Document:

Exhibit 10(D)

 

TARGET RECEIVABLES CORPORATION,

Transferor

 

RETAILERS NATIONAL BANK,

Servicer

 

and

 

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

Trustee

 

 

TARGET CREDIT CARD MASTER TRUST

AMENDED AND RESTATED

POOLING AND SERVICING AGREEMENT

 

 

Dated as of April 28, 2000

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  
	
  ARTICLE I Definitions

  	
   

  
	
  Section 1.1

  	
  Definitions  

  	
   

  
	
  Section 1.2

  	
  Other
  Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II Conveyance of
  Receivables

  	
   

  
	
  Section 2.1

  	
  Conveyance
  of Receivables

  	
   

  
	
  Section 2.2

  	
  Acceptance by
  Trustee

  	
   

  
	
  Section 2.3

  	
  Representations
  and Warranties of the Transferor Relating to the Transferor

  	
   

  
	
  Section 2.4

  	
  Representations and Warranties of
  the Transferor Relating to this Agreement and any Supplement and the
  Receivables

  	
   

  
	
  Section 2.5

  	
  Reassignment
  of Ineligible Receivables

  	
   

  
	
  Section 2.6

  	
  Reassignment
  of Receivables in Trust Portfolio

  	
   

  
	
  Section 2.7

  	
  Covenants
  of the Transferor

  	
   

  
	
  Section 2.8

  	
  Covenants
  of the Transferor with Respect to the Bank Purchase Agreement

  	
   

  
	
  Section 2.9

  	
  Addition of
  Accounts

  	
   

  
	
  Section 2.10

  	
  Removal of
  Accounts

  	
   

  
	
  Section 2.11

  	
  Discount Option

  	
   

  
	
  Section 2.12

  	
  Additional Transferors

  	
   

  
	
  Section 2.13

  	
  Account
  Allocations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III Administration and
  Servicing of Receivables 

  	
   

  
	
  Section 3.1

  	
  Acceptance
  of Appointment and Other Matters Relating to the Servicer

  	
   

  
	
  Section 3.2

  	
  Servicing
  Compensation

  	
   

  
	
  Section 3.3

  	
  Representations,
  Warranties and Covenants of the Servicer

  	
   

  
	
  Section 3.4

  	
  Report to the
  Trustee

  	
   

  
	
  Section 3.5

  	
  Annual
  Certificate of Servicer

  	
   

  
	
  Section 3.6

  	
  Annual
  Servicing Report of Independent Public Accountants; Copies of Reports
  Available

  	
   

  
	
  Section 3.7

  	
  Tax Treatment

  	
   

  
	
  Section 3.8

  	
  Notices to
  Retailers National Bank

  	
   

  
	
  Section 3.9

  	
  Adjustments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV Rights of Certificateholders
  and Allocation and Application of Collections 

  	
   

  
	
  Section 4.1

  	
  Rights of
  Certificateholders

  	
   

  
	
  Section 4.2

  	
  Establishment
  of Collection Account and Special Funding Account

  	
   

  
	
  Section 4.3

  	
  Collections
  and Allocations

  	
   

  
	
  Section 4.4

  	
  Shared
  Principal Collections

  	
   

  
	
  Section 4.5

  	
  Excess
  Finance Charge Collections

  	
   

  

 

 

	
  Section 4.6

  	
  Allocations
  During Funding Period

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V Distributions and Reports
  to Certificateholders 

  	
   

  
	
   

  	
   

  
	
  ARTICLE VI The Certificates

  	
   

  
	
  Section 6.1

  	
  The Certificates

  	
   

  
	
  Section 6.2

  	
  Authentication
  of Certificates

  	
   

  
	
  Section 6.3

  	
  New Issuances

  	
   

  
	
  Section 6.4

  	
  Registration
  of Transfer and Exchange of Certificates

  	
   

  
	
  Section 6.5

  	
  Mutilated, Destroyed, Lost or
  Stolen Certificates

  	
   

  
	
  Section 6.6

  	
  Persons Deemed Owners

  	
   

  
	
  Section 6.7

  	
  Appointment of Paying Agent

  	
   

  
	
  Section 6.8

  	
  Access to List of Registered
  Certificateholders’ Names and Addresses

  	
   

  
	
  Section 6.9

  	
  Authenticating Agent

  	
   

  
	
  Section 6.10

  	
  Book-Entry Certificates

  	
   

  
	
  Section 6.11

  	
  Notices to Clearing Agency

  	
   

  
	
  Section 6.12

  	
  Definitive Certificates

  	
   

  
	
  Section 6.13

  	
  Global Certificate

  	
   

  
	
  Section 6.14

  	
  Uncertificated Classes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII Other Matters Relating
  to the Transferor 

  	
   

  
	
  Section 7.1

  	
  Liability of the Transferor

  	
   

  
	
  Section 7.2

  	
  Merger or Consolidation of, or
  Assumption of the Obligations of, the Transferor

  	
   

  
	
  Section 7.3

  	
  Limitations on Liability of the
  Transferor

  	
   

  
	
  Section 7.4

  	
  Liabilities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII Other Matters
  Relating to the Servicer 

  	
   

  
	
  Section 8.1

  	
  Liability of the Servicer

  	
   

  
	
  Section 8.2

  	
  Merger or Consolidation of, or
  Assumption of the Obligations of, the Servicer

  	
   

  
	
  Section 8.3

  	
  Limitation on Liability of the
  Servicer and Others

  	
   

  
	
  Section 8.4

  	
  Servicer Indemnification of the
  Trust and the Trustee

  	
   

  
	
  Section 8.5

  	
  The Servicer Not To Resign

  	
   

  
	
  Section 8.6

  	
  Access to Certain Documentation
  and Information Regarding the Receivables

  	
   

  
	
  Section 8.7

  	
  Delegation of Duties

  	
   

  
	
  Section 8.8

  	
  Examination of Records

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX Early Amortization
  Events 

  	
   

  
	
  Section 9.1

  	
  Early Amortization Events

  	
   

  
	
  Section 9.2

  	
  Additional Rights upon the
  Occurrence of Certain Events

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X Servicer Defaults 

  	
   

  
	
  Section 10.1

  	
  Servicer Defaults

  	
   

  
	
  Section 10.2

  	
  Trustee to Act; Appointment of
  Successor

  	
   

  

 

 

	
  Section 10.3

  	
  Notification to
  Certificateholders

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI The Trustee 

  	
   

  
	
  Section 11.1

  	
  Duties of Trustee

  	
   

  
	
  Section 11.2

  	
  Certain Matters Affecting the
  Trustee

  	
   

  
	
  Section 11.3

  	
  Trustee Not Liable for Recitals
  in Certificates

  	
   

  
	
  Section 11.4

  	
  Trustee May Own Certificates

  	
   

  
	
  Section 11.5

  	
  The Servicer To Pay Trustee’s
  Fees and Expenses

  	
   

  
	
  Section 11.6

  	
  Eligibility Requirements for
  Trustee

  	
   

  
	
  Section 11.7

  	
  Resignation or Removal of Trustee

  	
   

  
	
  Section 11.8

  	
  Successor Trustee

  	
   

  
	
  Section 11.9

  	
  Merger or Consolidation of
  Trustee

  	
   

  
	
  Section 11.10

  	
  Appointment of Co-Trustee or
  Separate Trustee

  	
   

  
	
  Section 11.11

  	
  Tax Return

  	
   

  
	
  Section 11.12

  	
  Trustee May Enforce Claims
  Without Possession of Certificates

  	
   

  
	
  Section 11.13

  	
  Suits for Enforcement

  	
   

  
	
  Section 11.14

  	
  Rights of Certificateholders to
  Direct Trustee

  	
   

  
	
  Section 11.15

  	
  Representations and Warranties
  of Trustee

  	
   

  
	
  Section 11.16

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 11.17

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII Termination 

  	
   

  
	
  Section 12.1

  	
  Termination of Trust

  	
   

  
	
  Section 12.2

  	
  Final Distribution

  	
   

  
	
  Section 12.3

  	
  Transferor’s Termination Rights

  	
   

  
	
  Section 12.4

  	
  Defeasance

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII Miscellaneous
  Provisions 

  	
   

  
	
  Section 13.1

  	
  Amendment; Waiver of Past
  Defaults

  	
   

  
	
  Section 13.2

  	
  Protection of Right, Title and
  Interest to Trust Assets

  	
   

  
	
  Section 13.3

  	
  Limitation on Rights of
  Certificateholders

  	
   

  
	
  Section 13.4

  	
  GOVERNING LAW; JURISDICTION

  	
   

  
	
  Section 13.5

  	
  Notices, Payments

  	
   

  
	
  Section 13.6

  	
  Rule 144A Information

  	
   

  
	
  Section 13.7

  	
  Severability of Provisions

  	
   

  
	
  Section 13.8

  	
  Assignment

  	
   

  
	
  Section 13.9

  	
  Certificates Nonassessable and
  Fully Paid

  	
   

  
	
  Section 13.10

  	
  Further Assurances

  	
   

  
	
  Section 13.11

  	
  Nonpetition Covenant

  	
   

  
	
  Section 13.12

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  Section 13.13

  	
  Counterparts

  	
   

  
	
  Section 13.14

  	
  Third-Party Beneficiaries

  	
   

  
	
  Section 13.15

  	
  Actions by Certificateholders

  	
   

  
	
  Section 13.16

  	
  Merger and Integration

  	
   

  
	
  Section 13.17

  	
  Headings

  	
   

  
	
  Section 13.18

  	
  No Proceedings

  	
   

  

 

 

	
   

  	
   

  	
  EXHIBITS

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of
  Transferor Certificate

  
	
  Exhibit B

  	
   

  	
  Form of
  Assignment of Receivables in Supplemental Accounts

  
	
  Exhibit C

  	
   

  	
  Form of
  Reassignment of Receivables in Removed Accounts

  
	
  Exhibit D

  	
   

  	
  Form of
  Annual Servicer’s Certificate

  
	
  Exhibit E-1

  	
   

  	
  Private
  Placement Legend

  
	
  Exhibit E-2

  	
   

  	
  Form of
  Undertaking Letter

  
	
  Exhibit E-3

  	
   

  	
  ERISA
  Legend

  
	
  Exhibit F

  	
   

  	
  Example
  of a Credit Card Agreement

  
	
  Exhibit G

  	
   

  	
  Reserved

  
	
  Exhibit H-1

  	
   

  	
  Form of
  Opinion of Counsel with respect to Amendments

  
	
  Exhibit H-2

  	
   

  	
  Form of
  Opinion of Counsel with respect to Addition of Supplemental Accounts

  

 

 

AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of April 28,
2000 among TARGET RECEIVABLES CORPORATION, a Minnesota corporation, as
Transferor, RETAILERS NATIONAL BANK, a national banking association, as
Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as Trustee.

 

WHEREAS, the Transferor, the Servicer and the Trustee have heretofore
executed and delivered a Pooling and Servicing Agreement, dated as of September 13,
1995 (as amended, supplemented or otherwise modified, the “Original Pooling
and Servicing Agreement”), by and between Target Receivables Corporation
(formerly known as Dayton Hudson Receivables Corporation), as the Transferor,
Retailers National Bank, as the Servicer, and the Trustee for the issuance by
the Dayton Hudson Credit Card Master Trust of the Investor Certificates and the
Exchangeable Transferor Certificate;

 

WHEREAS, the Transferor, formerly known as Dayton Hudson Receivables
Corporation, has been renamed Target Receivables Corporation and desires to
amend and restate the Original Pooling and Servicing Agreement to read in its
entirety as set forth below and to, among other things, rename the Trust the
Target Credit Card Master Trust;

 

WHEREAS, Section 13.1(a) of the Original Pooling and
Servicing Agreement provides that the Servicer, the Transferor and the Trustee,
without the consent of any of the Certificateholders, may amend the Original
Pooling and Servicing Agreement from time to time so long as (x) the
Transferor shall have delivered to the Trustee an Officer’s Certificate to the
effect that the Transferor reasonably believes that such action shall not
adversely affect in any material respect the interests of any Investor
Certificateholder, (y) the Rating Agency Condition shall have been
satisfied with respect to such amendment and (z) a Tax Opinion is
delivered in connection with such amendment;

 

WHEREAS, all conditions precedent to the execution of this Agreement
have been complied with;

 

NOW, THEREFORE, pursuant to Section 13.1(a) of the Original
Pooling and Servicing Agreement, the Servicer, the Transferor and the Trustee
hereby agree that effective on and as of the date hereof, the Original Pooling
and Servicing Agreement is hereby amended and restated in its entirety as
follows:

 

In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Certificateholders
and any Enhancement Provider to the extent provided herein and in any
Supplement:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1             Definitions. 
Whenever used in this Agreement, the following words and phrases shall
have the following meanings, and the definitions of such terms are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.

 

 

“Account” shall mean each Initial Account, each Automatic
Additional Account and each Supplemental Account, but shall exclude any Account
all the Receivables in which are either reassigned or assigned to the
Transferor or its designee or the Servicer in accordance with the terms of this
Agreement and any inactive Accounts which in accordance with the Credit Card
Guidelines have been removed from the active computer records of the Credit
Card Originator.  The definition of
Account shall include each account into which an Account is transferred (a “Transferred
Account”); provided that (i) such transfer is made in
accordance with the Credit Card Guidelines and (ii) such Transferred
Account can be traced or identified, by reference to or by way of the computer
files, microfiche lists or printed lists delivered to the Trustee pursuant to Section 2.1
or 2.9(f), as an account into which an Account has been transferred.  The term “Account” shall be deemed to
refer to an Automatic Additional Account or a Supplemental Account only from
and after the Addition Date with respect thereto, and the term “Account” shall
be deemed to refer to any Removed Account only prior to the Removal Date with
respect thereto.

 

“Accumulation Period” shall mean, with respect to any Series,
the period, if any, specified as such in the related Supplement.

 

“Act” shall mean the Securities Act of 1933, as amended.

 

“Addition” shall mean the designation of additional Eligible
Accounts to be included as Accounts pursuant to subsection 2.9(a), (b) or (d) or
of Participation Interests to be included as Trust Assets pursuant to
subsection 2.9(a) or (b), as applicable.

 

“Addition Cut-Off Date” shall mean the date as of which any
Supplemental Accounts or Participation Interests are designated for inclusion
in the Trust, as specified in the related Assignment.

 

“Addition Date” shall mean (i) with respect to Supplemental
Accounts, the date on which the Receivables in such Supplemental Accounts are
conveyed to the Trust pursuant to subsection 2.9(a) or (b), as applicable,
(ii) with respect to Automatic Additional Accounts, the date on which such
accounts are created, and (iii) with respect to Participation Interests,
the date from and after which such Participation Interests are to be included
as Trust Assets pursuant to subsection 2.9(a) or (b).

 

“Additional Account” shall mean an Automatic Additional Account
or a Supplemental Account.

 

“Affiliate” shall mean, with respect to any specified Person,
any other Person controlling or controlled by or under common control with such
specified Person.  For the purposes of
this definition, “control” shall mean the power to direct the management and
policies of a Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Aggregate Addition Limit” shall mean, with respect to any
Series, the number of accounts which may be included as Automatic Additional
Accounts without

 

 

confirmation from each Rating Agency that
such action will satisfy the Rating Agency Condition and which may be
designated as Supplemental Accounts pursuant to subsection 2.9(a), without
the prior Rating Agency notice described under subsection 2.9(c)(iv), which
would either (x) with respect to any of the three consecutive Monthly
Periods commencing in January, April, July and October of each
calendar year commencing October, 1995, may not exceed 15% of the number of
Accounts as of the first day of the calendar year during which such Monthly
Periods commence (or the Trust Cut-Off Date, in the case of 1995) or (y) with
respect to any twelve-month period, equal 20% of the number of Accounts as of
the first day of such twelve-month period.

 

“Agreement” shall mean this Amended and Restated Pooling and
Servicing Agreement and all amendments hereof and supplements hereto,
including, with respect to any Series or Class, the related Supplement.

 

“Amortization Period” shall mean, with respect to any Series or
any Class within a Series, a period following the Revolving Period, which
shall be the controlled amortization period, the principal amortization period,
the rapid accumulation period, the early amortization period, or other
amortization period or accumulation period, in each case as defined with
respect to such Series in the related Supplement.

 

“Applicants” shall have the meaning specified in Section 6.8.

 

“Assignment” shall have the meaning specified in subsection
2.9(f).

 

“Authorized Newspaper” shall mean any newspaper or newspapers of
general circulation in the Borough of Manhattan, The City of New York printed
in the English language (and, with respect to any Series or Class, if and
so long as the Investor Certificates of such Series or Class are
listed on the Luxembourg Stock Exchange and such exchange shall so require, in
Luxembourg, printed in any language satisfying the requirements of such
exchange) and customarily published on each business day at such place, whether
or not published on Saturdays, Sundays or holidays.

 

“Automatic Addition Suspension Date” shall mean the Business Day
specified in subsection 2.9(d)(i) or the Determination Date specified in
subsection 2.9(d)(ii), as applicable.

 

“Automatic Addition Termination Date” shall mean the Business
Day specified by the Transferor pursuant to subsection 2.9(d)(i) hereof as
of which new open end credit card accounts owned by the Credit Card Originator
shall cease to become Automatic Additional Accounts.

 

“Automatic Additional Account” shall mean each open end credit
card account established pursuant to a Credit Card Agreement coming into
existence (i) after the Trust Cut-Off Date and prior to the earlier of the
Automatic Addition Termination Date or an Automatic Addition Suspension Date
and (ii) following an Automatic Addition Suspension Date and after a
Restart Date and prior to a subsequent Automatic Addition Suspension Date or
any Automatic Addition Termination Date; provided, however, with
respect to any accounts initially originated by parties other than Retailers
National Bank

 

 

and its successors or assigns and/or any
transferees of Accounts from Retailers National Bank, such accounts shall be
deemed to be Automatic Additional Accounts only upon satisfaction of the Rating
Agency Condition.

 

“Bank Purchase Agreement” shall mean (i) the amended and
restated receivables purchase agreement, dated as of April 28, 2000,
between Retailers National Bank, as seller, and Target Capital Corporation
(formerly known as Dayton Hudson Capital Corporation), as purchaser, and (ii) in
the event of a transfer of Accounts by Retailers National Bank to any other
entity in accordance with this Agreement, the receivables purchase agreement
between Retailers National Bank and such other entity, substantially in the
form of the receivables purchase agreement referred to in clause (i) above.

 

“Base Rate” shall have the meaning, with respect to any Series,
specified in the related Supplement.

 

“Bearer Certificate” shall have the meaning specified in Section 6.1.

 

“Benefit Plan” shall have the meaning specified in subsection
6.4(c).

 

“Book-Entry Certificates” shall mean beneficial interests in the
Investor Certificates, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 6.10.

 

“Business Day” shall mean any day other than (a) a Saturday
or Sunday, (b) any other day on which national banking associations or
state banking institutions in New York, New York, Minneapolis, Minnesota or
Sioux Falls, South Dakota are authorized or obligated by law, executive order
or governmental decree to be closed or (c) for purposes of any particular
Series, any other day specified in the related Supplement.

 

“Certificate” shall mean any one of the Investor Certificates or
the Transferor Certificate.

 

“Certificateholder” or “Holder” shall mean an Investor
Certificateholder or a Person in whose name the Transferor Certificate is
registered.

 

“Certificateholders’ Interest” shall have the meaning specified
in Section 4.1.

 

“Certificate Owner” shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).

 

“Certificate Rate” shall mean, with respect to any Series or
Class, the certificate rate specified therefor in the related Supplement.

 

“Certificate Register” shall mean the register maintained
pursuant to Section 6.4, providing for the registration of the Registered
Certificates and the Transferor Certificate and transfers and exchanges
thereof.

 

“Class” shall mean, with respect to any Series, any one of the
classes of Investor Certificates of that Series.

 

“Clearing Agency” shall mean an organization registered as a “clearing
agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.

 

“Clearing Agency Participant” shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.

 

“Closing Date” shall mean, with respect to any Series, the
closing date specified in the related Supplement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time.

 

“Collection Account” shall have the meaning specified in Section 4.2.

 

“Collections” shall mean all payments (including Recoveries of
Principal Receivables or Finance Charge Receivables) received by the Servicer
with respect to the Receivables, in the form of cash, checks (to the extent
collected), wire transfers or other form of payment in accordance with the
Credit Card Agreements in effect from time to time on any Receivables and all
payments received by the Servicer with respect to Merchant Fees and Deferred
Billing Fees.  If so specified in any
Supplement, Collections shall also include any payments received by the
Servicer with respect to Participation Interests.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Confidential Information” shall have the meaning specified in Section 11.17.

 

“Corporate Trust Office” shall have the meaning specified in Section 11.16.

 

“Coupon” shall have the meaning specified in Section 6.1.

 

“Credit Card Agreement” shall mean, with respect to an Account,
the agreements between the Credit Card Originator which owns such Account and
the related Obligor, governing the terms and conditions of such Account, as
such agreements may be amended, modified or otherwise changed from time to time
and as distributed (including any amendments and revisions thereto) to such
Obligors.  An example of a Credit Card
Agreement is attached as Exhibit F.

 

“Credit Card Guidelines” shall mean written policies and
procedures of the Credit Card Originator relating to the operation of its
consumer revolving lending 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 may be amended, modified, or otherwise
changed from time to time in conformance with all Requirements of Law, the
failure to comply with which would have a material adverse effect on interests
hereunder of Investor Certificateholders.

 

“Credit Card Originator” shall mean Retailers National Bank, and
its successors or assigns and/or any transferee of the Accounts from Retailers
National Bank or any other originator of Accounts.

 

“Daily Report” shall have the meaning specified in subsection
3.4(a).

 

“Date of Processing” shall mean, with respect to any
transaction, the Business Day on which such transaction is first recorded
pursuant to the Servicer’s customary and usual servicing practices on the
Servicer’s computer file of consumer open-end credit card accounts (without
regard to the effective date of such recordation).

 

“Debtor Relief Laws” shall mean the Bankruptcy Code of the
United States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, readjustment of debt, marshalling of
assets or similar debtor relief laws of the United States, any state or any
foreign country from time to time in effect, affecting the rights of creditors
generally.

 

“Defaulted Amount” shall mean, with respect to any Monthly
Period, an amount (which shall not be less than zero) equal to (a) the
amount of Defaulted Receivables for each day in such Monthly Period, minus
(b) the sum of (i) the amount of any Defaulted Receivables for which
the Transferor Amount is reduced as a result of the assignment of a principal
balance of zero thereto for purposes of determining the aggregate amount of
Principal Receivables or the Servicer became obligated to accept reassignment
or assignment in accordance with the terms of this Agreement during such
Monthly Period, (ii) the aggregate amount of Recoveries received in such
Monthly Period with respect to Finance Charge Receivables and Principal
Receivables previously charged off as uncollectible and (iii) the excess,
if any, for the immediately preceding Monthly Period, of the sum computed
pursuant to this clause (b) over the amount of Principal Receivables that
became Defaulted Receivables during such Monthly Period; provided, however,
that, if an Insolvency Event occurs with respect to the Transferor, the amount
of such Defaulted Receivables which are subject to reassignment to the
Transferor in accordance with the terms of this Agreement shall not be added to
the sum so subtracted and, if any of the events described in subsection 10.1(d) occur
with respect to the Servicer, the amount of such Defaulted Receivables which
are subject to reassignment or assignment to the Servicer in accordance with
the terms of this Agreement shall not be added to the sum so subtracted.

 

“Defaulted Receivable” shall mean, with respect to any date of
determination, all Principal Receivables in any Account which are charged off
as

 

 

uncollectible on such day in accordance with
the Credit Card Guidelines and the Servicer’s customary and usual servicing
procedures for servicing open end credit card account receivables comparable to
the Receivables.  A Principal Receivable
in any Account shall become a Defaulted Receivable on the day on which such
Principal Receivable is recorded as charged off on the Servicer’s computer
master file of consumer credit card accounts in accordance with the Credit Card
Guidelines.

 

“Defeasance” shall have the meaning specified in Section 12.4.

 

“Defeased Series” shall have the meaning specified in Section 12.4.

 

“Deferred Billing Fees” shall mean the fees paid with respect to
the Accounts by the Dayton’s, Hudson’s, Marshall Field’s, Mervyn’s and Target
Stores to Retailers National Bank as compensation for Accounts which make charges
on a deferred billing basis.

 

“Definitive Certificates” shall have the meaning specified in Section 6.10.

 

“Definitive Euro-Certificates” shall have the meaning specified
in Section 6.13.

 

“Demand Note” shall have the meaning specified in subsection 2.7(i).

 

“Depositary” shall mean the Person specified in the applicable
Supplement, in its capacity as depositary for the respective accounts of any
Clearing Agency or, with respect to Global Certificates, any foreign clearing
agencies set forth in the related Supplement.

 

“Depository Agreement” shall mean, with respect to any Series or
Class, the agreement among the Transferor, the Trustee and the applicable
Clearing Agency.

 

“Determination Date” shall mean the third Business Day preceding
each Distribution Date.

 

“Discount Option Receivables” shall mean, on any Date of
Processing on and after the date on which the Transferor’s exercise of its
discount option pursuant to Section 2.11 takes effect, the sum of (a) the
aggregate Discount Option Receivables at the end of the prior day (which
amount, prior to the date on which the Transferor’s exercise of its discount
option takes effect and with respect to Receivables generated prior to such
date, shall be zero) plus (b) any New Discount Option Receivables
created on such day minus (c) any Discount Option Receivables
Collections received on such Date of Processing.

 

“Discount Option Receivables Collections” shall mean on any Date
of Processing on and after the date on which the Transferor’s exercise of its
discount option pursuant to Section 2.11 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option
Receivables and the denominator of which is the sum of the Principal
Receivables plus the amount of Discount Option Receivables, in each case
(for both numerator and denominator) at the end of the prior Monthly Period and
(b) 

 

 

Collections of Principal Receivables, prior
to any reduction for Finance Charge Receivables which are Discount Option
Receivables, received on such Date of Processing.

 

“Discount Percentage” shall have the meaning specified in
subsection 2.11(a).

 

“Distribution Date” shall mean, with respect to any Series, the
date specified in the related Supplement.

 

“Document Delivery Date” shall mean the first Closing Date in
the case of Initial Accounts, the Addition Date in the case of Supplemental
Accounts and the Removal Date in the case of Removed Accounts.

 

“Early Amortization Event” shall mean, with respect to any
Series, each event specified in Section 9.1 and each additional event, if
any, specified in the relevant Supplement as an Early Amortization Event with
respect to such Series.

 

“Eligible Account” shall mean an open end credit card account,
which is not a commercial account, owned by the Credit Card Originator which as
of the Trust Cut-Off Date with respect to an Initial Account, on the date of
creation thereof, with respect to an Automatic Additional Account, or as of the
related Addition Cut-Off Date with respect to a Supplemental Account, meets the
requirement of either clause (i) or (ii) below: (i) (a) is
in existence and serviced at certain facilities of the Credit Card Originator
or an Affiliate thereof; (b) is payable in United States dollars; (c) except
as provided below, has not been identified as an account the credit cards with
respect to which have been reported to the Credit Card Originator as having
been lost or stolen; (d) has not been, and does not have any Receivables
that have been, sold, pledged, assigned or otherwise conveyed to any person
(except pursuant to this Agreement or the Bank Purchase Agreement), unless any
such pledge or assignment is released on or before the initial Closing Date or
the Addition Date, as applicable; (e) except as provided below, does not
have any Receivables that are Defaulted Receivables; (f) except as
provided below, does not have any Receivables which have been identified by the
Credit Card Originator or the relevant Obligor as having been incurred as a
result of fraudulent use of any related credit card; and (g) has an
Obligor who has provided as his or her most recent billing address, an address
located in the United States or its territories or possessions or a United
States military address; provided, however, that as of any date
of determination, up to 4% (or such greater percentage if prior written notice
thereof has been given by the Transferor to each Rating Agency and the Rating
Agency Condition has been satisfied) of the number of Accounts may have
Obligors who have provided addresses outside of such jurisdictions or (ii) with
respect to Supplemental Accounts, the addition of such Accounts (other than an
addition required pursuant to subsection 2.9(a)(i)) shall have satisfied the
Rating Agency Condition.

 

“Eligible Deposit Account” shall mean either (a) a
segregated account with an Eligible Institution or (b) a segregated trust
account with the corporate trust department of a depository institution
organized under the laws of the United States or any one of the states thereof,
including the District of Columbia (or any domestic branch of a foreign bank),
and acting as a trustee for funds deposited in such account, so long as any of
the

 

 

securities of such depository institution
shall have a credit rating from each Rating Agency in one of its generic credit
rating categories which signifies investment grade.

 

“Eligible Institution” shall mean (a) a depository
institution (which may be the Trustee or an Affiliate) organized under the laws
of the United States or any one of the states thereof which at all times (i) has
either (x) a long-term unsecured debt rating of “A2” or better by Moody’s
or (y) a certificate of deposit rating of “P-1” by Moody’s, (ii) has
either (x) a long-term unsecured debt rating of “AAA” by Standard &
Poor’s or (y) a certificate of deposit rating of “A-l+” by Standard &
Poor’s and (iii) is a member of the FDIC or (b) any other institution
that is acceptable to Moody’s and Standard & Poor’s.

 

“Eligible Investments” shall mean book-entry securities,
negotiable instruments or securities represented by instruments in bearer or
registered form which evidence:

 

(a)        direct
obligations of, and obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America;

 

(b)        demand
deposits, time deposits or certificates of deposit (having original maturities
of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States of America or any state
thereof (or domestic branches of foreign banks) and subject to supervision and
examination by Federal or state banking or depository institution authorities; provided
that at the time of the Trust’s investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or trust
company shall be in the highest investment category of each Rating Agency;

 

(c)        commercial
paper or other short-term obligations having, at the time of the Trust’s
investment or contractual commitment to invest therein, a rating from each Rating
Agency in its highest investment category;

 

(d)        demand
deposits, time deposits and certificates of deposit which are fully insured by
the FDIC, with a Person the commercial paper of which has a credit rating from
each Rating Agency in its highest investment category;

 

(e)        notes or
bankers’ acceptances (having original maturities of no more than 365 days)
issued by any depository institution or trust company referred to in clause (b) above;

 

(f)         time
deposits, other than as referred to in clause (d) above, with a Person the
commercial paper of which has a credit rating from each Rating Agency in its
highest investment category; or

 

(g)        any other
investments approved in writing by each Rating Agency which would not cause the
Trust to become an “investment company” within the meaning of the Investment
Company Act.

 

“Eligible Receivable” shall mean each Receivable:

 

 

(a)        which has
arisen under an Eligible Account;

 

(b)        which was
created in compliance with the Credit Card Guidelines and all Requirements of
Law applicable to the Credit Card Originator, the failure to comply with which
would have a material adverse effect on Investor Certificateholders, and
pursuant to a Credit Card Agreement which complies with all Requirements of Law
applicable to the Credit Card Originator, the failure to comply with which
would have a material adverse effect on Investor Certificateholders;

 

(c)        with respect
to which all consents, licenses, approvals or authorizations of, or
registrations with, any Governmental Authority required to be obtained or given
by the Credit Card Originator in connection with the creation of such
Receivable or the execution, delivery and performance by the Credit Card
Originator under the related Credit Card Agreement, have been duly obtained or
given and are in full force and effect as of the date of creation of such
Receivable, if, and to the extent that the failure to so obtain or give any
such consent, license, approval, authorization or registration would have a
material adverse effect on the Investor Certificateholders;

 

(d)        as to which,
at the time of its transfer to the Trust, the Transferor or the Trust will have
good title free and clear of all Liens (other than any Lien for municipal or
other local taxes if such taxes are not then due and payable or if the
Transferor is then contesting the validity thereof in good faith by appropriate
proceedings and has set aside on its books adequate reserves with respect
thereto);

 

(e)        which has
been the subject of a valid transfer and assignment from the Transferor to the
Trust of all the Transferor’s right, title and interest therein or the grant of
a “security interest” (as defined in the UCC) therein;

 

(f)         which at and
after the time of transfer to the Trust is the legal, valid and binding payment
obligation of the Obligor thereof, legally enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting the enforcement of creditors’
rights in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);

 

(g)        which
constitutes an “account,” a “general intangible” or “chattel paper” under and
as defined in Article 9 of the UCC;

 

(h)        which, at the
time of its transfer to the Trust, has not been waived or modified except as
permitted in accordance with subsection 3.3(h);

 

(i)         which, at
the time of its transfer to the Trust, is not subject to any right of
rescission, setoff, counterclaim or any other defense of the Obligor (including
the defense of usury), other than defenses arising out of Debtor Relief Laws or
other similar laws affecting the enforcement of creditors’ rights in general
and except as such enforceability may be limited by general principles of
equity (whether considered in a suit

 

 

at law or
in equity) or as to which the Servicer is required by Section 3.9 to make
an adjustment;

 

(j)         as to which,
at the time of its transfer to the Trust, the Transferor has satisfied all
obligations to be fulfilled at the time it is transferred to the Trust; and

 

(k)        as to which,
at the time of its transfer to the Trust, the Transferor has not taken any
action which, or failed to take any action the omission of which, would, at the
time of its transfer to the Trust, impair the rights of the Trust or the
Certificateholders therein.

 

“Eligible Servicer” shall mean the Trustee, a wholly owned
subsidiary of the Trustee or an entity which, at the time of its appointment as
Servicer, (a) is servicing a portfolio of consumer open end credit card
accounts or other consumer open end credit accounts, (b) is legally
qualified and has the capacity to service the Accounts, (c) is qualified
(or licensed) to use the software that is then being used to service the
Accounts or obtains the right to use, or has its own, software which is
adequate to perform its duties under this Agreement, (d) has, in the
reasonable judgment of the Trustee, the ability to professionally and
competently service a portfolio of similar accounts and (e) has a net
worth of at least $50,000,000 as of the end of its most recent fiscal quarter.

