Document:

<PAGE>

                                                                   EXHIBIT 10.22

                                                                  EXECUTION COPY

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                    NORDSTROM PRIVATE LABEL RECEIVABLES LLC,
                                   Transferor,

                                 NORDSTROM FSB,

                                    Servicer,

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION

                                       and

             NORDSTROM PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST,
                                     Issuer

                        --------------------------------

                        TRANSFER AND SERVICING AGREEMENT

                        --------------------------------

                           Dated as of October 1, 2001

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                               TABLE OF CONTENTS

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                                   ARTICLE ONE

                                   DEFINITIONS

Section 1.01.  Definitions..................................................   1
Section 1.02.  Other Definitional Provisions................................  14

                                   ARTICLE TWO

                            CONVEYANCE OF RECEIVABLES

Section 2.01.  Conveyance of Receivables....................................  15
Section 2.02.  Acceptance by Trust..........................................  16
Section 2.03.  Corporate Representations and Warranties of Each
                 Transferor.................................................  17
Section 2.04.  Other Representations and Warranties of Each Transferor......  19
Section 2.05.  Reassignment of Ineligible Receivables.......................  21
Section 2.06.  Reassignment of Trust Portfolio..............................  22
Section 2.07.  Covenants of each Transferor.................................  23
Section 2.08.  Covenants of each Transferor with Respect to Receivables
                 Purchase Agreements........................................  24
Section 2.09.  Addition of Accounts.........................................  25
Section 2.10.  Removal of Accounts and Participation Interests..............  28
Section 2.11.  Account Allocations..........................................  29
Section 2.12.  Discount Option..............................................  30
Section 2.13.  Representations and Warranties as to the Security Interest
                 of the Trust in the Receivables............................  30

                                  ARTICLE THREE

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.01.  Acceptance of Appointment and Other Matters Relating to the
                 Servicer...................................................  32
Section 3.02.  Servicing Compensation.......................................  33
Section 3.03.  Representations, Warranties and Covenants of the
                 Servicer...................................................  34
Section 3.04.  Reports and Records for the Owner Trustee and the Indenture
                 Trustee....................................................  36
Section 3.05.  Annual Certificate of Servicer...............................  37
Section 3.06.  Annual Servicing Report of Independent Public Accountants;
                 Copies of Reports Available................................  37
Section 3.07.  Tax Treatment................................................  38
Section 3.08.  Notices to Nordstrom fsb.....................................  38
Section 3.09.  Adjustments..................................................  38
Section 3.10.  Reports to the Commission....................................  39
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                                TABLE OF CONTENTS
                                   (continued)

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Section 3.11.  Reports to Rating Agencies...................................  39

                                  ARTICLE FOUR

                            OTHER TRANSFEROR MATTERS

Section 4.01.  Liability of each Transferor.................................  40
Section 4.02.  Merger or Consolidation of, or Assumption of the Obligations
                 of, a Transferor...........................................  40
Section 4.03.  Limitations on Liability of Each Transferor..................  41

                                  ARTICLE FIVE

                     OTHER MATTERS RELATING TO THE SERVICER

Section 5.01.  Liability of the Servicer....................................  42
Section 5.02.  Merger or Consolidation of, or Assumption of the Obligations
                 of, the Servicer...........................................  42
Section 5.03.  Limitation on Liability of the Servicer and Others...........  42
Section 5.04.  Servicer Indemnification of the Trust and the Trustees.......  43
Section 5.05.  Resignation of the Servicer..................................  43
Section 5.06.  Access to Certain Documentation and Information Regarding
                 the Receivables............................................  44
Section 5.07.  Delegation of Duties.........................................  44
Section 5.08.  Examination of Records.......................................  44

                                   ARTICLE SIX

                                INSOLVENCY EVENTS

Section 6.01.  Rights upon the Occurrence of an Insolvency Event............  45

                                  ARTICLE SEVEN

                                SERVICER DEFAULTS

Section 7.01.  Servicer Defaults............................................  46
Section 7.02.  Indenture Trustee To Act; Appointment of Successor...........  48
Section 7.03.  Notification to Noteholders..................................  50
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                                TABLE OF CONTENTS
                                   (continued)

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                                  ARTICLE EIGHT

