
accordance  with the terms thereof,  notwithstanding  that Enterprise was not so
obligated  and  (y)  not  have  the  right  to  elect  the  commencement  of the
amortization of its Net Investment  pursuant to the definition of  "Reinvestment
Termination Date",  notwithstanding that Enterprise had such right) and (ii) the
assignor  shall  relinquish  its rights with  respect to such  interest  for all
purposes of this  Agreement and under the other  Transaction  Documents to which
such assignor is or, immediately prior to such assignment,  was a party. No such
assignment  shall be  effective  unless  a fully  executed  copy of the  related
Assignment and  Assumption  Agreement  shall be delivered to the  Administrative
Agent,  the Enterprise  Agent and the Transferor.  All costs and expenses of the
Administrative  Agent,  the  Enterprise  Agent  and the  assignor  and  assignee
incurred  in  connection  with any  assignment  hereunder  shall be borne by the
Transferor  and not by the assignor or any such  assignee.  No  Enterprise  Bank
Investor  shall  assign any portion of its  Commitment  hereunder  without  also
simultaneously  assigning  an  equal  portion  of its  interest  in the  related
Liquidity Provider Agreement.

(c)      Effects of Assignment.

                           By executing and  delivering an Assignment and
Assumption  Agreement,  the assignor and assignee  thereunder
confirm to and agree with each other and the other  parties  hereto as  follows:
(i) other than as provided in such  Assignment  and  Assumption  Agreement,  the
assignor makes no representation or warranty and assumes no responsibility  with
respect  to  any  statements,  warranties  or  representations  made  in  or  in
connection with this  Agreement,  the other  Transaction  Documents or any other
instrument or document  furnished  pursuant  hereto or thereto or the execution,
legality, validity,  enforceability,  genuineness,  sufficiency or value or this
Agreement,  the other  Transaction  Documents  or any such other  instrument  or
document;  (ii) the assignor makes no  representation or warranty and assumes no
responsibility  with respect to the financial  condition of the Transferor,  the
Seller  or  the  Collection  Agent  or  the  performance  or  observance  by the
Transferor,  the  Seller  or the  Collection  Agent of any of  their  respective
obligations under this Agreement,  the Receivables Purchase Agreement, the other
Transaction  Documents or any other  instrument or document  furnished  pursuant
hereto;  (iii)  such  assignee  confirms  that  it has  received  a copy of this
Agreement,  the  Receivables  Purchase  Agreement  and such  other  instruments,
documents and  information  as it has deemed  appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption Agreement and
to purchase such interest;  (iv) such assignee will,  independently  and without
reliance upon the  Administrative  Agent,  the Enterprise  Agent or any of their
Affiliates,  or the  assignor  and  based  on  such  agreements,  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions in taking or not taking  action under this  Agreement  and the
other  Transaction  Documents;  (v) such assignee  appoints and  authorizes  the
Enterprise Agent to take such action as agent on its behalf and to exercise such
powers  under this  Agreement,  the other  Transaction  Documents  and any other
instrument or document  furnished pursuant hereto or thereto as are delegated to
such agent by the terms  hereof or  thereof,  together  with such  powers as are
reasonably incidental thereto and to enforce its respective rights and interests
in and under this Agreement,  the other Transaction  Documents,  the Receivables
and the Account  Agreements;  (vi) such assignee  agrees that it will perform in
accordance  with their terms all of the  obligations  which by the terms of this
Agreement and the other Transaction Documents are required to be performed by it
as the assignee of the assignor; and (vii) such assignee agrees that it will not
institute  against  Enterprise any proceeding of the type referred to in Section
10.9 hereof prior to the date which is one year and one day after the payment in
full of all Commercial Paper issued by Enterprise.

(d)      Transferor's Obligation to Pay Certain Amounts; Additional Assignment
Amount.

                           The Transferor  shall pay to the  Enterprise  Agent
for the account of  Enterprise,  in connection  with any
assignment by  Enterprise  to the  Enterprise  Bank  Investors  pursuant to this
Section 9.7, an aggregate  amount equal to all Carrying  Costs to accrue through
the end of each  outstanding  funding  period plus all other  Aggregate  Unpaids
(other than the  applicable  Net  Investment).  To the extent that such Carrying
Costs  relate to  interest  or  discount  on Related  Commercial  Paper,  if the
Transferor  fails to make  payment  of such  amounts  at or prior to the time of
assignment by Enterprise to the Enterprise Bank Investors,  such amount shall be
paid by the  Enterprise  Bank  Investors (in  accordance  with their  respective
Special Pro Rata  Shares) to  Enterprise  as  additional  consideration  for the
interests  assigned to the Enterprise  Bank Investors and the amount of the "Net
Investments"  hereunder held by the Enterprise Bank Investors shall be increased
by an  amount  equal to the  additional  amount so paid by the  Enterprise  Bank
Investors.

(e)      Administration of Agreement After Assignment.

                           After any  assignment by Enterprise to the Enterprise
Bank Investors  pursuant to this Section 9.7 (and the
payment of all amounts  owing to such  Purchaser in connection  therewith),  all
rights of the Enterprise  Agent and the Collateral  Agent set forth herein shall
be deemed to be afforded  to the  Enterprise  Agent on behalf of the  Enterprise
Bank Investors instead of either such party.

(f)      Payments.

                           After any  assignment by  Enterprise  to the
Enterprise  Bank  Investors  pursuant to this Section 9.7, all
payments to be made  hereunder  by the  Transferor  or the  Collection  Agent to
Enterprise shall be made to the account of the Enterprise Agent, as such account
shall have been notified to the  Transferor  and the  Collection  Agent.  In the
event that the Assignment Amount paid by the Enterprise Bank Investors  pursuant
to Section 9.7(a) is less than the sum of the applicable Net Investment plus the
Interest  Component of all outstanding  Related  Commercial  Paper,  then to the
extent  payments  made  hereunder in respect of the  applicable  Net  Investment
(excluding  interest) exceed the Assignment Amount, such excess amounts shall be
remitted by the Enterprise Agent to Enterprise.

(g)      Downgrade of Bank Investor.