 

“Enhancement” shall mean the rights and benefits provided to the
Investor Certificateholder of any Series or Class pursuant to any
letter of credit, surety bond, insurance policy, cash collateral account, cash
collateral guaranty, collateral invested amount, spread account, reserve
account, guaranty, guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate swap agreement, interest rate cap agreement
or other similar arrangement.  The
subordination of any Class to another Class, or a cross support feature
which requires collections on Receivables allocated to one Series to be
paid as principal and/or interest with respect to another Series shall be
deemed to be an Enhancement.

 

“Enhancement Agreement” shall mean any agreement, instrument or
document governing the terms of any Enhancement or pursuant to which any
Enhancement is issued or outstanding.

 

“Enhancement Invested Amount” with respect to any Series, shall
have the meaning specified in the related Supplement.

 

“Enhancement Provider” shall mean the Person or Persons
providing any Enhancement, other than the Investor Certificateholders of any Class which
is subordinated to another Class.

 

“ERISA” shall mean the Employee Retirement Income Security Act
of 1974, as amended.

 

“Excess Finance Charge Collections” shall have the meaning
specified in Section 4.5.

 

 

“FASIT” means a financial asset securitization investment trust.

 

“FDIC” shall mean the Federal Deposit Insurance Corporation or
any successor.

 

“Finance Charge Receivables” shall mean, with respect to any
Monthly Period, the sum of (i) all amounts billed to the Obligors on any
Account at the beginning of such Monthly Period in respect of Periodic Finance
Charges, (ii) certain fees and charges, including Late Fees, overlimit
fees, return check fees, Deferred Billing Fees and Merchant Fees, (iii) Discount
Option Receivables and (iv) all amounts (other than amounts already
included in clause (i) of this definition) billed in respect of
Receivables that are not Eligible Receivables.

 

“Finance Charge Shortfalls” shall have the meaning specified in Section 4.5.

 

“Floating Allocation Percentage” shall mean, with respect to any
Series, the floating allocation percentage specified in the related Supplement.

 

“Funding Period” shall have the meaning specified in Section 4.6.

 

“Global Certificate” shall have the meaning specified in Section 6.13.

 

“Governmental Authority” shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

 

“Group” shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is
to be included.

 

“Ineligible Receivables” shall have the meaning specified in
subsection 2.5(a).

 

“Initial Account” shall mean each open end credit card account
established pursuant to a Credit Card Agreement between the Credit Card
Originator and any Person existing on the Trust Cut-Off Date.

 

“Insolvency Event” shall have the meaning specified in
subsection 9.1(a).

 

“Insurance Proceeds” shall mean any amounts recovered by the
Servicer pursuant to any credit insurance policies covering any Obligor with
respect to Receivables under such Obligor’s Account.

 

“Interest Funding Account” shall mean, with respect to any
Series, the account, if any, specified as such in the related Supplement.

 

“Invested Amount” shall have, with respect to any Series, the
meaning specified in the related Supplement.

 

 

“Investment Company Act” shall mean the Investment Company Act
of 1940, as amended.

 

“Investor Certificateholder” shall mean the Person in whose name
a Registered Certificate is registered in the Certificate Register or the
holder of any Bearer Certificate (or the Global Certificate, as the case may be)
or Coupon.

 

“Investor Certificates” shall mean any one of the certificates
(including the Bearer Certificates, the Registered Certificates or any Global
Certificate) executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form attached to the related Supplement,
other than the Transferor Certificate, the Supplemental Certificates, if any,
and any Participation.

 

“Investor Percentage” shall have, for any Series, with respect
to Principal Receivables, Finance Charge Receivables and Receivables in
Defaulted Accounts, the meaning specified in the related Supplement.

 

“Late Fees” shall mean the fees specified in the Credit Card
Agreement applicable to each Account for late fees with respect to such
Account.

 

“Lien” shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing, excluding
any lien or filing pursuant to this Agreement; provided, however,
that any assignment or transfer pursuant to subsection 6.3(c) or (d) or
Section 7.2 shall not be deemed to constitute a Lien.

 

“Loss” shall have the meaning specified in subsection 7.4(b).

 

“Merchant Fees” shall mean the fees paid with respect to the
Accounts by the Dayton’s, Hudson’s, Marshall Field’s, Mervyn’s and Target
Stores to Retailers National Bank, in its capacity as Credit Card Originator,
in connection with Obligor charges for goods and services.

 

“Monthly Period” shall mean, with respect to each Distribution
Date, the immediately preceding fiscal month of the Transferor, unless
otherwise defined in any Supplement.

 

“Monthly Report” shall have the meaning specified in subsection
3.4(b).

 

“Monthly Servicing Fee” shall have the meaning specified in the
related Supplement.

 

“Moody’s” shall mean Moody’s Investors Service, Inc., or
its successor.

 

 

“New Discount Option Receivables” shall mean, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting out Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.

 

“Notices” shall have the meaning specified in subsection
13.5(a).

 

“Obligor” shall mean, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account, including any
guarantor thereof.

 

“Officer’s Certificate” shall mean, unless otherwise specified
in this Agreement, a certificate delivered to the Trustee signed by the Chief
Executive Officer, Chairman of the Board, President, any Vice President or the
Treasurer of the Transferor or the Servicer, as the case may be.

 

“Opinion of Counsel” shall mean a written opinion of counsel,
who may be counsel for, or an employee of, the Person providing the opinion and
which opinion shall be reasonably acceptable to the Trustee.

 

“Participation” shall have the meaning specified in subsection
6.3(e).

 

“Participation Interests” shall have the meaning specified in
subsection 2.9(a).

 

“Participation Percentage,” with respect to any Participation,
shall have the meaning specified in the related Participation Supplement.

 

“Participation Supplement” shall mean a supplement to this
Agreement under which the Trustee issues Participations at the Transferor’s
direction.

 

“Paying Agent” shall mean any paying agent and co-paying agent
appointed pursuant to Section 6.7.

 

“Periodic Finance Charges” shall have the meaning specified in
the Credit Card Agreement applicable to each Account for finance charges (due
to periodic rate) or any similar term.

 

“Person” shall mean any legal person, including any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.

 

“Portfolio Yield” shall have the meaning, with respect to any
Series, specified in the related Supplement.

 

“Pre-Funding Account” shall have the meaning specified in Section 4.6.

 

“Principal Allocation Percentage” shall mean, with respect to
any Series, the principal allocation percentage specified in the related
Supplement.

 

“Principal Receivable” shall mean all
Eligible Receivables which are not Finance Charge Receivables (and which are
not Deferred Billing Fees or Merchant Fees). 
In calculating the aggregate amount of Principal Receivables on any day,
the amount of Principal Receivables shall not include Defaulted Receivables and
shall be reduced by the aggregate amount of credit balances in the Accounts on
such day.

 

“Principal Sharing Series” shall mean
a Series that, pursuant to the Supplement therefor, is entitled to receive
Shared Principal Collections.

 

“Principal Shortfalls” shall have the
meaning specified in Section 4.4.

 

“Principal Terms” shall mean, with
respect to any Series, (i) its name or designation; (ii) its initial
principal amount (or method for calculating such amount) and its invested
amount in the Trust; (iii) its Certificate Rate (or method for the
determination thereof); (iv) the payment date or dates and the date or
dates from which interest shall accrue; (v) the method for allocating
Collections to Certificateholders of such Series; (vi) the designation of
any Series Accounts and the terms governing the operation of any such Series Accounts;
(vii) the percentage used to calculate the servicing fee with respect
thereto; (viii) the provider, if any, and the terms of any form of
Enhancement with respect thereto; (ix) the terms on which the Investor
Certificates of such Series may be repurchased by the Transferor or any
Affiliate of the Transferor or remarketed to other investors; (x) the Series Termination
Date; (xi) the number of Classes of Investor Certificates of such Series and,
if such Series consists of more than one Class, the rights and priorities
of each such Class; (xii) the extent to which the Investor Certificates of such
Series will be issuable in temporary or permanent global form (and, in
such case, the depositary for such Global Certificate or Certificates, the
terms and conditions, if any, upon which such Global Certificates may be
exchanged, in whole or in part, for Definitive Certificates, and the manner in
which any interest payable on a Global Certificate will be paid); (xiii)
whether the Investor Certificates of such Series may be issued as Bearer
Certificates and any limitation imposed thereon; (xiv) the priority of such Series with
respect to any other Series; (xv) the Group, if any, to which such Series belongs;
and (xvi) any other relevant terms of, or with respect to, such Series.

 

“Rating Agency” shall mean, with
respect to any outstanding Series or Class, each statistical rating agency
selected by the Transferor to rate the Investor Certificates of such Series or
Class.

 

“Rating Agency Condition” shall mean,
with respect to any action requiring rating agency approval or consent, that
each Rating Agency shall have notified the Transferor, the Servicer and the
Trustee in writing that such action will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class with
respect to which it is a Rating Agency.

 

“Reassignment” shall have the meaning
specified in Section 2.10.

 

“Receivable” shall mean any amount
owing from time to time by an Obligor under an Account, including amounts owing
for purchases of goods and services, and

 

 

amounts payable for Finance
Charge Receivables (exclusive of Deferred Billing Fees and Merchant Fees).  A Receivable shall be deemed to have been
created at the end of the day on the Date of Processing of such
Receivable.  Receivables which become
Defaulted Receivables shall not be shown on the Servicer’s records as amounts
payable (and shall cease to be included as Receivables) on the day on which
they become Defaulted Receivables.

 

“Receivables Purchase Agreement” shall
mean (i) the amended and restated receivables purchase agreement, dated as
of April 28, 2000, between Target Capital Corporation (formerly known as
Dayton Hudson Capital Corporation) and the Transferor and (ii) any
receivables purchase agreement between a transferor of the Accounts other than
TCC and the Transferor, substantially in the form of the receivables purchase
agreement referred to in clause (i) above.

 

“Record Date” shall mean, with respect
to any Series Date, the date specified in the related Supplement.

 

“Recoveries” shall mean all amounts,
including Insurance Proceeds, received by the Servicer with respect to Principal
Receivables which have previously become Defaulted Receivables and, with
respect to Finance Charge Receivables, which have been charged off as
uncollectible in accordance with the Credit Card Guidelines and the Servicer’s
customary and usual servicing procedures for servicing open end credit card
account receivables comparable to the Receivables, including the net proceeds
of any sale of such Defaulted Receivables and Finance Charge Receivables which
have been charged off as uncollectible by the Transferor or the Servicer
regardless of whether such Defaulted Receivables and Finance Charge Receivables
have been transferred, set over or otherwise conveyed to the Transferor
pursuant to Section 2.10.

 

“Registered Certificateholder” shall
mean the Holder of a Registered Certificate.

 

“Registered Certificates” shall have
the meaning specified in Section 6.1.

 

“Removal Date” shall have the meaning
specified in subsection 2.10(a).

 

“Removal Notice Date” shall have the
meaning specified in subsection 2.10(a).

 

“Removed Accounts” shall have the
meaning specified in Section 2.10.

 

“Required Designation Date” shall have
the meaning specified in subsection 2.9(a).

 

“Required Principal Balance” shall
mean, as of any date of determination, the sum of the numerators used at such
date to calculate (i) the Investor Percentage with respect to Principal
Receivables for all Series outstanding on such date and (ii) the
Participation Percentages for all Participations outstanding on such date, less
the amount on deposit in the Special Funding Account as of the date of
determination.

 

 

“Required Retained Transferor’s Percentage”
shall mean, as of any date of determination, the highest of the Required
Retained Transferor’s Percentages specified in the Supplements for all outstanding
Series.

 

“Required Retained Transferor Amount”
shall mean, as of any date of determination, the product of (i) the sum of
(a) the aggregate Principal Receivables and (b) the amounts on
deposit in the Special Funding Account and any other accounts specified in a
Supplement and (ii) the Required Retained Transferor’s Percentage.

 

“Requirements of Law” with respect to
any Person shall mean the certificate of incorporation, articles of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local.

 

“Responsible Officer” shall mean any
officer within the Corporate Trust Department (or any successor group of the
Trustee), including any vice president, assistant vice president, assistant
secretary or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred at the Trustee’s Corporate Trust Office because of such officer’s
knowledge of and familiarity with the particular subject.

 

“Restart Date” shall mean the date
specified in the notice delivered by the Transferor to the Trustee pursuant to
subsection 2.9(d)(i) or 2.9(d)(iii).

 

“Revolving Period” shall mean, with respect
to any Series, the period specified as such in the related Supplement.

 

“Rule 144A” shall mean Rule 144A
under the Act, as such Rule may be amended from time to time.

 

“Series” shall mean any series of
Investor Certificates established pursuant to a Supplement.

 

“Series Account” shall mean any
deposit, trust, escrow or similar account maintained for the benefit of the
Investor Certificateholders of any Series or Class, as specified in any
Supplement.

 

“Series Allocation Percentage”
shall mean with respect to any Series, on any date of determination, the
percentage equivalent of a fraction the numerator of which is the Series Invested
Amount of such Series and the denominator of which is the sum of the Series Invested
Amounts of all Series then outstanding.

 

“Series Invested Amount” shall
have, with respect to any Series, the meaning specified in the related
Supplement.

 

 

“Series Issuance Date” shall
mean, with respect to any Series, the date on which the Investor Certificates
of such Series are to be originally issued in accordance with Section 6.3
and the related Supplement.

 

“Series Termination Date” shall
mean, with respect to any Series, the termination date specified in the related
Supplement.

 

“Service Transfer” shall have the
meaning specified in Section 10.1.

 

“Servicer” shall mean Retailers
National Bank, in its capacity as Servicer pursuant to this Agreement, and,
after any Service Transfer, the Successor Servicer.

 

“Servicer Default” shall have the
meaning specified in Section 10.1.

 

“Servicing Fee” shall mean, with
respect to any Series, the servicing fee specified in Section 3.2.

 

“Servicing Fee Rate” shall mean, with
respect to any Series, the servicing fee rate specified in the related
Supplement.

 

“Servicing Officer” shall mean any
officer of the Servicer involved in, or responsible for, the administration and
servicing of the Receivables whose name appears on a list of servicing officers
furnished to the Trustee by the Servicer on the initial Closing Date, as such
list may from time to time be amended.

 

“Shared Principal Collections” shall
have the meaning specified in Section 4.4.

 

“Special Funding Account” shall have
the meaning specified in Section 4.2.

 

“Standard & Poor’s” shall
mean Standard & Poor’s Ratings Group, a division of The McGraw Hill
Companies or its successor.

 

“Successor Servicer” shall have the
meaning specified in subsection 10.2(a).

 

“Supplement” shall mean, with respect
to any Series, a Supplement to this Agreement, executed and delivered in
connection with the original issuance of the Investor Certificates of such Series pursuant
to Section 6.3, and all amendments thereof and supplements thereto.

 

“Supplemental Account” shall mean each
open end credit card account established pursuant to a Credit Card Agreement,
which account is designated pursuant to subsection 2.9(a) or 2.9(b) to
be included as an Account, and is identified in a computer file, microfiche
list or printed list delivered to the Trustee by the Transferor pursuant to Section 2.1.

 

“Supplemental Certificate” shall have
the meaning specified in subsection 6.3(c).

 

 

“Tax Opinion” shall mean, with respect
to any action, an Opinion of Counsel to the effect that, for Federal income tax
purposes, (a) such action will not adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class with respect to which an Opinion of Counsel was delivered at the
time of their issuance that such Investor Certificates would be characterized
as debt, (b) such action will not cause the Trust to be classified, for
federal income tax purposes, as an association (or publicly traded partnership)
taxable as a corporation and (c) such action will not cause or constitute
an event in which gain or loss would be recognized by any Investor Certificateholder.

 

“TCC” shall mean Target Capital
Corporation (formerly known as Dayton Hudson Capital Corporation), a Minnesota
corporation.

 

“Termination Notice” shall have the
meaning specified in Section 10.1.

 

“Transfer Agent and Registrar” shall
have the meaning specified in subsection 6.4(a).

 

“Transfer Date” shall mean the
Business Day immediately preceding each Distribution Date.

 

“Transferor” shall mean Target
Receivables Corporation (formerly known as Dayton Hudson Receivables
Corporation), a Minnesota corporation, or its permitted successors or assigns
under this Agreement and additional transferors, if any, designated in
accordance with Sections 2.12 or 6.3(d).

 

“Transferor Amount” shall mean, on any
date of determination, the aggregate amount of Principal Receivables on such
day, minus the sum of the Series Invested Amounts with respect to
all Series then outstanding, minus the amount of any Participation,
plus the principal amount on deposit in the Special Funding Account or
other account specified in a Supplement.

 

“Transferor Certificate” shall mean
the certificate executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form of Exhibit A.

 

“Transferor Retained Certificates”
shall mean Investor Certificates of any Series which the Transferor
retained pursuant to the terms of any Supplement.

 

“Transferor’s Interest” shall have the
meaning specified in Section 4.1.

 

“Transferor’s Percentage” shall mean,
with respect to Finance Charge Receivables and Defaulted Receivables, 100% less
the sum of the Floating Allocation Percentages with respect to all outstanding
Series, less the sum of the Participation Percentages with respect to all
Participations and with respect to Principal Receivables, 100% less the sum of the
Principal Allocation Percentages with respect to all outstanding Series, less
the sum of the Participation Percentages with respect to all Participations.

 

“Transferred Account” shall have the
meaning set forth in the definition of “Account.”

 

 

“Transfer Restriction Event” shall
have the meaning specified in Section 2.13.

 

“Trust” shall mean the Target Credit
Card Master Trust (formerly known as Dayton Hudson Credit Card Master Trust)
created by this Agreement.

 

“Trust Assets” shall have the meaning
specified in Section 2.1.

 

“Trust Cut-Off Date” shall mean June 30,
1995.

 

“Trust Portfolio Yield” shall mean,
with respect to any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the aggregate amount of
Collections of Finance Charge Receivables for such Monthly Period, and the
denominator of which is the aggregate amount of Principal Receivables in the
Trust as of the first day of such Monthly Period.

 

“Trustee” shall mean Norwest Bank
Minnesota, National Association, a national banking association, in its
capacity as trustee on behalf of the Trust, or its successor in interest, or
any successor trustee appointed as herein provided.

 

“UCC” shall mean the Uniform
Commercial Code, as amended from time to time, as in effect in the State of
Delaware and in any other state where the filing of a financing statement is
required to perfect the Transferor’s or the Trust’s interest in the Receivables
and the proceeds thereof or in any other specified jurisdiction.

 

“United States” shall mean the United
States of America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.

 

“Variable Funding Certificates” shall
have the meaning specified in any Variable Funding Supplement.

 

“Variable Funding Supplement” shall
mean a Supplement executed in connection with the issuance of, and otherwise
specifying the terms governing the issuance of, Variable Funding Certificates
provided for therein.

 

Section 1.2             Other Definitional Provisions.     
(a)  With respect to any Series, all terms used herein and not otherwise
defined herein shall have meanings ascribed to them in the related Supplement.

 

(b)        All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.

 

(c)        As used in this Agreement and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such certificate or
other document, and accounting terms partly defined in this Agreement or in any
such certificate or other document to the extent not

 

 

defined, shall have the respective meanings
given to them under generally accepted accounting principles.  To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any
such certificate or other document shall control.

 

(d)        The agreements, representations and
warranties of Target Receivables Corporation and Retailers National Bank in
this Agreement in each of their respective capacities as Transferor and as
Servicer, shall be deemed to be the separate agreements, representations and
warranties of Target Receivables Corporation and Retailers National Bank solely
in each such respective capacity for so long as Target Receivables Corporation
and Retailers National Bank act in each such capacity under this Agreement.

 

(e)        Any reference to each Rating Agency
shall only apply to any specific rating agency if such rating agency is then
rating any outstanding Series.

 

(f)         Unless otherwise specified, references
to any amount as on deposit or outstanding on any particular date shall mean
such amount at the close of business on such day.

 

(g)        The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term “including” means “including without limitation.”

 

ARTICLE
II

CONVEYANCE OF RECEIVABLES

 

Section 2.1             Conveyance of Receivables.  By execution of this Agreement, the
Transferor does hereby transfer, assign, set over and otherwise convey to the
Trust, for the benefit of the Certificateholders, all its right, title and
interest in, to and under (i) the Receivables existing at the close of
business on the Trust Cut-Off Date and thereafter created from time to time and
arising in the Initial Accounts and the Receivables existing on each applicable
Addition Date and thereafter created from time to time and arising in any
Automatic Additional Accounts owned by the Credit Card Originator, and in each
case, thereafter created from time to time until the termination of the Trust,
all Recoveries allocable to the Trust as provided herein, all monies due or to
become due and all amounts received with respect to any of the foregoing and
all proceeds (including “proceeds” as defined in the UCC) of any of the
foregoing, (ii) any Merchant Fees and Deferred Billing Fees, (iii) the
Receivables Purchase Agreement and (iv) the Bank Purchase Agreement.  Such property, together with all monies on
deposit in the Collection Account, the Special Funding Account, the Series Accounts
and any Enhancement shall constitute the assets of the Trust (the “Trust
Assets”).  The foregoing does not
constitute and is not intended to result in the creation or assumption by the
Trust, the Trustee, any Investor Certificateholders or any Enhancement Provider
of any obligation of the Credit Card

 

 

Originator,
the Servicer, the Transferor or any other Person in connection with the
Accounts or the Receivables or under any agreement or instrument relating
thereto, including any obligation to obligors, merchant banks, merchants
clearance systems or insurers.

 

The Transferor agrees to record and file, at
its own expense, financing statements (and continuation statements when
applicable) with respect to the Receivables now existing and hereafter created
in Accounts and other Trust Assets meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect, and
maintain the perfection of, the assignment of such Receivables to the Trust,
and to deliver a file-stamped copy of each such financing statement or other
evidence of such filing (which may, for purposes of this Section 2.1
consist of telephone confirmation of such filing promptly followed by delivery
to the Trustee of a file-stamped copy) to the Trustee on or prior to the
initial Closing Date, in the case of such Receivables arising in the Initial
Accounts and Automatic Additional Accounts, and (if any additional filing is so
necessary) the applicable Addition Date, in the case of such Receivables
arising in Supplemental Accounts.  The
Trustee shall be under no obligation whatsoever to file such financing or
continuation statements or to make any other filing under the UCC in connection
with such assignment.

 

The Transferor further agrees, at its own
expense, (a) on (x) the Automatic Addition Termination Date or any
Automatic Addition Suspension Date, in the case of the Initial Accounts and any
Additional Accounts designated pursuant hereto prior to such date, (y) the
applicable Addition Date, in the case of Supplemental Accounts, and (z) the
applicable Removal Date, in the case of Removed Accounts, to indicate in the
appropriate computer files that Receivables created in connection with the
Accounts owned by the Credit Card Originator (other than Removed Accounts) have
been conveyed to the Trust pursuant to this Agreement for the benefit of the
Certificateholders (or conveyed to the Transferor or its designee in accordance
with Section 2.10, in the case of Removed Accounts) by including in such
computer files the code identifying each such Account (or, in the case of
Removed Accounts, either including such a code identifying the Removed Accounts
only if the removal occurs prior to the Automatic Addition Termination Date or
any Automatic Addition Suspension Date, or subsequent to a Restart Date, or
deleting such code thereafter) and (b) on the date referred to in clause
(x), (y) or (z) above, as applicable, to deliver to the Trustee a
computer file, microfiche list or printed list containing a true and complete
list of all such Accounts, specifying for each such Account, as of the
Automatic Addition Termination Date or any Automatic Addition Suspension Date,
in the case of clause (x) above, the applicable Addition Cut-Off Date, in
the case of Supplemental Accounts, and the Removal Date, in the case of Removed
Accounts, its account number, the aggregate amount outstanding in such Account
and the aggregate amount of Principal Receivables outstanding in such Account.  Such file or list shall be supplemented from
time to time to reflect Supplemental Accounts and Removed Accounts.  Once the code referenced in this paragraph
has been included with respect to any Account, the Transferor further agrees
not to alter such code during the remaining term of this Agreement unless and
until (a) such Account becomes a Removed Account, (b) a Restart Date
has occurred on which the Transferor starts including Automatic Additional
Accounts as Accounts or (c) the Transferor shall have delivered to the
Trustee at least 30 days’ prior written notice of its

 

 

intention to do so and has
taken such action as is necessary or advisable to cause the interest of the
Trustee in the Receivables and other Trust Assets to continue to be perfected
with the priority required by this Agreement.

 

The Transferor hereby grants and transfers to
the Trustee, for the benefit of the Certificateholders, a security interest in
all of the Transferor’s right, title and interest in, to and under the
Receivables and all other Trust Assets, to secure a loan in an amount equal to
the unpaid principal amount of the Investor Certificates issued hereunder or to
be issued pursuant to this Agreement and the interest accrued at the related
Certificate Rate, and agrees that this Agreement shall constitute a security
agreement under applicable law.

 

Section 2.2             Acceptance by Trustee.   (a)  The Trustee hereby acknowledges
its acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust pursuant to
Section 2.1 and declares that it shall maintain such right, title and
interest, upon the trust herein set forth, for the benefit of all
Certificateholders.

 

(b)        The Trustee hereby agrees not to
disclose to any Person any of the account numbers or other information
contained in any computer files, microfiche lists or printed lists delivered to
the Trustee from time to time, except (i) to a Successor Servicer or as
required by a Requirement of Law applicable to the Trustee, (ii) in connection
with the performance of the Trustee’s duties hereunder or (iii) in
enforcing the rights of Certificateholders. 
The Trustee (i) agrees to take such measures as shall be reasonably
requested by the Transferor to protect and maintain the security and
confidentiality of such information and (ii) in any event will maintain
and preserve such files or lists and the confidentiality of the information
contained in such files or lists in the same manner and with the same degree of
care that it would exercise with respect to similar files, lists or information
maintained by it for its own account. 
The Trustee will also, upon two Business Days’ prior notice, allow the
Transferor to inspect the Trustee’s security and confidentiality arrangements
from time to time during normal business hours. 
The Trustee shall provide the Transferor with notice no later than five
Business Days prior to any disclosure pursuant to this Section or any
shorter period of time as required by any Requirements of Law.

 

(c)        The Trustee shall have no power to
create, assume or incur indebtedness or other liabilities in the name of the
Trust other than as contemplated in this Agreement or any Supplement.

 

(d)        The Trustee hereby agrees not to use any
information it obtains pursuant to this Agreement, including any of the account
numbers or other information contained in the computer files, microfiche lists
or printed lists delivered by the Transferor to the Trustee pursuant to this
Agreement, including Sections 2.1, 2.9, 2.10 or 3.4(c), other than to perform
its duties hereunder.

 

Section 2.3             Representations and Warranties of the Transferor
Relating to the Transferor.  The Transferor hereby represents and warrants
to the Trust (and agrees that the Trustee may rely on each such representation
and warranty in accepting the Receivables in trust and in authenticating the
Certificates) as of each Closing Date that:

 

 

(a)        Organization and Good Standing.  The Transferor is a corporation validly
existing in good standing under the laws of the State of Minnesota, and has
full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently conducted, to execute, deliver and perform its obligations under this
Agreement and each Supplement and to execute and deliver to the Trustee the
Certificates pursuant hereto.

 

(b)        Due Qualification.  The Transferor is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt from
such requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Credit Card Agreement relating to an Account owned
by the Credit Card Originator or any Receivable transferred to the Trust by the
Transferor unenforceable by the Credit Card Originator, the Transferor, the
Servicer or the Trustee and would have a material adverse effect on the
interests of the Certificateholders hereunder or under any Supplement.

 

(c)        Due Authorization.  The execution, delivery and performance of
this Agreement and each Supplement by the Transferor, the execution and
delivery to the Trustee of the Certificates by the Transferor and the
consummation by the Transferor of the transactions provided for in this
Agreement and each Supplement have been duly authorized by the Transferor by
all necessary corporate action on the part of the Transferor and this Agreement
and each Supplement will remain, from the time of its execution, an official
record of the Transferor.

 

(d)       No Conflict.  The execution and delivery by the Transferor
of this Agreement, each Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Transferor of the terms hereof and
thereof will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Transferor is a party
or by which it or any of its properties are bound.

 

(e)        No Violation.  The execution and delivery by the Transferor
of this Agreement, each Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Transferor of the terms hereof and
thereof will not conflict with or violate any Requirements of Law applicable to
the Transferor.

 

(f)         No Proceedings.  There are no proceedings or investigations
pending or, to the best knowledge of the Transferor, threatened against the
Transferor, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of
this Agreement, any Supplement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, any Supplement or the
Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Transferor, would materially and adversely affect
the performance by the Transferor of its obligations

 

under this Agreement or any
Supplement, (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement, any
Supplement or the Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the Federal or applicable state income or
franchise tax systems.

 

(g)        All Consents Required.  All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery by the Transferor of
this Agreement, each Supplement and the Certificates, the performance by the
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Transferor of the terms hereof and
thereof, have been obtained.

 

(h)        Insolvency.  No Insolvency Event with respect to the
Credit Card Originator, TCC or the Transferor has occurred and the transfer of
the Receivables by the Transferor to the Trust has not been made in
contemplation of the occurrence thereof.

 

The representations and warranties of the
Transferor set forth in this Section 2.3 shall survive the transfer and
assignment by the Transferor of the respective Receivables to the Trust.  Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and
warranties by the Transferor set forth in this Section 2.3, the party
discovering such breach shall give prompt written notice to the others and to
each Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement.  The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting to cure any such
breach.  For purposes of the
representations and warranties set forth in this Section 2.3, each
reference to a Supplement shall be deemed to refer only to those Supplements in
effect as of the relevant Closing Date.

 

Section 2.4             Representations and Warranties
of the Transferor Relating to this Agreement and any Supplement and the Receivables.   (a)  Representations and Warranties.  The Transferor hereby represents and warrants
to the Trust (and agrees that the Trustee may rely on each such representation
and warranty in accepting the Receivables in trust and in authenticating the
Certificates) as of the date of this Agreement and the date of each Supplement,
as of each Closing Date and, with respect to Additional Accounts, as of the
related Addition Date that:

 

(i)      this
Agreement, each Supplement and, in the case of Supplemental Accounts, the
related Assignment, each constitutes a legal, valid and binding obligation of
the Transferor, enforceable against the Transferor in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of creditors’ rights in general and except
as such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);

 

(ii)     as
of the Automatic Addition Termination Date or any Automatic Addition Suspension
Date and as of each subsequent Addition

 

 

Date with respect to Supplemental Accounts,
and as of the applicable Removal Date with respect to the Removed Accounts, the
related computer file, microfiche list or printed list delivered pursuant to
this Agreement, as supplemented to such date, is an accurate and complete
listing in all material respects of all the Accounts owned by the Credit Card
Originator as of such date, such Addition Cut-Off Date or such Removal Date, as
the case may be, and the information contained therein with respect to the
identity of such Accounts and the Receivables existing in such Accounts is true
and correct in all material respects as of such date, such Addition Cut-Off
Date or such Removal Date, as the case may be;

 

(iii)    the
Transferor is the legal and beneficial owner of all right, title and interest
in each Receivable and the Transferor has the full right to transfer such
Receivables to the Trust, and each Receivable conveyed to the Trust by the
Transferor has been conveyed to the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of its Affiliates (other
than Liens permitted under subsection 2.7(b)) and in compliance, in all
material respects, with all Requirements of Law applicable to the Transferor;

 

(iv)    all
authorizations, consents, orders or approvals of or registrations or
declarations with any Governmental Authority required to be obtained, effected
or given by the Transferor in connection with the conveyance by the Transferor
of Receivables to the Trust have been duly obtained, effected or given and are
in full force and effect;

 

(v)     this
Agreement or, in the case of Supplemental Accounts, the related Assignment
constitutes either a valid transfer and assignment to the Trust of all right,
title and interest of the Transferor in the Receivables and other Trust Assets
conveyed to the Trust by the Transferor and all monies due or to become due
with respect thereto and the proceeds thereof or this Agreement or a grant of a
“security interest” (as defined in the UCC) in such property to the Trust,
which, in the case of existing Receivables and the proceeds thereof, is
enforceable upon execution and delivery of this Agreement, or, with respect to
then existing Receivables in Additional Accounts, as of the applicable Addition
Date, and which will be enforceable with respect to such Receivables hereafter
and thereafter created and the proceeds thereof upon such creation, in each
case except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of creditors’ rights in general and except
as such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity). 
Upon the filing of the financing statements pursuant to Section 2.1
and, in the case of Receivables hereafter created and the proceeds thereof,
upon the creation thereof, the Trust shall have a first priority security
interest in such property and “proceeds” (as defined in the UCC) except for
Liens permitted under subsection 2.7(b);

 

 

(vi)    except
as otherwise expressly provided in this Agreement or any Supplement, neither
the Transferor nor any Person claiming through or under the Transferor has any
claim to or interest in the Collection Account, the Special Funding Account,
any Series Account or any Enhancement;

 

(vii)   on
the Trust Cut-Off Date, with respect to each Initial Account, on the date of
its creation, with respect to each Automatic Additional Account and, on the
applicable Addition Cut-Off Date, with respect to each related Supplemental
Account each Account classified as an “Eligible Account” by the Transferor in
any document or report delivered hereunder will satisfy the requirements
contained in the definition of Eligible Account and each Receivable classified
as an “Eligible Receivable” by the Transferor in any document or report
delivered hereunder will satisfy the requirements contained in the definition
of Eligible Receivable;

 

(viii)  on
the Trust Cut-Off Date, each Receivable then existing is an Eligible
Receivable, on the date of creation of each Automatic Additional Account, each
Receivable contained in such Automatic Additional Account is an Eligible
Receivable and, on the applicable Addition Cut-Off Date, each Receivable
contained in any related Supplemental Account is an Eligible Receivable; and

 

(ix)    as
of the date of the creation of any new Receivable, such Receivable is an
Eligible Receivable.