                                   TERMINATION

Section 8.01.  Termination of Agreement.....................................  51

                                  ARTICLE NINE

                            MISCELLANEOUS PROVISIONS

Section 9.01.  Amendment; Waiver of Past Defaults...........................  52
Section 9.02.  Waiver of Transferor or Servicer Defaults....................  53
Section 9.03.  Protection of Right, Title and Interest to Trust Assets......  53
Section 9.04.  GOVERNING LAW................................................  54
Section 9.05.  Notices; Payments............................................  55
Section 9.06.  Severability of Provisions...................................  55
Section 9.07.  Further Assurances...........................................  55
Section 9.08.  No Waiver; Cumulative Remedies...............................  55
Section 9.09.  Counterparts.................................................  56
Section 9.10.  Third-Party Beneficiaries....................................  56
Section 9.11.  Actions by Noteholders.......................................  56
Section 9.12.  Rule 144A Information........................................  56
Section 9.13.  Merger and Integration.......................................  56
Section 9.14.  Headings.....................................................  56
Section 9.15.  Assignment...................................................  56
Section 9.16.  Nonpetition Covenant.........................................  57
Section 9.17.  Limitation of Liability......................................  57

                                    EXHIBITS

EXHIBIT A      Form of Assignment of Receivables in Additional Accounts.....  A-1
EXHIBIT B      Form of Reassignment of Receivables in Removed Accounts......  B-1
EXHIBIT C      Form of Annual Servicer's Certificate........................  C-1
EXHIBIT D-1    Form of Opinion of Counsel with Respect to Amendments........  D-1-1
EXHIBIT D-2    Form of Opinion of Counsel with Respect to Accounts..........  D-2-1
EXHIBIT D-3    Provisions to be Included in Annual Opinion of Counsel.......  D-3-1
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<PAGE>

       TRANSFER AND SERVICING AGREEMENT, dated as of October 1, 2001 between
Nordstrom Private Label Receivables LLC, a Delaware limited liability company,
as transferor and Nordstrom fsb as Servicer, Nordstrom Private Label Credit Card
Master Note Trust, a Delaware business trust, as Issuer and Wells Fargo Bank
Minnesota, National Association, a national banking association, as Indenture
Trustee.

       In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Series Enhancer (as defined below) to the extent provided herein, in the
Indenture and in any Indenture Supplement:

                                   ARTICLE ONE

                                   DEFINITIONS

       Section 1.01. 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" means (i) each Initial Account, (ii) each Additional Account
(but only from and after the Addition Date with respect thereto), (iii) each
Related Account, and (iv) each Transferred Account, but shall exclude any
Account all the Receivables in which are either: (a) after the Removal Date,
removed by the Transferor pursuant to Section 2.10, (b) reassigned to the
Transferor pursuant to Section 2.05 or (c) assigned and transferred to the
Servicer pursuant to Section 3.03.

       "Account Originator" means Nordstrom fsb or Nordstrom Inc., or, upon
satisfaction of the Rating Agency Condition, any other entity which is the
issuer of the credit card relating to an Account pursuant to a Credit Card
Agreement.

       "Account Owner" means the Account Originator relating to an Account or
any Person who has acquired such Account and has sold the related Receivables to
the Transferor pursuant to a Receivables Purchase Agreement.

       "Addition" means the designation of (i) additional Eligible Accounts to
be included as Accounts or (ii) Participation Interests to be included as Trust
Assets in each case pursuant to Section 2.09(a) or (b).

       "Addition Cut-Off Date" means, with respect to any Additional Accounts or
Participation Interests to be included in the Trust, the date on which such
Additional Accounts are designated for inclusion in the Trust.

       "Addition Date" means, with respect to (i) Additional Accounts, the date
on which the Receivables in such Additional Accounts are conveyed to the Trust
pursuant to Section 2.09(a) or (b) and (ii) Participation Interests, the date
from and after which such Participation Interests are to be included as Trust
Assets pursuant to Section 2.09(a) or (b).

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       "Additional Account" means each consumer revolving credit card account or
business charge account established pursuant to a Credit Card Agreement, and
designated pursuant to Section 2.09(a) or (b) to be included as an Account.

       "Additional Transferors" means Affiliates of the Transfer designated by
the Transferor to be included as Transferors pursuant to Section 2.09(d).

       "Adverse Effect" means, with respect to any action, that such action will
(i) result in the occurrence of a Redemption Event or an Event of Default or
(ii) materially and adversely affect the amount or timing of distributions to be
made to the Noteholders of any Series or Class pursuant to this Agreement, the
Indenture or the related Indenture Supplement.