                           If at any time prior to any  assignment by
Enterprise  to the  Enterprise  Bank  Investors as  contemplated
pursuant to this Section 9.7, the short term debt rating of any Enterprise  Bank
Investor   shall  be  "A-2"  or  "P-2"  from   Standard  &  Poor's  or  Moody's,
respectively,  with negative credit implications, such Enterprise Bank Investor,
upon request of the  Enterprise  Agent,  shall,  within 30 days of such request,
assign its rights and  obligations  hereunder to another  financial  institution
(which  institution's  short term debt  shall be rated at least  "A-2" and "P-2"
from  Standard & Poor's and  Moody's,  respectively,  and which  shall not be so
rated with negative  credit  implications).  If the short term debt rating of an
Enterprise  Bank  Investor  shall be "A-3" or "P-3",  or lower,  from Standard &
Poor's or Moody's,  respectively  (or such rating  shall have been  withdrawn by
Standard  &  Poor's  or  Moody's),  such  Bank  Investor,  upon  request  of the
Enterprise Agent, shall,  within five (5) Business Days of such request,  assign
its rights and obligations  hereunder to another  financial  institution  (which
institution's  short  term debt  shall be rated at least  "A-2"  and "P-2"  from
Standard & Poor's and  Moody's,  respectively,  and which  shall not be so rated
with negative credit implications).  In either such case, if any such Enterprise
Bank  Investor  shall not have  assigned its rights and  obligations  under this
Agreement within the applicable time period  described  above,  Enterprise shall
have the right to require such Enterprise Bank Investor to pay to the Enterprise
Agent an amount equal to such Enterprise Bank Investor's  Commitment for deposit
by the Enterprise  Agent into an account,  in the name of the Enterprise  Agent,
which shall be in satisfaction of such Enterprise Bank Investor's  obligation to
make  Incremental  Purchases  and to accept an  assignment  from  Enterprise  in
accordance with Section 9.7 hereof.  The amount on deposit in such account shall
be invested by the Enterprise  Agent in Eligible  Investments  and such Eligible
Investments shall have a term of no more than 30 days, at the Enterprise Agent's
sole  discretion.  The  Enterprise  Agent  shall remit to such  Enterprise  Bank
Investor,  monthly, the income thereon. Nothing in the three preceding sentences
shall  affect  or  diminish  in any  way any  such  downgraded  Enterprise  Bank
Investor's  Commitment to the  Transferor  or such  downgraded  Enterprise  Bank
Investor's  other  obligations  and  liabilities  hereunder  and under the other
Transaction Documents.

(h)      Bank Investor Consent.

                           Upon the occurrence and during the continuance of any
Termination Event or Potential  Termination Event, the
Enterprise Agent shall take no action hereunder (other than ministerial  actions
or such  actions as are  specifically  provided  for  herein)  without the prior
consent  of the  Enterprise  Majority  Investors  (which  consent  shall  not be
unreasonably  withheld or delayed).  The Enterprise Agent shall not, without the
prior written  consent of all  Enterprise  Bank  Investors,  agree to (i) amend,
modify or waive  any  provision  of this  Agreement  in any way which  would (A)
reduce  or  impair  Collections  or the  payment  of  interest  or fees  payable
hereunder  to such Bank  Investors or delay the  scheduled  dates for payment of
such amounts,  (B) increase the Servicing Fee (other than as permitted  pursuant
to  Section  6.2(b)),  (C)  modify  any  provisions  of  this  Agreement  or the
Receivables Purchase Agreement relating to the timing of payments required to be
made by the Transferor or the Seller or the  application of the proceeds of such
payments,   (D)  permit  the   appointment   of  any  Person   (other  than  the
Administrative  Agent) as successor  Collection  Agent, (E) release any property
from the lien provided by this Agreement  (other than as expressly  contemplated
herein) or (F) extend or permit the extension of the Commitment Termination Date
without the consent of each such Enterprise Bank Investor.  The Enterprise Agent
shall not agree to any amendment of this  Agreement  which  increases the dollar
amount of an Enterprise Bank Investor's  Commitment without the prior consent of
such Enterprise Bank Investor. In addition, the Enterprise Agent shall not agree
to any  amendment  of  this  Agreement  not  specifically  described  in the two
preceding  sentences  without the consent of the Enterprise  Majority  Investors
(which  consent  shall not be  unreasonably  withheld or  delayed).  "Enterprise
Majority  Investors"  shall  mean at any time,  the  Enterprise  Agent and those
Enterprise Bank Investors which hold Commitments aggregating in excess of 66 and
2/3% of  Enterprise's  Pro Rata Share of the Facility  Limit as of such date. In
the event the Enterprise  Agent requests an Enterprise Bank  Investor's  consent
pursuant to the foregoing provisions and the Enterprise Agent does not receive a
consent (either  positive or negative) from such Enterprise Bank Investor within
10 Business Days of such  Enterprise  Bank  Investor's  receipt of such request,
then such Enterprise Bank Investor (and its percentage interest hereunder) shall
be disregarded in determining  whether the Enterprise  Agent shall have obtained
sufficient consent hereunder.

SECTION 9.8.        Authorization and Action of Enterprise Agent.

(a) Enterprise and each  Enterprise Bank Investor hereby appoints and authorizes
the Enterprise  Agent to take such action as agent on its behalf and to exercise
such powers  under this  Agreement  and the other  Transaction  Documents as are
delegated to the Enterprise Agent by the terms hereof and thereof, together with
such powers as are reasonably  incidental thereto.  In furtherance,  and without
limiting the generality,  of the foregoing,  Enterprise and each Enterprise Bank
Investor  hereby  appoints  the  Enterprise  Agent as its agent to  execute  and
deliver all further instruments and documents,  and take all further action that
the Enterprise  Agent may deem necessary or appropriate or that Enterprise or an
Enterprise Bank Investor may reasonably request in order to perfect,  protect or
more fully evidence the interests  transferred or to be transferred from time to
time by the  Transferor  hereunder,  or to  enable  any of them to  exercise  or
enforce any of their respective rights hereunder, including, without limitation,
the  execution  by the  Enterprise  Agent  as  secured  party/assignee  of  such
financing or  continuation  statements,  or  amendments  thereto or  assignments
thereof,  relative to all or any of the  Receivables  now  existing or hereafter
arising,  and  such  other  instruments  or  notices,  as  may be  necessary  or
appropriate for the purposes stated herein above.  Enterprise and the Enterprise
Majority  Investors may direct the Enterprise  Agent to take any such incidental
action  hereunder.  With respect to other  actions  which are  incidental to the
actions specifically delegated to the Enterprise Agent hereunder, the Enterprise
Agent shall not be required to take any such incidental  action  hereunder,  but
shall be required to act or to refrain from acting (and shall be fully protected
in acting or refraining  from acting) upon the  direction of Enterprise  and the
Enterprise  Majority  Investors;  provided,  however,  that the Enterprise Agent
shall not be required to take any action hereunder if the taking of such action,
in the reasonable  determination of the Enterprise Agent,  shall be in violation
of any  applicable  law, rule or regulation or contrary to any provision of this
Agreement  or shall  expose  the  Enterprise  Agent to  liability  hereunder  or
otherwise.

(b) The  Enterprise  Agent shall exercise such rights and powers vested in it by
this Agreement and the other Transaction  Documents,  and use the same degree of
care and skill in their  exercise,  as a prudent  person  would  exercise or use
under the  circumstances  in the conduct of such  person's own affairs.  SECTION
9.9. Reliance, Etc. of Enterprise Agent.

                  Neither  the  Enterprise  Agent  nor  any  of  its  directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them as  Enterprise  Agent  under or in  connection  with this
Agreement or any of the other Transaction Documents, except for its or their own
gross  negligence or willful  misconduct.  Without  limiting the foregoing,  the
Enterprise Agent: (i) may consult with legal counsel  (including counsel for the
Transferor  or the Seller),  independent  public  accountants  and other experts
selected  by it and shall not be liable  for any  action  taken or omitted to be
taken  in good  faith  by it in  accordance  with the  advice  of such  counsel,
accountants or experts;  (ii) makes no warranty or  representation to Enterprise
or any  Enterprise  Bank Investor and shall not be  responsible to Enterprise or
any Enterprise Bank Investor for any statements,  warranties or  representations
made in or in connection with this  Agreement;  (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants  or  conditions  of this  Agreement  or any of the  other  Transaction
Documents on the part of the Transferor,  the Collection  Agent or the Seller or
to inspect the property (including the books and records) of the Transferor, the
Collection Agent or the Seller;  (iv) shall not be responsible to a Purchaser or
any Bank Investor for the due  execution,  legality,  validity,  enforceability,
genuineness,   sufficiency  or  value  of  this  Agreement,  any  of  the  other
Transaction  Documents or any other  instrument or document  furnished  pursuant
hereto or thereto;  and (v) shall incur no liability under or in respect of this
Agreement  or any of the other  Transaction  Documents by acting upon any notice
(including  notice by telephone),  consent,  certificate or other  instrument or
writing (which may be by telex)  believed by it to be genuine and signed or sent
by the proper party or parties.