 

(b)        Notice of Breach.  The representations and warranties of the
Transferor set forth in this Section 2.4 shall survive the transfer and
assignment by the Transferor of Receivables to the Trust.  Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and
warranties by the Transferor set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice to the others and to
each Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement.  The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting to cure any such
breach.  For purposes of the representations
and warranties set forth in this Section 2.4, each reference to a
Supplement shall be deemed to refer only to those Supplements in effect as of
the date of the relevant representations or warranties.

 

Section 2.5             Reassignment of Ineligible Receivables.

 

(a)        Reassignment of Receivables.  In the event that (i) any representation
or warranty of the Transferor contained in subsection 2.4(a)(ii), (iii), (iv),
(vii), (viii) or (ix) is not true and correct in any material respect
as of the date specified therein with respect to any Receivable transferred to
the Trust by the Transferor or any Account owned by the Credit Card Originator
and as a result of such breach any Receivables in the related Account become
Defaulted Receivables or the Trust’s rights in, to or under such Receivables or
the proceeds of such Receivables are impaired or such proceeds are not
available for any reason to the Trust free and clear of any Lien, unless cured
within 60 days (or such longer period, not in excess of 150 days, as may be
agreed to by the Trustee) after

 

 

the earlier to occur of the discovery thereof
by the Transferor or receipt by the Transferor or a designee of the Transferor
of notice thereof given by the Trustee, or (ii) it is so provided in
subsection 2.7(a) with respect to any Receivables transferred to the Trust
by the Transferor, then such Receivable shall be designated an “Ineligible
Receivable” and shall be assigned a principal balance of zero for the purpose
of determining the aggregate amount of Principal Receivables on any day; provided,
however, that such Receivables will not be deemed to be Ineligible
Receivables but will be deemed an Eligible Receivable and such Principal
Receivables shall be included in determining the aggregate Principal
Receivables in the Trust if, on any day prior to the end of such 60-day or
longer period, (x) either (A) in the case of an event described in
clause (i) above the relevant representation and warranty shall be true
and correct in all material respects as if made on such day or (B) in the
case of an event described in clause (ii) above the circumstances causing
such Receivable to become an Ineligible Receivable shall no longer exist and (y) the
Transferor shall have delivered an Officer’s Certificate describing the nature
of such breach and the manner in which the relevant representation and warranty
became true and correct.

 

(b)        Price of Reassignment.  On and after the date of its designation as
an Ineligible Receivable, each Ineligible Receivable shall not be given credit
in determining the aggregate amount of Principal Receivables used to calculate
the Transferor Amount, and the Floating Allocation Percentage and the Principal
Allocation Percentage applicable to any Series. 
If, following the exclusion of such Principal Receivables from the
calculation of the Transferor Amount, the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) would otherwise be less
than the Required Retained Transferor Amount, the Transferor shall make a
deposit into the Special Funding Account in immediately available funds prior
to the next succeeding Business Day in an amount equal to the amount by which
the Transferor Amount (excluding the interest represented by any Supplemental
Certificate) would otherwise be less than the Required Retained Transferor
Amount (up to the amount of such Principal Receivables).  The payment of such deposit amount in
immediately available funds shall otherwise be considered payment in full of all
of the Ineligible Receivables.

 

The obligation of the Transferor to make the
deposits, if any, required to be made to the Special Funding Account as
provided in this Section 2.5, shall constitute the sole remedy respecting
the event giving rise to such obligation available to Certificateholders (or
the Trustee on behalf of the Certificateholders) or any Enhancement Provider.

 

Section 2.6             Reassignment of Receivables in Trust Portfolio.  If any representation or warranty of the
Transferor set forth in subsection 2.3(a), (b) or (c) or subsection 2.4(a)(i),
(v) or (vi) is not true and correct in any material respect and such
breach has a material adverse effect on the Certificateholders’ Interest in the
Receivables transferred to the Trust by the Transferor, then either the Trustee
or the Holders of Investor Certificates evidencing not less than 50% of the
aggregate unpaid principal amount of all outstanding Investor Certificates, by
notice then given to the Transferor and the Servicer (and to the Trustee if
given by the Investor Certificateholders), may direct the Transferor to accept
a reassignment of the Receivables transferred to the Trust by the Transferor if
such breach and any material adverse effect caused by such breach is not cured
within 60 days of

 

 

such notice
(or within such longer period, not in excess of 150 days, as may be specified
in such notice), and upon those conditions the Transferor shall be obligated to
accept such reassignment on the terms set forth below; provided, however,
that such Receivables will not be reassigned to the Transferor if, on any day
prior to the end of such 60-day or longer period (i) the relevant
representation and warranty shall be true and correct in all material respects
as if made on such day and (ii) the Transferor shall have delivered an
Officer’s Certificate describing the nature of such breach and the manner in
which the relevant representation and warranty became true and correct.

 

The Transferor shall deposit in the
Collection Account in immediately available funds not later than 12:00 noon,
New York City time, on the first Distribution Date following the Monthly Period
in which such reassignment obligation arises, in payment for such reassignment,
an amount equal to the sum of the amounts specified therefor with respect to
each outstanding Series in the related Supplement.  Notwithstanding anything to the contrary in
this Agreement, such amounts shall be distributed on such Distribution Date in
accordance with Article IV and the terms of each Supplement.  The payment of such deposit amount in immediately
available funds shall otherwise be considered payment in full of all of the
Receivables.

 

Upon the deposit, if any, required to be made
to the Collection Account as provided in this Section 2.6 and the
reassignment of the applicable Receivables, the Trustee, on behalf of the
Trust, shall automatically and without further action be deemed to transfer,
assign, set over and otherwise convey to the Transferor or its designee,
without recourse, representation or warranty (except for the warranty that since
the date of transfer by the Transferor, the Trustee has not sold, transferred
or encumbered any such Receivables or interest therein), all the right, title
and interest of the Trust in and to such Receivables, all monies due or to
become due and all amounts received with respect thereto and all proceeds
thereof.  The Trustee shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall reasonably be requested by the Transferor to effect the conveyance of
such Receivables pursuant to this Section 2.6.  The obligation of the Transferor to accept
reassignment of any Receivables, and to make the deposits, if any, required to
be made to the Collection Account as provided in this Section 2.6, shall
constitute the sole remedy respecting the event giving rise to such obligation
available to Certificateholders (or the Trustee on behalf of the
Certificateholders).

 

Section 2.7             Covenants of the Transferor.  The Transferor hereby covenants as follows:

 

(a)        Receivables to be Accounts, General
Intangibles or Chattel Paper.  Except
in connection with the enforcement or collection of an Account, the Transferor
will take no action to cause any Receivable transferred by it to the Trust to
be evidenced by any instrument (as defined in the UCC) and, if any such
Receivable is so evidenced (whether or not in connection with the enforcement
or collection of an Account), it shall be deemed to be an Ineligible Receivable
in accordance with subsection 2.5(a) and shall be reassigned to the Transferor
in accordance with subsection 2.5(b).

 

 

(b)        Security Interests.  Except for the conveyances hereunder, the
Transferor will not sell, pledge, assign or transfer or otherwise convey to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Receivable, whether now existing or hereafter created, or any interest
therein; the Transferor will immediately notify the Trustee of the existence of
any Lien on any Receivable of which the Transferor has knowledge; and the Transferor
shall defend the right, title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under the Transferor; provided, however,
that nothing in this subsection 2.7(b) shall prevent or be deemed to
prohibit the Transferor from suffering to exist upon any of the Receivables any
Liens for taxes if such taxes shall not at the time be due and payable or if
the Transferor shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto. 
Notwithstanding the foregoing, nothing in this subsection 2.7(b) shall
be construed to prevent or be deemed to prohibit (i) the transfer of the
Transferor Certificate and certain other rights of the Transferor in accordance
with the terms of this Agreement and any related Supplement or (ii) the
sale of any Defaulted Receivables and Finance Charge Receivables in Accounts
that have been reconveyed to the Transferor pursuant to Section 2.10 provided
that Recoveries on such Accounts shall be applied as provided herein and that
with respect to any Monthly Period, the aggregate amount of sales proceeds
received from such sold receivables shall not exceed the greater of (x) 0.20%
of the aggregate outstanding balance of all Receivables on the first day of
such Monthly Period or (y) $5,000,000.

 

(c)        Transferor’s Interest.  Except as otherwise permitted herein,
including in Sections 2.12, 6.3 and 7.2, the Transferor agrees not to transfer,
assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant
a security interest in the Transferor’s Interest represented by the Transferor
Certificate or any Supplemental Certificate and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation or grant shall be void.

 

(d)        Delivery of Collections or Recoveries.  If the Transferor receives Collections or
Recoveries, the Transferor agrees to pay the Servicer all such Collections and
Recoveries as soon as practicable after receipt thereof but in no event later
than two Business Days after the Date of Processing by the Transferor.

 

(e)        Notice of Liens.  The Transferor shall notify the Trustee and
each Enhancement Provider, if any, entitled to such notice pursuant to the
relevant Supplement promptly after becoming aware of any Lien on any Receivable
other than the conveyances hereunder or Liens permitted under subsection
2.7(b).

 

(f)         Separate Corporate Existence.  The Transferor shall:

 

    (i)          Maintain in full effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation and obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Agreement and the Receivables Purchase
Agreement 

 

 

and each other instrument or agreement
necessary or appropriate to proper administration hereof and permit and
effectuate the transactions contemplated hereby.

 

(ii)     Maintain
its own deposit account or accounts, separate from those of any Affiliate of
the Transferor, with commercial banking institutions.  The funds of the Transferor will not be
diverted to any other Person or for other than the corporate use of the
Transferor, and, except as may be expressly permitted by this Agreement or the
Receivables Purchase Agreement, the funds of the Transferor shall not be
commingled with those of any Affiliate of the Transferor.

 

(iii)    Ensure
that, to the extent that it shares the same officers or other employees as any
of its stockholders or Affiliates, the salaries of and the expenses related to
providing benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its fair share
of the salary and benefit costs associated with all such common officers and
employees.

 

(iv)    Ensure
that, to the extent that it jointly contracts with any of its stockholders or
Affiliates to do business with vendors or service providers or to share
overhead expenses, the costs incurred in so doing shall be allocated fairly
among such entities, and each such entity shall bear its fair share of such
costs.  To the extent that the Transferor
contracts or does business with vendors or service providers where the goods
and services provided are partially for the benefit of any other Person, the
costs incurred in so doing shall be fairly allocated to or among such entities
for whose benefit the goods and services are provided, and each such entity
shall bear its fair share of such costs. 
All material transactions between the Transferor and any of its
Affiliates shall be only on an arm’s-length basis.

 

(v)     Maintain
a principal executive and administrative office through which its business is
conducted separate from those of its stockholders and Affiliates.  To the extent that the Transferor and any of
its stockholders or Affiliates have offices in contiguous space, there shall be
fair and appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.

 

(vi)    Conduct
its affairs strictly in accordance with its Articles of Incorporation and
observe all necessary, appropriate and customary corporate formalities,
including, but not limited to, holding all regular and special stockholders’
and directors’ meetings appropriate to authorize all corporate action, keeping
separate and accurate minutes of such meetings, passing all resolutions or
consents necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not limited
to, payroll and intercompany

 

 

transaction accounts.  Regular stockholders’ and directors’ meetings
shall be held at least annually.

 

(vii)   Ensure
that its Board of Directors shall be elected independently from the Boards of
Directors of its Affiliates and shall at all times include at least one
Independent Director (for purposes hereof, “Independent Director” shall
mean any member of the Board of Directors of the Transferor who is not and has
not at any time been (x) a director, officer, employee or shareholder of
any Affiliate of the Transferor within a period of three years prior to such
Person’s election to the Board of Directors or (y) a member of the
immediate family of any of the foregoing).

 

(viii)  Ensure
that decisions with respect to its business and daily operations shall be
independently made by the Transferor (although the officer making any
particular decision may also be an officer or director of an Affiliate of the
Transferor) and shall not be dictated by an Affiliate of the Transferor.

 

(ix)    Act
solely in its own corporate name and through its own authorized officers and
agents, and no Affiliate of the Transferor shall be appointed to act as agent
of the Transferor, except as expressly contemplated by this Agreement or the
Receivables Purchase Agreement.

 

(x)     Ensure
that no Affiliate of the Transferor shall advance funds to the Transferor,
other than capital contributions from TCC made to enable the Transferor to pay
the purchase price of Receivables or as is otherwise provided in the
Receivables Purchase Agreement, and no Affiliate of the Transferor will
otherwise supply funds to, or guaranty debts of, the Transferor; provided,
however, that an Affiliate of the Transferor may provide funds to the
Transferor in connection with capitalization of the Transferor provided to
assure that the Transferor has “substantial assets” as described in Treasury
Regulation Section 301.7701-2(d)(2).

 

(xi)    Not
enter into any guaranty, or otherwise become liable, with respect to any
obligation of any Affiliate of the Transferor other than with respect to Section 7.4.

 

(xii)   Ensure
that any financial reports required of the Transferor shall comply with
generally accepted accounting principles and shall be issued separately from,
but may be consolidated with, any reports prepared for any of its Affiliates.

 

(g)        Continuous Perfection.  The Transferor shall not change its name,
identity or structure in any manner that could cause any financing or
continuation statement filed pursuant to this Agreement to be misleading within
the meaning of Section 9-402(7) of the UCC (or any other then
applicable provision of the UCC) unless the Transferor shall have delivered to
the Trustee at least 30 days’ prior written notice thereof and, no later than

 

 

30 days after making such change, shall have
taken all action necessary or advisable to amend such financing statement or
continuation statement so that it is not misleading.  The Transferor shall not change its chief
executive office or change the location of its principal records concerning the
Receivables, the Trust Assets or the Collections unless it has delivered to the
Trustee at least 30 days’ prior written notice of its intention to do so and
has taken such action as is necessary or advisable to cause the interest of the
Trustee in the Receivables and other Trust Assets to continue to be perfected
with the priority required by this Agreement.

 

(h)        Reports to the Commission.  The Transferor shall, on behalf of the Trust,
cause to be filed with the Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder.

 

(i)         Net Worth.  The Transferor shall retain in force and
shall enforce according to its terms that certain demand note (the “Demand
Note”) dated as of September 13, 1995, between Dayton Hudson
Corporation (now known as Target Corporation), as the maker, and Dayton Hudson
Capital Corporation (now known as Target Capital Corporation), as the payee and
any other demand note provided by Target Corporation to TCC pursuant to the
Demand Note.  Notwithstanding the
foregoing, at such time as the Demand Note shall become due according to its
terms, the Transferor may enter into a new demand note or alternative
arrangement (in lieu of retaining the cash paid under the Demand Note) if it
obtains an opinion of counsel that use of such replacement demand note or
alternative arrangement will not cause the Trust to be classified for federal
income tax purposes as an association taxable as a corporation.

 

Section 2.8             Covenants of the Transferor with Respect to the Bank
Purchase Agreement.  The Transferor, in its capacity as purchaser
of the Receivables from TCC pursuant to the Receivables Purchase Agreement,
hereby covenants that the Transferor will at all times enforce the covenants
and agreements of the Credit Card Originator in the Bank Purchase Agreement
assigned by TCC to the Transferor in the Receivables Purchase Agreement,
including, without limitation, covenants to the effect set forth below.

 

(a)        Periodic Finance Charges and Other
Fees.  Except as otherwise required
by any Requirement of Law, or as is deemed by the Credit Card Originator in its
sole discretion to be appropriate, it shall not at any time reduce the annual
percentage rates of the Periodic Finance Charges assessed on the Receivables or
reduce other fees on the Accounts, if, either (a) as a result of such
reduction it is reasonably expected that such reduction will cause an Early
Amortization Event to occur with respect to a Series or (b) such
reduction (x) if the Credit Card Originator owns a comparable segment of
receivables, is not applied to any such comparable segment of consumer open end
credit accounts owned by the Credit Card Originator that have characteristics
the same as or substantially similar to the Receivables that are the subject of
such change and (y) if the Credit Card Originator does not own such a
comparable segment of receivables, will not be made with the intent to
materially benefit the Transferor over the Investor Certificateholders or to
materially adversely affect the Investor Certificateholders, except as
otherwise restricted by

 

 

an endorsement, sponsorship, or other
agreement between the Transferor and an unrelated third party or by the terms
of the Accounts.

 

(b)        Credit Card Agreements and Credit
Card Guidelines.  The Credit Card
Originator shall comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines except
insofar as any failure so to comply or perform would not materially and
adversely affect the rights of the Trust or the Certificateholders hereunder or
under the Certificates.  Unless required
by law or unless, in its sole discretion, the Credit Card Originator deems it
appropriate, it will not change the terms and provisions of the Credit Card
Agreements or the Credit Card Guidelines with respect to any of the Accounts in
any respect (including the calculation of the amount, or the timing, of
charge-offs and the Periodic Finance Charges and other fees to be assessed
thereon), if, either (i) as a result of such change it is reasonably
expected that such change will cause an Early Amortization Event to occur with
respect to a Series or (ii) such change (x) if the Credit Card
Originator owns a comparable segment of receivables, is not applied to any such
comparable segment of consumer open end credit accounts owned by the Credit
Card Originator that have characteristics the same as or substantially similar
to the Receivables that are the subject of such change and (y) if the
Credit Card Originator does not own such a comparable segment of receivables,
will not be made with the intent to materially benefit the Transferor over the
Investor Certificateholders or to materially adversely affect the Investor
Certificateholders, except as otherwise restricted by an endorsement, sponsorship,
or other agreement between the Transferor and an unrelated third party or by
the terms of the Accounts.

 

The Transferor further covenants that the
Transferor will not enter into any amendments to the Receivables Purchase
Agreement unless the Rating Agency Condition has been satisfied.

 

Section 2.9             Addition of Accounts.  (a) Required
Additions.

 

(i)      If,
as of the close of business on the last Business Day of any Monthly Period,
either (x) the Transferor Amount (excluding the interest represented by
any Supplemental Certificate) is less than the Required Retained Transferor
Amount on such date or (y) the aggregate amount of Principal Receivables
is less than the Required Principal Balance on such date, the Transferor shall
on or prior to the close of business on the 10th Business Day following the
last Business Day of such Monthly Period (the “Required Designation Date”),
unless the Transferor Amount (excluding the interest represented by any
Supplemental Certificate) equals or exceeds the Required Retained Transferor
Amount or the aggregate amount of Principal Receivables equals or exceeds the
Required Principal Balance, as the case may be, in either case as of the close
of business on any day after the last Business Day of such Monthly Period and prior
to the Required Designation Date, designate additional Eligible Accounts to be
included as Accounts as of the Required Designation Date or any earlier date in
a sufficient amount such that, after giving effect to such addition, the
Transferor Amount (excluding the interest represented by any Supplemental  Certificate) as of

 

 

the close of business on the Addition
Date is at least equal to the Required Retained Transferor Amount on such date
and the aggregate amount of Principal Receivables equals or exceeds the
Required Principal Balance on such date. 
The failure of any condition set forth in paragraph (c) or
(d) below, as the case may be, shall not relieve the Transferor of its
obligation pursuant to this paragraph; provided, however, that
the failure of the Transferor to transfer Receivables to the Trust as provided
in this paragraph solely as a result of the unavailability of a sufficient
amount of Eligible Receivables shall not constitute a breach of this Agreement;
provided, further, that any such failure which has not been
timely cured will nevertheless result in the occurrence of an Early
Amortization Event with respect to each Series for which, pursuant to the
Supplement therefor, a failure by the Transferor to convey Receivables in
Supplemental Accounts or Participation Interests to the Trust by the day on
which it is required to convey such Receivables or Participation Interests
constitutes an “Early Amortization Event” (as defined in such Supplement).

 

(ii)     In
lieu of, or in addition to, designating Supplemental Accounts pursuant to
clause (i) above, the Transferor may, subject to the conditions specified
in paragraph (c) below, convey to the Trust participations representing
undivided interests in a pool of assets primarily consisting of open end credit
card receivables generated in credit card accounts owned by a Credit Card
Originator, and any interests in the foregoing, including securities
representing or backed by such receivables, and other self-liquidating
financial assets including, without limitation, any “Eligible Assets” as such
term is defined in Rule 3a-7 under the Investment Company Act (or any
successor to such Rule) and collections thereon (“Participation Interests”);
provided that an Opinion of Counsel is delivered that such Participation
Interest will not be classified or cause the Trust to be classified as an
equity interest in an association taxable as a corporation; provided, further,
that to the extent required pursuant to the Act, any Participation Interests
transferred to the Trust (a) shall have been (i) registered under the
Act or (ii) held for at least the Rule 144(k) holding period,
and (b) shall be acquired in secondary market transactions not from the
issuer or an affiliate.  The addition of
Participation Interests in the Trust pursuant to this paragraph (a) or
paragraph (b) below shall be effected by a Supplement, dated the
applicable Addition Date, pursuant to subsection 13.1(a).

 

(b)        Permitted Additions.  The Transferor may from time to time after an
Automatic Addition Termination Date or an Automatic Addition Suspension Date
(and in the latter case, prior to a Restart Date), at its sole discretion,
subject to the conditions specified in paragraph (c) below, designate
additional Eligible Accounts to be included as Accounts or Participation
Interests to be included as Trust Assets, in either case as of the applicable
Addition Date.

 

(c)        Conditions to Addition.  On the Addition Date  with respect to any Supplemental Accounts or
Participation Interests added pursuant to subsection 2.9(a) or

 

 

2.9(b), the 
Credit Card Originator will sell to TCC, TCC will thereafter sell to the
Transferor and the Transferor will thereafter transfer to the Trust the
Receivables arising in Supplemental Accounts (and such Supplemental Accounts
shall be deemed to be Accounts for purposes of this Agreement) and Participation
Interests, subject to the satisfaction of the following conditions:

 

(i)      on
or before the tenth Business Day immediately preceding the Addition Date, the
Transferor shall have given the Trustee, the Servicer, each Rating Agency and
any Enhancement Provider entitled thereto pursuant to the relevant Supplement
written notice that the Supplemental Accounts or Participation Interests will
be included and specifying the applicable Addition Date, the Addition Cut-Off
Date, the approximate number of accounts expected to be added and the
approximate aggregate balances expected to be outstanding in the accounts to be
added;

 

(ii)     in the case of Supplemental Accounts, the Transferor shall
have delivered to the Trustee copies of UCC-1 financing statements covering
such Supplemental Accounts, if necessary to perfect the Trust’s interest in the
Receivables arising therein;

 

(iii)    as
of each of the Addition Cut-Off Date and the Addition Date, (x) no
Insolvency Event with respect to the Credit Card Originator, TCC or the
Transferor shall have occurred, (y) the Credit Card Originator, TCC and
the Transferor shall not be insolvent and (z) the transfer of the
Receivables arising in the Supplemental Accounts or the Participation Interests
to the Trust shall not have been made in contemplation of the occurrence of an
Insolvency Event or the insolvency thereof;

 

(iv)    except
in the case of an Addition pursuant to subsection 2.9(a), the Rating Agency
Condition shall have been satisfied and in the case of an Addition pursuant to
subsection 2.9(a) which would exceed the Aggregate Addition Limit, the
Transferor shall have provided to Standard & Poor’s at least 10
Business Days’ prior written notice of such Addition and at or prior to the end
of such 10 Business Day period, the Transferor shall receive a notice in
writing from Standard & Poor’s that such Addition will not result in
the lowering or withdrawal of its then existing rating of the Investor
Certificates of any Series;

 

(v)     the
Transferor shall have delivered to the Trustee and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement an Officer’s Certificate,
dated the Addition Date, stating that (x) in the case of Supplemental
Accounts, as of the applicable Addition Date the Supplemental Accounts are all
Eligible Accounts, (y) to the extent applicable, the conditions set forth
in clauses (ii) through (iv) above have been satisfied and (z) the
Transferor reasonably believes that (A) the addition by the Transferor of
the Receivables arising in the Supplemental Accounts or of the Participation
Interests to the Trust will not, based on the

 

 

facts
known to such officer at the time of such certification, then or thereafter
cause an Early Amortization Event to occur with respect to any Series and (B) in
the case of Supplemental Accounts, no selection procedure was utilized by the
Transferor which would result in a selection of Supplemental Accounts (from
among the available Eligible Accounts owned by the Credit Card Originator) that
would have a result that would be materially less favorable to the interests of
the Investor Certificateholders of any Series as of the Addition Date than
a random selection; and

 

(vi)    the Transferor shall have delivered to the Trustee, each
Rating Agency and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement an outside Opinion of Counsel, dated the Addition Date, in
accordance with subsection 13.2(d).

 

(d)        Automatic Additional Accounts.

 

(i)      All
accounts which meet the definition of Automatic Additional Accounts shall be
included as Accounts from and after the date upon which such Automatic
Additional Accounts are created and all Receivables in such Automatic
Additional Accounts, whether such Receivables are then existing or thereafter
created, shall be transferred automatically to the Trust upon purchase by the
Transferor.  For all purposes of this
Agreement, all receivables of such Automatic Additional Accounts shall be
treated as Receivables upon their creation. 
The Transferor may elect at any time to terminate the inclusion in
Accounts of new accounts which would otherwise be Automatic Additional Accounts
as of any Business Day (the “Automatic Addition Termination Date”), or
suspend any such inclusion as of any Business Day (an “Automatic Addition
Suspension Date”) until a date (the “Restart Date”) to be notified
in writing by the Transferor to the Trustee by delivering to the Trustee, the
Servicer and each Rating Agency prior written notice of such election at least
10 days prior to such Automatic Addition Termination Date or Automatic Addition
Suspension date.  Promptly after an
Automatic Addition Termination Date or any Automatic Addition Suspension Date,
or a Restart Date, the Transferor and the Trustee agree to execute and the
Transferor agrees to record and file at its own expense an amendment to the
financing statements referred to in Section 2.1 to specify the accounts
then subject to this Agreement (which specification may incorporate a list of
accounts by reference) and, except in connection with any such filing made
after a Restart Date, to release any security interest in any accounts created
after the Automatic Addition Termination Date or any Automatic Addition
Suspension Date.

 

(ii)     The
Transferor shall not be permitted to continue to designate Automatic Additional
Accounts to be included as Accounts pursuant to this subsection 2.9(d) (and
the Determination Date on which such determination is made shall be also
referred to as an “Automatic Addition Suspension Date”) unless:

 

 

(I)                                    the arithmetic average for the three
Monthly Periods preceding the then current Monthly Period, of the annualized
percentage equivalent of a fraction for each respective Monthly Period, the
numerator of which is equal to the Defaulted Amount for the respective Monthly Period
and the denominator of which is equal to the aggregate Principal Receivables as
of the first day of the respective Monthly Period, is less than 10.50%;

 

(II)                                the arithmetic average for the three
Monthly Periods preceding the then current Monthly Period, of the percentage
equivalent of a fraction for each respective Monthly Period, the numerator of
which is equal to the amount of Collections received during the respective
Monthly Period and the denominator of which is equal to the aggregate Principal
Receivables as of the first day of the respective Monthly Period, is greater
than or equal to 10.0%;

 

(III)                            the arithmetic average for the three
Monthly Periods preceding the then current Monthly Period of the Trust
Portfolio Yield minus the weighted arithmetic average of the Base Rates
for each Series then outstanding for such three Monthly Periods is greater
than or equal to 1.5%;

 

(IV)                            the number of accounts to be
included as Automatic Additional Accounts with respect to the related six-month
period is less than or equal to 30% of the number of Accounts as of the first
day of such six-month period;

 

(V)                                provided, however, that the
designation of Automatic Additional Accounts shall be permitted to continue in
the event that as of any date of determination on which (x) any of the
conditions in clauses (I) through (III) listed above is not met, and
if the Aggregate Addition Limit would be exceeded as a result of the inclusion
of such Automatic Additional Accounts as Accounts or (y) the condition in

 

 

clause (IV) above would not be
satisfied because the threshold specified therein would be exceeded as a result
of the inclusion of such Automatic Additional Accounts as Accounts, the Rating
Agency Condition shall have been satisfied with respect to such inclusion;

 

(VI)                            on each Determination Date, the
Transferor shall have delivered to the Rating Agencies and the Trustee an
Officer’s Certificate, certifying (i) that each Automatic Additional
Account designated as an Eligible Account is an Eligible Account and (ii) that
either (x) the conditions under clauses (I), (II) or (III) above
shall be satisfied or the Aggregate Addition Limit would not be exceeded as a
result of the inclusion of such Automatic Additional Accounts as Accounts and
the limitation under clause (IV) above will not be exceeded or (y) if
the conditions under clauses (I), (II) or (III) shall not be
satisfied and the Aggregate Addition Limit would be exceeded as a result of the
inclusion of such Automatic Additional Accounts as Accounts, or the condition
under clause (IV) above would not be satisfied because the threshold
specified therein would be exceeded as a result of the inclusion of Automatic
Additional Accounts as Accounts, the Rating Agency Condition has been satisfied
with respect to such inclusion; and

 

(VII)                        as of the Addition Date, (x) no
Insolvency Event with respect to the Credit Card Originator, TCC or the
Transferor shall have occurred, (y) the Credit Card Originator, TCC and
the Transferor shall not be insolvent and (z) the transfer of the
Receivables arising in the Automatic Additional Accounts to the Trust shall not
have been made in contemplation of the occurrence of an Insolvency Event or the
insolvency thereof.

 

(iii)    If
the conditions of clauses (I) through (III) of clause (ii) above
are not satisfied and clause (IV) of clause (ii) above is satisfied,
the Transferor intends to continue to automatically add accounts so long as the

 

 

Aggregate
Addition Limit is not exceeded.  Upon
either (x) any one of the conditions set forth in clauses (I) through
(III) of clause (ii) above not being satisfied and the Aggregate
Addition Limit being exceeded or (y) the condition set forth in clause (IV) above
not being satisfied because the threshold specified therein has been exceeded
as specified in an Officer’s Certificate of the Transferor delivered pursuant
to clause (ii)(V) above, the Transferor shall cease to designate Automatic
Additional Accounts to be included as Accounts pursuant to this subsection 2.9(d) until
a date (the “Restart Date”) specified in a written notice given by the
Transferor to the Trustee; provided, however, that the Transferor
shall specify in such notice that on such Restart Date (x) the conditions
under clauses (I) through (III) of clause (ii) above will be
satisfied or the Aggregate Addition Limit would not be exceeded as a result of
the inclusion of Automatic Additional Accounts as Accounts and the condition
under clause (ii)(IV) above will be satisfied on the Restart Date and (y) all
accounts of the Credit Card Originators shall have been designated Accounts
either as Automatic Additional Accounts prior to the Automatic Addition
Suspension Date or as Supplemental Accounts.

 

(e)        Representations and Warranties.  The Transferor hereby represents and warrants
to the Trust as of the related Addition Date as to the matters relating to it
set forth in paragraph (d)(iii) above and that the file or list delivered
pursuant to paragraph (f) below is, as of the applicable Addition Cut-Off
Date, true and complete in all material respects.

 

(f)         Delivery of Documents.  In the case of the designation of
Supplemental Accounts, the Transferor shall deliver to the Trustee (i) the
computer file, microfiche list or printed list required to be delivered
pursuant to Section 2.1 with respect to such Supplemental Accounts on the
applicable Document Delivery Date and (ii) a duly executed, written
Assignment (including an acceptance by the Trustee for the benefit of the
Certificateholders), substantially in the form of Exhibit B (the “Assignment”),
on the Document Delivery Date.

 

(g)        Adjustment to Calculations.  The Transferor may direct that the Principal
Receivables in the Additional Accounts be treated as Principal Receivables
outstanding on the last day of the Monthly Period preceding the Monthly Period
in which the Addition is made for purposes of calculating Floating Allocation
Percentages and Principal Allocation Percentages for the Monthly Period of such
Addition.  Such direction may be made on
the Addition Date only if all collections with respect to the Additional
Accounts for the period from the last day of the preceding Monthly Period
through the Addition Date are deposited in the Collection Account on the
Addition Date.  Following any such
Addition, the Servicer shall allocate collections for the balance of such
Monthly Period, including the collections deposited on the Addition Date, to
the Certificateholders’ Interest of each Series and the Transferor Amount
so that each interest receives the same allocations of Finance Charge
Receivables, Principal Receivables and Defaulted Amounts that it would have
received if such Additional Accounts had been included in the Trust for the
entire Monthly Period in which the Addition occurred.