       "Affiliate" means, 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" means 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.

       "Agreement" means this Transfer and Servicing Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.

       "Appointment Date" means the day on which an Insolvency Event occurs with
respect to the Transferor.

       "Assignment" means an Assignment of Receivables in Additional Accounts,
in substantially the form of Exhibit A.

       "Authorized Newspaper" means any major 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 Notes of such Series are (i) listed on the Luxembourg Stock Exchange and
such Exchange shall so require, in Luxembourg, printed in any language
satisfying the requirements of such Exchange or (ii) Bearer Notes, in such place
as may be specified in the applicable Indenture Supplement) and customarily
published on each business day at such place, whether or not published on
Saturdays, Sundays or holidays.

       "Bearer Notes" has the meaning specified in the Indenture.

       "Business Day" means any day other than (i) a Saturday or Sunday or (ii)
any other day on which national banking associations or state banking
institutions in Washington, Colorado, Minnesota, New York, Delaware or any other
state in which the principal executive offices of Nordstrom fsb and Nordstrom
Credit, Inc., the Owner Trustee, the Indenture Trustee or other Account Owner,
as the case may be, are located, are authorized or obligated by law, executive
order or governmental decree to be closed or (iii) for purposes of any
particular Series, any other day specified in the related Indenture Supplement.

       "Cash Advance Fees" means cash advance transaction fees and cash advance
late fees, if any, as specified in the Credit Card Agreement applicable to each
Account.

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       "Class" has the meaning specified in the Indenture.

       "Closing Date" means, with respect to any Series, the closing date
specified in the related Indenture Supplement.

       "Collections" means all payments by or on behalf of Obligors (including
Insurance Proceeds) received in respect of the Receivables, in the form of cash,
checks, wire transfers, electronic transfers, ATM transfers or any other form of
payment in accordance with a Credit Card Agreement in effect from time to time,
Merchant Fees and all other amounts specified by this Agreement, the Indenture
or any Indenture Supplement as constituting Collections. As specified in any
Participation Interest Supplement or Indenture Supplement, Collections shall
include amounts received with respect to Participation Interests. All Recoveries
with respect to Receivables previously charged off as uncollectible will be
treated as Collections of Finance Charge Receivables.

       "Commission" has the meaning specified in the Indenture.

       "Continued Errors" has the meaning specified in Section 7.02(e).

       "Contractually Delinquent" with respect to an Account, means an Account
as to which the required minimum payment set forth on the related billing
statement has not been received by the due date thereof.

       "Corporate Trust Office" has the meaning when used in respect of (i) the
Owner Trustee, specified in the Trust Agreement and (ii) the Indenture Trustee,
specified in the Indenture.

       "Coupon" has the meaning specified in the Indenture.

       "Credit Card Agreement" means, with respect to a revolving credit card
account, the agreements between an Account Owner and the 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 holders of such account.

       "Credit Card Guidelines" means the written policies and procedures of the
Servicer, the Transferor or any other Account Owner, as the case may be,
relating to the operation of its consumer revolving lending business, which are
consistent with prudent practice, including, the written policies and procedures
for determining the creditworthiness of credit card account customers, the
extension of credit to credit card account 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.

       "Date of Processing" means, with respect to any transaction or receipt of
Collections, the date on which such transaction is first recorded on the
Servicer's computer file of revolving credit card accounts (without regard to
the effective date of such recordation).

       "Defaulted Receivables" means, with respect to any Monthly Period, all
Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with

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<PAGE>

the Credit Card Guidelines and the Servicer's customary and usual servicing
procedures for servicing consumer revolving credit card and other revolving
credit account receivables comparable to the Receivables (excluding any
servicing procedures applicable to receivables arising in Secured Accounts). A
Principal Receivable 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 revolving credit card accounts but, in any event, shall
be deemed a Defaulted Receivable no later than the month following the day the
related Account becomes 151 days Contractually Delinquent unless the Obligor
cures such default by making a partial payment which satisfies the criteria for
curing delinquencies set forth in the applicable Credit Card Guidelines.

       "Determination Date" means, with respect to any Series, the date
specified in the applicable Indenture Supplement.

       "Dilution Amount" means the amount by which the Servicer is required to
adjust the amount of Principal Receivables used to calculate the Transfer or
Interest pursuant to the first two sentences of Section 3.09.