SECTION 9.10.       Credit Decision with respect to Enterprise.

                  Enterprise and each Enterprise Bank Investor acknowledges that
it has, independently and without reliance upon the Enterprise Agent, any of the
Enterprise Agent's Affiliates,  any other Enterprise Bank Investor or Enterprise
(in the case of any Enterprise  Bank Investor) and based upon such documents and
information as it has deemed  appropriate,  made its own evaluation and decision
to enter into this Agreement and the other Transaction  Documents to which it is
a party and, if it so determines, to accept the transfer to the Enterprise Agent
on its  behalf  of any  undivided  ownership  interest  in the  Affected  Assets
hereunder.  Enterprise and each Enterprise Bank Investor also  acknowledges that
it will,  independently  and without reliance upon the Enterprise  Agent, any of
the  Enterprise  Agent's  Affiliates,  any other  Enterprise  Bank  Investor  or
Enterprise  (in the case of any  Enterprise  Bank  Investor)  and  based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own decisions in taking or not taking  action under this  Agreement and
the other Transaction Documents to which it is a party.

SECTION 9.11.       Indemnification of Enterprise Agent.

                  The  Enterprise   Bank   Investors   agree  to  indemnify  the
Enterprise  Agent (to the extent not reimbursed by the  Transferor),  ratably in
accordance  with their  Special  Pro Rata  Shares,  from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind or nature  whatsoever which may be
imposed on,  incurred by, or asserted  against the  Enterprise  Agent in any way
relating to or arising out of this  Agreement  or any action taken or omitted by
the  Enterprise  Agent,  any of the other  Transaction  Documents  hereunder  or
thereunder;  provided,  however, that the Enterprise Bank Investors shall not be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the  Enterprise  Agent's gross  negligence or willful  misconduct.  Without
limitation of the foregoing,  the Enterprise  Bank Investors  agree to reimburse
the Enterprise Agent,  ratably in accordance with their Special Pro Rata Shares,
promptly upon demand for any  out-of-pocket  expenses  (including  counsel fees)
incurred  by  the  Enterprise  Agent  in  connection  with  the  administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities  under, this Agreement and the other Transaction Documents,  to
the extent that such  expenses are incurred in the  interests of or otherwise in
respect of the Enterprise Bank Investors  hereunder and/or thereunder and to the
extent that the  Enterprise  Agent is not  reimbursed  for such  expenses by the
Transferor.

SECTION 9.12.       Successor Agent to Enterprise Agent.

                  The Enterprise  Agent may resign at any time by giving written
notice thereof to each Enterprise Bank Investor,  Enterprise, the Administrative
Agent  and the  Transferor  and may be  removed  at any time  with  cause by the
Enterprise Majority Investors. Upon any such resignation or removal,  Enterprise
and the  Enterprise  Majority  Investors  shall  appoint a successor  Enterprise
Agent.  Enterprise and each  Enterprise  Bank Investor  agrees that it shall not
unreasonably  withhold or delay its approval of the  appointment  of a successor
Enterprise  Agent.  If no such  successor  Enterprise  Agent  shall have been so
appointed,  and shall have accepted such  appointment,  within 30 days after the
retiring  Enterprise  Agent's  giving of notice of resignation or the Enterprise
Majority  Investors' removal of the retiring Enterprise Agent, then the retiring
Enterprise Agent may, on behalf of Enterprise and the Enterprise Bank Investors,
appoint a successor  Enterprise Agent which successor  Enterprise Agent shall be
either (i) a commercial bank organized under the laws of the United States or of
any  state  thereof  and  have  a  combined  capital  and  surplus  of at  least
$50,000,000  or (ii) an Affiliate  of such a bank.  Upon the  acceptance  of any
appointment as Enterprise Agent hereunder by a successor  Enterprise Agent, such
successor Enterprise Agent shall thereupon succeed to and become vested with all
the rights, powers,  privileges and duties of the retiring Enterprise Agent, and
the  retiring   Enterprise  Agent  shall  be  discharged  from  its  duties  and
obligations  under  this  Agreement.   After  any  retiring  Enterprise  Agent's
resignation  or removal  hereunder as Enterprise  Agent,  the provisions of this
Article IX shall  continue to inure to its  benefit as to any  actions  taken or
omitted to be taken by it while it was Enterprise Agent under this Agreement.

SECTION 9.13.       Payments by the Purchaser Agents.

                  Unless  specifically  allocated to a Bank Investor pursuant to
the terms of this Agreement,  all amounts  received by the applicable  Purchaser
Agent on behalf of the Bank Investors  shall be paid by such Purchaser  Agent to
the Bank Investors (at their respective  accounts  specified in their respective
Assignment  and  Assumption  Agreements)  in  accordance  with their  respective
related pro rata  interests in the applicable Net Investment on the Business Day
received by such Purchaser  Agent,  unless such amounts are received after 12:00
noon on such  Business  Day,  in which case such  Purchaser  Agent shall use its
reasonable  efforts to pay such amounts to the Bank  Investors on such  Business
Day,  but,  in any  event,  shall  pay such  amounts  to the Bank  Investors  in
accordance  with their  respective  related pro rata interests in the applicable
Net Investment not later than the following Business Day.


                                    ARTICLE X

                                  MISCELLANEOUS

                    Term of Agreement.

                  This Agreement shall terminate on the date following the later
of a  Termination  Date  and a  Special  Termination  Date  upon  which  the Net
Investments have been reduced to zero and all other Aggregate  Unpaids have been
paid in full, in each case, in cash; provided,  however, that (i) the rights and
remedies of the  Administrative  Agent, the Purchaser Agents, the Purchasers and
the Bank  Investors  with respect to any  representation  and  warranty  made or
deemed  to be made  by the  Transferor  pursuant  to this  Agreement,  (ii)  the
indemnification  and payment provisions of Article VIII, and (iii) the agreement
set forth in Section  10.9 hereof,  shall be  continuing  and shall  survive any
termination of this Agreement.

SECTION 10.2.       Waivers; Amendments.

                  No failure or delay on the part of the  Administrative  Agent,
any of the Purchaser  Agents, a Purchaser or any Bank Investor in exercising any
power,  right or remedy under this Agreement  shall operate as a waiver thereof,
nor shall any  single or partial  exercise  of any such  power,  right or remedy
preclude any other further  exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive  of any rights or remedies  provided by law. Any  provision of this
Agreement  may be  amended  or  waived  if,  but  only  if,  in the  case of any
amendment,  such  amendment is in writing and is signed by the  Transferor,  the
Purchasers,  the  Administrative  Agent,  the  Purchaser  Agents  and  the  Bank
Investors holding Commitments  aggregating 66 and 2/3 % of the Pro Rata Share of
its  related  Purchaser's  Facility  Limit and in the case of any  waiver,  such
waiver is granted in writing by the Administrative  Agent,  Purchaser Agents and
such Bank Investors.  The Transferor shall notify each Rating Agency then rating
the Commercial Paper of any Purchaser of any waiver or amendment with respect to
this  Agreement,  and, as to each material  waiver or amendment  (other than any
extension of the Commitment Termination Date or decrease in the Facility Limit),
shall obtain  confirmation  by such Rating Agency that such  material  waiver or
amendment shall not result in a reduction or withdrawal of any such rating.