 

 

Section 2.10           Removal of Accounts.  On any day of any Monthly Period the
Transferor shall have the right to require the reassignment to it or its
designee of all the Trust’s right, title and interest in, to and under the
Receivables then existing and thereafter created, all monies due or to become
due and all amounts received with respect thereto and all proceeds thereof in
or with respect to the Accounts then owned by the Credit Card Originator and
designated by the Transferor (the “Removed Accounts”) or Participation
Interests (unless otherwise set forth in the applicable Supplement), upon
satisfaction of the following conditions:

 

(a)        on or before the tenth Business Day
immediately preceding the Removal Date (the “Removal Notice Date”) the
Transferor shall have given the Trustee, the Servicer, each Rating Agency and
any Enhancement Provider entitled thereto pursuant to the relevant Supplement
written notice of such removal and specifying the date for removal of the
Removed Accounts and Participation Interests (the “Removal Date”);

 

(b)        with respect to Removed Accounts, on or
prior to the date that is 10 Business Days after the Removal Date, the
Transferor shall have delivered to the Trustee a computer file, microfiche list
or printed list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the Removal Notice Date, its account
number, the aggregate amount outstanding, and the aggregate amount of Principal
Receivables outstanding in such Account;

 

(c)        with respect to Removed Accounts, the
Transferor shall have represented and warranted as of the Removal Date that the
list of Removed Accounts delivered pursuant to paragraph (b) above, as of
the Removal Date, is true and complete in all material respects;

 

(d)        the Rating
Agency Condition shall have been satisfied with respect to such removal;

 

(e)        the Transferor shall have delivered to
the Trustee and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement an Officer’s Certificate, dated as of the Removal Date, to
the effect that the Transferor reasonably believes that (i) such removal
will not, based on the facts known to such officer at the time of such
certification, then or thereafter cause an Early Amortization Event or an event
which with notice or lapse of time would constitute an Early Amortization Event
to occur with respect to any Series and (ii) no selection procedure
believed by the Transferor to be materially adverse to the interests of the
Investor Certificateholders has been used in removing Removed Accounts from
among any pool of Accounts or Participation Interests of a similar type;

 

(f)         the Transferor shall not utilize a
selection procedure intended to include a disproportionately higher level of
Defaulted Receivables in the Removed Accounts than exist in the Accounts and
shall not remove such Accounts for the intended purpose of mitigating losses to
the Trust; and

 

 

(g)        the Transferor shall pay to the Trust
the greater of (i) the fair market value (as of the Removal Date) of the
Receivables to be removed and (ii) the amount of the Principal Receivables
to be removed; to the extent the fair market value of the Receivables exceeds
the amount of the Principal Receivables to be removed, the amount of such
excess shall be treated as Collections of Finance Charge Receivables.

 

Upon satisfaction of the above conditions,
the Trustee shall execute and deliver to the Transferor or its designee a
written reassignment in substantially the form of Exhibit C (the “Reassignment”)
and shall, without further action, be deemed to transfer, assign, set over and
otherwise convey to the Transferor or its designee, effective as of the Removal
Date, without recourse, representation or warranty, all the right, title and
interest of the Trust in and to the Receivables arising in the Removed Accounts
or the Participation Interests, all monies due and to become due and all
amounts received with respect thereto and all proceeds thereof.  In addition, the Trustee shall execute such
other documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the Transferor to effect the conveyance of Receivables pursuant to this Section 2.10.

 

In addition to the foregoing, on the date
when any Receivable in an Account becomes a Defaulted Receivable, the Trust
shall automatically and without further action or consideration be deemed to
transfer, set over and otherwise convey to the Transferor, without recourse,
representation or warranty, all right, title and interest of the Trust in and
to the Defaulted Receivables and Finance Charge Receivables which have been
charged off as uncollectible, in such Account, all monies due or to become due
with respect thereto and all proceeds thereof; provided that Recoveries
of such Account shall be applied as provided herein.  Each such Account shall constitute a Removed
Account for which the applicable Removal Date shall be the first date on which
any Receivable in such Account became a Defaulted Receivable.

 

Section 2.11           Discount Option.  
  (a)        The Transferor shall have the option to designate at any time
a fixed or floating percentage (the “Discount Percentage”), of the
amount of Receivables arising in the Accounts on or after the date such
designation becomes effective that would otherwise constitute Principal
Receivables (prior to subtracting from Principal Receivables, Finance Charge
Receivables that are Discount Option Receivables) to be treated as Finance
Charge Receivables.  The Transferor may
from time to time increase (subject to the limitations described below), reduce
or eliminate the Discount Percentage for Discount Option Receivables arising in
the Accounts on and after the date of such change.  The Transferor must provide 30 days’ prior
written notice to the Servicer, the Trustee and each Rating Agency of any such
increase, reduction or elimination, and such increase, reduction or elimination
shall become effective on the date specified therein only if (i) the
Transferor has delivered to the Trustee an Officer’s Certificate to the effect
that, based on the facts known to such officer at the time, the Transferor
reasonably believes that such increase, reduction or elimination shall not at
the time of its occurrence cause an Early Amortization Event, or an event which
with notice or the lapse of time would constitute an Early Amortization Event,
to occur with respect to any Series and (ii) the Discount Percentage
shall not be greater than 3% at any time, unless the

 

 

Transferor, the Servicer and the Trustee
shall have received written confirmation from each Rating Agency that the Rating
Agency Condition is satisfied.

 

(b)        On each Date of Processing after the
date on which the Transferor’s exercise of its discount option takes effect,
the Transferor shall treat Discount Option Receivables Collections as
Collections of Finance Charge Receivables.

 

Section 2.12           Additional Transferors.  The Transferor may designate additional
Persons to be included as Transferors under this Agreement by an amendment to
this Agreement (which amendment shall be subject to Section 13.1) and, in
connection with such designation, the Transferor shall surrender the Transferor
Certificate to the Trustee in exchange for a newly issued Transferor
Certificate reflecting such additional Transferor’s interest in the Transferor’s
Interest; provided, however, that prior to any such designation
and issuance the conditions set forth in subsection 6.3(c) shall have been
satisfied with respect thereto.

 

Section 2.13           Account Allocations.  In the event that the Transferor is unable
for any reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement, including by reason of the application of the
provisions of Section 9.1 or any order of any Governmental Authority (a “Transfer
Restriction Event”), then, in any such event, (a) the Transferor and
the Servicer agree (except as prohibited by any such order) to allocate and pay
to the Trust, after the date of such inability, all Collections, including
Collections of Receivables transferred to the Trust prior to the occurrence of
such event, and all amounts which would have constituted Collections but for
the Transferor’s inability to transfer Receivables (up to an aggregate amount
equal to the amount of Receivables transferred to the Trust by the Transferor
in the Trust on such date), (b) the Transferor and the Servicer agree that
such amounts will be applied as Collections in accordance with Article IV
and the terms of each Supplement and (c) for so long as the allocation and
application of all Collections and all amounts that would have constituted Collections
are made in accordance with clauses (a) and (b) above, Principal
Receivables and all amounts which would have constituted Principal Receivables
but for the Transferor’s inability to transfer Receivables to the Trust which
are written off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with Article IV and the terms of
each Supplement.  For the purpose of the
immediately preceding sentence, the Transferor and the Servicer shall treat the
first received Collections with respect to  the Accounts as allocable to the Trust
until the Trust shall have been allocated and paid Collections in an amount
equal to the aggregate amount of Principal Receivables in the Trust as of the
date of the occurrence of such event.  If
the Transferor and the Servicer are unable pursuant to any Requirements of Law
to allocate Collections as described above, the Transferor and the Servicer
agree that, after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account shall be allocated first to
the oldest principal balance of such Account and shall have such payments
applied as Collections in accordance with Article IV and the terms of each
Supplement.  The parties hereto agree
that Finance Charge Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust shall continue to
be a part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and Collections with respect
thereto 

 

shall continue to be allocated and paid in
accordance with Article IV and the terms of each Supplement. 

 

ARTICLE III

ADMINISTRATION AND SERVICING

OF RECEIVABLES

 

Section 3.1             Acceptance of Appointment and Other Matters Relating
to the Servicer.  (a)  
Retailers National Bank agrees to act as Servicer under this Agreement
and the Certificateholders by their acceptance of Certificates consent to
Retailers National Bank acting as Servicer.

 

(b)        The Servicer shall service and
administer the Receivables, shall collect payments due under the Receivables
and shall charge off as uncollectible Receivables, all in accordance with its
customary and usual servicing procedures for servicing credit card and other
consumer open end credit receivables comparable to the Receivables and in
accordance with the Credit Card Guidelines. 
The Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
in connection with such servicing and administration which it may deem
necessary or desirable.  Without limiting
the generality of the foregoing, subject to Section 10.1 and provided
Retailers National Bank is the Servicer, the Servicer or its designee (rather than
the Trustee) is hereby authorized and empowered (i) to make withdrawals
and payments or to instruct the Trustee to make withdrawals and payments from
the Collection Account and any Series Account, as set forth in this
Agreement or any Supplement, and (ii) to take any action required or
permitted under any Enhancement, as set forth in this Agreement or any
Supplement.  Without limiting the
generality of the foregoing and subject to Section 10.1, the Servicer or
its designee is hereby authorized and empowered to make any filings, reports,
notices, applications and registrations with, and to seek any consents or
authorizations from, the Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply with any Federal
or state securities laws or reporting requirements; provided, however,
that initially, the Transferor shall make any filings with the Commission and
under state securities laws on behalf of the Trust.  The Trustee shall furnish the Servicer with
any powers of attorney or other documents necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder.

 

(c)        The Servicer shall not be obligated to
use separate servicing procedures, offices, employees or accounts for servicing the Receivables from the procedures, offices,
employees and accounts used by the Servicer in connection with servicing other
credit card receivables.

 

(d)        The Servicer shall comply with and
perform its servicing obligations with respect to the Accounts and Receivables
in accordance with the Credit Card Agreements relating to the Accounts and the
Credit Card Guidelines except insofar as any failure to so comply or perform
would not materially and adversely affect the Trust or the Investor
Certificateholders.

 

(e)        The
Servicer shall be liable for the payment, without reimbursement, of all
expenses incurred in connection with the Trust and the servicing activities
hereunder including expenses related to enforcement of the Receivables, fees
and disbursements of the Trustee, any Paying Agent and any Transfer Agent and
Registrar (including the reasonable fees and expenses of its counsel) in
accordance with Section 11.5, fees and disbursements of independent
accountants and all other fees and expenses, including the costs of filing UCC
continuation statements and the costs and expenses relating to obtaining and
maintaining the listing of any Investor Certificates on any stock exchange,
that are not expressly stated in this Agreement to be payable by the Trust, the
Investor Certificateholders of a Series or the Transferor (other than
Federal, state, local and foreign income, franchise and other taxes, if any, or
any interest or penalties with respect thereto, assessed on the Trust).

 

(f)         The
Servicer agrees that upon a request by the Transferor it will use its best
efforts to obtain and maintain the listing of the Investor Certificates of any Series or
Class on any specified securities exchange.  If any such request is made, the Servicer
shall give notice to the Transferor and the Trustee on the date on which such
Investor Certificates are approved for such listing.  Within three Business Days following receipt
of notice by the Servicer of any actual, proposed or contemplated delisting of
such Investor Certificates by any such securities exchange the Servicer, in its
sole discretion, may terminate any listing on any such securities exchange.

 

Section 3.2             Servicing Compensation.  As full compensation for its servicing
activities hereunder and as reimbursement for any expense incurred by it in
connection therewith, the Servicer shall be entitled to receive a servicing fee
(the “Servicing Fee”) with respect to each Monthly Period, payable
monthly on the related Distribution Date, in an amount equal to one-twelfth of
the product of (a) the weighted average of the Servicing Fee Rates with
respect to each outstanding Series (based upon the Servicing Fee Rate for
each Series and the Series Invested Amount (or such other amount as
specified in the related Supplement) of such Series, in each case as of the
last day of the prior Monthly Period) and (b) the amount of Principal
Receivables on the last day of the prior Monthly Period.  The share of the Servicing Fee allocable to (i) the
Certificateholders’ Interest of a particular Series with respect to any
Monthly Period (the “Monthly Servicing Fee”) and (ii) the
Enhancement Invested Amount, if any, of a particular Series with respect
to any Monthly Period will each be determined in accordance with the relevant
Supplement.  The share of the Servicing
Fee allocable to any Participation with respect to any Monthly Period will be
determined in accordance with the applicable Participation Supplement.  The portion of the Servicing Fee with respect
to any Monthly Period not so allocated to the Certificateholders’ Interest or
the Enhancement Invested Amount, if any, of a particular Series or any
Participation shall be paid from amounts allocable to the Holder of the
Transferor Certificate on the related Distribution Date.  In no event shall the Trust, the Trustee, the
Investor Certificateholders of any Series, the holder of any Participation or
any Enhancement Provider be directly liable for the share of the Servicing Fee
with respect to any Monthly Period to be paid from amounts allocable to the Holder
of the Transferor Certificate.

 

 

Section 3.3             Representations, Warranties and Covenants of the
Servicer.  Retailers National Bank, in its capacity as
initial Servicer, hereby makes, and any Successor Servicer by its appointment
hereunder shall make, on each Closing Date (and on the date of any such
appointment), the following representations, warranties and covenants to the
Trust (and agrees that the Trustee may rely on each such representation,
warranty and covenant in accepting the Receivables in trust and in
authenticating the Certificates):

 

(a)        Organization
and Good Standing.  The Servicer is a
national banking association (or with respect to such Successor Servicer, such
other corporate entity as may be applicable) duly organized, validly existing
and in good standing under the laws of the United States, and has full
corporate power, authority and legal right to execute, deliver and perform its
obligations under this Agreement and each Supplement and, in all material
respects, to own its properties and conduct its business as such properties are
presently owned and as such business is presently conducted.

 

(b)        Due
Qualification.  The Servicer is duly
qualified to do business and is in good standing as a foreign corporation (or
is exempt from such requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would have a material adverse effect on the interests of
the Investor Certificateholders hereunder or under any Supplement.

 

(c)        Due
Authorization.  The execution,
delivery, and performance of this Agreement and each Supplement have been duly
authorized by the Servicer by all necessary corporate action on the part of the
Servicer.

 

(d)        Binding
Obligation.  This Agreement and each
Supplement constitutes a legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect, affecting the enforcement of
creditors’ rights in general (or with respect to such Successor Servicer, such
other corporate entity as may be applicable) and except as such enforceability
may be limited by general principles of equity (whether considered in a suit at
law or in equity).

 

(e)        No
Violation.  The execution and
delivery of this Agreement and each Supplement by the Servicer, the performance
of the transactions contemplated by this Agreement and each Supplement and the
fulfillment of the terms hereof and thereof applicable to the Servicer, will
not conflict with, violate, result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or both)
a material default under, any Requirement of Law applicable to the Servicer or
any indenture, contract, agreement, mortgage, deed of trust or other instrument
to which the Servicer is a party or by which it or any of its properties are
bound.

 

(f)         No
Proceedings.  There are no
proceedings or investigations pending or, to the best knowledge of the
Servicer, threatened against the Servicer before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality seeking
to prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any Supplement, seeking any

 

 

determination
or ruling that, in the reasonable judgment of the Servicer, would materially
and adversely affect the performance by the Servicer of its obligations under
this Agreement or any Supplement, or seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of this
Agreement or any Supplement.

 

(g)        Compliance
with Requirements of Law.  The
Servicer shall duly satisfy all obligations on its part to be fulfilled under
or in connection with the Receivables and the related Accounts, will maintain
in effect all qualifications required under Requirements of Law in order to
properly service the Receivables and the related Accounts and will comply in
all material respects with all other Requirements of Law in connection with
servicing the Receivables and the related Accounts, the failure to comply with
which would have a material adverse effect on the interests of the Investor
Certificateholders.

 

(h)        No
Rescission or Cancellation.  Subject
to Section 3.9, the Servicer 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 Card Guidelines.

 

(i)         Protection
of Certificateholders’ Rights. 
Except as provided in subsections 2.8(a) and (b) hereof with
respect to the Bank Purchase Agreement, the Servicer shall take no action
which, nor omit to take any action the omission of which, would substantially
impair the rights of Certificateholders in any Receivable or Account, nor shall
it, except in the ordinary course of its business and in accordance with the
Credit Card Guidelines, reschedule, revise or defer Collections due on the
Receivables.

 

(j)         Receivables
Not To Be Evidenced by Promissory Notes. 
Except in connection with its enforcement or collection of an Account,
the Servicer will take no action to cause any Receivable to be evidenced by any
instrument, other than an instrument that, taken together with one or more
other writings, constitutes chattel paper (as such terms are defined in the UCC)
and, if any Receivable is so evidenced (whether or not in connection with the
enforcement or collection of an Account), it shall be reassigned or assigned to
the Servicer as provided in this Section 3.3.

 

(k)        All
Consents Required.  All approvals,
authorizations, consents, orders or other actions of any Person or of any
governmental body or official required in connection with the execution and
delivery by the Servicer of this Agreement and each Supplement, the performance
by the Servicer of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by the Servicer of the terms hereof and thereof,
have been obtained; provided, however, that the Servicer makes no
representation or warranty regarding state securities or “blue sky” laws in
connection with the distribution of the Certificates.

 

(l)         Maintenance
of Records and Books of Account.  The
Servicer shall maintain and implement administrative and operating procedures
(including the ability to recreate records evidencing the Receivables in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, computer records and other

 

 

information,
reasonably necessary or advisable for the collection of all the
Receivables.  Such documents, books and
computer records shall reflect all facts giving rise to the Receivables, all
payments and credits with respect thereto, and, to the extent required pursuant
to Section 2.1, such documents, books and computer records shall indicate
the interests of the Trust in the Receivables.

 

For purposes of the representations,
warranties and covenants set forth in this Section 3.3, each reference to
a Supplement shall be deemed to refer only to those Supplements in effect as of
the relevant Closing Date or the date of appointment of a Successor Servicer,
as applicable.

 

If any of the representations, warranties or
covenants of the Servicer contained in paragraph (g), (h), (i) or (j) with
respect to any Receivable or the related Account is breached, and as a result
of such breach the Trust’s rights in, to or under any Receivables in the
related Account or the proceeds of such Receivables are materially impaired or
such proceeds are not available for any reason to the Trust free and clear of
any Lien, then no later than the expiration of 60 days (or such longer period,
not in excess of 150 days, as may be agreed to by the Trustee) from the earlier
to occur of the discovery of such event by the Servicer, or receipt by the
Servicer of notice of such event given by the Trustee, all Receivables in the
Account or Accounts to which such event relates shall be reassigned or assigned
to the Servicer on the terms and conditions set forth below; provided, however,
that such Receivables will not be reassigned or assigned to the Servicer if, on
any day prior to the end of such 60-day or longer period, (i) the relevant
representation and warranty shall be true and correct, or the relevant covenant
shall have been complied with, in all material respects and (ii) the
Servicer shall have delivered an Officer’s Certificate describing the nature of
such breach and the manner in which such breach was cured.

 

The Servicer shall effect such assignment by
making a deposit into the Collection Account in immediately available funds
prior to the next succeeding Business Day in an amount equal to the amount of
such Receivables, which deposit shall be considered a Collection with respect
to such Receivables and shall be applied in accordance with Article IV and
the terms of each Supplement.

 

Upon each such assignment to the Servicer,
the Trustee, on behalf of the Trust, shall automatically and without further
action be deemed to transfer, assign, set over and otherwise convey to the
Servicer, without recourse, representation or warranty (except for the warranty
that since the date of transfer by the Transferor, the Trustee has not sold,
transferred or encumbered any such Receivables or interest therein), all right,
title and interest of the Trust in and to such Receivables, all monies due or
to become due and all amounts received with respect thereto and all proceeds
thereof.  The Trustee shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall be reasonably requested by the Servicer to effect the conveyance of
any such Receivables pursuant to this Section 3.3.  The obligation of the Servicer to accept
assignment of such Receivables, and to make the deposits, if any, required to
be made to the Special Funding Account or the Collection Account as provided in
the preceding paragraph, shall constitute the sole remedy respecting the event
giving rise to such

 

 

obligation
available to Certificateholders (or the Trustee on behalf of
Certificateholders) or any Enhancement Provider, except as provided in Section 8.4.

 

Section 3.4             Report to the Trustee.

 

(a)        Daily
Reports.  On the second Business Day
immediately following each Date of Processing, the Servicer shall prepare and
make available at the office of the Servicer for inspection by the Trustee a
report (the “Daily Report”) that shall set forth (i) the aggregate
amount of Collections processed by the Servicer on such Date of Processing, (ii) estimates
of the aggregate amount of Collections processed by the Servicer with respect
to Principal Receivables on such Date of Processing, (iii) estimates of
the aggregate amount of Collections processed by the Servicer with respect to
Finance Charge Receivables, on such Date of Processing, (iv) the aggregate
amount of Defaulted Receivables for such Date of Processing, and (v) the
estimates of the aggregate amount of Principal Receivables in the Trust as of
such Date of Processing.  The estimate of
the aggregate amount of Collections processed by the Servicer with respect to
Principal Receivables required by clause (ii) above shall equal (x) the
product of (a) the Collections, other than Merchant Fees and Deferred
Billing Fees, and (b) a fraction, the numerator of which shall be the
aggregate amount of Collections of Principal Receivables as of the last day of
the preceding Monthly Period and the denominator of which shall be the
aggregate amount of Collections, excluding Merchant Fees and Deferred Billing
Fees, as of such last day.  The estimate
of the aggregate amount of Collections processed by the Servicer with respect
to Finance Charge Receivables required by clause (iii) above shall equal
the sum of (x) the product of (a) the Collections, excluding Merchant
Fees and Deferred Billing Fees, and (b) a fraction, the numerator of which
shall be the aggregate amount of Collections of Finance Charge Receivables
other than Merchant Fees and Deferred Billing Fees (including Discount Option
Receivables) as of the last day of the preceding Monthly Period and the
denominator of which shall be the aggregate amount of Collections, other than
Merchant Fees and Deferred Billing Fees, as of such last day and (y) the
Merchant Fees and Deferred Billing Fees.

 

(b)        Monthly
Reports; Adjustments.  On or before
each Determination Date, the Servicer shall prepare and make available at the
office of the Servicer for inspection by the Trustee a report (the “Monthly
Report”) that shall set forth (x) during the Monthly Period the amount
on deposit in the Special Funding Account as of the last day of the preceding
Monthly Period and (y) a calculation of the Transferor Amount and the
Required Retained Transferor Amount as of the last day of the preceding Monthly
Period and a determination of whether the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) on such day was greater
than the Required Retained Transferor Amount on such day and such other
information as may be specified in any applicable Supplement.  In addition, on the Determination Date
following each Monthly Period during which the methods of estimating shall have
been used pursuant to subsection 3.4(a) above by the Servicer, the
Servicer shall make in the Monthly Report an appropriate “true-up” adjustment
of the aggregate amounts allocated as Collections of Principal Receivables and
Finance Charge Receivables in the Collection Account for such Monthly Period
pursuant to subsection 3.4(a) above to the actual amount of Collections of
Principal Receivables included in the Trust Assets, the amount of Discount
Option Receivables for such Monthly

 

 

Period,
and the actual amount of Collections of Finance Charge Receivables included in
the Trust Assets, in each case, to reflect the difference between (x) the
amounts that should have been recorded as Collections in respect of Principal
Receivables and Finance Charge Receivables if actual Collections of Principal
Receivables and Finance Charge Receivables had been known and (y) the
amount allocated thereto pursuant to the last two sentences of subsection
3.4(a).

 

(c)        Monthly
Servicer’s Certificate.  Unless
otherwise stated in the Supplement related to any Series, on each Determination
Date, the Servicer shall forward to the Trustee, the Paying Agent, each Rating
Agency and each Enhancement Provider, if any, a certificate of a Servicing
Officer setting forth (i) the aggregate amounts for the preceding Monthly
Period with respect to each of the items specified in clauses (i), (ii) and
(iii) of subsection 3.4(a), together with the amount and nature of any “true-up”
adjustment required by subsection 3.4(b), (ii) the Defaulted Amount for
the preceding Monthly Period, (iii) Recoveries for the preceding Monthly
Period, (iv) a calculation of the Portfolio Yield and Base Rate for each Series then
outstanding, (v) the aggregate amount of Receivables and the balance on
deposit in the Collection Account (or any subaccount thereof) or any Series Account
applicable to any Series then outstanding with respect to Collections
processed as of the end of the last day of the preceding Monthly Period, (vi) the
aggregate amount of adjustments from the preceding Monthly Period, (vii) the
aggregate amount, if any, of withdrawals, drawings or payments under any
Enhancement with respect to each Series required to be made with respect
to the preceding Monthly Period, (viii) the sum of all amounts payable to
the Investor Certificateholders on the succeeding Distribution Date in respect
of interest and principal payable with respect to the Investor Certificates and
(ix) such other amounts, calculations, and/or information as may be
required by any relevant Supplement.

 

(d)        Transferred
Accounts.  The Servicer covenants and
agrees hereby to deliver to the Trustee, after the Automatic Addition
Termination Date or any Automatic Addition Suspension Date (but in the latter
case, prior to a Restart Date) within a reasonable time period after any
Transferred Account is created, but in any event not later than 15 days after
the end of the Monthly Period within which the Transferred Account is created,
a notice specifying the new account number for any Transferred Account and the
replaced account number.

 

Section 3.5             Annual Certificate of Servicer.  The Servicer shall deliver to the Trustee,
each Rating Agency and each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement, on or before the 90th day following the
Transferor’s fiscal year an Officer’s Certificate (with appropriate insertions)
substantially in the form of Exhibit D.

 

 

Section 3.6             Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available.

 

(a)        On
or before the 90th day following the end of the Transferor’s fiscal year the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report (addressed to the Trustee) to the Trustee, the
Servicer and each Rating Agency to the effect that they have applied certain
procedures agreed upon with the Servicer to certain documents relating to the
administration and servicing of Accounts under this Agreement and each
Supplement, and that based on such agreed upon procedures, such firm will
provide a report stating that the administration and servicing was conducted in
compliance with Article III and Article IV and Section 8.8 of
this Agreement and the applicable provisions of any Supplement, except for such
exceptions or errors as they believe to be immaterial and such other exceptions
as shall be set forth in such report.  A
copy of such report shall be delivered to each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Supplement.

 

(b)        On
or before the 90th day following the end of the Transferor’s fiscal year,
beginning with May 3, 1996, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services
to the Servicer or the Transferor) to furnish a report to the Trustee, the
Servicer and each Rating Agency to the effect that they have randomly selected
at least one (1) of the Servicer’s Certificates delivered pursuant to
subsection 3.4(c) during each of the three month periods ended March 31,
June 30, September 30 and December 31 during the period covered
by such report and applied certain procedures agreed upon with the Servicer to
compare the mathematical calculations of certain amounts set forth in such
report with the Servicer’s computer reports which were the source of such
amounts and that on the basis of such agreed upon procedures and comparison,
such accountants are of the opinion that such amounts are in agreement, except
for such exceptions as they believe to be immaterial and such other exceptions
as shall be set forth in such statement. 
A copy of such report shall be delivered to each Enhancement Provider,
if any, entitled thereto pursuant to the relevant Supplement.  Notwithstanding the foregoing, the report
furnished by the independent public accountants shall cover each of the twelve
(12) Servicer’s Certificates delivered pursuant to Section 3.4(c) if
any material exceptions were set forth in that report by the independent public
accountants pursuant to this Section 3.6(b).

 

(c)        A
copy of each certificate and report provided pursuant to Section 3.4(c),
3.5 or 3.6 may be obtained by any Investor Certificateholder or Certificate
Owner by a request to the Trustee addressed to the Corporate Trust Office.

 

Section 3.7             Tax Treatment. 
The Transferor has entered into this Agreement, and the Certificates
will be issued with the intention that, unless otherwise specified in any
Supplement, for Federal, state and local income and franchise tax purposes, the
Investor Certificates (except any Certificates held by the Transferor) of each Series will
qualify as debt secured by the Receivables. 
The Transferor, by entering into this Agreement, each Certificateholder,
by the acceptance of its Certificate (and each Certificate Owner, by its
acceptance of an interest in the applicable Certificate), agree to treat the

 

 

Investor
Certificates for Federal, state and local income and franchise tax purposes as
debt.  Each Holder of an Investor
Certificate agrees that it will cause any Certificate Owner acquiring an
interest in an Investor Certificate through it to comply with this Agreement as
to treatment as debt under applicable tax law, as described in this Section 3.7.  Furthermore, subject to Section 11.11 or
unless the Transferor shall determine that the filing of returns is
appropriate, the Trustee shall treat the Trust as a security device only and
shall not file tax returns or obtain an employer identification number on
behalf of the Trust.

 

Section 3.8             Notices to Retailers National Bank.  If Retailers National Bank is no longer
acting as Servicer, any Successor Servicer shall deliver to Retailers National
Bank each certificate and report required to be provided thereafter pursuant to
Section 3.4(c), 3.5 or 3.6.

 

Section 3.9             Adjustments. 
(a)  If the Servicer adjusts downward the amount of any Receivable
because of a rebate, refund, unauthorized charge or billing error to an
accountholder, or because such Receivable was created in respect of merchandise
which was refused or returned by an accountholder, or if the Servicer otherwise
adjusts downward the amount of any Receivable without receiving Collections
therefor or charging off such amount as uncollectible, then, in any such case, the
amount of Principal Receivables will be reduced by the amount of the
adjustment.  Similarly, the amount of
Principal Receivables will be reduced by the amount of any Principal Receivable
which was discovered as having been created through a fraudulent or counterfeit
charge or with respect to which the covenant of the Transferor contained in
subsection 2.7(b) has been breached. 
Notwithstanding the foregoing, any Collection with respect to such
Receivables, the balances of which have been adjusted downward, which would
otherwise have been treated as Collections of Principal Receivables shall be
treated as Collections of Principal Receivables.  Any adjustment required as provided above
shall be made on or prior to the end of the Monthly Period in which such adjustment
obligation arises.  If, following the
exclusion of such Principal Receivables from the calculation of the Transferor
Amount, the Transferor Amount (excluding the interest represented by any
Supplemental Certificate) would otherwise be less than the Required Retained
Transferor Amount, not later than 12:00 noon, New York City time, on the
Distribution Date following the Monthly Period in which such adjustment
obligation arises, the Transferor shall make a deposit into the Special Funding
Account in immediately available funds in an amount equal to the amount by
which the Transferor Amount (excluding the interest represented by any
Supplemental Certificate) would otherwise be less than the Required Retained
Transferor Amount (up to the amount of such Principal Receivables).  Any amount deposited into the Special Funding
Account pursuant to the preceding sentence shall be considered Collections of
Principal Receivables and shall be applied in accordance with Article IV
and the terms of each Supplement.

 

(b)        If
(i) the Servicer makes a deposit into the Collection Account in respect of
a Collection of a Receivable and such Collection was received by the Servicer
in the form of a check which is not honored for any reason or (ii) the
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored

 

 

check
or mistake.  Any Receivable in respect of
which a dishonored check is received shall be deemed not to have been
paid.  Notwithstanding the first two
sentences of this paragraph, any adjustments made pursuant to this paragraph
will be reflected in a current report but will not change any amount of
Collections previously reported pursuant to subsection 3.4(c).

 

ARTICLE IV

Rights of Certificateholders and

Allocation and Application of Collections

 

Section 4.1             Rights of Certificateholders.  The Investor Certificates shall represent
fractional undivided interests in the Trust, which, with respect to each
Series, shall consist of the right to receive, to the extent necessary to make
the required payments with respect to the Investor Certificates of such Series at
the times and in the amounts specified in the related Supplement, the portion
of Collections allocable to Investor Certificateholders of such Series pursuant
to this Agreement and such Supplement, funds on deposit in the Collection Account
allocable to Certificateholders of such Series pursuant to this Agreement
and such Supplement, funds on deposit in any related Series Account and
funds available pursuant to any related Enhancement (collectively, with respect
to all Series, the “Certificateholders’ Interest”), it being understood
that, unless otherwise specified in the Supplement with respect to such Series,
the Investor Certificates of any Series or Class shall not represent
any interest in any Series Account or Enhancement for the benefit of any
other Series or Class.  The
Transferor Certificate shall represent the ownership interest in the remainder
of the Trust Assets not allocated, pursuant to this Agreement, any Supplement
or any Participation Supplement, to the Certificateholders’ Interest or any
Participation, respectively, including the right to receive Collections with
respect to the Receivables and other amounts at the times and in the amounts
specified in this Agreement or any Supplement to be paid to the Transferor on
behalf of the Holder of the Transferor Certificate (the “Transferor’s
Interest”); provided, however, that the Transferor
Certificate shall not represent any interest in the Collection Account, any Series Account
or any Enhancement, except as specifically provided in this Agreement or any
Supplement.

 

Section 4.2             Establishment of Collection Account and Special
Funding Account.  The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders (the “Collection Account”).  The Collection Account shall initially be
established with the Trustee.  The
Trustee shall possess all right, title and interest in and to all funds on
deposit from time to time in the Collection Account and in all proceeds thereof
for the benefit of the Certificateholders. 
The Collection Account shall be under the sole dominion and control of
the Trustee for the benefit of the Certificateholders.  Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right of set-off or banker’s
lien against, and no right to otherwise deduct from, any funds held in the
Collection Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Enhancement Provider. 
If at any time the Collection Account ceases to be an Eligible Deposit
Account, the Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which

 

 

each Rating
Agency may consent) establish a new Collection Account meeting the conditions
specified above, transfer any cash or any investments to such new Collection
Account and from the date such new Collection Account is established, it shall
be the “Collection Account.”

 

Funds on deposit in the Collection Account
(other than amounts deposited pursuant to Section 2.6, 10.1 or 12.2) shall
at the direction of the Servicer or the Transferor be invested by the Trustee
in Eligible Investments selected by the Servicer or the Transferor.  All such Eligible Investments shall be held
by the Trustee for the benefit of the Certificateholders.  The Trustee shall maintain for the benefit of
the Certificateholders possession of the negotiable instruments or certificated
securities, if any, evidencing such Eligible Investments.  Investments of funds representing Collections
collected during any Monthly Period shall be invested in Eligible Investments
that will convert or be convertible into cash so that all funds will be
available at the close of business on the Transfer Date following such Monthly
Period.  No Eligible Investment shall be
disposed of prior to its maturity; provided, however, that the
Trustee may sell, liquidate or dispose of an Eligible Investment before its
maturity, at the written direction of the Servicer, if such sale, liquidation
or disposal would not result in a loss of all or part of the principal portion
of such Eligible Investment or if, prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any other
amount with respect to such Eligible Investment.  On each Distribution Date, all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Collection Account shall be treated as Collections of Finance
Charge Receivables with respect to the last day of the related Monthly Period,
except as otherwise specified in any Supplement.  For purposes of determining the availability
of funds or the balances in the Collection Account for any reason under this
Agreement, all investment earnings net of investment expenses and losses on
such funds shall be deemed not to be available or on deposit.