       "Discount Option Date" means each date on which a Discount Percentage
designated by the Transferor pursuant to Section 2.12 takes effect.

       "Discount Option Receivables" means Principal Receivables (or a specified
portion thereof) existing on or after the Discount Option Date designated by the
Transferor as being treated as Finance Charge Receivables pursuant to Section
2.12(a). The aggregate amount of Discount Option Receivables outstanding on any
Date of Processing occurring on or after the Discount Option Date shall equal
the sum of (i) the aggregate amount of Discount Option Receivables at the end of
the prior Date of Processing (which amount, prior to the Discount Option Date,
shall be zero) plus (ii) the aggregate amount of any new Discount Option
Receivables created on such Date of Processing minus (iii) any Discount Option
Receivables Collections received on such Date of Processing. Discount Option
Receivables created on any Date of Processing means the product of the amount of
any Principal Receivables created on such Date of Processing (without giving
effect to the proviso in the definition of the term Principal Receivables) and
the Discount Percentage.

       "Discount Option Receivable Collections" means on any Date of Processing,
the product of (i) a fraction the numerator of which is the aggregate amount of
Discount Option Receivables and the denominator of which is the sum of the
aggregate amount of Principal Receivables and the aggregate amount of Discount
Option Receivables, in each case at the end of the prior Date of Processing and
(ii) Collections of Principal Receivables on such Date of Processing (without
giving effect to the proviso in the definition of Principal Receivables).

       "Discount Percentage" means the percentages, if any, designated by the
Transferor pursuant to Section 2.12(a).

       "Distribution Date" means, with respect to any Series, the date specified
in the applicable Indenture Supplement.

       "Dollars", "$" or "U.S. $" means United States dollars.

                                       4
<PAGE>

       "Early Accumulation Period" has the meaning, with respect to any Series,
specified in the related Indenture Supplement.

       "Eligible Account" means a consumer revolving credit card account owned
by an Account Owner identified by the Transferor as of (i) the Initial Cut-Off
Date, in the case of the Initial Accounts or (ii) the applicable Addition
Cut-Off Date, in the case of the Additional Accounts, as having the following
characteristics:

has not been cancelled and is in existence and maintained by Transferor or the
applicable Account Owner;

              (a) is payable in Dollars;

              (b) except as provided below, has not been identified as an
       account the credit card or cards with respect to which have been reported
       to the applicable Account Owner as having been lost or stolen or has an
       Obligor who has not been identified as deceased;

              (c) the Obligor of which has provided, as his or her billing
       address, an address located in Canada or the United States (or its
       territories or possessions or military address);

              (d) except as provided below, does not have any Receivables which
       are Defaulted Receivables;

              (e) has at no time been a Secured Account;

              (f) except as provided below, does not have any Receivables which
       have been identified by the applicable Account Owner or the relevant
       Obligor as having been incurred as a result of fraudulent use of any
       related credit card;

              (g) the Obligor of which has not been identified by the Servicer
       in its computer files as having been declared bankrupt;

              (h) is a private label revolving credit card account or business
       charge account that may be used to purchase goods and services in
       Nordstrom Inc. and its retail subsidiaries' stores, catalogs and internet
       sites and for cash advances at automatic teller machines;

              (i) was created in accordance with the Credit Card Guidelines of
       the applicable Account Originator at the time of creation of such
       Account;

              (j) does not have outstanding Receivables which have been sold or
       pledged by the related Account Owner to any party other than the
       Transferor pursuant to a Receivables Purchase Agreement; and

              (k) does not have outstanding Receivables that give rise to any
       claim of any governmental agency including, without limitation, the
       government of the United States or any state thereof or any agency,
       instrumentality or department thereof.

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<PAGE>

       Eligible Accounts may include Accounts, the Receivable of which have been
written off, or with respect to which the Transferor believes the related
Obligor is bankrupt, or as to which certain Receivables have been identified by
the Obligor as having been incurred as a result of fraudulent use of any credit
cards, or as to which any credit cards have been reported to the Account Owner
or the Servicer as lost or stolen, in each case as of the Initial Cut-Off Date,
with respect to the Initial Accounts, and as of the related Addition Cut-Off
Date, with respect to the Additional Accounts; provided that (i) the balance of
all Receivables included in such Accounts is reflected on the books and records
of the Account Owner (and is treated for purposes of this Agreement) as "zero",
and (ii) charging privileges with respect to all such Accounts have been
canceled in accordance with the relevant Credit Card Guidelines.