SECTION 10.3.       Notices.

                  Except as  provided  below,  all  communications  and  notices
provided for  hereunder  shall be in writing  (including  telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other party
at its  address or telecopy  number set forth below or at such other  address or
telecopy  number as such party may hereafter  specify for the purposes of notice
to such party. Each such notice or other communication shall be effective (i) if
given by telecopy,  when such  telecopy is  transmitted  to the telecopy  number
specified in this Section 10.3 and  confirmation  is received,  (ii) if given by
mail 3 Business Days following such posting,  postage prepaid, U.S. certified or
registered,  (iii) if given by  overnight  courier,  one (1)  Business Day after
deposit thereof with a national  overnight courier service,  or (iv) if given by
any other means,  when  received at the address  specified in this Section 10.3.
However,  anything  in  this  Section  to  the  contrary  notwithstanding,   the
Transferor  hereby  authorizes  the  Purchasers to effect  Transfers and funding
period  selections  based on  telephonic  notices  made by any Person  which the
Purchasers in good faith believe to be acting on behalf of the  Transferor.  The
Transferor  agrees to deliver promptly to the Purchasers a written  confirmation
of each  telephonic  notice  signed  by an  authorized  officer  of  Transferor.
However,  the absence of such confirmation shall not affect the validity of such
notice.  If the written  confirmation  differs in any material  respect from the
action  taken by the  Purchasers,  the records of the  Purchasers  shall  govern
absent manifest error.

                           If to Enterprise:

                                    Enterprise Funding Corporation
                                    c/o Merrill Lynch Money Markets, Inc.
                                    World Financial Center
                                    South Tower, 8th Floor
                                    225 Liberty Street
                                    New York, NY  10080

                                    Attention:  Gerard Haugh
                                    Telephone:  (212) 236-7200
                                    Telecopy:   (212) 236-7584

                                    (with a copy to the Enterprise Agent)

                                    Payment Information:
                                    Bankers Trust Company
                                    New York, New York
                                    ABA:  021 001 033
                                    BNF:  BTCo as Depository for EFC
                                    Account #: 000 362 917
                                    Ref:  Metris - PNC
                                    Attention:  Stacy Coulon

                           If to PARCO:

                                    Park Avenue Receivables Corporation
                                    c/o Global Securitization Services, LLC
                                    25 West 43rd Street, Suite 704
                                    New York, New York 10036
                                    Attention:  President
                                    Telephone:       (212) 302-5151
                                    Telecopy:        (212) 302-8767

                                    (with a copy to the PARCO Agent)

                                    Payment Information:
                                    Chase Manhattan Bank
                                    New York, New York
                                    ABA: 021-000-021
                                    Account: 507839463
                                    Account #: 507839463
                                    For account of:Park Avenue Receivables Corp.
                                    Ref: Metris/PNC

                           If to Sheffield:

                                    Sheffield Receivables Corporation
                                    c/o Barclays Bank plc
                                    222 Broadway, 7th Floor
                                    New York, New York  10030
                                    Attention:  Mike Wade
                                    Telephone:       (212) 412-7554
                                    Telecopy:        (212) 412-6846

                                    (with a copy to the Sheffield Agent)

                                    Payment Information:
                                    Barclays Bank plc
                                    New York, New York  10038
                                    ABA:  026 0025-74
                                    Account #: 050 791 516
                                    Ref:  Sheffield Funding Account/Metris

                           If to the Transferor:

                                    Metris Asset Funding Co.
                                    600 South Highway 169, Suite 300
                                    St. Louis Park, MN  55426
                                    Telephone:  (612) 525-5024
                                    Telecopy:  (612) 525-5070
                                    Payment Information:
                                    Bank:  Norwest Bank, N.A. Minnesota
                                    ABA 091 000 019
                                    Account #: 6355055112
                                    Reference:  EFC/PNC National Bank

                           If to the Collection Agent:

                                    Direct Merchants Credit Card Bank, N.A.
                                    6909 East Greenway Parkway
                                    Scottsdale, AZ 85254
                                    Telephone:  (602) 718-4600
                                    Telecopy:  (602) 718-4830

                           If to the Collateral Agent:

                                    NationsBank, N.A.
                                    NationsBank Corporate Center -- 10th Floor
                                    Charlotte, North Carolina  28255
                                    Attention:  Michelle M. Heath,
                                                Structured Finance
                                    Telephone:  (704) 386-7922
                                    Telecopy:   (704) 388-9169

                           If to the PARCO Agent:

                                    The Chase Manhattan Bank
                                    450 West 33rd Street, 15th Floor
                                    New York, New York 10001
                                    Attention:  Structured Finance Services
                                    Telephone:       (212) 946-7861
                                    Telecopy:        (212) 946-7776

                           If to the Sheffield Agent:

                                    Barclays Bank plc,
                                    222 Broadway, 7th Floor
                                    New York, New York  10035
                                    Attention:  Mary Logan
                                    Telephone:       (212) 412-3266
                                    Telecopy:        (212) 412-6846

                           If to the Enterprise Agent or the Administrative
                           Agent:

                                    NationsBank, N.A.
                                    NationsBank Corporate Center, -- 10th Floor
                                    Charlotte, North Carolina  28255
                                    Attention:  Michelle M. Heath, Structured
                                    Finance
                                    Telephone:  (704) 386-7922
                                    Telecopy:   (704) 388-9169
                                    Payment Information:
                                    NationsBank, N.A.
                                    ABA: 053000196
                                    for the account of IBG Operations/Admin.
                                    Account #: 1093601650000
                                    Ref: Metris PNC
                                    Attention: Jennifer Luhia

                  If to the Bank Investors,  at their  respective  addresses set
forth  on the  signature  pages  hereto  or of  the  Assignment  and  Assumption
Agreement pursuant to which it became a party hereto.

SECTION 10.4.       Governing Law; Submission to Jurisdiction; Integration.

(a) THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK.  Each of the parties  hereto  agrees that a final
judgment in any such court shall be  conclusive  and may be enforced in such and
other  jurisdictions  by suit on the judgment or in any other manner provided by
law. Each of the Collection Agent and the Transferor hereby irrevocably  waives,
to the fullest extent it may  effectively do so, any objection  which it may now
or hereafter have to the laying of the venue of any such  proceeding  brought in
such a court and any claim that any such proceeding  brought in such a court has
been brought in an inconvenient  forum in connection with any objection based on
lack of personal  jurisdiction.  Nothing in this  Section  10.4 shall affect the
right  of  the  Purchasers  to  bring  any  action  or  proceeding  against  the
Transferor,  the  Collection  Agent or their  property  in the  courts  of other
jurisdictions.