 

The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders (the “Special Funding Account”).  The Special Funding Account shall initially
be established with the Trustee.  The
Trustee shall possess all right, title and interest in and to all funds on
deposit from time to time in the Special Funding Account and in all proceeds
thereof.  The Special Funding Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Certificateholders.  Except as
expressly provided in this Agreement, the Servicer agrees that it shall have no
right of set-off or banker’s lien against, and no right to otherwise deduct
from, any funds held in the Special Funding Account for any amount owed to it
by the Trustee, the Trust, any Certificateholder or any Enhancement
Provider.  If, at any time, the Special
Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Special Funding Account meeting the conditions specified above,
transfer any cash or any investments to such new Special Funding Account and
from the date such new Special Funding Account is established, it shall be the “Special
Funding Account.”

 

Funds on deposit in the Special Funding
Account shall at the direction of the Servicer or the Transferor be invested by
the Trustee in Eligible Investments selected by the Servicer or the
Transferor.  All such Eligible
Investments shall be held by the Trustee for the benefit of the
Certificateholders.  The Trustee shall
maintain for the benefit of the Certificateholders possession of the negotiable
instruments or certificated securities, if any, evidencing such Eligible
Investments.  Funds on deposit in the
Special Funding Account on any day will be invested in Eligible Investments
that will convert or be convertible into cash so that all funds will be
available at the close of business on the next Business Day.  No Eligible Investment shall be disposed of prior
to its maturity; provided, however, that the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, at the
written direction of the Servicer, if such sale, liquidation or disposal would
not result in a loss of all or part of the principal portion of such Eligible
Investment or if, prior to the maturity of such Eligible Investment, a default
occurs, in the payment of principal, interest or any other amount with respect
to such Eligible Investment.  Unless
directed by the Servicer, funds deposited in the Special Funding Account on a
Transfer Date with respect to the next following Distribution Date are not
required to be invested overnight.  On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds on deposit in the Special Funding
Account shall be treated as Collections of Finance Charge Receivables with
respect to the last day of the related Monthly Period except as otherwise
specified in the related Supplement.  Unless otherwise directed by the Servicer,
funds on deposit in the Special Funding Account will be withdrawn and paid to
the Holder of the Transferor Certificate or such other Person as may be
specified in a Supplement on any Business Day to the extent that the Transferor
Amount (excluding the interest represented by any Supplemental Certificate)
would otherwise exceed the Required Retained Transferor Amount on such
date.  On any Transfer Date on which one
or more Series is in an Accumulation Period or Amortization Period, the
Servicer shall determine the aggregate amounts of Principal Shortfalls, if any,
with respect to each such Series that is a Principal Sharing Series (after
giving effect to the allocation and payment provisions in the Supplement with respect
to each such Series), and the Servicer shall instruct the Trustee to withdraw
such amount (up to the amount on deposit in the Special Funding Account) on the
succeeding Distribution Date and allocate such amount among each such Series as
specified in each related Supplement; provided, however, that
funds shall only be withdrawn from the Special Funding Account for allocation
to cover such Principal Shortfalls if, and to the extent, that such allocation
will not result in the reduction of the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) to an amount below the
Required Retained Transferor Amount.  For
purposes of determining the availability of funds or the balances in the
Special Funding Account for any reason under this Agreement, all investment
earnings net of investment expenses and losses on such funds shall be deemed
not to be available or on deposit.

 

Section 4.3             Collections and Allocations.   (a)  The Servicer will apply or will
instruct the Trustee to apply all funds on deposit in the Collection Account as
described in this Article IV and in each Supplement.  Except as otherwise provided below and in
each Supplement, the Servicer shall deposit Collections into the Collection
Account no later than the second Business Day following the Date of Processing
of such Collections.  Subject to the
express terms of any Supplement, but notwithstanding anything else in this
Agreement

 

 

to the contrary, if Retailers National Bank remains the Servicer and (x) for
so long as Target Corporation maintains a short-term debt rating of “A-1” or
better by Standard & Poor’s and “P-1” or better by Moody’s (or such
other rating below “A-1” or “P-1,” as the case may be, which is satisfactory to
each Rating Agency), or (y) Retailers National Bank has provided to the
Trustee a letter of credit covering collection risk of the Servicer acceptable
to each Rating Agency (as evidenced by a letter from each Rating Agency to the
effect that the Rating Agency Condition has been satisfied), the Servicer need
not make the daily deposits of Collections into the Collection Account as
provided in the preceding sentence, but may make a single deposit in the
Collection Account in immediately available funds not later than 12:00 noon,
New York City time, on the related Transfer Date.

 

(b)        With
respect to each day during each Monthly Period, (i) Collections of Finance
Charge Receivables will be allocated to the Certificateholders’ Interest of
each Series, and (ii) Collections of Principal Receivables will be
allocated to the Certificateholders’ Interest of each Series, each as set forth
in the Supplement related to such Series.

 

On each Determination Date, (i) Collections
of Recoveries will be treated as Collections of Principal Receivables and
allocated to the Certificateholders’ Interest of each Series and (ii) Defaulted
Receivables will be allocated to the Certificate-holders’ Interest of each
Series, each as set forth in the related Supplement.

 

(c)        Throughout
the existence of the Trust, unless otherwise stated in any Supplement, the
Servicer shall allocate to the Holder of the Transferor Certificate an amount
equal to the product of (A) the Transferor’s Percentage and (B) the
aggregate amount of such Collections allocated to Principal Receivables and
Finance Charge Receivables, respectively, in respect of each Monthly Period; provided,
however, that, if the Transferor Amount (determined after giving effect
to any payment of such amount and any Principal Receivables transferred to the
Trust on such date and excluding the interest represented by any Supplemental
Certificate), would otherwise be less than or equal to the Required Retained
Transferor Amount, the Servicer will not distribute to the Holder of the
Transferor Certificate any such amounts that otherwise would be distributed to
the Holder of the Transferor Certificate, but shall deposit such funds in the
Special Funding Account.  Notwithstanding
anything in this Agreement to the contrary, unless otherwise stated in any
Supplement, the Servicer need not deposit this amount or any other amounts so
allocated to the Transferor Certificate pursuant to any Supplement into the
Collection Account and shall pay, or be deemed to pay, such amounts as
collected to the Holder of the Transferor Certificate.

 

The payments to be made to the Holder of the
Transferor Certificate pursuant to this subsection 4.3(c) do not apply to
deposits to the Collection Account or other amounts that do not represent
Collections, including payment of the purchase price for Receivables pursuant
to Section 2.6 or 10.1, proceeds from the sale, disposition or liquidation
of Receivables pursuant to Section 12.2 or payment of the purchase price
for the Certificateholders’ Interest of a specific Series pursuant to the
related Supplement.

 

 

(d)        Throughout
the existence of the Trust, unless otherwise stated in any Participation
Supplement, the Servicer shall allocate to the holders of any Participations an
amount equal to the product of (A) the related Participation Percentage
and (B) the aggregate amount of such Collections allocated to Principal
Receivables, Finance Charge Receivables and Recoveries, respectively, and the
aggregate amount of Defaulted Receivables, in each case, in respect of each
Monthly Period.  Notwithstanding anything
in this Agreement to the contrary, unless otherwise stated in any Participation
Supplement, the Servicer need not deposit these amounts or any other amounts so
allocated to any Participation pursuant to any Participation Supplement into
the Collection Account and shall pay such amounts as collected to the holder of
the related Participation.

 

The payments to be made to the holder of any
Participation pursuant to this subsection 4.3(d) do not apply to deposits
to the Collection Account or other amounts that do not represent Collections,
including payment of the purchase price for Receivables pursuant to Section 2.6
or 10.1, proceeds from the sale, disposition or liquidation of Receivables
pursuant to Section 12.2 or payment of the purchase price for the Certificateholders’
Interest of a specific Series pursuant to the related Supplement.

 

Section 4.4             Shared Principal Collections.  On each Distribution Date, (a) the
Servicer shall allocate Shared Principal Collections to each Principal Sharing
Series, pro rata, in proportion to the Principal Shortfalls, if any, with
respect to each such Series, and any remainder may, at the option of the
Transferor, be applied as principal with respect to any Variable Funding
Certificate and (b) the Servicer shall withdraw from the Collection
Account or the Special Funding Account and pay to the Holder of the Transferor
Certificate an amount equal to the excess, if any, of (x) the sum of the
aggregate amount for all outstanding Series of Collections of Principal
Receivables which the related Supplements or this Agreement specify are to be
treated as “Shared Principal Collections” for such Distribution Date plus
the amount of any payment received by the Trustee from the holder of any
Participation with respect to the purchase of a Participation or any increases
in the principal amount of such Participation (such sum to be treated for
purposes of this Agreement as “Shared Principal Collections”) over (y) the
aggregate amount for all outstanding Principal Sharing Series which the
related Supplements specify are “Principal Shortfalls,” for such Distribution
Date; provided, however, that, if, on any Distribution Date the
Transferor Amount (determined after giving effect to any Principal Receivables
transferred to the Trust on such date and excluding the interest represented by
any Supplemental Certificate), would otherwise be less than or equal to the
Required Retained Transferor Amount, the Servicer will not distribute to the
Holder of the Transferor Certificate any Shared Principal Collections that
otherwise would be distributed to the Holder of the Transferor Certificate, but
shall deposit such funds in the Special Funding Account.

 

Section 4.5             Excess Finance Charge Collections.  On each Distribution Date, (a) for each
Group the Servicer shall apply the aggregate amount for all outstanding Series in
such Group of the amounts which the related Supplements specify are to be
treated as “Excess Finance Charge Collections” for such Distribution Date to
each Series in such Group, pro rata, in proportion to the Finance Charge
Shortfalls, if any, with respect to each such Series, and (b) the Servicer
shall withdraw (or shall instruct the Trustee to 

 

 

withdraw) from
the Collection Account and pay to the Holder of the Transferor Certificate an
amount equal to the excess, if any, of (x) the aggregate amount for all
outstanding Series in a Group of the amounts which the related Supplements
specify are to be treated as “Excess Finance Charge Collections” for such
Distribution Date over (y) the aggregate amount for all outstanding Series in
such Group which the related Supplements specify are “Finance Charge Shortfalls”
for such Distribution Date; provided, however, that the sharing
of Excess Finance Charge Collections among Series in a Group will continue
only until such time, if any, at which the Transferor shall deliver to the
Trustee an Officer’s Certificate to the effect that, in the reasonable belief
of the Transferor, the continued sharing of Excess Finance Charge Collections
among Series in any Group would have adverse regulatory implications with
respect to the Transferor.  Following the
delivery by the Transferor of such an Officer’s Certificate to the Trustee,
there will not be any further sharing of Excess Finance Charge Collections
among Series in any Group.

 

Section 4.6             Allocations During Funding Period.  To the extent that the Servicer establishes
an Eligible Deposit Account as a pre-funding account (the “Pre-Funding
Account”) with respect to any Series, bearing a designation indicating that
the funds deposited therein are for the benefit of such Series, during the
period (the “Funding Period”), as set forth in the related Supplement,
that the Pre-Funding Account maintains a balance, the date upon which an
increase in the Invested Amount of such Series in accordance with the
terms of such related Supplement occurs shall be treated as an Addition Date
solely for the purpose of calculating the Floating Allocation Percentage and
the Principal Allocation Percentage.  Such
Addition Date shall be deemed to occur on the date of each such increase and
the Floating Allocation Percentage and Principal Allocation Percentage shall be
calculated accordingly.

 

ARTICLE V

Distributions and Reports to

Certificateholders

 

Distributions shall be made to, and reports
shall be provided to, Certificateholders as set forth in the applicable
Supplement.

 

ARTICLE VI

THE CERTIFICATES

 

Section 6.1             The Certificates.  The Investor Certificates of any Series or
Class may be issued in bearer form (“Bearer Certificates”) with
attached interest coupons and any other applicable coupon (collectively, the “Coupons”)
or in fully registered form (“Registered Certificates”) and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement.  The Transferor
Certificate will be issued in registered form, substantially in the form of Exhibit A,
and shall upon issue, be executed and delivered by the Transferor to the
Trustee for authentication and redelivery as provided in Section 6.2.  Unless otherwise specified in the applicable
Participation Supplement, each Participation shall be uncertificated.  Each Supplemental Certificate shall be either
issued  in

 

 

registered
form or shall be uncertificated, in either case as specified in the applicable
Supplement.  Except as otherwise provided
in Section 6.3 or in any Supplement, Bearer Certificates shall be issued
in minimum denominations of $5,000 and Registered Certificates shall be issued
in minimum denominations of $1,000 and in integral multiples of $1,000 in
excess thereof and shall be subject to the terms specified in the applicable
Supplement.  If specified in any
Supplement, the Investor Certificates of any Series or Class shall be
issued upon initial issuance as a single certificate evidencing the aggregate
original principal amount of such Series or Class as described in Section 6.13.  The Transferor Certificate shall initially be
a single certificate and shall initially represent the entire Transferor’s
Interest.  Each Certificate shall be
executed by manual or facsimile signature on behalf of the Transferor by its
President or any Vice President. 
Certificates bearing the manual or facsimile signature of an individual
who was, at the time when such signature was affixed, authorized to sign on
behalf of the Transferor shall not be rendered invalid, notwithstanding that
such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates.  No Certificates shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Trustee by the manual signature of a duly authorized signatory, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. 
Bearer Certificates shall be dated the Closing Date.  All Registered Certificates and the
Transferor Certificate shall be dated the date of their authentication.

 

Section 6.2             Authentication of Certificates.  The Trustee shall authenticate and deliver the
Investor Certificates of each Series and Class that are issued upon
original issuance to or upon the order of the Transferor against payment to the
Transferor of the purchase price therefor. 
The Trustee shall authenticate and deliver the Transferor Certificate to
the Transferor simultaneously with its delivery of the Investor Certificates of
the first Series to be issued hereunder. 
If specified in the related Supplement for any Series or Class, the
Trustee shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.

 

Section 6.3             New Issuances.  
(a)  The Transferor may from time to time direct the Trustee, on
behalf of the Trust, to authenticate one or more new Series of Investor
Certificates.  The Investor Certificates
of all outstanding Series shall be equally and ratably entitled as
provided herein to the benefits of this Agreement without preference, priority
or distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series or
Class, as provided in the related Supplement.

 

(b)        On
or before the Closing Date relating to any new Series, the parties hereto will
execute and deliver a Supplement which will specify the Principal Terms of such
new Series.  The terms of such Supplement
may modify or amend the terms of this Agreement solely as applied to such new
Series.  The obligation of the Trustee to
authenticate the Investor Certificates of such new Series and to execute
and deliver the related Supplement is subject to the satisfaction of the
following conditions; provided, 

 

 

however, that the conditions set forth in
clauses (i), (iii), (iv) and (v) below shall not be applicable to the
issuance of the first Series of Investor Certificates:

 

(i)      on or before the fifth Business Day
immediately preceding the Closing Date, the Transferor shall have  given the Trustee, the Servicer, each Rating
Agency and any Enhancement Provider entitled thereto pursuant to the relevant
Supplement notice of such issuance and the Closing Date;

 

(ii)     the Transferor shall have delivered to the
Trustee the related Supplement, executed by each party hereto other than the
Trustee;

 

(iii)    the Transferor shall have delivered to the
Trustee any related Enhancement Agreement executed by each of the parties
thereto, other than the Trustee;

 

(iv)    the Rating Agency Condition shall have been
satisfied with respect to such issuance;

 

(v)     the Transferor shall have delivered to the
Trustee and any Enhancement Provider entitled thereto pursuant to the relevant
Supplement an Officer’s Certificate, dated the Series Issuance Date, to
the effect that the Transferor reasonably believes that such issuance will not,
based on the facts known to such officer at the time of such certification,
then or thereafter cause an Early Amortization Event to occur with respect to
any Series;

 

(vi)    the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the Closing Date, with
respect to such issuance; and

 

(vii)   the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be less than the
Required Retained Transferor Amount, as of the Closing Date and after giving
effect to such issuance.

 

Upon satisfaction of the above conditions,
the Trustee shall execute the Supplement and authenticate the Investor
Certificates of such Series upon execution thereof by the Transferor.

 

(c)        The
Transferor may surrender the Transferor Certificate to the Trustee in exchange
for a newly issued Transferor Certificate and one or more additional
certificates (each, a “Supplemental Certificate”), the terms of which
shall be defined in a Supplement (which Supplement shall be subject to
subsection 13.1(a) to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of the Transferor (or the
Holder of a Supplemental Certificate, in the case of the transfer or exchange
thereof, as provided below), upon satisfaction of the following conditions:

 

 

(i)      the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) shall not be less than
the Required Retained Transferor Amount, as of the date of, and after giving
effect to, such exchange;

 

(ii)     the Rating Agency Condition shall have been
satisfied with respect to such exchange (or transfer or exchange as provided
below); and

 

(iii)    the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the date of such exchange
(or transfer or exchange as provided below), with respect thereto.

 

Any Supplemental Certificate may be
transferred or exchanged only upon satisfaction of the conditions set forth in
clauses (ii) and (iii) above.

 

(d)        The
Transferor Certificate (or any interest therein) may be transferred to a Person
which is a member of the “affiliated group” as defined in Code Section 1504(a) of
which Retailers National Bank is a member without the consent or approval of
the Holders of the Investor Certificates, provided that (i) the
Rating Agency Condition shall have been satisfied with respect to such
transfer, (ii) the Transferor shall have delivered to the Trustee and each
Rating Agency a Tax Opinion, dated the date of such transfer, with respect
thereto, and (iii) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be less than the
Required Retained Transferor Amount.  In
connection with any such transfer, the Person to whom the Transferor
Certificate is transferred will, by its acquisition and holding of an interest
in the Transferor Certificate, assume all of the rights and obligations of the
Transferor as described in this Agreement and in any Supplement or amendment
thereto (including the right under this paragraph (d) with respect to
subsequent transfers of an interest in the Transferor Certificate).

 

(e)        The
Transferor may direct the Trustee to issue on behalf of the Trust one or more
participations (each, a “Participation”), the terms of which shall be
defined in a Participation Supplement (which Participation Supplement shall be
subject to subsection 13.1(a) to the extent that it amends any of the
terms of this Agreement), to be delivered to or upon the order of the
Transferor upon satisfaction of the following conditions:

 

(i)      the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) shall not be less than
the Required Retained Transferor Amount, as of the date of, and after giving
effect to, such exchange;

 

(ii)     the Rating Agency Condition shall have been
satisfied with respect to such issuance (or transfer as provided below); and

 

(iii)    the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the date of such issuance
(or transfer as provided below), with respect thereto.

 

 

Any Participation may be transferred or
exchanged only upon satisfaction of the conditions set forth in clauses (ii) and
(iii) above.  Notwithstanding the
foregoing, on the Closing Date, the Transferor shall issue to Retailers
National Bank a Participation with respect to which the conditions above need
not be specifically satisfied.  The
Trustee, at the direction of the Transferor, may agree to extend the term of
any Participation.  Any payments made by
the holder of any Participation and received by the Trustee with respect to the
purchase of any Participation or the increase in the principal amount of the
Participation shall be treated as Collections of Principal Receivables pursuant
to Section 4.4.

 

Section 6.4             Registration of Transfer and Exchange of Certificates.   (a)  The Trustee shall cause to be
kept at the office or agency to be maintained in accordance with the provisions
of Section 11.16 a register (the “Certificate Register”) in which,
subject to such reasonable regulations as it may prescribe, a transfer agent
and registrar (which may be the Trustee) (the “Transfer Agent and Registrar”)
shall provide for the registration of the Registered Certificates and of
transfers and exchanges of the Registered Certificates as herein provided.  The Transfer Agent and Registrar shall
initially be Norwest Bank Minnesota, National Association, and any co-transfer
agent and co-registrar chosen by the Transferor and acceptable to the Trustee,
including, if and so long as any Series or Class is listed on the
Luxembourg Stock Exchange and such exchange shall so require, a co-transfer
agent and co-registrar in Luxembourg.  So
long as any Investor Certificates are outstanding, the Transferor shall
maintain a co-transfer agent and co-registrar in New York City.  Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context requires otherwise.

 

The Trustee may revoke such appointment and
remove any Transfer Agent and Registrar if the Trustee determines in its sole
discretion that such Transfer Agent and Registrar failed to perform its
obligations under this Agreement in any material respect.  Any Transfer Agent and Registrar shall be
permitted to resign as Transfer Agent and Registrar upon 30 days’ notice to the
Transferor, the Trustee and the Servicer; provided, however, that
such resignation shall not be effective and such Transfer Agent and Registrar
shall continue to perform its duties as Transfer Agent and Registrar until the
Trustee has appointed a successor Transfer Agent and Registrar reasonably
acceptable to the Transferor.

 

Subject to paragraph (c) below, upon
surrender for registration of transfer of any Registered Certificate at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose, one or more new Registered Certificates (of the same Series and
Class) in authorized denominations of like aggregate fractional undivided
interests in the Certificateholders’ Interest shall be executed, authenticated
and delivered, in the name of the designated transferee or transferees.

 

At the option of a Registered
Certificateholder, Registered Certificates (of the same Series and Class)
may be exchanged for other Registered Certificates of authorized denominations
of like aggregate fractional undivided interests in the Certificateholders’
Interest, upon surrender of the Registered Certificates to be exchanged at any
such office or agency; Registered Certificates, including Registered
Certificates received in exchange for Bearer Certificates, may not be exchanged
for Bearer Certificates.

 

 

At the option
of the Holder of a Bearer Certificate, subject to applicable laws and
regulations, Bearer Certificates may be exchanged for other Bearer Certificates
or Registered Certificates (of the same Series and Class) of authorized
denominations of like aggregate fractional undivided interests in the
Certificateholders’ Interest, upon surrender of the Bearer Certificates to be
exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States.  Each Bearer
Certificate surrendered pursuant to this Section 6.4 shall have attached
thereto all unmatured Coupons; provided that any Bearer Certificate, so
surrendered after the close of business on the Record Date preceding the
relevant payment date or distribution date after the expected final payment
date need not have attached the Coupon relating to such payment date or
distribution date (in each case, as specified in the applicable Supplement).

 

Whenever any Investor Certificates are so
surrendered for exchange, the Transferor shall execute, the Trustee shall
authenticate and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States) the Investor Certificates which
the Investor Certificateholder making the exchange is entitled to receive.  Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee or the
Transfer Agent and Registrar duly executed by the Investor Certificateholder or
the attorney-in-fact thereof duly authorized in writing.

 

No service charge shall be made for any
registration of transfer or exchange of Investor Certificates, but the Transfer
Agent and Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
transfer or exchange.

 

All Investor Certificates (together with any
Coupons) surrendered for registration of transfer and exchange or for payment
shall be canceled and disposed of in a manner satisfactory to the Trustee.  The Trustee shall cancel and destroy any
Global Certificate upon its exchange in full for Definitive Euro-Certificates
and shall deliver a certificate of destruction to the Transferor.  Such certificate shall also state that a
certificate or certificates of a foreign Clearing Agency to the effect referred
to in Section 6.13 was received with respect to each portion of the Global
Certificate exchanged for Definitive Euro-Certificates.

 

The Transferor shall execute and deliver to
the Trustee Bearer Certificates and Registered Certificates in such amounts and
at such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement, each Supplement and the Certificates.

 

(b)        The
Transfer Agent and Registrar will maintain at its expense in the City of New
York and, if and so long as any Series or Class is listed on the
Luxembourg Stock Exchange, Luxembourg, an office or agency where Investor
Certificates may be surrendered for registration of transfer or exchange
(except that Bearer Certificates may not be surrendered for exchange at any
such office or agency in the United States).

 

 

(c)        (i)   Registration of transfer of Investor
Certificates containing (x) a legend substantially to the effect set forth
on Exhibit E-1-A shall be effected only if such transfer is made pursuant
to an effective registration statement under the Act or is exempt from the
registration requirements under the Act and (y) a legend substantially to
the effect set forth on Exhibit E-1-B shall be effected only if such
transfer is made to a Person that is not (1) an employee benefit plan or
other plan, trust or account (including an individual retirement account) that
is subject to ERISA or Section 4975 of the Code or (2) any collective
investment fund, insurance company separate or general account or other entity
(except an entity registered under the Investment Company Act) whose underlying
assets include “plan assets” under ERISA by reason of a plan’s investment in
such entity (a “Benefit Plan”). 
In the event that registration of a transfer is to be made in reliance
upon an exemption from the registration requirements under the Act, the
transferor or the transferee shall deliver, at its expense, to the Transferor,
the Servicer and the Trustee, an investment letter from the transferee,
substantially in the form of the investment representation letter attached
hereto as Exhibit E-2, and no registration of transfer shall be made until
such letter is so delivered.

 

Investor Certificates issued upon
registration or transfer of, or Investor Certificates issued in exchange for,
Investor Certificates bearing the legend referred to above shall also bear such
legend unless the Transferor, the Servicer, the Trustee and the Transfer Agent
and Registrar receive an Opinion of Counsel, satisfactory to each of them, to
the effect that such legend may be removed.

 

Whenever an Investor Certificate containing
the legend referred to above is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek instructions from the Servicer regarding such transfer and shall be entitled
to receive instructions signed by a Servicing Officer prior to registering any
such transfer.  The Transferor hereby
agrees to indemnify the Transfer Agent and Registrar and the Trustee and to
hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in relation to any such instructions
furnished pursuant to this clause (i).

 

(ii)     Registration of transfer of Investor
Certificates containing a legend to the effect set forth on Exhibit E-3
shall be effected only if such transfer is made to a Person which is not a
Benefit Plan.  By accepting and holding
any such Investor Certificate, an Investor Certificateholder shall be deemed to
have represented and warranted that it is not a Benefit Plan.  By acquiring any interest in a Book-Entry
Certificate which contains such legend, a Certificate Owner shall be deemed to
have represented and warranted that it is not a Benefit Plan.

 

(iii)    If so requested by the Transferor, the
Trustee will make available to any prospective purchaser of Investor
Certificates who so requests, a copy of a letter provided to the Trustee by or
on behalf of the Transferor relating to the transferability of any Series or
Class to a Benefit Plan.

 

Section 6.5             Mutilated, Destroyed, Lost or Stolen Certificates.  If (a) any mutilated Certificate
(together, in the case of Bearer Certificates, with all unmatured Coupons (if
any) appertaining thereto) is surrendered to the Transfer Agent and Registrar,
or the Transfer Agent and Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there is
delivered to the Transfer Agent and Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Transferor shall execute, the Trustee shall
authenticate and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States), in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and aggregate fractional undivided interest.  In connection with the issuance of any new
Certificate under this Section 6.5, the Trustee or the Transfer Agent and
Registrar may require the payment by the Certificateholder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and Transfer Agent and Registrar) connected therewith.  Any duplicate Certificate issued pursuant to
this Section 6.5 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.

 

Section 6.6             Persons Deemed Owners.  The Trustee, the Paying Agent, the Transfer
Agent and Registrar and any agent of any of these may (a) prior to due
presentation of a Registered Certificate for registration of transfer, treat
the Person in whose name any Registered Certificate is registered as the owner
of such Registered Certificate for the purpose of receiving distributions pursuant
to the terms of the applicable Supplement and for all other purposes
whatsoever, and (b) treat the bearer of a Bearer Certificate or Coupon as
the owner of such Bearer Certificate or Coupon for the purpose of receiving
distributions pursuant to the terms of the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary.  Notwithstanding the foregoing, in determining
whether the Holders of the requisite Investor Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Servicer, any other Holder of the
Transferor Certificate, the Trustee or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Certificates
which the Trustee actually knows to be so owned shall be so disregarded.  Certificates so owned which have been pledged
in good faith shall not be disregarded and may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee’s right
so to act with respect to such Certificates and that the pledgee is not the
Transferor, the Servicer, any other Holder of the Transferor Certificate or any
Affiliate thereof.

 

Section 6.7             Appointment of Paying Agent.  The Paying Agent shall make distributions to
Investor Certificateholders from the Collection Account or any applicable Series Account
pursuant to the provisions of the applicable Supplement and shall report the
amounts of such distributions to the Trustee. 
Any Paying Agent shall have the revocable

 

 

power to withdraw funds from
the Collection Account or any applicable Series Account for the purpose of
making the distributions referred to above. 
The Trustee may revoke such power and remove the Paying Agent if the
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement or any Supplement in any
material respect.  The Paying Agent shall
initially be Norwest Bank Minnesota, National Association, and any co-paying
agent chosen by the Transferor and acceptable to the Trustee, including, if and
so long as any Series or Class is listed on the Luxembourg Stock
Exchange and such exchange so requires, a co-paying agent in Luxembourg or
another western European city.  Any
Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ notice
to the Trustee.  In the event that any
Paying Agent shall resign, the Trustee shall appoint a successor to act as Paying
Agent.  The Trustee shall cause each
successor or additional Paying Agent to execute and deliver to the Trustee an
instrument in which such successor or additional Paying Agent shall agree with
the Trustee that it will hold all sums, if any, held by it for payment to the
Investor Certificateholders in trust for the benefit of the Investor
Certificateholders entitled thereto until such sums shall be paid to such
Investor Certificateholders.  The Paying
Agent shall return all unclaimed funds to the Trustee and upon removal shall
also return all funds in its possession to the Trustee.  The provisions of Sections 11.1, 11.2, 11.3
and 11.5 shall apply to the Trustee also in its role as Paying Agent, for so
long as the Trustee shall act as Paying Agent. 
Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.

 

Section 6.8             Access to List of Registered Certificateholders’
Names and Addresses.  The Trustee
will furnish or cause to be furnished by the Transfer Agent and Registrar to
the Servicer or the Paying Agent, within five Business Days after receipt by
the Trustee of a request therefor, a list in such form as the Servicer or the
Paying Agent may reasonably require, of the names and addresses of the
Registered Certificateholders.  If any
Holder or group of Holders of Investor Certificates of any Series or all
outstanding Series, as the case may be, evidencing not less than 10% of the
aggregate unpaid principal amount of such Series or all outstanding
Series, as applicable (the “Applicants”), apply to the Trustee, and such
application states that the Applicants desire to communicate with other
Investor Certificateholders with respect to their rights under this Agreement
or any Supplement or under the Investor Certificates and is accompanied by a
copy of the communication which such Applicants propose to transmit, then the
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses shall afford or shall cause the Transfer Agent and Registrar
to afford such Applicants access during normal business hours to the most
recent list of Registered Certificateholders of such Series or all
outstanding Series, as applicable, held by the Trustee, within five Business
Days after the receipt of such application. 
Such list shall be as of a date no more than 45 days prior to the date
of receipt of such Applicants’ request.

 

Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Registered Certificateholders hereunder, regardless of the
sources from which such information was derived.

 

 

Section 6.9             Authenticating Agent.   (a)  The Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates
in connection with the issuance, delivery, registration of transfer, exchange
or repayment of the Certificates. 
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee’s certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an authenticating agent and certificate of authentication executed
on behalf of the Trustee by an authenticating agent.  Each authenticating agent must be acceptable
to the Transferor and the Servicer.

 

(b)        Any institution succeeding to the
corporate agency business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any power or any
further act on the part of the Trustee or such authenticating agent.  An authenticating agent may at any time
resign by giving notice of resignation to the Trustee and to the Transferor.  The Trustee may at any time terminate the
agency of an authenticating agent by giving notice of termination to such
authenticating agent and to the Transferor. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time an authenticating agent shall cease to be acceptable to
the Trustee or the Transferor, the Trustee promptly may appoint a successor
authenticating agent.  Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an authenticating agent.  No successor authenticating agent shall be
appointed unless acceptable to the Trustee and the Transferor.  The Transferor agrees to pay to each
authenticating agent from time to time reasonable compensation for its services
under this Section 6.9.  The
provisions of Sections 11.1, 11.2 and 11.3 shall be applicable to any
authenticating agent.

 

(c)        Pursuant to an appointment made under
this Section 6.9, the Certificates may have endorsed thereon, in lieu of
the Trustee’s certificate of authentication, an alternate certificate of
authentication in substantially the following form:

 

This is one of the Certificates described in the Amended and Restated
Pooling and Servicing Agreement.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  as
  Authenticating Agent

  	
   

  
	
   

  	
  for the Trustee,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  
					

 

Section 6.10           Book-Entry Certificates.  Unless otherwise specified in the related
Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the

 

 

Book-Entry Certificates, to be
delivered to the Clearing Agency, by, or on behalf of, the Transferor.  The Investor Certificates shall initially be
registered on the Certificate Register in the name of the Clearing Agency or
its nominee, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner’s interest in the Investor Certificates,
except as provided in Section 6.12. Unless and until definitive, fully
registered Investor Certificates (“Definitive Certificates”) have been
issued to the applicable Certificate Owners pursuant to Section 6.12 or as
otherwise specified in any such Supplement:

 

(a)        the provisions of this Section 6.10
shall be in full force and effect;

 

(b)        the Transferor, the Servicer and the
Trustee may deal with the Clearing Agency and the Clearing Agency Participants
for all purposes (including the making of distributions) as the authorized
representatives of the respective Certificate Owners;

(c)        to the extent that the provisions of
this Section conflict with any other provisions of this Agreement, the
provisions of this Section 6.10 shall control; and

 

(d)        the rights of the respective Certificate
Owners shall be exercised only through the Clearing Agency and the Clearing
Agency Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency or the
Clearing Agency Participants.  Pursuant
to the Depository Agreement, unless and until Definitive Certificates are
issued pursuant to Section 6.12, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Investor Certificates to
such Clearing Agency Participants.