       "Eligible Receivable" means each Receivable, including, where applicable,
the underlying receivable:

              (a) which has arisen in an Eligible Account;

              (b) which was created in compliance in all material respects with
       all Requirements of Law applicable to the institution which owned such
       Receivable at the time of its creation and pursuant to a Credit Card
       Agreement which complies in all material respects with all Requirements
       of Law applicable to the Account Originator or Account Owner, as the case
       may be;

              (c) with respect to which all material consents, licenses,
       approvals or authorizations of, or registrations or declarations with,
       any Governmental Authority required to be obtained, effected or given in
       connection with the creation of such Receivable or the execution,
       delivery and performance by applicable Account Originator and any
       subsequent Account Owner of its obligations, if any, under the related
       Credit Card Agreement pursuant to which such Receivable was created, have
       been duly obtained, effected or given and are in full force and effect;

              (d) as to which at the time of the transfer of such Receivable to
       the Trust, the Transferor or the Trust will have good and marketable
       title thereto and which itself is, and the underlying receivables are,
       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 either a valid transfer and
       assignment from the Transferor to the Trust of all the Transferor's
       right, title and interest therein (including any proceeds thereof), or
       the grant of a first priority perfected security interest therein (and in
       the proceeds thereof), effective until the termination of the Trust;

              (f) which at all times will be the legal, valid and binding
       payment obligation of the related Obligor 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

                                       6
<PAGE>

       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, at the time of transfer to the Trust, has not been
       waived or modified except as permitted in accordance with the Credit Card
       Guidelines and which waiver or modification is reflected in the
       Servicer's computer file of revolving credit card accounts;

              (h) which, at the time of transfer to the Trust, is not subject to
       any right of rescission, setoff, counterclaim or any other defense
       (including defenses arising out of violations of usury laws) of the
       Obligor, other than defenses arising out of applicable bankruptcy,
       insolvency, reorganization, moratorium 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 equity) or as to which the Servicer is
       required by Section 3.09 to make an adjustment;

              (i) as to which, at the time of transfer to the Trust, the
       relevant Account Originator and any subsequent Account Owner has
       satisfied all of its obligations required to be satisfied by such time;

              (j) as to which, at the time of transfer to the Trust, none of the
       Transferor, the Servicer, or any other Account Owner, as the case may be,
       has taken any action which would impair, or omitted to take any action
       the omission of which would impair, the rights of the Trust or the
       Noteholders therein;

              (k) that does not cause the aggregate amount of Receivables that
       arises from Accounts that (A) have Obligors with a billing address in
       Canada to be more than 1% of total amount of Receivables in the Trust,
       (B) are business charge accounts to be more than 1% of the total amount
       of Receivables in the Trust, (C) are Starter Accounts to be more than 3%
       of the total amount of the Receivables in the Trust and (D) have Obligors
       that are employees of Nordstrom Inc. or any of its affiliates to be more
       than 5% of the total amount Receivables in the Trust; and

              (l) which constitutes an "account" under and as defined in Article
       9 of the UCC in effect in the State of Delaware and any other State where
       the filing of a financing statement is required to perfect the Trust's
       interest in the Receivables and the proceeds thereof.

       "Eligible Servicer" means the Indenture Trustee or, if the Indenture
Trustee is not acting as Servicer, an entity which, at the time of its
appointment as Servicer, (i) is servicing a portfolio of revolving credit card
accounts, (ii) is legally qualified and has the capacity to service the
Accounts, (iii) has demonstrated the ability to service professionally and
competently a portfolio of similar accounts in accordance with high standards of
skill and care, (iv) is qualified 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 and (v) has a net worth
of at least $50,000,000 as of the end of its most recent fiscal quarter.

       "Errors" has the meaning specified in Section 7.02(e).

                                       7
<PAGE>

       "Event of Default" has the meaning specified in the Indenture.

       "Exchange Act" has the meaning specified in the Indenture.

       "FDIC" means the Federal Deposit Insurance Corporation, and its
successors.