(b)  EACH  OF  THE  PARTIES  HERETO  HEREBY  WAIVES  ANY  RIGHT  TO  HAVE A JURY
PARTICIPATE  IN RESOLVING  ANY DISPUTE,  WHETHER  SOUNDING IN CONTRACT,  TORT OR
OTHERWISE  AMONG ANY OF THEM  ARISING  OUT OF,  CONNECTED  WITH,  RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.

(c) This  Agreement  contains  the final and complete  integration  of all prior
expressions  by the parties hereto with respect to the subject matter hereof and
shall  constitute the entire  Agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.

(d) Each of the parties hereto irrevocably consents to service of process in the
manner  provided for notices in Section  10.3.  Nothing in this  Agreement  will
affect  the  right of any  party  hereto to serve  process  in any other  manner
permitted by law.

SECTION 10.5.       Severability; Counterparts.

                  This  Agreement may be executed in any number of  counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed  shall be deemed to be an original and all of which when taken together
shall  constitute one and the same  Agreement.  Any provisions of this Agreement
which are prohibited or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

SECTION 10.6.       Successors and Assigns.

(a) This Agreement  shall be binding on the parties hereto and their  respective
successors and assigns;  provided,  however, that neither the Transferor nor the
Seller may assign any of its rights or delegate  any of its duties  hereunder or
under the Receivables  Purchase  Agreement or under any of the other Transaction
Documents  to which it is a party  without  the  prior  written  consent  of the
Administrative  Agent and the Purchaser  Agents.  No provision of this Agreement
shall in any manner  restrict the ability of a Purchaser or any Bank Investor to
assign,  participate,  grant  security  interests in, or otherwise  transfer any
portion of the Transferred Interest.

(b) Without  limiting the foregoing,  a Purchaser  may, from time to time,  with
prior  or  concurrent   notice  to  Transferor  and  Collection  Agent,  in  one
transaction  or a series of  transactions,  assign  all or a portion  of its Net
Investment  and its rights and  obligations  under this  Agreement and any other
Transaction Documents to which it is a party to a Conduit Assignee.  Upon and to
the extent of such assignment by such Purchaser to a Conduit Assignee,  (i) such
Conduit  Assignee  shall be the owner of the assigned  portion of the applicable
Net  Investment,  (ii) the related  administrative  or  managing  agent for such
Purchaser will act as the agent  hereunder for such Conduit  Assignee,  with all
corresponding  rights and powers,  express or implied,  granted to the Purchaser
Agent  hereunder or under the other  Transaction  Documents,  (iii) such Conduit
Assignee and its liquidity  support  provider(s) and credit support  provider(s)
and  other  related  parties  shall  have  the  benefit  of all the  rights  and
protections provided to such Purchaser and its Liquidity Support Provider(s) and
Credit Support  Provider(s),  respectively,  herein and in the other Transaction
Documents  (including,  without  limitation,  any limitation on recourse against
such  Purchaser or related  parties,  any  agreement  not to file or join in the
filing  of  a  petition  to  commence  an  insolvency  proceeding  against  such
Purchaser,  and the right to assign to another  Conduit  Assignee as provided in
this paragraph), (iv) such Conduit Assignee shall assume all (or the assigned or
assumed portion) of such Purchaser's obligations, if any, hereunder or any other
Transaction   Document,   and  such  Purchaser   shall  be  released  from  such
obligations,  in each case to the extent of such assignment, and the obligations
of such Purchaser and such Conduit  Assignee shall be several and not joint, (v)
all  distributions  in  respect  of the  Net  Investments  shall  be made to the
applicable Purchaser Agent or administrative agent, as applicable,  on behalf of
such Purchaser and such Conduit  Assignee on a pro rata basis according to their
respective interests,  (vi) the definition of the term "Interest Component" with
respect to the  portion of the Net  Investments  funded  with  commercial  paper
issued by such Purchaser from time to time shall be determined in the manner set
forth in the definition of " Interest Component" applicable to such Purchaser on
the basis of the interest rate or discount applicable to commercial paper issued
by such Conduit Assignee  (rather than such Purchaser),  (vii) the defined terms
and other  terms and  provisions  of this  Agreement  and the other  Transaction
Documents shall be interpreted in accordance  with the foregoing,  and (viii) if
requested  by any of the  Purchaser  Agents  or the  administrative  agent  with
respect to the Conduit  Assignee,  the  parties  will  execute and deliver  such
further  agreements  and documents and take such other actions as the applicable
Purchaser Agent or such administrative  agent may reasonably request to evidence
and give effect to the  foregoing.  No Assignment by such Purchaser to a Conduit
Assignee of all or any portion of the applicable Net Investment shall (A) in any
way diminish the related Bank  Investors'  obligation  under Section 9.9 to fund
any Incremental  Transfer not funded by such Purchaser or such Conduit  Assignee
or to acquire from such Purchaser or such Conduit Assignee all or any portion of
the  applicable  Net Investment or (B) result in the liability of the Transferor
for any Section 8.2 Costs  which are higher than those then  applicable  to such
Purchaser.

(c) Each of the  Transferor  and the Seller  hereby  agrees and  consents to the
assignment  by a  Purchaser  from time to time of all or any part of its  rights
under,  interest in and title to this Agreement and the Transferred  Interest to
any  Liquidity  Provider  or to any  Conduit  Assignee  as set forth in  section
10.6(b).  In addition,  each of the Transferor and the Seller hereby consents to
and  acknowledges  the  assignment by such Purchaser of all of its rights under,
interest  in and title to this  Agreement  and the  Transferred  Interest to the
Collateral  Agent, in the case of Enterprise,  and the collateral agent for each
of the other Purchasers in the case of such other Purchasers.

SECTION 10.7.       Waiver of Confidentiality.

                  Each of the Transferor  and the Seller hereby  consents to the
disclosure  of any  nonpublic  information  with  respect  to it  received  by a
Purchaser,  the  Administrative  Agent,  any of the Purchaser Agents or any Bank
Investor to any of a Purchaser,  the Administrative  Agent, any of the Purchaser
Agents,  any  nationally   recognized  rating  agency  rating  such  Purchaser's
Commercial  Paper,  the  Collateral  Agent,  any Bank Investor or potential Bank
Investor,  the Liquidity Provider, the Credit Support Provider or any dealers of
Commercial  Paper in relation to this  Agreement;  provided,  that each Purchase
Agent will notify the Transferor in advance of its sending nonpublic information
to a potential  related  Bank  Investor  and will use its best efforts to obtain
executed  confidentiality   agreements  covering  the  disclosure  of  any  such
information to any Bank Investor, potential Bank Investor, Liquidity Provider or
Credit Support Provider other than the Purchaser Agents.

SECTION 10.8.       Confidentiality Agreement.

                  Each of the Transferor and the Collection  Agent hereby agrees
that  it  will  not  disclose  the  contents  of  this  Agreement  or any  other
proprietary  or  confidential  information  of a Purchaser,  the  Administrative
Agent, any of the Purchaser Agents, the Collateral Agent, any Liquidity Provider
or any Bank Investor to any other Person except (i) its auditors and  attorneys,
employees  or  financial  advisors  (other  than any  commercial  bank)  and any
nationally  recognized  rating  agency,   provided  such  auditors,   attorneys,
employees,  financial  advisors or rating  agencies  are  informed of the highly
confidential  nature  of  such  information  or (ii) as  otherwise  required  by
applicable law (including any disclosure  required to be made under the rules of
the  Securities  and  Exchange  Commission)  or order  of a court  of  competent
jurisdiction.