 

For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of Investor Certificates, such direction or consent may be
given by Certificate Owners (acting through the Clearing Agency and the
Clearing Agency Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.

 

Section 6.11           Notices to Clearing Agency.  Whenever any notice or other communication is
required to be given to Investor Certificateholders of any Series or Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Trustee shall give all such notices and communications to the
applicable Clearing Agency.

 

Section 6.12           Definitive Certificates.  If Book-Entry Certificates have been issued
with respect to any Series or Class and (a) the Transferor
advises the Trustee that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and the Trustee or the Transferor is
unable to engage a qualified successor, (b) the Transferor, at its option,
advises the Trustee that it elects to terminate the book-entry system with
respect to such Series or Class through the Clearing Agency or (c) after
the occurrence of a Servicer

 

 

Default, Certificate Owners of
such Series or Class evidencing not less than 50% of the aggregate
unpaid principal amount of such Series or Class advise the Trustee
and the Clearing Agency through the Clearing Agency Participants that the
continuation of a book-entry system with respect to the Investor Certificates
of such Series or Class through the Clearing Agency is no longer in
the best interests of the Certificate Owners with respect to such Certificates,
then the Trustee shall notify all Certificate Owners of such Certificates,
through the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same.  Upon surrender to the Trustee of
any such Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Transferor shall
execute and the Trustee shall authenticate and deliver such Definitive
Certificates.  Neither the Transferor nor
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions.  Upon the issuance of such
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Investor Certificateholders hereunder.

 

Section 6.13           Global Certificate.  If specified in the related Supplement for
any Series, or Class, the Investor Certificates for such Series or Class will
initially be issued in the form of a single temporary global Certificate (the “Global
Certificate”) in bearer form, without interest coupons, in the denomination
of the aggregate principal amount of such Series or Class and
substantially in the form set forth in the exhibit with respect thereto
attached to the related Supplement.  The
Global Certificate will be executed by the Transferor and authenticated by the
Trustee upon the same conditions, in substantially the same manner and with the
same effect as the Definitive Certificates. 
The Global Certificate may be exchanged for Bearer or Registered
Certificates in definitive form (the “Definitive EuroCertificates”)
pursuant to the terms of any applicable Supplement.

 

Section 6.14           Uncertificated Classes.  Notwithstanding anything to the contrary
contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI
and in Article XII relating to the registration, form, execution,
authentication, delivery, presentation, cancellation and surrender of
Certificates shall not be applicable to any uncertificated Certificates.

 

ARTICLE VII

 

Other Matters Relating to the
Transferor

 

Section 7.1             Liability of the Transferor.  The Transferor shall be liable in all
respects for the obligations, covenants, representations and warranties of the
Transferor arising under or related to this Agreement or any Supplement.  The Transferor shall be liable only to the
extent of the obligations specifically undertaken by it in its capacity as
Transferor.

 

 

Section 7.2             Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor.   (a) 
The Transferor shall not consolidate with or merge into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person unless:

 

(i)      (x) the business entity formed by
such consolidation or into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets of the Transferor
substantially as an entirety shall be, if the Transferor is not the surviving
entity, organized and existing under the laws of the United States of America
or any state or the District of Columbia, and, if the Transferor is not the
surviving entity, such business entity shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the performance of every covenant and obligation
of the Transferor hereunder, including its obligations under Section 7.4; (y) the
Transferor has delivered to the Trustee an Officer’s Certificate and an Opinion
of Counsel each stating that such consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Section 7.2, that such
supplemental agreement is a valid and binding obligation of such surviving
entity enforceable against such surviving entity in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity), and that all conditions precedent
herein provided for relating to such transaction have been complied with;

 

(ii)     the Rating Agency Condition shall have been
satisfied with respect to such consolidation, merger, conveyance or transfer;

 

(iii)    the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the date of such
consolidation, merger, conveyance or transfer, with respect thereto;

 

(iv)    in connection with any merger or
consolidation, the business entity into which the Transferor shall merge or
consolidate shall be (x) a business entity that is not subject to Title 11
of the United States Code or (y) a special-purpose corporation, the powers
and activities of which shall be limited to the performance of the Transferor’s
obligations under this Agreement, any Supplement and the Receivables Purchase
Agreement; and

 

(v)     if the Transferor is not the surviving
entity, the surviving entity shall file new UCC-1 financing statements with
respect to the interest of the Trust in the Receivables.

 

 

(b)        The obligations of the Transferor
hereunder shall not be assignable nor shall any Person succeed to the
obligations of the Transferor hereunder except in each case in accordance with (i) the
provisions of the foregoing paragraph, (ii) Sections 2.12 or 6.3(d), or (iii) conveyances,
mergers, consolidations, assumptions, sales or transfers to other entities (1) for
which the Transferor delivers an Officer’s Certificate to the Trustee
indicating that the Transferor reasonably believes that such action will not
adversely affect in any material respect the interests of any Investor
Certificateholder, (2) which meet the requirements of clause (ii) of
the preceding paragraph and (3) for which such purchaser, transferee,
pledgee or entity shall expressly assume, in an agreement supplemental hereto,
executed and delivered to the Trustee in writing in form satisfactory to the
Trustee, the performance of every covenant and obligation of the Transferor
thereby conveyed.

 

(c)        This Section 7.2 shall not be construed
to prohibit or in any way limit the Transferor’s ability to effectuate any
consolidation or merger pursuant to which the Transferor would be the surviving
entity.

 

Section 7.3             Limitations on Liability of the Transferor.  Subject to Sections 7.1 and 7.4, neither the
Transferor, any Holder of the Transferor Certificate nor any of the directors,
officers, employees or agents of the Transferor acting in such capacities shall
be under any liability to the Trust, the Trustee, the Certificateholders, any
Enhancement Provider or any other Person for any action taken or for refraining
from the taking of any action in good faith in their capacities as Transferor
pursuant to this Agreement; provided, however, that this
provision shall not protect the Transferor, any Holder of the Transferor
Certificate or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder.  The Transferor and any
director, officer, employee or agent of the Transferor may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person (other than the Transferor) respecting any matters arising hereunder.

 

Section 7.4             Liabilities.  
(a)  Notwithstanding Section 7.3 (and notwithstanding Sections
8.3 and 8.4), the Transferor by entering into this Agreement, and any Holder of
any interest in the Transferor Certificate (excluding, unless otherwise
provided in any Supplement, any Supplemental Certificate and not including,
unless otherwise provided in any Participation Supplement, any Participation)
by its acceptance thereof, agree to be liable, directly to the injured party,
for the entire amount of any losses, claims, damages or liabilities (other than
those that would be incurred by an Investor Certificateholder if the Investor
Certificates were notes secured by the Receivables, for example, as a result of
the performance of the Receivables, market fluctuations, a shortfall or failure
to make payment under any Enhancement or other similar market or investment
risks associated with ownership of the Investor Certificates) arising out of or
based on the arrangement created by this Agreement or the actions of the
Servicer taken pursuant hereto (to the extent that, if the Trust Assets at the
time the claim is made were used to pay in full all outstanding Certificates of
all Series, the Trust Assets that would remain after the Investor Certificateholders
and Enhancement Providers, if any, were paid in full would be insufficient to
pay any such losses, claims, damages or liabilities) as though this Agreement
created a partnership under the Delaware Revised Uniform Partnership Act in
which the 

 

 

Transferor and such Holder of
the Transferor Certificate were general partners.  To the extent provided in Section 8.4,
the Servicer will (from its own assets and not from the assets of the Trust)
indemnify and hold harmless the Transferor and each Holder of the Transferor
Certificate against and from certain losses, claims, damages and liabilities of
the Transferor or such Holder as described in this Section 7.4 arising
from the actions or omissions of the Servicer.

 

(b)        The Transferor shall indemnify and hold
harmless the Trustee and its officers, directors, employees and agents, from
and against any loss, liability, expense, damage or injury (collectively, a “Loss”)
suffered or sustained by reason of the acceptance by the Trustee of the Trust
pursuant to this Agreement, other than as specified in Section 8.4,
including any judgment, award, settlement, reasonable attorneys’ fees and other
costs or expenses incurred in connection with the defense of any action,
proceeding or claim; provided, however, that the Transferor’s
duty to indemnify under this subsection 7.4(b) shall not extend to any
Losses (i) for which the Trustee has a right to indemnification under any
other provision of this Agreement, or (ii) that are caused by or result
from the breach of contract by, or the fraud, negligence, or willful misconduct
of, the Trustee, its employees or its agents.

 

ARTICLE VIII

 

Other Matters Relating to the Servicer

 

Section 8.1             Liability of the Servicer.  The Servicer shall be liable under this
Agreement only to the extent of the obligations specifically undertaken by the
Servicer in its capacity as Servicer.

 

Section 8.2             Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer.  The
Servicer shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to
any Person, unless:

 

(a)        (i)   the corporation formed by such consolidation
or into which the Servicer is merged or the Person which acquires by conveyance
or transfer the properties and assets of the Servicer substantially as an
entirety shall be, if the Servicer is not the surviving entity, a corporation
organized and existing under the laws of the United States of America or any
state or the District of Columbia, and, if the Servicer is not the surviving
entity, such corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, in form reasonably satisfactory
to the Trustee, the performance of every covenant and obligation of the
Servicer hereunder;

 

(ii)       the Servicer has delivered to the Trustee
an Officer’s Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental agreement
comply with this Section 8.2, that such supplemental agreement is a valid
and binding obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such enforceability
may be limited

 

 

by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally from time to time in effect and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at law or
in equity), and that all conditions precedent herein provided for relating to
such transaction have been complied with; and

 

(iii)    either (x) the corporation formed by
such consolidation or into which the Servicer is merged or the Person which
acquired by conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be an Eligible Servicer (taking into
account, in making such determination, the experience and operations of the
predecessor Servicer) or (y) upon the effectiveness of such consolidation,
merger, conveyance or transfer, a Successor Servicer shall have assumed the
obligations of the Servicer in accordance with this Agreement.

 

(b)        This Section 8.2 shall not be
construed to prohibit or in any way limit the Servicer’s ability to effectuate
any consolidation or merger pursuant to which the Servicer would be the
surviving entity.

 

(c)        The Servicer shall notify each Rating
Agency promptly after any consolidation, merger, conveyance or transfer
effected pursuant to this Section 8.2.

 

Section 8.3             Limitation on Liability of the Servicer and Others.  Except as provided in Sections 8.4 and 11.5,
neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer in its capacity as Servicer shall be under any liability to the
Trust, the Trustee, the Certificateholders, any Enhancement Providers or any
other person for any action taken or for refraining from the taking of any
action in good faith in its capacity as Servicer pursuant to this Agreement; provided,
however, that this provision shall not protect the Servicer or any such
Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder.  The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person (other than the
Servicer) respecting any matters arising hereunder.  The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Servicer in accordance with this Agreement and
which in its reasonable judgment may involve it in any expense or
liability.  The Servicer may, in its sole
discretion, undertake any such legal action which it may deem necessary or
desirable for the benefit of the Certificateholders with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder.

 

Section 8.4             Servicer Indemnification of the Trust and the Trustee.  The Servicer shall indemnify and hold
harmless the Trust and the Trustee and its officers, directors, employees and
agents, from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts or omissions of the Servicer with
respect to the Trust pursuant to this Agreement, including any judgment, award,
settlement,

 

 

reasonable attorneys’ fees and
other costs or expenses incurred in connection with the defense of any action,
proceeding or claim; provided, however, that the Servicer shall
not indemnify the Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by the
Trustee; provided, further, that the Servicer shall not indemnify
the Trust, the Investor Certificateholders or the Certificate Owners for any
liabilities, costs or expenses of the Trust with respect to any action taken by
the Trustee at the request of the Investor Certificateholders; provided,
further, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including, without
limitation, losses with respect to market or investment risks associated with
ownership of the Investor Certificates or losses incurred as a result of
Defaulted Receivables; and provided, further, that the Servicer
shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax
law, including, any Federal, state, local or foreign income or franchise taxes
or any other tax imposed on or measured by income (or any interest or penalties
with respect thereto or arising from a failure to comply therewith) required to
be paid by the Trust, the Investor Certificateholders or the Certificate Owners
in connection herewith to any taxing authority. 
Indemnification pursuant to this Section 8.4 shall not be payable
from the Trust Assets.  The provisions of
this indemnity shall run directly to and be enforceable by an indemnitee
subject to the limitations hereof.

 

Section 8.5             The Servicer Not To Resign.  The Servicer shall not resign from the
obligations and duties hereby imposed on it except (x) upon the
determination that (i) the performance of its duties hereunder is no
longer permissible under Requirements of Law (other than the charter and
by-laws of the Servicer) and (ii) there is no reasonable action which the
Servicer could take to make the performance of its duties hereunder permissible
under such Requirements of Law or (y) as may be required, in connection
with the Servicer’s consolidation with, or merger into any other corporation or
the Servicer’s conveyance or transfer of its properties and assets
substantially as an entirety to any Person in each case, in accordance with Section 8.2.  Any determination permitting the resignation
of the Servicer pursuant to clause (x) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee.  No resignation shall become effective until
the Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.2.  If within 120 days of the date of the
determination that the Servicer may no longer act as Servicer, and if the
Trustee is unable to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer.  Notwithstanding the
foregoing, the Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established institution having a
net worth of not less than $50,000,000 and whose regular business includes the
servicing of credit card accounts as the Successor Servicer hereunder.  The Trustee shall give prompt notice to each
Rating Agency and each Enhancement Provider, if any, entitled thereto under the
terms of the applicable Supplement upon the appointment of a Successor
Servicer.

 

Section 8.6             Access to Certain Documentation and Information
Regarding the Receivables.  The
Servicer shall provide to the Trustee access to the documentation regarding the
Accounts and the Receivables in such cases where the Trustee is required in

 

connection
with the enforcement of the rights of Certificateholders or by applicable
statutes or regulations to review such documentation, such access being
afforded without charge but only (a) upon reasonable request, (b) during
normal business hours, (c) subject to the Servicer’s normal security and
confidentiality procedures and (d) at reasonably accessible offices in the
continental United States designated by the Servicer.  Nothing in this Section 8.6 shall
derogate from the obligation of the Credit Card Originator, TCC, the
Transferor, the Trustee and the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure of
the Servicer to provide access as provided in this Section 8.6 as a result
of such obligation shall not constitute a breach of this Section 8.6.

 

Section 8.7             Delegation
of Duties.  In the
ordinary course of business, the Servicer may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in accordance with
the Credit Card Guidelines and this Agreement. 
Any such delegations shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.5 and the Servicer will remain
jointly and severally liable with such Person for any amounts which would
otherwise be payable pursuant to this Article VIII as if the Servicer had
performed such duty; provided, however, that in the case of any
significant delegation to a Person other than an Affiliate of Retailers
National Bank, at least 30 days’ prior written notice shall be given to the
Trustee, each Rating Agency and each Enhancement Provider, if any, entitled
thereto pursuant to the relevant Supplement, of such delegation to any entity
that is not an Affiliate of the Servicer.

 

Section 8.8             Examination of Records.  To the extent required pursuant to Section 2.1,
the Transferor and the Servicer shall clearly and unambiguously indicate in
their computer files or other records that the Receivables arising in the
Accounts have been conveyed to the Trustee, on behalf of the Trust, pursuant to
this Agreement for the benefit of the Certificateholders.  From and after the date the actions referred
to in the preceding sentence are required to be taken, the Transferor and the
Servicer shall, prior to the sale or transfer to a third party of any
receivable held in its custody, examine its computer and other records to
determine that such receivable is not a Receivable.

 

ARTICLE IX

 

Early Amortization Events

 

Section 9.1             Early Amortization Events.  If any one of the following events (each, an “Early
Amortization Event”) shall occur with respect to any Series:

 

(a)        Retailers
National Bank, TCC, the Transferor or any Holder of the Transferor Certificate
shall fail generally to, or admit in writing its inability to, pay its debts as
they become due or makes an assignment for the benefit of its creditors; or a
proceeding shall have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of Retailers National Bank,
TCC, the Transferor or any Holder of the Transferor Certificate in an
involuntary case under any Debtor Relief Law, or for the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator 

 

 

or
other similar official of such Person or for any substantial part of its
property, or for the winding-up or liquidation, dissolution, reorganization or
readjustment of its affairs or similar relief and, if instituted against the
Transferor or any Holder of the Transferor Certificate, any such proceeding
shall continue undismissed or unstayed and in effect, for a period of 60
consecutive days, or any of the actions sought in such proceeding shall occur; or
the commencement by Retailers National Bank, TCC, the Transferor or any Holder
of the Transferor Certificate, of a voluntary case under any Debtor Relief Law,
or such Person’s seeking, consenting or acquiescing to the entry of an order
for relief in an involuntary case under any Debtor Relief Law, or seeking,
consenting or acquiescing to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator
or other similar official of such Person or for any substantial part of its
property, or any general assignment for the benefit of creditors; or such
Person or any subsidiary of such Person shall have taken any corporate action
in furtherance of any of the foregoing actions (any such event, an “Insolvency
Event”);

 

(b)        the Trust shall become an “investment company” within the
meaning of the Investment Company Act;

 

(c)        the Transferor Amount (excluding the interest represented by
any Supplemental Certificate) shall be less than the Required Retained Transferor
Amount; or

 

(d)        the Transferor shall become unable for any reason to
transfer Receivables to the Trust pursuant to this Agreement;

 

then
in the case of any such event, an Early Amortization Event shall occur with
respect to such Series without any notice or other action on the part of
the Trustee or the Investor Certificateholders, immediately upon the occurrence
of such event.

 

Section 9.2             Additional Rights upon the
Occurrence of Certain Events.  If an
Insolvency Event occurs with respect to the Transferor (excluding any
Supplemental Certificate), or the event set forth in subsection 9.1(c) shall
occur, the Transferor shall on the day any such event occurs, immediately cease
to transfer Principal Receivables, or interests in Principal Receivables represented
by any Participation Interests to the Trust and shall promptly give notice to
the Trustee thereof.  Notwithstanding any
cessation of the transfer to the Trust of additional Principal Receivables or
any Participation Interests, Principal Receivables or any Participation
Interests transferred to the Trust prior to the occurrence of such Insolvency
Event and Collections in respect of such Principal Receivables and
Participation Interests, and Finance Charge Receivables whenever created
accrued in respect of such Principal Receivables, shall continue to be a part
of the Trust.

 

ARTICLE X

 

Servicer Defaults

 

Section 10.1           Servicer Defaults.  If any one of the following events (a “Servicer
Default”) shall occur and be continuing:

 

 

(a)        any
failure by the Servicer to make any payment, transfer or deposit or to give
instructions or notice to the Trustee pursuant to the terms of this Agreement
or any Supplement on or before the date occurring five Business Days after the
date such payment, transfer or deposit or such instruction or notice is
required to be made or given, as the case may be, under the terms of this
Agreement or any Supplement;

 

(b)        failure
on the part of the Servicer to duly observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in this Agreement
or any Supplement which has a material adverse effect on the interests
hereunder of the Investor Certificateholders of any Series or Class (which
determination shall be made without regard to whether funds are then available
pursuant to any Enhancement) and which continues unremedied for a period of 60
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by Holders of Investor Certificates evidencing not
less than 25% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such failure that does not relate to all
Series, 25% of the aggregate unpaid principal amount of all Series to
which such failure relates); the Servicer shall delegate its duties under this
Agreement, except as permitted by Sections 8.2 and 8.7, a Responsible Officer
of the Trustee has actual knowledge of such delegation and such delegation
continues unremedied for 15 days after the date on which written notice
thereof, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by Holders of
Investor Certificates evidencing not less than 25% of the aggregate unpaid
principal amount of all Investor Certificates;

 

(c)        any
representation, warranty or certification made by the Servicer in this
Agreement or any Supplement or in any certificate delivered pursuant to this
Agreement or any Supplement shall prove to have been incorrect when made, which
has a material adverse effect on the rights of the Investor Certificateholders
of any Series or Class (which determination shall be made without
regard to whether funds are then available pursuant to any Enhancement) and
which continues to be incorrect in any material respect for a period of 60 days
after the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Investor Certificates evidencing not
less than 25% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such representation, warranty or certification
that does not relate to all Series, 25% of the aggregate unpaid principal
amount of all Series to which such representation, warranty or
certification relates); or

 

(d)        the
Servicer shall fail generally to, or admit in writing its inability to, pay its
debts as they become due; or a proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of the Servicer in an involuntary case under any Debtor Relief Law, or
for the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs and, if instituted against the Servicer, any such proceeding shall
continue undismissed or unstayed and in effect, for a period of 60 consecutive
days, or any

 

 

of the actions sought in
such proceeding shall occur; or the commencement by the Servicer, of a
voluntary case under any Debtor Relief Law, or such Person’s consent to the
entry of an order for relief in an involuntary case under any Debtor Relief
Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its property, or
any general assignment for the benefit of creditors; or such Person or any
subsidiary of such Person shall have taken any corporate action in furtherance of
any of the foregoing actions;

 

then, in the event of any
Servicer Default, so long as the Servicer Default shall not have been remedied,
either the Trustee or the Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid principal amount of all Investor Certificates, by
notice given to the Servicer (and to the Trustee and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement if given by the Investor
Certificateholders) (a “Termination Notice”), may terminate all but not
less than all the rights and obligations of the Servicer, as Servicer, under
this Agreement and in and to the Receivables and the proceeds thereof; provided,
however, if within 60 days of receipt of a Termination Notice the
Trustee is unable to obtain any bids from Eligible Servicers in accordance with
subsection 10.2(c) to act as a Successor Servicer and receives an Officer’s
Certificate of the Servicer to the effect that the Servicer cannot in good
faith cure the Servicer Default which gave rise to the Termination Notice, the
Trustee shall offer the Transferor the right at its option to purchase the
Certificateholders’ Interest and the interest in the Trust Assets represented
by any Participation on the Distribution Date occurring in the next calendar
month.  The purchase price for the
Certificateholders’ Interest shall be equal to the sum of the amounts specified
therefor with respect to each outstanding Series in the related
Supplement.  The Transferor shall notify
the Trustee prior to the Record Date for the related Distribution Date of the
purchase if it is exercising such option. 
If it exercises such option, the Transferor shall (x) deliver to
the Trustee an Opinion of Counsel (which must be an independent outside
counsel) to the effect that, in reliance on certain certificates to the effect
that the Receivables constitute fair value for consideration paid therefor and
as to the solvency of the Transferor, the purchase would not be considered a
fraudulent conveyance and (y) deposit the purchase price into the
Collection Account not later than 12:00 noon, New York City time, on such
Distribution Date in immediately available funds.  The purchase price shall be allocated and
distributed to Investor Certificateholders in accordance with Article IV
and the terms of each Supplement.

 

After receipt by the Servicer of such
Termination Notice, and on the date that a Successor Servicer shall have been
appointed by the Trustee pursuant to Section 10.2, all authority and power
of the Servicer under this Agreement shall pass to and be vested in the
Successor Servicer (a “Service Transfer”); and, without limitation, the
Trustee is hereby authorized and empowered (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments,
and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights.  The Servicer agrees to cooperate with the
Trustee and the Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder
including, without

 

 

limitation,
the transfer to the Successor Servicer of all authority of the Servicer to
service the Receivables provided for under this Agreement, including, without
limitation, all authority over all Collections which shall on the date of
transfer be held by the Servicer for deposit, or which have been deposited by
the Servicer, in the Collection Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds. 
The Servicer shall promptly transfer its electronic records relating to
the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary
for the continued servicing of the Receivables in the manner and at such times
as the Successor Servicer shall reasonably request.  To the extent that compliance with this Section 10.1
shall require the Servicer to disclose to the Successor Servicer information of
any kind which the Servicer reasonably deems to be confidential, the Successor
Servicer shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem appropriate to protect
its interests.

 

Notwithstanding the foregoing, any delay in
or failure of performance under subsection 10.1(a) for a period of five
Business Days or under subsection 10.1(b) or (c) for a period of 60
days (in addition to any period provided in subsection 10.1(a), (b) or
(c)) shall not constitute a Servicer Default until the expiration of such
additional five Business Days or 60 days, respectively, if such delay or
failure could not be prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes.  The preceding
sentence shall not relieve the Servicer from the obligation to use its best
efforts to perform its obligations in a timely manner in accordance with the
terms of this Agreement and any Supplement and the Servicer shall provide the
Trustee, each Rating Agency, any Enhancement Provider entitled thereto pursuant
to the relevant Supplement, the Holder of the Transferor Certificate and the
Investor Certificateholders with an Officer’s Certificate giving immediate
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations.

 

Section 10.2           Trustee to Act; Appointment of
Successor.  
(a)  On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.1, the Servicer shall continue to perform
all servicing functions under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee or until a date
mutually agreed upon by the Servicer and the Trustee.  The Trustee shall, as promptly as possible
after the giving of a Termination Notice, appoint an Eligible Servicer as a
successor servicer (the “Successor Servicer”), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee.  In the event
that a Successor Servicer has not been appointed or has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the
Trustee without further action shall automatically be appointed the Successor
Servicer.  The Trustee may delegate any
of its servicing obligations to an Affiliate of the Trustee or agent in
accordance with Section 3.1(b) and 8.7.  Notwithstanding the foregoing, the Trustee
shall, if it is legally unable so to act, petition a court of competent
jurisdiction to appoint any established institution having a net worth of not
less than $50,000,000 and whose regular business

 

 

includes the servicing of credit card
receivables as the Successor Servicer hereunder.  The Trustee shall give prompt notice to each
Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant
to the applicable Supplement upon the appointment of a Successor Servicer.

 

(b)        Upon
its appointment, the Successor Servicer shall be the successor in all respects
to the Servicer with respect to servicing functions under this Agreement and
shall be subject to all the responsibilities, duties and liabilities (except
for liabilities arising during the period of time when the prior Servicer was
performing and acting as Servicer) relating thereto placed on the Servicer by
the terms and provisions hereof, and all references in this Agreement to the
Servicer shall be deemed to refer to the Successor Servicer.

 

(c)        In
connection with any Termination Notice, the Trustee will review any bids which
it obtains from Eligible Servicers and shall be permitted to appoint any
Eligible Servicer submitting such a bid as a Successor Servicer for servicing
compensation not in excess of the aggregate Servicing Fees for all Series; provided,
however, that the Holder of the Transferor Certificate shall be
responsible for payment of the portion of such aggregate Servicing Fees
allocable to the Holder of the Transferor Certificate and that no such monthly
compensation paid out of Collections shall be in excess of such aggregate
Servicing Fees.  Each Holder of the
Transferor Certificate agrees that, if Retailers National Bank (or any
Successor Servicer) is terminated as Servicer hereunder, the portion of the
Collections in respect of Finance Charge Receivables that the Holder of the
Transferor Certificate is entitled to receive pursuant to this Agreement or any
Supplement shall be reduced by an amount sufficient to pay the Holder of the
Transferor Certificate share (determined by reference to the Supplements with
respect to any outstanding Series) of the compensation of the Successor
Servicer.

 

(d)        All
authority and power granted to the Successor Servicer under this Agreement
shall automatically cease and terminate upon termination of the Trust pursuant
to Section 12.1 and shall pass to and be vested in the Transferor and,
without limitation, the Transferor is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact
or otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights.  The
Successor Servicer agrees to cooperate with the Transferor in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. 
The Successor Servicer shall transfer its electronic records relating to
the Receivables to the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records, correspondence and
documents to the Transferor in the manner and at such times as the Transferor
shall reasonably request.  To the extent
that compliance with this Section 10.2 shall require the Successor
Servicer to disclose to the Transferor information of any kind which the
Successor Servicer deems to be confidential, the Transferor shall be required
to enter into such customary licensing and confidentiality agreements as the
Successor Servicer shall deem appropriate to protect its interests.

 

 

Section 10.3           Notification to Certificateholders.  Within two Business Days after the Servicer
becomes aware of any Servicer Default, the Servicer shall give notice thereof
to the Trustee, each Rating Agency and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement and the Trustee shall give notice
to the Investor Certificateholders.  Upon
any termination or appointment of a Successor Servicer pursuant to this Article X,
the Trustee shall give prompt notice thereof to the Investor
Certificateholders.

 

ARTICLE XI

 

THE TRUSTEE

 

Section 11.1           Duties of Trustee.   (a)  The Trustee, prior to the
occurrence of a Servicer Default and after the curing of all Servicer Defaults
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement.  If a Servicer Default has occurred (which has
not been cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person’s own affairs.

 

(b)        The
Trustee, upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee which
are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform on their face
to the requirements of this Agreement. 
The Trustee shall give prompt written notice to the Certificateholders
of any material lack of conformity of any such instrument to the applicable
requirements of this Agreement discovered by the Trustee which would entitle a
specified percentage of the Certificateholders to take any action pursuant to
this Agreement.

 

(c)        Subject
to subsection 11.1(a), no provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however,
that:

 

(i)      the Trustee shall
not be personally liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(ii)     the Trustee shall not be personally liable
with respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Investor Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement; provided that such direction is
delivered by the Holders of Investor Certificates evidencing the percentage of
the aggregate unpaid principal amount of Investor Certificates of all Series to

 

 

which such action relates required for
such action by the terms of this Agreement; and

 

(iii)    the Trustee shall not be charged with
knowledge of any failure by the Servicer referred to in clauses (a) and (b) of
Section 10.1 unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure or the Trustee receives written notice of such
failure from the Servicer, any Holders of Investor Certificates evidencing not
less than 25% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such failure that does not relate to all
Series, 25% of the aggregate unpaid principal amount of all Investor
Certificates of all Series to which such failure relates, or the
Enhancement Providers, if any, for all Series to which such failure
relates).

 

(d)        The
Trustee shall not be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers hereunder, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.

 

(e)        The
Trustee shall have no power to vary the corpus of the Trust, except as
expressly provided in this Agreement.

 

(f)         In
the event that the Paying Agent or the Transfer Agent and Registrar shall fail
to perform any obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated as soon as possible upon knowledge of a Responsible Officer thereof
and receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.

 

(g)        If
the Transferor has agreed to transfer any of its receivables (other than the
Receivables) to another Person, upon the written request of the Transferor, the
Trustee will enter into such intercreditor agreements with the transferee of
such receivables as are customary and necessary to separately identify the
rights of the Trust and such other Person in the Transferor’s receivables; provided
that the Trustee shall not be required to enter into any intercreditor
agreement which could adversely affect the interests of the Certificateholders
and, upon the request of the Trustee, the Transferor will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement, reasonably
requested by the Trustee.

 

Section 11.2           Certain Matters Affecting the
Trustee.   (a)  the Trustee may
rely on and shall be protected in acting on, or in refraining from acting in
accord with, any resolution, Officer’s Certificate, certificate of auditors or
any other certificate, statement,

 

 

instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement by the proper party
or parties;

 

(b)        the
Trustee may consult with counsel, and any advice of such counsel, or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;

 

(c)        the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement or any Enhancement Agreement, or to institute,
conduct or defend any litigation hereunder or thereunder or in relation to this
Agreement or any Enhancement Agreement, at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this Agreement or
any Enhancement Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligations, upon the occurrence of
any Servicer Default (which has not been cured) to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of care
and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs;

 

(d)        the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;

 

(e)        the
Trustee shall not be bound to make any investigation into the facts of matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond or other paper or
document, unless requested in writing to do so by Holders of Investor
Certificates evidencing more than 25% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any such matters that do not
relate to all Series, 25% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such matters relate);

 

(f)         the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or a custodian,
and the Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed with due care by it
hereunder; and

 

(g)        except
as may be required by subsection 11.1(a), the Trustee shall not be required to
make any initial or periodic examination of any documents or records related to
the Receivables or the Accounts for the purpose of establishing the presence or
absence of defects, the compliance by the Transferor with its representations
and warranties or for any other purpose.

 

Section 11.3           Trustee Not Liable for Recitals in
Certificates. 
The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the

 

 

Certificates (other than the certificate of authentication on the
Certificates). 
Except as set forth in Section 11.15, the Trustee
makes no representations as to the validity or sufficiency of this Agreement or
any Supplement or of the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable or related document.  The Trustee shall not be accountable for the
use or application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Transferor or the Holder of the Transferor Certificate in respect of the
Receivables or deposited in or withdrawn from the Collection Account, any Series Accounts
or any other accounts hereafter established to effectuate the transactions
contemplated by this Agreement and in accordance with the terms of this
Agreement.

 

Section 11.4           Trustee
May Own Certificates.  Subject
to Section 6.6, the Trustee in its individual or any other capacity may
become the owner or pledgee of Investor Certificates with the same rights as it
would have if it were not the Trustee.

 

Section 11.5           The Servicer To
Pay Trustee’s Fees and Expenses.  The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by it in the execution of the
trust hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and the Servicer will pay or reimburse the
Trustee (without reimbursement from the Collection Account or otherwise) upon
its request for all reasonable expenses or disbursements incurred or made by
the Trustee in accordance with any of the provisions of this Agreement or any
Enhancement Agreement (including the reasonable fees and expenses of its
agents, any co-trustee and counsel) except any such expense, disbursement or
advance as may arise from its own negligence, willful misconduct or bad faith
and except as provided in the following sentence.  If the Trustee is appointed Successor
Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by the
Trustee in its capacity as Successor Servicer.

 

The obligations of the Servicer under Section 8.4
and this Section 11.5 shall survive the termination of the Trust and the
resignation or removal of the Trustee.

 

Section 11.6           Eligibility Requirements for
Trustee.  The Trustee hereunder shall
at all times be a bank, trust company or a corporation organized and doing
business under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by Federal or state authority and maintain any credit or deposit
rating required by any Rating Agency (as of the date hereof “Baa3” for Moody’s).  If such bank or corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this Section 11.6,
the combined capital and surplus of such bank or corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.  In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 11.6, the Trustee shall resign immediately in the manner
and with the effect specified in Section 11.7.