       "Finance Charge Receivables" means all amounts (a) billed to the Obligors
on any Account in respect of (i) all Periodic Rate Finance Charges, (ii) Cash
Advance Fees, (iii) annual membership fees and annual service charges, (iv) Late
Fees, (v) Overlimit Fees and (vi) Discount Option Receivables, if any. Finance
Charge Receivables shall also include (a) the interest portion of Participation
Interests as shall be determined pursuant to, and only if so provided in, the
applicable Participation Interest Supplement or Indenture Supplement for any
Series and (b) all Recoveries with respect to Receivables previously charged off
as uncollectible.

       "Fitch" means Fitch, Inc. and its successors.

       "Governmental Authority" means the United States, any State or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

       "Indenture" means the Master Indenture, dated as of October 1, 2001,
between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.

       "Indenture Collateral" has the meaning specified in Section 2.01.

       "Indenture Supplement" has the meaning specified in the Indenture.

       "Indenture Trustee" means Wells Fargo Bank Minnesota, National
Association, and its successors, in its capacity as trustee under the Indenture,
its successors in interest and any successor indenture trustee under the
Indenture.

       "Ineligible Receivables" has the meaning specified in Section 2.05(a).

       "Initial Account" means each consumer revolving credit card account or
business charge account established pursuant to a Credit Card Agreement between
the applicable Account Owner and any Person, which account is identified in the
computer file or microfiche list delivered to the Owner Trustee by the
Transferor pursuant to Section 2.01 on the Initial Issuance Date.

       "Initial Cut-Off Date" means September 30, 2001.

       "Initial Issuance Date" means November 2, 2001, the date the Transferor's
Certificate is delivered by the Trust to the Transferor pursuant to the Trust
Agreement.

       "Insolvency Event" has the meaning specified in Section 6.01.

                                       8
<PAGE>

       "Insurance Proceeds" means any amounts received pursuant to the payment
of benefits under any credit life insurance policies, credit disability or
unemployment insurance policies covering any Obligor with respect to Receivables
under such Obligor's Account.

       "Invested Amount" means, with respect to any Series and for any date, an
amount equal to the invested amount or adjusted invested amount, as applicable,
specified in the related Indenture Supplement.

       "Investor Percentage" means, with respect to any Series, the investor
percentage for such Series specified in the related Indenture Supplement.

       "Issuer" means the Trust.

       "Late Fees" has the meaning specified in the Credit Card Agreement
applicable to each Account for late fees or similar terms.

       "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, equity interest, encumbrance, lien (statutory
or other), preference, participation interest, 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 or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment permitted by Section 3.06(b) of the Trust Agreement or Section 4.02
of, and the lien created by, this Agreement shall not be deemed to constitute a
Lien.

       "Monthly Period" has the meaning specified in the Indenture.

       "Monthly Servicing Fee" means, with respect to any Series and any Monthly
Period, the portion of the Servicing Fee for such Monthly Period allocable to
such Series.

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

       "Note Interest Rate" has the meaning specified in the Indenture.

       "Note Owner" has the meaning specified in the Indenture.

       "Note Register" has the meaning specified in the Indenture.

       "Noteholder" or "Holder" has the meaning specified in the Indenture.

       "Notices" means all demands, notices, instructions, directions and
communications under this Agreement.

       "Obligor" means, with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any guarantor
thereof, but excluding any merchant.

                                       9
<PAGE>

       "Officer's Certificate" has the meaning specified in the Indenture.

       "Opinion of Counsel" has the meaning specified in the Indenture.

       "Overlimit Fees" has the meaning specified in the Credit Card Agreement
applicable to each Account for overlimit fees or similar terms if such fees are
provided for with respect to such Account.

       "Owner Trustee" means Wilmington Trust Company, not in individual its
capacity, but solely as owner trustee under the Trust Agreement, its successors
in interest and any successor owner trustee under the Trust Agreement.

       "Participating Transferor" means each Transferor who (i) owns any
Additional Account the Receivables in which shall be transferred to the Trust on
an Additional Date or (ii) is transferring a Participation Interest to the Trust
on an Addition Date.

       "Participation Interest Supplement" means a supplement to this Agreement
entered into pursuant to Section 2.09(a)(ii) or (b) in connection with the
conveyance of Participation Interests to the Trust.

       "Participation Interests" has the meaning specified in Section
2.09(a)(ii).

       "Paying Agent" has the meaning specified in the Indenture.

       "Periodic Rate Finance Charges" has the meaning specified in the Credit
Card Agreement applicable to each Account for finance charges (due to periodic
rate) or any similar term.