SECTION 10.9.       No Bankruptcy Petition Against the Purchasers.

(a) Each of the parties  hereto  (other than  Enterprise)  hereby  covenants and
agrees  that,  prior to the date which is one year and one day after the payment
in full of all outstanding Commercial Paper or other indebtedness of Enterprise,
it will not institute against, or join any other Person in instituting  against,
Enterprise   any   bankruptcy,   reorganization,   arrangement,   insolvency  or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.

(b) Each of the parties  hereto (other than PARCO)  hereby  covenants and agrees
that,  prior to the date which is one year and one day after the payment in full
of all outstanding  Commercial Paper or other Indebtedness of PARCO, it will not
institute against,  or join any other Person in instituting  against,  PARCO any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States.

(c) Each of the parties  hereto  (other than  Sheffield)  hereby  covenants  and
agrees  that,  prior to the date which is one year and one day after the payment
in full of all outstanding  Commercial Paper or other indebtedness of Sheffield,
it will not institute against, or join any other Person in instituting  against,
Sheffield any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar  proceedings under the laws of the United States or
any state of the United States.

SECTION 10.10.      No Recourse Against Stockholders, Officers or Directors.

(a) (i) No recourse  under any  obligation,  covenant or agreement of Enterprise
contained in this  Agreement  shall be had against  Merrill  Lynch Money Markets
Inc.  (or any  affiliate  thereof)  or any  stockholder,  officer or director of
Enterprise,  as such, by the  enforcement  of any  assessment or by any legal or
equitable proceeding,  by virtue of any statute or otherwise; it being expressly
agreed and understood  that this  Agreement is solely a corporate  obligation of
Enterprise,  and that no personal  liability  whatsoever  shall  attach to or be
incurred by Merrill Lynch Money  Markets Inc. (or any affiliate  thereof) or the
stockholders,  officers or directors of such Purchaser, as such, or any of them,
under  or by  reason  of any of the  obligations,  covenants  or  agreements  of
Enterprise contained in this Agreement,  or implied therefrom,  and that any and
all personal  liability for breaches by  Enterprise of any of such  obligations,
covenants  or  agreements,  either at common law or at equity,  or by statute or
constitution,  of Merrill Lynch Money  Markets Inc. (or any affiliate  thereof),
and  every  such  stockholder,  officer  or  director  of  Enterprise  is hereby
expressly waived as a condition of and  consideration  for the execution of this
Agreement;  provided that the  foregoing  shall not relieve any such Person from
any liability it might  otherwise have as a result of its fraudulent  actions or
omissions. The provisions of this Section 10.10(a) shall survive the termination
of this Agreement.

                           (ii)     No recourse under any obligation, covenant
or agreement of PARCO contained in this Agreement shall
be had against any incorporator,  stockholder,  officer,  director,  employee or
agent of PARCO, the PARCO Agent or any of their Affiliates  (solely by virtue of
such capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise, it being expressly agreed and
understood  that this Agreement is solely a corporate  obligation of PARCO,  and
that no  personal  liability  whatever  shall  attach to or be  incurred  by any
incorporator,  stockholder,  officer, director,  employee or agent of PARCO, the
PARCO Agent or any of their  Affiliates  (solely by virtue of such  capacity) or
any  of  them  under  or by  reason  of any of  the  obligations,  covenants  or
agreements of PARCO contained in this Agreement, or implied therefrom,  and that
any and all personal liability for breaches by PARCO of any of such obligations,
covenants or agreements,  either at common law or at equity, or by statute, rule
or  regulation,  of every such  incorporator,  stockholder,  officer,  director,
employee  or  agent  is  hereby  expressly  waived  as a  condition  of  and  in
consideration  for the execution of this Agreement;  provided that the foregoing
shall not relieve any such Person from any liability it might  otherwise have as
a result of its fraudulent actions or fraudulent omissions.
The  provisions  of this Section  10.10(b)  shall  survive  termination  of this
Agreement.

                           (iii) No recourse under any  obligation,  covenant or
agreement of Sheffield contained in this Agreement
shall be had against any incorporator,  stockholder, officer, director, employee
or agent of Sheffield, the Sheffield Agent or any of their Affiliates (solely by
virtue of such capacity) by the enforcement of any assessment or by any legal or
equitable proceeding,  by virtue of any statute or otherwise, it being expressly
agreed and understood  that this  Agreement is solely a corporate  obligation of
Sheffield,  and  that no  personal  liability  whatever  shall  attach  to or be
incurred by any incorporator,  stockholder, officer, director, employee or agent
of Sheffield,  the Sheffield Agent or any of their Affiliates  (solely by virtue
of such  capacity) or any of them under or by reason of any of the  obligations,
covenants or agreements  of Sheffield  contained in this  Agreement,  or implied
therefrom,  and that any and all personal liability for breaches by Sheffield of
any of such  obligations,  covenants or  agreements,  either at common law or at
equity,  or  by  statute,  rule  or  regulation,  of  every  such  incorporator,
stockholder,  officer, director, employee or agent is hereby expressly waived as
a  condition  of and in  consideration  for the  execution  of  this  Agreement;
provided that the foregoing shall not relieve any such Person from any liability
it might  otherwise  have as a result of its  fraudulent  actions or  fraudulent
omissions.   The  provisions  of  this  Section   10.10(b)(iii)   shall  survive
termination of this Agreement.

(b)  Notwithstanding  anything to the contrary contained herein, the obligations
of each Purchaser under this Agreement and all other  Transaction  Documents are
solely  the  corporate  obligations  of  such  Purchaser  and,  in the  case  of
obligations  of such Purchaser  other than such  Purchaser's  Commercial  Paper,
shall be payable at such time as funds are received by or are  available to such
Purchaser in excess of funds  necessary  to pay in full all of such  Purchaser's
outstanding  Commercial  Paper, as applicable,  and, to the extent funds are not
available  to pay such  obligations,  the  claims  relating  thereto  shall  not
constitute a claim  against such  Purchaser but shall  continue to accrue.  Each
party hereto  agrees that the payment of any claim (as defined in Section 101 of
Title 11 of the Bankruptcy  Code) of any such party against any Purchaser  shall
be  subordinated  to the payment in full of all of such  Purchaser's  Commercial
Paper.

SECTION 10.11.      Characterization of the Transactions Contemplated by the
Agreement.

                  It is the  intention  of the  parties  that  the  transactions
contemplated hereby constitute the sale of the Transferred  Interest,  conveying
good title thereto free and clear of any Adverse Claims to the Purchaser Agents,
on  behalf  of  their  related  Purchasers  and  Bank  Investors,  and  that the
Transferred  Interest not be part of the Transferor's  estate in the event of an
insolvency.   If,   notwithstanding  the  foregoing,   in  the  event  that  the
transactions  contemplated hereby are deemed a financing,  the Transferor hereby
grants to the Purchaser Agents,  on behalf of their Related  Purchasers and Bank
Investors,  and the Transferor  hereby grants to the Purchaser Agents, on behalf
of their related  Purchasers and Bank Investors,  a first priority perfected and
continuing  security  interest  in all  of the  Transferor's  right,  title  and
interest in, to and under the Receivables,  together with Collections,  Proceeds
and (to the extent that a security  interest  therein can be perfected  and have
first  priority by the filing of the  financing  statements  contemplated  to be
filed  hereunder  on the Closing  Date,  together  with  amendments  thereto and
continuations  thereof) Related Security with respect thereto, and together with
all of the Transferor's rights under the Receivables Purchase Agreement to which
it is a  party  with  respect  to  the  Receivables  and  with  respect  to  any
obligations  thereunder of the Seller with respect to the Receivables,  and that
this Agreement shall  constitute a security  agreement under applicable law. The
Transferor  hereby assigns to the Purchaser  Agents,  on behalf of their related
Purchasers  and  Bank  Investors,  all of its  rights  and  remedies  under  the
Receivables  Purchase  Agreement  to which  it is a party  with  respect  to the
Receivables and with respect to any  obligations  thereunder of the Sellers with
respect to the Receivables.