 

 

Section 11.7           Resignation or Removal of Trustee.   (a)  The Trustee may at any time resign
and be discharged from the trust hereby created by giving written notice
thereof to the Servicer.  Upon receiving
such notice of resignation, the Transferor shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor
trustee.  If no successor trustee shall have
been so appointed and have accepted within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

 

(b)        If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 11.6 and shall fail to resign after written request
therefor by the Servicer or the Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, in
which event the Servicer shall remove the Trustee and promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.

 

(c)        Any
resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section 11.7 shall not become
effective until acceptance of appointment by the successor trustee as provided
in Section 11.8 and any liability of the Trustee arising hereunder shall
survive such appointment of a successor trustee.

 

Section 11.8           Successor Trustee.   (a)  Any successor trustee appointed as
provided in Section 11.7 shall execute, acknowledge and deliver to the
Transferor, to the Servicer and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein.  The predecessor Trustee shall deliver to the
successor trustee all documents and statements held by it hereunder, and the
Transferor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.

 

(b)        No
successor trustee shall accept appointment as provided in this Section 11.8
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 11.6.

 

(c)        Upon
acceptance of appointment by a successor trustee as provided in this Section 11.8,
such successor trustee shall provide notice of such succession hereunder to all
Investor Certificateholders and the Servicer shall provide such notice to each
Rating Agency and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement.

 

 

Section 11.9           Merger or Consolidation of Trustee.  Any Person into which the Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be eligible under the provisions of Section 11.6,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 11.10         Appointment
of Co-Trustee or Separate Trustee.

(a)  Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions
of this Section 11.10, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable; provided, however,
that the Trustee shall exercise due care in the appointment of any co-trustee.  No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 11.6 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 11.8.

 

(b)        Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:

 

(i)         all rights,
powers, duties and obligations conferred or imposed upon the Trustee shall be
conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the Trustee
joining in such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed (whether
as Trustee hereunder or as successor to the Servicer hereunder) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;

 

(ii)        no trustee
hereunder shall be personally liable by reason of any act or omission of any
other trustee hereunder; and

 

(iii)       the Trustee
may at any time accept the resignation of or remove any separate trustee or
co-trustee.

 

(c)        Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. 
Every instrument appointing any separate trustee or 

 

 

co-trustee shall refer to this Agreement and the conditions
of this Article XI.  Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. 
Every such instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.

 

(d)        Any
separate trustee or co-trustee may at any time constitute the Trustee its agent
or attorney-in-fact with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect to this Agreement on its
behalf and in its name.  If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

 

Section 11.11         Tax
Return.  In the event the Trust shall
be required to file tax returns, the Servicer shall prepare or shall cause to
be prepared any tax returns required to be filed by the Trust and shall remit
such returns to the Trustee for signature (if it is determined that the Trustee
is required to sign such returns) at least five days before such returns are
due to be filed; the Trustee shall promptly sign such returns and deliver such
returns after signature to the Servicer and such returns shall be filed by the
Servicer.  The Servicer in accordance
with the terms of each Supplement shall also prepare or shall cause to be
prepared all tax information required by law to be distributed to Investor
Certificateholders.  The Trustee upon
request, will furnish the Servicer with all such information known to the
Trustee as may be reasonably required in connection with the preparation of all
tax returns of the Trust.  In no event
shall the Trustee or the Servicer (except as provided in Section 7.4 or
8.4) be liable for any liabilities, costs or expenses of the Trust or the
Investor Certificateholders arising under any tax law, including Federal,
state, local or foreign income or excise taxes or any other tax imposed or
measured by income (or any interest or penalty with respect thereto or arising
from a failure to comply therewith).

 

Section 11.12         Trustee
May Enforce Claims Without Possession of Certificates.  All rights of action and claims under this
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee.  Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.

 

Section 11.13         Suits
for Enforcement.  If a Servicer
Default shall occur and be continuing, the Trustee, in its discretion may,
subject to the provisions of Sections 10.1 and 11.14, proceed to protect and
enforce its rights and the rights of the Certificateholders under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this

 

 

Agreement
or in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as the Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of the Trustee or the Certificateholders.

 

Section 11.14         Rights
of Certificateholders to Direct Trustee. 
Holders of Investor Certificates evidencing more than 50% of the
aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any remedy, trust or power that does not relate to all Series, 50%
of the aggregate unpaid principal amount of the Investor Certificates of all Series to
which such remedy, trust or power relates) shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee
relating to such proceeding; provided, however, that, subject to Section 11.1,
the Trustee shall have the right to decline to follow any such direction if the
Trustee being advised by counsel determines that the action so directed may not
lawfully be taken, or if the Trustee in good faith shall, by a Responsible
Officer or Responsible Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Certificateholders not parties to such direction;
and provided, further, that nothing in this Agreement shall
impair the right of the Trustee to take any action deemed proper by the Trustee
and which is not inconsistent with such direction.

 

Section 11.15         Representations
and Warranties of Trustee.  The
Trustee represents and warrants as of each Closing Date that:

 

(a)        the
Trustee is a national banking association organized, existing and in good
standing under the laws of the United States;

 

(b)       the
Trustee has full power, authority and right to execute, deliver and perform
this Agreement and each Supplement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement and
each Supplement; and

 

(c)        this
Agreement and each Supplement has been duly executed and delivered by the
Trustee and is a binding obligation of the Trustee enforceable against the
Trustee in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors’
rights in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).

 

Section 11.16         Maintenance
of Office or Agency.  The Trustee
will maintain at its expense an office or agency (the “Corporate Trust
Office”) where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served (a) in the City of New York,
in the case of Registered Certificates and Holders thereof, and (b) in
London or Luxembourg, in the case of Bearer Certificates and Holders thereof,
if and for so long as any Bearer Certificates are outstanding.  The corporate trust office of the Trustee
(the “Corporate Trust Office”) shall initially be located at Norwest

 

 

Bank
Minnesota, National Association, MAC N9311-161, Sixth and Marquette,
Minneapolis, Minnesota 55479.  The
Trustee will give prompt notice to the Servicer and to Investor Certificateholders
of any change in the location of the Certificate Register or any such office or
agency.

 

Section 11.17         Confidentiality.  Information provided by the Credit Card
Originator or the Transferor to the Trustee related to the transaction effected
hereunder, including all information related to the Obligors with respect to
the Receivables, and any computer software provided to the Trustee in
connection with the transaction effected hereunder or under any Supplement, in
each case whether in the form of documents, reports, lists, tapes, discs or any
other form, shall be “Confidential Information.”  The Trustee and its agents, representatives
or employees shall at all times maintain the confidentiality of all
Confidential Information and shall not, without the prior written consent of
the Credit Card Originator or the Transferor, as applicable, disclose to third
parties (including Certificateholders) or use such information, in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or under any Supplement or as required to fulfill an obligation of
the Trustee under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to the Trustee’s agents, representatives and employees who
need to know such Confidential Information to the extent required for the
purpose of fulfilling an obligation of the Trustee under this Agreement or
under any Supplement.  Notwithstanding
the above, Confidential Information may be disclosed to the extent required by
law or legal process, provided that the Trustee gives prompt written
notice to the Credit Card Originator or the Transferor, as applicable, of the
nature and scope of such disclosure.

 

ARTICLE XII

 

Termination

 

Section 12.1           Termination of Trust.  The Trust and the respective obligations and
responsibilities of the Transferor, the Servicer and the Trustee created hereby
(other than the obligation of the Trustee to make payments to Investor Certificateholders
as hereinafter set forth) shall terminate, except with respect to the duties
described in Sections 7.4, 8.4, 9.2 and 12.2(b), upon the earlier of (i) September 30,
2095 and (ii) the day following the Distribution Date on which the
Invested Amount and Enhancement Invested Amount for each Series is zero (provided
that the Transferor has delivered a written notice to the Trustee electing to
terminate the Trust).

 

Section 12.2           Final Distribution.   (a)  The Servicer shall give the
Trustee at least 30 days’ prior notice of the Distribution Date on which the
Investor Certificateholders of any Series or Class may surrender
their Investor Certificates for payment of the final distribution on and
cancellation of such Investor Certificates (or, in the event of a final
distribution resulting from the application of Section 2.6 or 10.1, notice
of such Distribution Date promptly after the Servicer has determined that a
final distribution will occur, if such determination is made less than 30 days
prior to such Distribution Date).  Such
notice shall be accompanied by an Officer’s Certificate setting forth the
information specified in Section 3.5 covering the period during the then
current calendar year through the date of

 

 

such
notice.  Not later than the fifth day of
the month in which the final distribution in respect of such Series or Class is
payable to Investor Certificateholders, the Trustee shall provide notice to
Investor Certificateholders of such Series or Class specifying (i) the
date upon which final payment of such Series or Class will be made
upon presentation and surrender of Investor Certificates of such Series or
Class at the office or offices therein designated, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable
to such payment date is not applicable, payments being made only upon
presentation and surrender of such Investor Certificates at the office or
offices therein specified (which, in the case of Bearer Certificates, shall be
outside the United States).  The Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying Agent
at the time such notice is given to Investor Certificateholders.

 

(b)        Notwithstanding
a final distribution to the Investor Certificateholders of any Series or Class (or
the termination of the Trust), except as otherwise provided in this paragraph,
all funds then on deposit in the Collection Account, the Special Funding
Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Paying Agent or the Trustee shall pay such
funds to such Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with the terms of any
relevant Enhancement Agreement).  In the
event that all such Investor Certificateholders shall not surrender their
Investor Certificates for cancellation within six months after the date specified
in the notice from the Trustee described in paragraph (a), the Trustee shall
give a second notice to the remaining such Investor Certificateholders to
surrender their Investor Certificates for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the case of
Bearer Certificates, shall be outside the United States).  If within one year after the second notice
all such Investor Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining such Investor
Certificateholders concerning surrender of their Investor Certificates, and the
cost thereof shall be paid out of the funds in the Collection Account or any Series Account
held for the benefit of such Investor Certificateholders.  The Trustee and the Paying Agent shall pay to
the Transferor any monies held by them for the payment of principal or interest
that remains unclaimed for two years. 
After payment to the Transferor, Investor Certificate-holders entitled
to the money must look to the Transferor for payment as general creditors
unless an applicable abandoned property law designates another Person.

 

(c)        In the
event that the Invested Amount with respect to any Series is greater than
zero on its Series Termination Date or such earlier date as is specified
in the related Supplement (after giving effect to deposits and distributions
otherwise to be made on such date), the Trustee will sell or cause to be sold
on such Series Termination Date, in accordance with the procedures and
subject to the conditions described in such Supplement, Principal Receivables
and the related Finance Charge Receivables (or, if a Tax Opinion is obtained,
interests therein) in an amount up to 110% of the Invested Amount with respect
to such Series on such date (after giving effect to such deposits and
distributions; provided, however, that in no event shall such
amount exceed an amount of Principal Receivables (and all associated Finance
Charge Receivables) equal to the sum of (i) the product of (A) the
Transferor’s Percentage, (B) the aggregate outstanding Principal
Receivables, and (C) a

 

 

fraction the numerator of which is the related Investor
Percentage of Collections of Finance Charge Receivables and the denominator of
which is the sum of all Investor Percentages with respect to Collections of
Finance Charge Receivables of all Series outstanding and (ii) the
Invested Amount of such Series).  The
proceeds from any such sale shall be allocated and distributed in accordance
with the terms of the applicable Supplement.

 

Section 12.3           Transferor’s Termination Rights.  Upon the termination of the Trust pursuant to
Section 12.1 and the surrender of the Transferor Certificate and any
Supplemental Certificate, the Trustee shall assign and convey to the Transferor
or its designee, without recourse, representation or warranty, all right, title
and interest of the Trust in and to the Receivables, whether then existing or
thereafter created, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof, except for amounts held by the
Trustee pursuant to subsection 12.2(b). 
The Trustee shall execute and deliver such instruments of transfer and assignment,
in each case without recourse, as shall be reasonably requested by the
Transferor to vest in the Transferor or its designee all right, title and
interest which the Trust had in and to the Receivables and such other related
assets.

 

Section 12.4           Defeasance.  Notwithstanding anything to the contrary in
this Agreement or any Supplement:

 

(a)        The
Transferor may at its option be discharged from its obligations hereunder with
respect to any Series or all outstanding Series (the “Defeased
Series”) on the date the applicable conditions set forth in subsection 12.4(c) are
satisfied (“Defeasance”); provided, however, that the
following rights, obligations, powers, duties and immunities shall survive with
respect to the Defeased Series until otherwise terminated or discharged
hereunder:  (i) the rights of
Holders of Investor Certificates of the Defeased Series to receive, solely
from the trust fund provided for in subsection 12.4(c), payments in respect of
principal of and interest on such Investor Certificates when such payments are
due; (ii) the Transferor’s obligations with respect to such Certificates
under Sections 6.4 and 6.5; (iii) the rights, powers, trusts, duties and
immunities of the Trustee, the Paying Agent and the Transfer Agent and
Registrar hereunder; and (iv) this Section 12.4

 

(b)        Subject
to subsection 12.4(c), the Transferor at its option may cause Collections
allocated to the Defeased Series and available to purchase additional
Receivables to be applied to purchase Eligible Investments rather than
additional Receivables.

 

(c)        The following
shall be the conditions to Defeasance under subsection 12.4(a):  (i) the Transferor irrevocably shall
have deposited or caused to be deposited with the Trustee, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for making the payments described below, (A) dollars
in an amount, or (B) Eligible Investments which through the scheduled
payment of principal and interest in respect thereof will provide, not later
than the due date of payment thereon, money in an amount, or (C) a
combination thereof, in each case sufficient to pay and discharge, and, which
shall be applied by the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding 

 

 

Investor Certificates of the Defeased Series on the
dates scheduled for such payments in this Agreement and the applicable
Supplements and all amounts owing to the Enhancement Providers, if any, with
respect to the Defeased Series; (ii) prior to any exercise of its right
pursuant to this Section 12.4 with respect to a Defeased Series to
substitute money or Eligible Investments for Receivables, the Transferor shall
have delivered to the Trustee a Tax Opinion with respect to such deposit and
termination of obligations and an Opinion of Counsel to the effect that such
deposit and termination of obligations will not result in the Trust being
required to register as an “investment company” within the meaning of the
Investment Company Act; (iii) the Transferor shall have delivered to the
Trustee and each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement an Officer’s Certificate of the Transferor stating that the
Transferor reasonably believes that such deposit and termination of obligations
will not, based on the facts known to such officer at the time of such
certification, then cause an Early Amortization Event or any event that, with
the giving of notice or the lapse of time, would constitute an Early
Amortization Event to occur with respect to any Series; and (iv) the
Rating Agency Condition has been satisfied.

 

ARTICLE XIII

 

Miscellaneous Provisions

 

Section 13.1           Amendment; Waiver of Past Defaults.   (a)  This Agreement or any Supplement
may be amended from time to time (including, without limitation, in connection
with (i) adding covenants, restrictions or conditions of the Transferor,
such further covenants, restrictions or conditions as its Board of Directors
and the Trustee shall consider to be for the benefit or protection of the
Investor Certificateholders, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions or
conditions a default or Early Amortization Event permitting the enforcement of
all or any of the several remedies provided in this Agreement as herein set
forth; provided, however, that in respect of any such additional
covenant, restriction or condition such amendment may provide for a particular
period of grace after default or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default, (ii) curing any ambiguity or correcting or supplementing any
provision contained herein or in any Supplement which may be defective or inconsistent
with any other provision contained herein or in any Supplement or to surrender
any right or power conferred upon the Transferor, (iii) the issuance of a
Supplemental Certificate or Participation, (iv) the addition of a
Participation Interest to the Trust, (v) the assumption by another entity,
in accordance with the provisions of this Agreement, of the Transferor’s
obligations hereunder, (vi) the provision of additional Enhancement for
the benefit of Certificateholders of any Series by the Servicer, the
Transferor and the Trustee without the consent of any of the
Certificateholders, (vii) enabling the Trust or a portion thereof to elect
to qualify as a FASIT (or comparable tax entity for the securitization of
financial assets) in accordance with the Code or (viii) adding any
provision to, changing in any manner or eliminating any of the provisions of
this Agreement or any Supplement or modifying in any manner the rights of
Certificateholders of any Series then issued and outstanding, provided,
in each case, that (x) the Transferor shall have delivered to the Trustee
an Officer’s Certificate to the effect that the Transferor

 

 

reasonably
believes that such action shall not adversely affect in any material respect
the interests of any Investor Certificateholder, (y) except with respect
to clauses (i) and (ii), the Rating Agency Condition shall have been
satisfied with respect to any such amendment and (z) a Tax Opinion is
delivered in connection with any such amendment.  The designation of additional Transferors
pursuant to Section 2.12 shall be subject to this Section 13.1 only
to the extent that the supplement to this Agreement providing for such
designation amends any of the terms of this Agreement.

 

(b)        This
Agreement or any Supplement may also be amended from time to time by the
Servicer, the Transferor and the Trustee, with the consent of the Holders of
Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid
principal amount of the Investor Certificates of all adversely affected Series,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Investor Certificateholders; provided,
however, that no such amendment shall (i) reduce in any manner the
amount of or delay the timing of any distributions to be made to Investor
Certificateholders or deposits of amounts to be so distributed or the amount
available under any Enhancement without the consent of each affected Investor
Certificateholder (provided that any amendment of the terms of an Early
Amortization Event shall not be deemed to be within the scope of this clause
(i)), (ii) change the definition of or the manner of calculating the
interest of any Investor Certificateholder without the consent of each affected
Investor Certificateholder or (iii) reduce the aforesaid percentage
required to consent to any such amendment without the consent of each Investor
Certificateholder.  Any amendment to be
effected pursuant to this paragraph shall be deemed to adversely affect all
outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an Opinion of Counsel for the Transferor, addressed
and delivered to the Trustee, adversely affect in any material respect the
interests of any Investor Certificateholder of such Series.  The Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Trustee’s rights, duties or
immunities under this Agreement or otherwise.

 

(c)        Promptly
after the execution of any such amendment or consent (other than an amendment
pursuant to paragraph (a)), the Trustee shall furnish notification of the
substance of such amendment to each Investor Certificateholder, and the
Servicer shall furnish notification of the substance of such amendment to each
Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant
to the relevant Supplement.

 

(d)        It
shall not be necessary for the consent of Investor Certificateholders under
this Section 13.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof.  The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Investor Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.

 

(e)        Any
Supplement executed in accordance with the provisions of Section 6.3 shall
not be considered an amendment to this Agreement for the purposes of this Section 13.1.

 

 

(f)         The
Holders of Investor Certificates evidencing more than 66-2/3% of the aggregate
unpaid principal amount of the Investor Certificates of each Series, or, with
respect to any Series with two or more Classes, of each Class (or,
with respect to any default that does not relate to all Series, 66-2/3% of the
aggregate unpaid principal amount of the Investor Certificates of each Series to
which such default relates or, with respect to any such Series with two or
more Classes, of each Class) may, on behalf of all Certificateholders, waive
any default by the Transferor or the Servicer in the performance of their
obligations hereunder (other than any event which would result in an Early
Amortization Event as described in Section 9.1 of this Agreement or the
failure to add Receivables in Additional Accounts when required to do so
pursuant to subsection 2.9(a)(i)) and its consequences, except the failure to
make any distributions required to be made to Investor Certificateholders or to
make any required deposits of any amounts to be so distributed.  Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement.  No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.

 

Section 13.2           Protection of Right, Title and
Interest to Trust Assets.   (a) 
The Transferor shall cause this Agreement, all amendments and supplements
hereto and all financing statements and continuation statements and any other
necessary documents covering the Certificateholders, and the Trustee’s right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders and the Trustee hereunder
to all property comprising the Trust Assets. 
The Transferor shall deliver to the Trustee file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.

 

(b)        Within
30 days after the Transferor makes any change in its name, identity or
corporate structure which would make any financing statement or continuation
statement filed in accordance with paragraph (a) seriously misleading
within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, the Transferor shall give the Trustee notice of any such change and
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust’s security interest in the Receivables and
the proceeds thereof.

 

(c)        The
Transferor and the Servicer will give the Trustee prompt notice of any
relocation of any office from which it services Receivables or keeps records
concerning the Receivables or of its principal executive office and whether, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall file such financing
statements or amendments as may be necessary to perfect or to continue the
perfection of the Trust’s security interest in the Receivables and the proceeds
thereof.  The Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive offices within the United States.

 

 

(d)        The
Transferor will deliver to the Trustee and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement: 
(i) upon the execution and delivery of each amendment of this
Agreement or any Supplement, an Opinion of Counsel to the effect specified in Exhibit H-1;
(ii) on each Addition Date on which any Supplemental Accounts are to be
designated as Accounts pursuant to subsection 2.9(a) or (b), an Opinion of
Counsel substantially in the form of Exhibit H-2, and on each Addition
Date on which any Participation Interests are to be included in the Trust
pursuant to subsection 2.9(a) or (b), an Opinion of Counsel covering the
same substantive legal issues addressed by Exhibit H-2 but conformed to
the extent appropriate to relate to Participation Interests; and (iii) on
or before March 31 of each year, beginning with March 31, 1996, an
Opinion of Counsel substantially in the form of Exhibit H-2.

 

Section 13.3           Limitation on Rights of
Certificateholders.   (a)  The
death or incapacity of any Certificateholder (other than the Transferor) shall
not operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholders’ legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.

 

(b)        No
Investor Certificateholder shall have any right to vote (except as expressly
provided in this Agreement) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor
shall any Investor Certificateholder be under any liability to any third person
by reason of any action by the parties to this Agreement pursuant to any
provision hereof.

 

(c)        No
Investor Certificateholder shall have any right by virtue of any provisions of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Investor
Certificateholder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any such
action, suit or proceeding that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all Series to
which such action, suit or proceeding relates) shall have made, written request
to the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Investor Certificateholder
with every other Investor Certificateholder and the Trustee, that no one or
more Investor Certificateholders shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of Holders of any other of the
Investor Certificates, or to obtain or seek to obtain priority over or
preference to any other Investor Certificateholder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Investor Certificateholders except as
otherwise expressly provided in this Agreement. 
For the protection and

 

 

enforcement
of the provisions of this Section 13.3, each and every Investor Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

 

Section 13.4         GOVERNING
LAW; JURISDICTION.  THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.  Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Delaware and of the federal courts sitting in the
State of Delaware for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts) and further agrees that
service of any process, summons, notice or document by prepaid certified mail
with proof of mailing receipt validated by the United States Postal Service to
its respective address set forth in Section 13.5 (or to the agent of such
party appointed and maintained in the State of Delaware as such party’s agent
for acceptance of legal process) shall be effective service of process for any
litigation brought against it in any such court.  Each of the parties hereto hereby irrevocably
and unconditionally waives any objection to the laying of venue of any
litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of Delaware or of the federal courts sitting
in the State of Delaware and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such
litigation brought in any such court has been brought in an inconvenient forum.

 

Section 13.5           Notices, Payments.   (a)  All demands notices, instructions,
directions and communications (collectively, “Notices”) under this
Agreement shall be in writing and shall be deemed to have been duly given if
personally delivered at, mailed by registered mail, return receipt requested,
or sent by facsimile transmission (i) in the case of the Transferor, to
Target Receivables Corporation, 80 South Eighth Street, 14th Floor, Suite 1401,
Minneapolis, Minnesota 55402, Attention Treasurer (facsimile no. (612)
370-5508), (ii) in the case of the Servicer to Retailers National Bank,
3901 West 53rd Street, Sioux Falls, South Dakota 57106, Attention: Vice
President and Manager (facsimile no. (605) 362-2028), (iii) in the case of
the Trustee, to Norwest Bank Minnesota, National Association, MAC N9311-161,
Sixth and Marquette, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services/Asset-Backed Administration (facsimile no. (612) 667-3464), (iv) in
the case of Moody’s, to 99 Church Street, New York, New York 10007, Attention of
ABS Monitoring Department 4th Floor (facsimile no. (212) 553-4600), (v) in
the case of Standard & Poor’s, to 55 Water Street, New York, New York
10041, Attention of Asset Backed Group (facsimile no. (212) _________), (vi) in
the case of the Paying Agent or the Transfer Agent and Registrar, to Norwest
Bank Minnesota, National Association, 

MAC N9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services/Asset-Backed Administration (facsimile no. (612)
667-3464) and (vii) to any other Person as specified in any Supplement;
or, as to each party, at such other address or facsimile number as shall be
designated by such party in a written notice to each other party.

 

 

(b)        Any
Notice required or permitted to be given to a Holder of Registered Certificates
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. 
No Notice shall be required to be mailed to a Holder of Bearer
Certificates or Coupons but shall be given as provided below.  Any Notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Investor Certificateholder receives such Notice.  In addition, (a) if and so long as any Series or
Class is listed on the Luxembourg Stock Exchange and such exchange shall
so require, any Notice to Investor Certificateholders shall be published in an
Authorized Newspaper of general circulation in Luxembourg within the time
period prescribed in this Agreement and (b) in the case of any Series or
Class with respect to which any Bearer Certificates are outstanding, any
Notice required or permitted to be given to Investor Certificateholders of such
Series or Class shall be published in an Authorized Newspaper within
the time period prescribed in this Agreement.

 

Section 13.6           Rule 144A Information.  For so long as any of the Investor
Certificates of any Series or Class are “restricted securities”
within the meaning of Rule 144(a)(3) under the Act, each of the
Transferor, the Trustee, the Servicer and any Enhancement Provider agree to
cooperate with each other to provide to any Investor Certificateholders of such
Series or Class and to any prospective purchaser of Certificates
designated by such Investor Certificateholder, upon the request of such
Investor Certificateholder or prospective purchaser, any information required
to be provided to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Act.

 

Section 13.7           Severability of Provisions.  If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then such provisions shall be deemed severable from
the remaining provisions of this Agreement and shall in no way affect the
validity or enforceability of the remaining provisions or of the Certificates
or the rights of the Certificateholders.

 

Section 13.8           Assignment.  Notwithstanding anything to the contrary
contained herein, except as provided in Article VIII, this Agreement may
not be assigned by the Servicer without the prior consent of Holders of
Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid
principal amount of all outstanding Investor Certificates.

 

Section 13.9           Certificates Nonassessable and
Fully Paid.  It is the intention of
the parties to this Agreement that the Certificateholders shall not be
personally liable for obligations of the Trust, that the interests in the Trust
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.2 are and
shall be deemed fully paid.

 

Section 13.10         Further
Assurances.  The Transferor and the
Servicer agree 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
Trustee more fully to effect the 

 

 

purposes
of this Agreement, including the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.

 

Section 13.11         Nonpetition
Covenant.  Notwithstanding any prior
termination of this Agreement, the Servicer, the Trustee, the Transferor, each
Enhancement Provider, if any, each Holder of a Supplemental Certificate and
each Holder of a Participation shall not, prior to the date which is one year
and one day after the termination of this Agreement with respect to the Trust
or the Transferor, acquiesce, petition or otherwise invoke or cause the Trust
or the Transferor to invoke the process of any Governmental Authority for the
purpose of commencing or sustaining a case against the Trust or the Transferor
under any Federal or state bankruptcy, insolvency or similar law or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or the Transferor or any substantial part of
their respective property or ordering the winding-up or liquidation of the
affairs of the Trust or the Transferor.

 

Section 13.12         No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of the Trustee or
the Certificateholders, any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges provided under this Agreement are cumulative
and not exhaustive of any rights, remedies, powers and privileges provided by
law.

 

Section 13.13         Counterparts.
 This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.

 

Section 13.14         Third-Party
Beneficiaries.  This Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Enhancement Provider (to the extent provided in this
Agreement and the related Supplement) and their respective successors and
permitted assigns.  Except as otherwise
expressly provided in this Agreement (including, without limitation, Section 7.4),
no other Person will have any right or obligation hereunder.

 

Section 13.15         Actions
by Certificateholders.   (a) 
Wherever in this Agreement a provision is made that an action may be taken or a
Notice given by Certificateholders, such action or Notice may be taken or given
by any Certificateholder, unless such provision requires a specific percentage
of Certificateholders.

 

(b)        Any
Notice, request, authorization, direction, consent, waiver or other act by the
Holder of a Certificate shall bind such Holder and every subsequent Holder of
such Certificate and of any Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.

 

 

Section 13.16         Merger
and Integration.  Except as
specifically stated otherwise herein, this Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended,
waived or supplemented except as provided herein.

 

Section 13.17         Headings.  The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.

 

Section 13.18         No
Proceedings.  Each of the Trustee,
the Transferor, the Servicer, and each Certificateholder by acceptance of its
Certificate, hereby agrees that it will not institute against the Holder of the
Transferor Certificate, or join any other Person in instituting against the
Holder of the Transferor Certificate, on account of its ownership of the
Transferor Certificate or its obligations hereunder, any bankruptcy,
insolvency, liquidation, readjustment of debt, marshalling of assets or any
similar proceeding so long as there shall not have elapsed one year plus
one day since the last day on which any Investor Certificates shall have been
outstanding.

 

 

IN WITNESS WHEREOF, the
Transferor, the Servicer and the Trustee have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

 

 

	
   

  	
  TARGET RECEIVABLES

  
	
   

  	
    CORPORATION,
  as Transferor,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Stephen C. Kowalke

  
	
   

  	
   

  	
  Name: Stephen C. Kowalke

  
	
   

  	
   

  	
  Title: Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RETAILERS NATIONAL BANK,

  
	
   

  	
    as Servicer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Stephen C. Kowalke

  
	
   

  	
   

  	
  Name: Stephen C. Kowalke

  
	
   

  	
   

  	
  Title: Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORWEST BANK MINNESOTA,

  
	
   

  	
     NATIONAL
  ASSOCIATION, as

  
	
   

  	
     Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ S. Dignan

  	
   

  
	
   

  	
   

  	
  Name: S. Dignan

  
	
   

  	
   

  	
  Title: Corporate Trust
  Officer

  
					

 

 

EXHIBIT A

 

 

FORM OF
TRANSFEROR CERTIFICATE

 

THIS TRANSFEROR CERTIFICATE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NEITHER THIS TRANSFEROR CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS.

 

THIS TRANSFEROR CERTIFICATE
IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR
CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

 

No. R-1

One
Unit

 

 

TARGET
CREDIT CARD MASTER TRUST

TRANSFEROR
CERTIFICATE

 

THIS
CERTIFICATE REPRESENTS AN INTEREST

IN
CERTAIN ASSETS OF THE

TARGET
CREDIT CARD MASTER TRUST

 

Evidencing an interest in a
trust, the corpus of which consists primarily of receivables generated from
time to time in the ordinary course of business in a portfolio of open end
credit card accounts owned by Retailers National Bank.

 

(Not
an interest in or obligation of the Transferor or any affiliate thereof)

 

This certifies that TARGET
RECEIVABLES CORPORATION is the registered owner of a fractional interest in the
assets of a trust (the “Trust”) not allocated to the Certificateholders’
Interest, the interest of any Holder of a Supplemental Certificate or the
interest of any holder of a Participation pursuant to the Amended and Restated
Pooling and Servicing Agreement dated as of April 28, 2000 (as amended and
supplemented, the “Agreement”), among Target Receivables Corporation, a
Minnesota corporation, as transferor (the “Transferor”), Retailers
National Bank, a national banking association, as Servicer, and Norwest Bank
Minnesota, National Association, a national banking association, as trustee
(the “Trustee”).  The corpus of
the Trust consists of (i) a portfolio of all receivables (the “Receivables”)
existing in the open end credit card accounts identified under the Agreement
from time to time (the “Accounts”), (ii) all Receivables generated
under the Accounts from time to time thereafter, (iii) funds

 

 

collected or to be collected
from accountholders in respect of the Receivables, (iv) all funds which
are from time to time on deposit in the Collection Account, the Special Funding
Account and in the Series Accounts, (v) the benefits of any
Enhancements issued and to be issued by Enhancement Providers, if any, with
respect to one or more Series of Investor Certificates and (vi) all
other assets and interests constituting the Trust.  Although a summary of certain provisions of
the Agreement is set forth below, this Certificate does not purport to
summarize the Agreement and reference is made to the Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the
Trustee.  A copy of the Agreement may be
requested from the Trustee by writing to the Trustee at Norwest Center, Sixth
and Marquette, Minneapolis, Minnesota 55479, Attention: Joseph Travis.  To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement.

 

This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended and supplemented from time to time, the Holder
of this Certificate by virtue of the acceptance hereof assents and is bound.

 

The Receivables consist of
Principal Receivables which arise generally from the purchase of merchandise
and services and Finance Charge Receivables which arise generally from Periodic
Finance Charges, Late Fees and other fees and charges with respect to the
Accounts.

 

This Certificate is the
Transferor Certificate, which represents the Transferor’s interest in certain
assets of the Trust, including the right to receive a portion of the
Collections and other amounts at the times and in the amounts specified in the
Agreement.  The aggregate interest
represented by the Transferor Certificate at any time in the Receivables in the
Trust shall not exceed the Transferor’s Interest at such time.  In addition to the Transferor Certificate, (i) Investor
Certificates will be issued to investors pursuant to the Agreement, which will
represent the Certificateholders’ Interest, (ii) Supplemental Certificates
may be issued pursuant to the Agreement, which will represent that portion of
the Transferor’s Interest not allocated to the Holder of the Transferor
Certificate and (iii) Participations may be issued pursuant to the
Agreement, which will represent an undivided ownership interest in the
Receivables.  This Transferor Certificate
shall not represent any interest in the Collection Account, the Special Funding
Account or the Series Accounts, except as expressly provided in the
Agreement, or any Enhancements.