       "Person" means 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 any nature.

       "Portfolio Yield" has the meaning specified in the Indenture Supplement.

       "Predecessor Servicer Work Product" has the meaning specified in Section
7.02(e).

       "Principal Funding Account" has the meaning, with respect to any Series,
specified in the related Indenture Supplement.

       "Principal Funding Account Balance" has the meaning, with respect to any
Series, specified in the related Indenture Supplement.

       "Principal Receivables" means all Receivables other than Finance Charge
Receivables or Defaulted Receivables; provided, however, that after the Discount
Option Date, Principal Receivables on any Date of Processing thereafter means
Principal Receivables as otherwise determined pursuant to this definition minus
the amount of any Discount Option Receivables. Principal Receivables shall also
include the principal portion of Participation Interests as shall be determined
pursuant to, and only if so provided in, the applicable Participation Interest
Supplement or Indenture Supplement for any Series. In calculating the aggregate
amount of

                                       10
<PAGE>

Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
Any Principal Receivables which the Transferor is unable to transfer as provided
in Section 2.11 shall not be included in calculating the amount of Principal
Receivables.

       "Rating Agency" has the meaning specified in the Indenture.

       "Rating Agency Condition" has the meaning specified in the Indenture.

       "Reassignment" means a Reassignment of Receivables in Removed Accounts,
in substantially the form of Exhibit B.

       "Receivables" means all amounts shown on the Servicer's records as
amounts payable by Obligors on any Account from time to time, including amounts
payable for Principal Receivables and Finance Charge Receivables. Receivables
which become Defaulted Receivables will cease to be included as Receivables as
of the day on which they become Defaulted Receivables.

       "Receivables Purchase Agreement" means any receivables purchase agreement
entered into between the Servicer, the Transferor and an Account Owner;
provided, that before the Transferor shall enter into any receivables purchase
agreement, (i) the Rating Agency Condition is satisfied with respect to such
receivables purchase agreement and (ii) the Transferor shall have delivered to
the Indenture Trustee an Officer's Certificate to the effect that such officer
reasonably believes that the execution and delivery of such receivables purchase
agreement and the purchase of Receivables from the Account Owner named therein
will not have an Adverse Effect.

       "Recoveries" means all amounts received (net of out-of-pocket costs of
collection) including Insurance Proceeds, which are reasonably estimated by the
Servicer to be attributable to Defaulted Receivables, including the net proceeds
of any sale of such Defaulted Receivables by the Transferor.

       "Redemption Event" has the meaning specified in the Indenture.

       "Registered Notes" has the meaning specified in the Indenture.

       "Related Account" means an Account with respect to which a new credit
account number has been issued by the applicable Account Owner or Servicer or
the applicable Transferor under circumstances resulting from a lost or stolen
credit card and not requiring standard application and credit evaluation
procedures under the Credit Card Guidelines.

       "Removal Date" means the date specified by the Transferor for removal of
Removed Accounts and Removed Participation Interest.

       "Removed Accounts" has the meaning specified in Section 2.10(a).

       "Removed Participation Interests" has the meaning specified in Section
2.10.

       "Required Designation Date" has the meaning specified in Section
2.09(a)(i).

                                       11
<PAGE>

       "Required Minimum Principal Balance" means, unless otherwise provided in
an Indenture Supplement relating to any Series, as of any date of determination,
an amount equal to the sum of the numerators used in the calculation of the
Investor Percentages with respect to Principal Receivables for all outstanding
Series on such date; provided that with respect to any Series in its Early
Accumulation Period or such other period as designated in the related Indenture
Supplement with an Invested Amount as of such date of determination equal to the
Principal Funding Account Balance relating to such Series taking into account
the Principal Funding Account Balance relating to such Series on deposit in the
Principal Funding Account on such date of determination, the numerator used in
the calculation of the Investor Percentage with respect to Principal Receivables
relating to such Series shall, solely for the purpose of the definition of
Required Minimum Principal Balance, be deemed to equal zero.

       "Required Transferor Interest" has the meaning specified in the
Indenture.

       "Requirements of Law" means any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, whether federal, state
or local (including usury laws, the Federal Truth in Lending Act and Regulation
B and Regulation Z of the Board of Governors of the Federal Reserve System),
and, when used with respect to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person.