SECTION 10.12.      Conflict Waiver.

(a) NationsBank acts as Enterprise's  administrative agent, as provider of other
facilities for  Enterprise,  and may provide other  services or facilities  from
time to time (the "NationsBank  Roles").  Each party hereto hereby  acknowledges
and consents to any and all NationsBank Roles, waives any objections it may have
to any actual or potential  conflict of interest caused by NationsBank's  acting
as the  Enterprise  Agent  or as a Bank  Investor  hereunder  and  acting  as or
maintaining any of the NationsBank Roles, and agrees that in connection with any
NationsBank Role, NationsBank may take, or refrain from taking, any action which
it in its discretion deems appropriate.

(b) Chase acts as PARCO's  administrative agent, as issuing and paying agent for
PARCO's  Commercial Paper, as provider of other backup facilities for PARCO, and
may provide other services or facilities  from time to time (the "Chase Roles").
Each party hereto hereby  acknowledges  and consents to any and all Chase Roles,
waives  any  objections  it may have to any  actual  or  potential  conflict  of
interest  caused by  Chase's  acting as the  PARCO  Agent or as a Bank  Investor
hereunder and acting as or maintaining  any of the Chase Roles,  and agrees that
in connection with any Chase Role,  Chase may take, or refrain from taking,  any
action which it in its discretion deems appropriate.

(c) Barclays acts as  Sheffield's  administrative  agent,  as issuing and paying
agent for Sheffield's  Commercial  Paper, as provider of other backup facilities
for Sheffield,  and may provide other  services or facilities  from time to time
(the "Barclays  Roles").  Each party hereto hereby  acknowledges and consents to
any and all Barclays  Roles,  waives any objections it may have to any actual or
potential conflict of interest caused by Barclays' acting as the Sheffield Agent
or as a Bank Investor hereunder and acting as or maintaining any of the Barclays
Roles, and agrees that in connection with any Barclays Role,  Barclays may take,
or refrain from taking, any action which it in its discretion deems appropriate.

SECTION 10.13.      Limitation of Liability.

                  Notwithstanding  any provision of this  Agreement or any other
Transaction  Document:   (i)  none  of  the  Purchaser  Agents  shall  have  any
obligations  under this Agreement or any other  Transaction  Document other than
those specifically set forth herein and therein,  and no implied  obligations of
any of the  Purchaser  Agents  shall be read  into this  Agreement  or any other
Transaction Document;  and (ii) in no event shall any of the Purchaser Agents be
liable  under or in  connection  with this  Agreement  or any other  Transaction
Document for indirect,  special, or consequential losses or damages of any kind,
including  lost  profits,  even  if  advised  of  the  possibility  thereof  and
regardless of the form of action by which such losses or damages may be claimed.
None of the  Purchaser  Agents nor any of its  respective  directors,  officers,
agents or employees  shall be liable for any action taken or omitted to be taken
in good faith by it or them under or in  connection  with this  Agreement or any
other  Transaction  Document,  except for its or their own gross  negligence  or
willful misconduct. Without limiting the foregoing, each Purchaser Agent (a) may
consult with legal counsel (including  counsel for the Purchasers),  independent
public  accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in  accordance  with
the advice of such counsel, accountants or experts, (b) shall not be responsible
to any party to this Agreement for any statements, warranties or representations
made in or in connection with this Agreement or the other Transaction  Documents
(other  than  its  own),  (c)  shall  not be  responsible  to any  party to this
Agreement   for  the  due   execution,   legality,   validity,   enforceability,
genuineness,  sufficiency  or value of this  Agreement or the other  Transaction
Documents (except with respect to itself), (d) shall incur no liability under or
in respect of any of the Commercial Paper or other  obligations of any Purchaser
under this Agreement or the other  Transaction  Documents and (e) shall incur no
liability  under  or in  respect  of this  Agreement  or the  other  Transaction
Documents by acting upon any notice  (including  notice by telephone),  consent,
certificate or other instrument or writing (which may be by facsimile)  believed
by it to be  genuine  and  signed  or  sent  by the  proper  party  or  parties.
Notwithstanding  anything else herein or in the other Transaction Documents,  it
is agreed  that where any of the  Purchaser  Agents may be  required  under this
Agreement  or the other  Transaction  Documents  to give  notice of any event or
condition  or to take any action as a result of the  occurrence  of any event or
the existence of any condition,  the applicable  Purchaser  Agent agrees to give
such notice or take such action only to the extent that it has actual  knowledge
of the  occurrence of such event or the existence of such  condition,  and shall
incur no  liability  for any  failure to give such notice or take such action in
the absence of such knowledge.

SECTION 10.14.      Pari Passu Interests.

                  It is the  intention of the parties  hereto that the interests
being  acquired  hereunder by the Purchaser  Agents,  on behalf of their related
Purchasers and Bank Investors, shall rank equally in priority.

SECTION 10.15.      Further Assurances.

                  Each of the Transferor  and Collection  Agent agrees to do and
perform  from time to time any and all acts and to execute  any and all  further
instruments  required or reasonably requested by the Administrative Agent or the
Purchaser  Agents more fully to effect the  purposes of this  Agreement  and the
other Transaction  Documents in a manner consistent with this Agreement and such
other Transaction Documents.



                  IN WITNESS  WHEREOF,  the  parties  hereto have  executed  and
delivered the Transfer and Administration Agreement as of the date first written
above.

                                    ENTERPRISE FUNDING CORPORATION,
                                    as Purchaser

                                    By:/s/
                                        Name:
                                        Title:


                                    PARK AVENUE RECEIVABLES
                                    CORPORATION,
                                    as Purchaser

                                    By: /s/ Andrea L. Stidd
                                        Name: Andrea L. Stidd
                                        Title:


                                    SHEFFIELD RECEIVABLES CORPORATION,
                                    as Purchaser

                                    By: /s/ Michael Wade
                                        Name: Michael Wade
                                        Title:Associate Director


                                    METRIS ASSET FUNDING CO.,
                                    as Transferor

                                    By: /s/ Paul Runice
                                        Name:Paul Runice
                                        Title: President & Treasurer


                                    DIRECT MERCHANTS CREDIT CARD BANK,
                                    NATIONAL ASSOCIATION,
                                    as Collection Agent

                                    By: /s/ Jean Benson
                                        Name:Jean Benson
                                        Title:Controller


<PAGE>



Commitment                           NATIONSBANK, N.A.,
$__________                          as a Bank Investor, Enterprise Agent and
                                     Administrative Agent

                                     By: /s/ Robert R. Wood
                                     Name:Robert R. Wood
                                     Title:Vice President