 

The Transferor has entered
into the Agreement, and this Certificate is issued, with the intention that,
for Federal, state and local income and franchise tax purposes only, the
Investor Certificates (except, Transferor Retained Certificates which are held
by the Transferor) will qualify as debt secured by the Receivables.  The Transferor, by entering into the
Agreement and the Holder of the Transferor Certificate by acceptance of this
Transferor Certificate, agree to treat such Investor Certificates for Federal,
state and local income and franchise tax purposes as debt under applicable tax
law.

 

 

Subject to certain
conditions and exceptions specified in the Agreement, the obligations created
by the Agreement and the Trust created thereby shall terminate upon the
earliest of (i) September 30, 2095 and (ii) the day following
the Distribution Date on which the Invested Amount and Enhancement Invested
Amount for each Series is zero (provided the Transferor has
delivered a written notice to the Trustee electing to terminate the Trust).

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trustee, by
manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.

 

IN WITNESS WHEREOF, the
Holder of the Transferor Certificate has caused this Certificate to be duly
executed.

 

 

	
   

  	
   

  	
  TARGET RECEIVABLES

  CORPORATION,

  
	
   

  	
   

  	
     as
  Transferor,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
   

  
									

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is the Transferor
Certificate described in the within-mentioned Agreement.

 

	
  NORWEST BANK MINNESOTA,
  NATIONAL ASSOCIATION,

  	
   

  
	
     as
  Trustee,

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
	
   

  	
   

  
	
  Or

  	
   

  
	
   

  	
   

  
	
  By  [

  	
   

  	
  ],

  	
   

  
	
   

  	
  as Authenticating Agent

  	
   

  
	
   

  	
  for the Trustee,

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
							

 

 

EXHIBIT B

 

 

FORM OF ASSIGNMENT OF
RECEIVABLES IN SUPPLEMENTAL ACCOUNTS

 

(As required by Section 2.9
of the Amended and 

Restated Pooling and Servicing Agreement)

 

ASSIGNMENT No.           OF RECEIVABLES IN  SUPPLEMENTAL ACCOUNTS dated as of                     ,
        (1) by and among
TARGET RECEIVABLES CORPORATION, a Minnesota corporation, as Transferor (the “Transferor”),
RETAILERS NATIONAL BANK, as Servicer (the “Servicer”), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association (the “Trustee”),
pursuant to the Amended and Restated Pooling and Servicing Agreement referred
to below.

 

WITNESSETH

 

WHEREAS the Transferor, the Servicer and the Trustee
are parties to the Amended and Restated Pooling and Servicing Agreement dated
as of April 28, 2000 (as may be amended and supplemented from time to
time, the “Agreement”);

 

WHEREAS, pursuant to the Agreement, the Transferor
wishes to designate Supplemental Accounts owned by the Credit Card Originator
to be included as Accounts and to convey the Receivables of such Supplemental
Accounts, whether now existing or hereafter created, to the Trust as part of
the corpus of the Trust (as each such term is defined in the Agreement); and

 

WHEREAS the Trustee is willing to accept such
designation and conveyance subject to the terms and conditions hereof;

 

NOW, THEREFORE, the Transferor, the Servicer and the
Trustee hereby agree as follows:

 

1.             Defined Terms. 
All capitalized terms used herein shall have the meanings ascribed to
them in the Agreement unless otherwise defined herein.

 

“Addition Date” shall mean, with respect to the
Supplemental Accounts designated hereby,                       ,
        .

 

“Addition Cut-Off Date” shall mean, with respect to
the Supplemental Accounts designated hereby,                       ,
        .

 

2.             Designation of Supplemental Accounts.  On or before the Document Delivery Date, the
Transferor will deliver to the Trustee a computer file,

 

1       To be dated as of the applicable Addition
Date.

 

 

microfiche list or printed
list containing a true and complete schedule identifying all such Supplemental
Accounts specifying for each such Account, as of the Addition Cut-Off Date, its
account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account, which
computer file, microfiche list or printed list shall supplement any computer
file, microfiche list or printed list previously delivered to the Trustee.

 

3.             Conveyance of Receivables.  The Transferor does hereby transfer, assign,
set over and otherwise convey to the Trust, for the benefit of the
Certificateholders, all its right, title and interest in, to and under the
Receivables of such Supplemental Accounts existing at the close of business on
the Addition Date and thereafter created from time to time until the
termination of the Trust, all monies due or to become due and all amounts
received with respect thereto and all proceeds (including “proceeds” as defined
in the UCC) thereof.  The foregoing does
not constitute and is not intended to result in the creation or assumption by
the Trust, the Trustee, any Investor Certificateholder or any Enhancement
Provider of any obligation of the Servicer, the Transferor, the Credit Card
Originator or any other Person in connection with the Accounts, the Receivables
or under any agreement or instrument relating thereto, including any obligation
to Obligors, merchant banks, merchants clearance systems or insurers.

 

The Transferor agrees to record and file, at its own
expense, financing statements (and continuation statements when applicable)
with respect to the Receivables now in Supplemental Accounts, meeting the
requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect, and maintain perfection of, the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of each such
financing statement or other evidence of such filing to the Trustee on or prior
to the Addition Date.  The Trustee shall
be under no obligation whatsoever to file such financing or continuation
statements or to make any other filing under the UCC in connection with such
assignment.

 

In connection with such assignment, the Transferor
further agrees, at its own expense, on or prior to the date of this Assignment,
to cause the Credit Card Originator to indicate in the appropriate computer
files that Receivables created in connection with the Supplemental Accounts and
designated hereby have been conveyed to the Trust pursuant to the Agreement and
this Assignment for the benefit of the Certificateholders.

 

The Transferor does hereby grant to the Trustee a
security interest in all of its right, title and interest in and to the
Receivables now existing and hereafter created in the Supplemental Accounts,
all monies due or to become due and all amounts received with respect thereto
and all proceeds (including “proceeds” as defined in the UCC) thereof.  This Assignment constitutes a security
agreement under the UCC.

 

4.             Acceptance by Trustee.  The Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Trust pursuant to
Section 3 of this

 

 

Assignment, and declares
that it shall maintain such right, title and interest, upon the trust set forth
in the Agreement, for the benefit of all Certificateholders.  The Trustee further acknowledges that, prior
to or simultaneously with the execution and delivery of this Assignment, the
Transferor delivered to the Trustee the computer file, microfiche list or
printed list described in Section 2 of this Assignment.

 

5.            Representations and Warranties of the Transferor.  The Transferor hereby represents and warrants
to the Trustee, on behalf of the Trust, as of the date of this Assignment and
as of the Addition Date that:

 

(a)        Legal,
Valid and Binding Obligation.  This
Assignment constitutes a legal, valid and binding obligation of the Transferor
enforceable against the Transferor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors’ rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);

 

(b)        Eligibility
of Accounts.  Each Supplemental
Account designated hereby is an Eligible Account;

 

(c)        Insolvency.  As of each of the Addition Cut-Off Date and
the Addition Date, no Insolvency Event with respect to the Credit Card
Originator or the Transferor has occurred and the transfer by the Transferor of
Receivables arising in the Supplemental Accounts to the Trust has not been made
in contemplation of the occurrence thereof;

 

(d)        Early
Amortization Event.  The Transferor
reasonably believes that (A) the addition of the Receivables arising in
the Supplemental Accounts will not, based on the facts known to the Transferor,
then or thereafter cause an Early Amortization Event to occur with respect to
any Series and (B) no selection procedure was utilized by the
Transferor which would result in the selection of Supplemental Accounts (from
among the available Eligible Accounts owned by the Credit Card Originator) that
would be materially less favorable to the interests of the Investor
Certificateholders of any Series as of the Addition Date than a random
selection;

 

(e)        Security
Interest.  This Assignment
constitutes a valid transfer and assignment to the Trust of all right, title
and interest of the Transferor in and to the Receivables and other Trust Assets
conveyed to the Trust by the Transferor and all monies due or to become due and
all amounts received with respect thereto and the proceeds as defined in the
UCC, and this Assignment constitutes a grant of a “security interest” (as
defined in the UCC) in such property to the Trust, which, in the case of
existing Receivables and the proceeds thereof, is enforceable upon execution
and delivery of this Assignment, and which will be enforceable with respect to
such Receivables hereafter created and the proceeds thereof upon such
creation.  Upon the filing of the
financing statements described in Section 3 of this Assignment and, in the
case of the Receivables hereafter created and the proceeds thereof, upon the
creation thereof, the

 

 

Trust shall
have a first priority security interest in such property except for Liens
permitted under Section 2.7(b) of the Agreement;

 

(f)         No
Conflict.  The execution and delivery
by the Transferor of this Assignment, the performance of the transactions
contemplated by this Assignment and the fulfillment of the terms hereof
applicable to the Transferor, will not conflict with or violate any
Requirements of Law applicable to the Transferor or conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Transferor is a party or by which it or its properties are bound;

 

(g)        No
Proceedings.  There are no
proceedings or investigations, pending or, to the best knowledge of the
Transferor, threatened against the Transferor before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality (i) asserting
the invalidity of this Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Assignment, (iii) seeking
any determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of its
obligations under this Assignment, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to affect adversely the
income tax attributes of the Trust under the Federal or applicable state income
or franchise tax systems; and

 

(h)        All
Consents.  All authorizations,
consents, orders or approvals or other actions of any Person or of any court or
other governmental authority required to be obtained by the Transferor in
connection with the execution and delivery of this Assignment by the Transferor
and the performance of the transactions contemplated by this Assignment by the
Transferor, have been obtained.

 

6.             Ratification of Agreement.  As supplemented by this Assignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one and
the same instrument.

 

7.             Counterparts. 
This Assignment may be executed in two or more counterparts, and by
different parties on separate counterparts, each of which shall be an original,
but all of which shall constitute one and the same instrument.

 

8.             GOVERNING LAW. 
THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

 

 

IN WITNESS WHEREOF, the Transferor, the Servicer and
the Trustee have caused this Assignment to be duly executed by their respective
officers as of the day and year first above written.

 

 

	
   

  	
  TARGET RECEIVABLES

  CORPORATION,

  
	
   

  	
     as
  Transferor,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RETAILERS NATIONAL BANK,

  
	
   

  	
     as
  Servicer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORWEST BANK MINNESOTA, 

  NATIONAL ASSOCIATION,

  
	
   

  	
     as
  Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

EXHIBIT C

 

 

FORM OF REASSIGNMENT OF
RECEIVABLES IN REMOVED ACCOUNTS

 

(As required by Section 2.10
of the Amended

and Restated Pooling and Servicing Agreement)

 

REASSIGNMENT No.             OF RECEIVABLES dated as of                     ,
      ,(2) by and among TARGET
RECEIVABLES CORPORATION, a Minnesota corporation, as Transferor (the “Transferor”),
RETAILERS NATIONAL BANK, a national banking association, as Servicer (the “Servicer”)
and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as trustee (the “Trustee”), pursuant to the Amended and
Restated Pooling and Servicing Agreement referred to below.

 

WITNESSETH:

 

WHEREAS the Transferor, the Servicer and the Trustee
are parties to the Amended and Restated Pooling and Servicing Agreement dated
as of April 28, 2000 (as may be amended and supplemented from time to
time, the “Agreement”);

 

WHEREAS pursuant to the Agreement, the Transferor
wishes to remove from the Trust all Receivables in certain designated Accounts
owned by the Credit Card Originator (the “Removed Accounts”) and to
cause the Trustee to reconvey the Receivables of such Removed Accounts, whether
now existing or hereafter created, from the Trust to the Transferor; and

 

WHEREAS the Trustee is willing to accept such
designation and to reconvey the Receivables in the Removed Accounts subject to
the terms and conditions hereof;

 

NOW, THEREFORE, the Transferor, the Servicer and the
Trustee hereby agree as follows:

 

1.             Defined Terms. 
All terms defined in the Agreement and used herein shall have such
defined meanings when used herein, unless otherwise defined herein.

 

“Removal Date” shall mean, with respect to
the Removed Accounts designated hereby,                             ,        .

 

“Removal Notice Date” shall mean, with
respect to the Removed Accounts,                             ,
        .

 

2   To be dated as of the Removal Date.

 

2.             Designation of Removed Accounts.  On or before the date that is 10 Business
Days after the Removal Date, the Transferor will deliver to the Trustee a
computer file, microfiche list or printed list containing a true and complete
schedule identifying all Accounts the Receivables of which are being removed
from the Trust, specifying for each such Account, as of the Removal Notice
Date, its account number, the aggregate amount outstanding in such Account and
the aggregate amount of Principal Receivables in such Account, which computer
file, microfiche list or printed list shall supplement any computer file,
microfiche list or printed list previously delivered to the Trustee pursuant to
the Agreement.

 

3.             Conveyance of Receivables.  (a)  The Trustee does hereby transfer,
assign, set over and otherwise convey to the Transferor, without recourse, on
and after the Removal Date, all right, title and interest of the Trust in, to
and under the Receivables existing at the close of business on the Removal Date
and thereafter created from time to time in the Removed Accounts designated
hereby, all monies due or to become due and all amounts received with respect
thereto and all proceeds thereof.

 

                (b) 
In connection with such transfer, the Trustee agrees to execute and deliver to
the Transferor on or prior to the date this Reassignment is delivered,
applicable termination statements with respect to the Receivables existing at
the close of business on the Removal Date and thereafter created from time to
time in the Removed Accounts reassigned hereby and the proceeds thereof
evidencing the release by the Trust of its interest in the Receivables in the
Removed Accounts, and meeting the requirements of applicable state law, in such
manner and such jurisdictions as are necessary to terminate such interest.

 

4.            Representations and Warranties of the Transferor.  The Transferor hereby represents and warrants
to the Trustee, on behalf of the Trust, as of the Removal Date:

 

(a)           Legal, Valid and Binding Obligation.  This Reassignment constitutes a legal, valid
and binding obligation of the Transferor enforceable against the Transferor, in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors’ rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);

 

(b)           Early Amortization Event.  The Transferor reasonably believes that (A) the
removal of the Receivables existing in the Removed Accounts will not, based on
the facts known to the Transferor, then or thereafter cause an Early
Amortization Event to occur with respect to any Series and (B) no
selection procedure believed by the Transferor to be materially adverse to the
interests of the Investor Certificateholders has been used in removing Removed
Accounts from among any pool of Accounts or Participations of a similar type as
of the Removal Date;

 

 

(c)           List of Removed Accounts.  The list of Removed Accounts delivered
pursuant to Section 2.10(c) of the Agreement, as of the Removal Date,
is true and complete in all material respects; and

 

(d)           Defaulted Receivables.  No selection procedure was utilized by the
Transferor with the intent to include a disproportionately higher level of Defaulted
Receivables in the Removed Accounts than exist in the Accounts or to remove
Accounts for the intended purpose of mitigating losses to the Trust.

 

5.             Ratification of Agreement.  As supplemented by this Reassignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Reassignment shall be read, taken and construed as one and
the same instrument.

 

6.             Counterparts. 
This Reassignment may be executed in two or more counterparts, and by
different parties on separate counterparts, each of which shall be an original,
but all of which shall constitute one and the same instrument.

 

GOVERNING LAW. 
THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

 

 

IN WITNESS WHEREOF, the Transferor, the Servicer and
the Trustee have caused this Reassignment to be duly executed by their
respective officers as of the day and year first above written.

 

 

	
   

  	
  TARGET RECEIVABLES

  CORPORATION,

  
	
   

  	
     as
  Transferor,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RETAILERS NATIONAL BANK,

  
	
   

  	
     as
  Servicer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORWEST BANK MINNESOTA, 

  NATIONAL ASSOCIATION,

  
	
   

  	
     as
  Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							

 

 

EXHIBIT D

 

 

FORM OF ANNUAL SERVICER’S
CERTIFICATE

 

(To be delivered on or
before the 

90th day following the end of the fiscal year 

of the Transferor, pursuant to Section 3.5 of

the Amended and Restated Pooling and Servicing

Agreement referred to below)

 

RETAILERS NATIONAL BANK

 

TARGET CREDIT CARD MASTER
TRUST

 

The undersigned, a duly authorized representative of
Retailers National Bank, as Servicer (“RNB”), pursuant to the Amended
and Restated Pooling and Servicing Agreement dated as of April 28, 2000 (as
may be amended and supplemented from time to time, the “Agreement”),
among Target Receivables Corporation, as Transferor, RNB as Servicer, and
Norwest Bank Minnesota, National Association, as Trustee, does hereby certify
that:

 

1.  RNB is, as
of the date hereof, the Servicer under the Agreement.  Capitalized terms used in this Certificate
have their respective meanings as set forth in the Agreement.

 

2.  The
undersigned is a Servicing Officer who is duly authorized pursuant to the
Agreement to execute and deliver this Certificate to the Trustee.

 

3.  A review
of the activities of the Servicer during 
the fiscal year ended                     ,
        , and of its performance
under the Agreement was conducted under my supervision.

 

4.  Based on
such review, the Servicer has, to the best of my knowledge, performed in all
material respects its obligations under the Agreement throughout such year and
no default in the performance of such obligations has occurred or is continuing
except as set forth in paragraph 5 below.

 

5.  The
following is a description of each default in the performance of the Servicer’s
obligations under the provisions of the Agreement known to me to have been made
by the Servicer during the fiscal year ended                     ,
        ,  which sets forth in detail (i) the
nature of each such default, (ii) the action taken by the Servicer, if
any, to remedy each such default and (iii) the current status of each such
default:  [If applicable, insert “None.”]

 

 

IN WITNESS WHEREOF, the undersigned has duly
executed this Certificate this           
day of       ,        .

 

 

	
   

  	
  RETAILERS NATIONAL BANK,

  
	
   

  	
     as Servicer,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT E-1-A

 

 

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).  NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS. 
THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.

 

 

EXHIBIT E-1-B

 

 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR
THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).(3)

 

3                    The following text should be
included in any Certificate in which the above legend appears:

 

                        The
[Certificates] may not be acquired by or for the account of (a) any
employee benefit plan or other plan, trust or account (including an individual
retirement account) that is subject to the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal
Revenue Code of 1986, as amended, or (b) any collective investment fund,
insurance company separate or general account or other entity (except an entity
registered under the Investment Company Act of 1940, as amended) whose
underlying assets include “plan assets” under ERISA by reason of any such plan’s
investment in such entity (a “Benefit Plan”).  By accepting and holding this Certificate,
the Holder hereof shall be deemed to have represented and warranted that it is
not, and is not acting on behalf of, a Benefit Plan.  By acquiring any interest in this
Certificate, each applicable Certificate Owner shall be deemed to have
represented and warranted that it is not, and is not acting on behalf of, a
Benefit Plan.

 

 

EXHIBIT E-2

 

 

[FORM OF UNDERTAKING
LETTER]

 

[Date]

 

Norwest Bank Minnesota, National Association

Norwest Center

Sixth and Marquette

Minneapolis, Minnesota 55479

Attention: Joseph Travis

 

Target Receivables Corporation

80 South Eighth Street, 14th Floor, Suite 1401

Minneapolis, Minnesota  55402

Attention:  Treasurer

 

	
  Re:

  	
   

  	
  Purchase
  of $                   1
  principal

  
	
   

  	
   

  	
  amount
  of Target Credit Card

  
	
   

  	
   

  	
  Master
  Trust, [Class      ], [     %]
  [Floating Rate]

  
	
   

  	
   

  	
  Asset
  Backed Certificates, Series [  ]

  

 

Dear Sirs:

 

In
connection with our purchase of the above-referenced Asset Backed Certificates
(the “Certificates”) we confirm that:

 

(i)            we understand that the Certificates
are not being registered under the Securities Act of 1933, as amended (the “1933
Act”), and are being sold to us in a transaction that is exempt from the
registration requirements of the 1933 Act;

 

(ii)           any
information we desire concerning the Certificates or any other matter relevant
to our decision to purchase the certificates is or has been made available to
us;

 

(iii)          we
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the
Certificates, and we (and any account for which we are purchasing under
paragraph (iv) below) are able to bear the economic risk

 

1       Not less
than $250,000 minimum principal amount.

 

 

of an investment in the
Certificates; we (and any account for which we are purchasing under paragraph (iv) below)
are an “accredited investor” (as such term is defined in Rule 501(a)(1), (2) or
(3) of Regulation D under the 1933 Act); and we are not, and none of such
accounts is, a Benefit Plan;

 

(iv)          we are
acquiring the Certificates for our own account or for accounts as to which we
exercise sole investment discretion and not with a view to any distribution of
the Certificates, subject, nevertheless, to the understanding that the
disposition of our property shall at all times be and remain within our
control;

 

(v)           we agree that
the Certificates must be held indefinitely by us unless subsequently registered
under the 1933 Act or an exemption from any registration requirements of that
Act and any applicable state securities laws available;

 

(vi)          we agree that
in the event that at some future time we wish to dispose of or exchange any of
the Certificates (such disposition or exchange not being currently foreseen or
contemplated), we will not transfer or exchange any of the Certificates unless:

 

(A)(1)  the sale is of at least U.S. $250,000
principal amount of Certificates to an Eligible Purchaser (as defined below), (2) a
letter to substantially the same effect as paragraphs (i), (ii), (iii), (iv), (v) and
(vi) of this letter is executed promptly by the purchaser and (3) all
offers or solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to Eligible Purchasers
and are not made by means of any form of general solicitation or general
advertising whatsoever; or

 

(B)           the
Certificates are transferred pursuant to Rule 144 under the 1933 Act by us
after we have held them for more than three years; or

 

(C)           the
Certificates are sold in any other transaction that does not require
registration under the 1933 Act and, if the Transferor, the Servicer, the
Trustee or the Transfer Agent and Registrar so requests, we theretofore have
furnished to such party an opinion of counsel satisfactory to such party, in
form and substance satisfactory to such party, to such effect; or

 

(D)          the
Certificates are transferred pursuant to an exception from the registration requirements
of the 1933 Act under Rule 144A under the 1933 Act; and

 

(vii)         we understand
that the Certificates will bear a legend to substantially the following effect:

 

 

“THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).  NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS. 
THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.”

 

[“THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR
FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).”](5)

 

The first paragraph of this legend may be removed if
the Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar
have received an opinion of counsel satisfactory to them, in form and substance
satisfactory to them, to the effect that such paragraph may be removed.

 

“Eligible Purchaser” means either an Eligible
Dealer or a corporation, partnership or other entity which we have reasonable
grounds to believe and do believe can make representations with respect to
itself to substantially the same effect as the representations set forth
herein.  “Eligible Dealer” means
any corporation or other entity the principal business of which is acting as a
broker and/or dealer in securities.  [“Benefit
Plan” means (a) any employee benefit plan or other plan, trust or
account (including an individual retirement account) that is subject to the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any
collective investment fund, insurance company separate or general account or
other entity (except an entity registered under the Investment Company Act of
1940, as amended) whose underlying assets include “plan assets” under ERISA by
reason of a plan’s investment in such entity.](6)  Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Amended and Restated Pooling and Servicing Agreement, dated as of April 28,
2000, by and

 

2                    This bracketed text should
be included only if the Certificate(s) to be purchased include the legend
specified on Exhibit E-1-B.

 

3                    This bracketed text should
be included only if the Certificate(s) to be purchased include the legend
specified on Exhibit E-1-B.

 

 

among Target Receivables Corporation, Retailers
National Bank and Norwest Bank Minnesota, National Association

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
      (Name
  of Purchaser)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
               (Authorized
  Officer)

  
					

 

 

 

EXHIBIT E-3

 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR
THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).1

 

1       The
following text should be included in any Certificate in which the above legend
appears:

 

The [Certificates] may
not be acquired by or for the account of (a) any employee benefit plan or
other plan, trust or account (including an individual retirement account) that
is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any
collective investment fund, insurance company separate or general account or
other entity (except an entity registered under the Investment Company Act of
1940, as amended) whose underlying assets include “plan assets” under ERISA by
reason of any such plan’s investment in such entity (a “Benefit Plan”).  By accepting and holding this Certificate,
the Holder hereof shall be deemed to have represented and warranted that it is
not, and is not acting on behalf of, a Benefit Plan.  By acquiring any interest in this
Certificate, each applicable Certificate Owner shall be deemed to have
represented and warranted that it is not, and is not acting on behalf of, a
Benefit Plan.

 

 

EXHIBIT F

 

 

Example of a Credit Card
Agreement

 

 

EXHIBIT G

 

 

RESERVED.

 

 

EXHIBIT H-1

 

 

FORM OF OPINION OF
COUNSEL WITH RESPECT

TO AMENDMENTS

 

Provisions to be included in

Opinion of Counsel to be delivered pursuant

to Section 13.2(d)(i)

 

The opinions set forth below
may be subject to all the qualifications, assumptions, limitations and
exceptions taken or made in the Opinions of Counsel delivered on any applicable
Closing Date.

 

(i)            The
amendment to the [Amended and Restated Pooling and Servicing Agreement],
[Supplement], attached hereto as Schedule 1 (the “Amendment” ), has been
duly authorized, executed and delivered by the Transferor and the Servicer and
constitutes the legal, valid and binding agreement of the Transferor and the
Servicer, respectively, enforceable in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws from time to time in effect affecting
creditors’ rights generally or the rights of creditors of national banking
associations.  The enforceability of the
respective obligations of the Transferor and the Servicer is also subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law)

 

(ii)           The
Amendment has been entered into in accordance with the terms and provisions of Section 13.1
of the Amended and Restated Pooling and Servicing Agreement.

 

 

EXHIBIT H-2

 

 

FORM OF OPINION OF
COUNSEL WITH RESPECT

TO ADDITION OF SUPPLEMENTAL ACCOUNTS

 

Provisions to be included in

Opinion of Counsel to be

delivered pursuant to

Section 13.2(d)(ii) or (iii)

 

The opinions set forth below may be subject to
appropriate qualifications, assumptions, limitations and exceptions.  Paragraphs 1-3 are not required if the
opinion is being delivered solely under Section 13.2(d)(iii).

 

1.             The
Receivables arising in such Supplemental Accounts constitute either “general
intangibles,” “accounts” or “chattel paper,” in each case as defined under Section 9-106
of the UCC.

 

2.             The
Amended and Restated Pooling and Servicing Agreement creates in favor of the
Trust a security interest in the Transferor’s rights in the Receivables in such
Supplemental Accounts and the proceeds thereof.

 

3.             The
security interest described in paragraph 2 is perfected and of first priority
under the UCC.

 

4.             No
further filings or actions are required 
under the UCC prior to March 31,
        , in order to maintain the
perfection and priority of the security interest created by the Amended and
Restated Pooling and Servicing Agreement in favor of the Trust in the
Transferor’s rights in the Receivables and the proceeds thereof.Exhibit 10(E)

 

AMENDMENT NO. 1, dated as of August 22,
2001 (this “Agreement”), by and among TARGET RECEIVABLES CORPORATION, a
Minnesota corporation, as Transferor, RETAILERS NATIONAL BANK, a national
banking organization organized and existing under the laws of the United States
of America, as Servicer, and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
(formerly known as NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION), a national
banking association, as Trustee, to the AMENDED AND RESTATED POOLING AND SERVICING
AGREEMENT, dated as of April 28, 2000 (the “Pooling and Servicing
Agreement”), by and among the Transferor, the Servicer and the Trustee.

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, the Transferor, the Servicer and the
Trustee desire to amend the Pooling and Servicing Agreement pursuant to Section 13.1(a) therein
in order to provide for the terms contained herein.

 

WHEREAS, the Transferor desires to amend the
Pooling and Servicing Agreement as set forth below.

 

Therefore, in consideration of the mutual
agreements herein contained, each party agrees as follows for the benefit of
the other parties and the Investor Certificateholders:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1        Definitions.  (a)  Section 1.1 of the Pooling and
Servicing Agreement shall be amended by replacing the definition of “Merchant
Fees” with the following:

 

“Merchant Fees” shall mean the fees
paid with respect to the proprietary private label accounts, by Target stores,
Marshall Field’s, Mervyn’s and other merchants, and with respect to the Target
VISA accounts, by merchants accepting the Target VISA card, to Retailer’s
National Bank, in its capacity as Credit Card Originator, in connection with
obligor charges for goods and services.

 

(b)      Section 1.1 of the Pooling and Servicing Agreement shall
be amended by adding the following definition thereto:

 

“Target VISA” shall mean a credit card
originated by RNB, enhanced with VISA capabilities and having a Target brand
name.

 

ARTICLE II

 

Section 2.1        Amendment
of Section 2.4(a)(v).  Section 2.4(a)(v) of
the Pooling and Servicing Agreement is hereby replaced in its entirety by the
following:

 

 

“                                                                                                          (v)  this Agreement or, in
the case of Supplemental Accounts, the related Assignment constitutes either a
valid transfer and assignment to the Trust of all right, title and interest of
the Transferor in the Receivables and other Trust Assets conveyed to the Trust
by the Transferor and all monies due or to become due with respect thereto and
the proceeds thereof under this Agreement or a grant of a security interest (as
defined in the UCC) in such property to the Trust, which, in the case of
existing Receivables and the proceeds thereof, is enforceable upon execution
and delivery of this Agreement, or, with respect to then existing Receivables
in Additional Accounts, as of the applicable Addition Date, and which will be
enforceable with respect to such Receivables hereafter and thereafter created
and the proceeds thereof upon such creation, in each case except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors’ rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity). 
This Agreement, or in the case of Supplemental Accounts, the related
Assignment, creates a valid and continuing security interest (as defined in the
UCC) in the Receivables in favor of the Trust, which security interest is prior
to all other Liens, and is enforceable as such against creditors of and
purchasers from the Trust. Upon the filing of the financing statements pursuant
to Section 2.1 and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have a first
priority security interest in such property and proceeds (as defined in the
UCC) except for Liens permitted under subsection 2.7(b);”

 

Section 2.2        Addition
of Subsections 2.4(a)(x) and 2.4(a)(xi). The following subsections are
hereby added to the end of Section 2.4(a) of the Pooling and
Servicing Agreement:

 

“                                                                                                          (x)  the Receivables
constitute “accounts” within the meaning of the UCC; and

 

                                                                                                                (xi)  other than the security interest granted to
the Trust pursuant to this Agreement, the Transferor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Receivables. The Transferor has not authorized the filing of and is not aware
of any financing statements against the Transferor that include a description
of the collateral covering the Receivables other than any financing statement
relating to the security interest granted to the Trust hereunder or that has
been terminated. The Transferor is not aware of any judgment or tax lien filings
against the Transferor.

 

The representations and warranties set forth herein shall survive the
transfer and assignment of the respective Receivables to the Trust, and shall
be continuing, and remain in full force and effect, until such time as all Investor
Certificates have been finally and fully paid.”

 

 

Section 2.3        Amendment
of Section 5(e) of Exhibit B.  Section 5(e) of Exhibit B to
the Pooling and Servicing Agreement is hereby replaced in its entirety by the
following:

 

“                                                                                                          (e)  this Assignment constitutes
a valid transfer and assignment to the Trust of all right, title and interest
of the Transferor in and to the Receivables and other Trust Assets conveyed to
the Trust by the Transferor and all monies due or to become due and all amounts
received with respect thereto and the proceeds as defined in the UCC, and this
Agreement constitutes the grant of a security interest (as defined in the UCC)
in such property to the Trust, which, in the case of existing Receivables and
the proceeds thereof, is enforceable upon execution and delivery of this
Agreement, and which will be enforceable with respect to such Receivables
hereafter and thereafter created and the proceeds thereof upon such
creation.  This Assignment creates a
valid and continuing security interest (as defined in the UCC) in the
Receivables in favor of the Trust, which security interest is prior to all
other Liens, and is enforceable as such against creditors of and purchasers
from the Trust. Upon the filing of the financing statements pursuant to Section 3
of this Assignment and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have a first
priority security interest in such property and proceeds (as defined in the
UCC) except for Liens permitted under Section 2.7(b) of the
Agreement;”

 

Section 2.4        Addition
of Sections 5(i) and 5(j) to Exhibit B.  The following subsections are hereby added to
the end of Section 5 of Exhibit B to the Pooling and Servicing
Agreement:

 

“                                                                                                          (i)  the Receivables
constitute “accounts” within the meaning of the UCC; and

 

                                                                                                                (j)  other than the
security interest granted to the Trust pursuant to this Assignment, the
Transferor has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Receivables. The Transferor has not authorized
the filing of and is not aware of any financing statements against the
Transferor that include a description of the collateral covering the
Receivables other than any financing statement relating to the security
interest granted to the Trust hereunder or that has been terminated. The
Transferor is not aware of any judgment or tax lien filings against the
Transferor.

 

The representations and warranties set forth herein shall survive the
transfer and assignment of the respective Receivables to the Trust, and shall
be continuing, and remain in full force and effect, until such time as all
Investor Certificates have been finally and fully paid.”

 

Section 2.5        Governing
Law.  THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

 

Section 2.6        Counterparts.
 This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.

 

 

IN WITNESS WHEREOF, the Transferor, the
Servicer and the Trustee have caused this Agreement to be duly executed by
their respective officers as of the day and year first above written.

 

 

	
   

  	
  TARGET
  RECEIVABLES CORPORATION,

  
	
   

  	
     as
  Transferor,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  C. Kowalke

  	
   

  
	
   

  	
   

  	
  Name: Stephen
  C. Kowalke

  
	
   

  	
   

  	
  Title:   Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RETAILERS
  NATIONAL BANK,

  
	
   

  	
     as
  Servicer,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  C. Kowalke

  	
   

  
	
   

  	
   

  	
  Name:
  Stephen C. Kowalke

  
	
   

  	
   

  	
  Title:   Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK MINNESOTA,

  
	
   

  	
     NATIONAL
  ASSOCIATION,

  
	
   

  	
     as
  Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S.
  Dignan

  	
   

  
	
   

  	
   

  	
  Name: S.
  Dignan

  
	
   

  	
   

  	
  Title:   Corporate Trust Officer

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