                                     THE CHASE MANHATTAN BANK,
                                     as a Bank Investor

                                     By: ______________________________________
                                         Name:
                                         Title:



                                     THE CHASE MANHATTAN BANK,
                                     as PARCO Agent

                                     By: /s/ Andrew Taylor
                                     Name:Andrew Taylor
                                     Title:Vice President



                                     BARCLAYS BANK PLC,
                                     as a Bank Investor and Sheffield Agent

                                     By: /s/ Mary Logan
                                     Name:Mary Logan
                                     Title:Director





<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I  DEFINITIONS........................................................1

         SECTION 1.1. Certain Defined Terms...................................1

         SECTION 1.2. Other Terms............................................24

         SECTION 1.3. Computation of Time Periods............................24

ARTICLE II  PURCHASES AND SETTLEMENTS........................................25

         SECTION 2.1. Facility...............................................25

         SECTION 2.2. Transfers; Certificates; Eligible Receivables..........25

         SECTION 2.3. Selection of Interest Rates and Interest Periods;
                      LIBOR Protection; Illegality...........................29

         SECTION 2.4. Carrying Costs, Fees and Other Costs and Expenses......32

         SECTION 2.5. Allocations of Collections; Non-Liquidation
                      Settlement and Reinvestment Procedures.................33

         SECTION 2.6. Liquidation Settlement Procedures......................35

         SECTION 2.7. Fees...................................................36

         SECTION 2.8. Protection of Ownership Interest of the Purchasers
                      and the Bank Investors.................................36

         SECTION 2.9. Application of Payments................................37

         SECTION 2.10. Payments and Computations, Etc........................38

         SECTION 2.11. Reports...............................................39

         SECTION 2.12. Collection Account, Spread Account
                       and Excess Funding Account............................39

         SECTION 2.13. Sharing of Payments, Etc..............................40

         SECTION 2.14. Right of Setoff.......................................41

         SECTION 2.15. Special Termination Date with Respect to
                       a Particular Purchaser................................41

ARTICLE III  REPRESENTATIONS AND WARRANTIES..................................42

         SECTION 3.1. Representations and Warranties of the Transferor.......42

         SECTION 3.2. Reaffirmation of Representations and
                      Warranties by the Transferor...........................46

         SECTION 3.3. Representations and Warranties of the
                      Collection Agent.......................................46

ARTICLE IV  CONDITIONS PRECEDENT.............................................49

         SECTION 4.1. Conditions to Closing..................................49

ARTICLE V  COVENANTS.........................................................52

         SECTION 5.1. Affirmative Covenants of Transferor....................52

         SECTION 5.2. Negative Covenants of the Transferor...................58

         SECTION 5.3. Affirmative Covenants of the Collection Agent..........60

         SECTION 5.4. Negative Covenants of the Collection Agent.............63

ARTICLE VI  ADMINISTRATION AND COLLECTIONS...................................64

         SECTION 6.1. Appointment of Collection Agent........................64

         SECTION 6.2. Duties of Collection Agent.............................65

         SECTION 6.3. Rights After Designation of New Collection Agent.......66

         SECTION 6.4. Collection Agent Default...............................67

         SECTION 6.5. Responsibilities of the Transferor and the Seller......75

ARTICLE VII  TERMINATION EVENTS..............................................76

         SECTION 7.1. Termination Events.....................................76

         SECTION 7.2. Termination............................................78

ARTICLE VIII  INDEMNIFICATION; EXPENSES; RELATED MATTERS.....................79

         SECTION 8.1. Indemnities by the Transferor..........................79

         SECTION 8.2. Indemnity for Taxes, Reserves and Expenses.............82

         SECTION 8.3. Taxes..................................................84

         SECTION 8.4. Other Costs, Expenses and Related Matters..............84

         SECTION 8.5. Reconveyance Under Certain Circumstances...............85

ARTICLE IX  THE ADMINISTRATIVE AGENT; BANK COMMITMENT; PURCHASER AGENTS......85

         SECTION 9.1. Authorization and Action of Administrative Agent.......85

         SECTION 9.2. Administrative Agent's Reliance, Etc...................86

         SECTION 9.3. Credit Decision With Respect to Administrative Agent...87

         SECTION 9.4. Indemnification of the Administrative Agent............87

         SECTION 9.5. Successor Administrative Agent.........................88

         SECTION 9.6. Payments by the Administrative Agent...................88

         SECTION 9.7. Bank Commitment; Assignment to Bank Investors..........88

         SECTION 9.8. Authorization and Action of Enterprise Agent...........93

         SECTION 9.9. Reliance, Etc. of Enterprise Agent.....................94

         SECTION 9.10. Credit Decision with respect to Enterprise............94

         SECTION 9.11. Indemnification of Enterprise Agent...................94

         SECTION 9.12. Successor Agent to Enterprise Agent...................95

         SECTION 9.13. Payments by the Purchaser Agents......................95

ARTICLE X  MISCELLANEOUS.....................................................96

         SECTION 10.1. Term of Agreement.....................................96

         SECTION 10.2. Waivers; Amendments...................................96

         SECTION 10.3. Notices...............................................97

         SECTION 10.4. Governing Law; Submission to Jurisdiction;
                       Integration..........................................100

         SECTION 10.5. Severability; Counterparts...........................101

         SECTION 10.6. Successors and Assigns...............................101

         SECTION 10.7. Waiver of Confidentiality............................103

         SECTION 10.8. Confidentiality Agreement............................103

         SECTION 10.9. No Bankruptcy Petition Against the Purchasers........103

         SECTION 10.10. No Recourse Against Stockholders,
                        Officers or Directors...............................104

         SECTION 10.11. Characterization of the Transactions
                        Contemplated by the Agreement.......................105

         SECTION 10.12. Conflict Waiver.....................................106

         SECTION 10.13. Limitation of Liability.............................106

         SECTION 10.14. Pari Passu Interests................................107

         SECTION 10.15. Further Assurances..................................107



EXHIBIT A          Form of Additional Investment Certificates

EXHIBIT B          Form of Assignment and Assumption Agreement

EXHIBIT C          Form of Agreed Upon Procedures

EXHIBIT D          Form of Investor Report

EXHIBIT E          Form of Certificates

EXHIBIT F          Form of Transfer Certificates

EXHIBIT G          Location of Records

EXHIBIT H          List of Subsidiaries, Divisions and Tradenames



<PAGE>

EXECUTION COPY


                      TRANSFER AND ADMINISTRATION AGREEMENT
                                      among
                            METRIS ASSET FUNDING CO.,
                               as the Transferor,
                         ENTERPRISE FUNDING CORPORATION,
                       PARK AVENUE RECEIVABLES CORPORATION
                                       and
                       SHEFFIELD RECEIVABLES CORPORATION,
                                 as Purchasers,
            DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION,
                            as the Collection Agent,
                               BARCLAYS BANK PLC,
                     as a Bank Investor and Sheffield Agent,
                            THE CHASE MANHATTAN BANK,

                       as a Bank Investor and PARCO Agent,
                                       and
                               NATIONSBANK, N.A.,
                    as a Bank Investor and Enterprise Agent,
                                       and
                               NATIONSBANK, N.A.,
                             as Administrative Agent
                          Dated as of December 9, 1998

                           PNC NATIONAL BANK PORTFOLIO