       "Secured Account" means any Account for which the related Obligor has
pledged assets or made a cash collateral deposit as security for payment of the
Receivables arising in such Account.

       "Series" has the meaning specified in the Indenture.

       "Series Account" has the meaning specified in the Indenture.

       "Series Enhancement" has the meaning specified in the Indenture.

       "Series Enhancer" has the meaning specified in the Indenture.

       "Service Transfer" has the meaning specified in Section 7.01.

       "Servicer" means Nordstrom fsb, in its capacity as Servicer pursuant to
this Agreement, and, after any Service Transfer, the Successor Servicer.

       "Servicer Default" has the meaning specified in Section 7.01(a).

       "Servicing Fee" means the servicing fee payable to the Servicer in
respect of each Monthly Period pursuant to Section 3.02 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 Invested Amount (or such other amount as specified in
the related Indenture 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 prior to the termination of the Trust
pursuant to Section 8.01 of the Trust Agreement.

                                       12
<PAGE>

       "Servicing Fee Rate" means, with respect to any Series, the servicing fee
rate specified in the related Indenture Supplement.

       "Special Funding Account" has the meaning specified in the Indenture.

       "Special Funding Amount" has the meaning specified in the Indenture.

       "Standard & Poor's" means Standard & Poor's Ratings Services, or its
successor.

       "Starter Account" means an Account for which the related Obligor had no
credit history as of the date of origination of the Account.

       "State" has the meaning specified in the Indenture.

       "Successor Servicer" has the meaning specified in Section 7.02(a).

       "Supplemental Accounts" means Additional Accounts that the Transferor
designates as Accounts pursuant to Sections 2.09(a)(i) and 2.09(b).

       "Supplemental Certificate" has the meaning specified in the Trust
Agreement.

       "Tax Opinion" has the meaning specified in the Indenture.

       "Termination Notice" has the meaning specified in Section 7.01.

       "Transaction Documents" has the meaning specified in the Indenture.

       "Transfer Agent and Registrar" has the meaning specified in the
Indenture.

       "Transfer Restriction Event" means, with respect to a Transferor, that
such Transferor unable for any reason to transfer Receivables to the Trust
pursuant to this Agreement, including by reason of the application of the
provisions of Section 6.01 or any order of any Governmental Authority.

       "Transferor" means (i) Nordstrom Private Label Receivables LLC, or its
successor under this Agreement and (ii) any Additional Transferor. References to
"each Transferor" shall refer to each entity mentioned in the preceding sentence
and references to "the Transferor" shall refer to all of such entities.

       "Transferor Certificates" has the meaning specified in the Trust
Agreement.

       "Transferor Interest" has the meaning specified in the Indenture.

       "Transferred Account" means each account into which an Account shall be
transferred; provided, that (i) such transfer was made in accordance with the
Credit Card Guidelines and (ii) such account can be traced or identified as an
account into which an Account has been transferred.

       "Trust" means the Nordstrom Private Label Credit Card Master Note Trust.

                                       13
<PAGE>

       "Trust Agreement" means the Trust Agreement relating to the Trust, dated
as of October 1, 2001, between Nordstrom Private Label Receivables LLC and the
Owner Trustee, as the same may be amended, supplemented or otherwise modified
from time to time.

       "Trust Assets" has the meaning specified in Section 2.01.

       "Trust Termination Date" has the meaning specified in the Trust
Agreement.

       "Trustee" means the Owner Trustee and the Indenture Trustee.

       "UCC" means the Uniform Commercial Code, as amended from time to time, as
in effect in the applicable jurisdiction.

       "United States" has the meaning specified in the Indenture

       Section 1.02. 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 Trust Agreement, the
Indenture or the related Indenture Supplement, as applicable.

       (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 GAAP. 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 GAAP, the definitions contained in this Agreement
or in any such certificate or other document shall control.

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

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

       (f) The words "hereof", "herein", "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 subsection,
Section, Schedule or Exhibit are references to subsections, Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the term
"including" means "including without limitation."

                                       14
<PAGE>

                                   ARTICLE TWO

                            CONVEYANCE OF RECEIVABLES

       Section 2.01. Conveyance of Receivables. By execution of this Agreement,
Nordstrom Private Label Receivables LLC or, if applicable, any Additional
Transferor, does hereby transfer, assign, set over and otherwise convey to the
Trust, without recourse except as provided herein, all its right, title and
interest in, to and under the Receivables existing at the close of business on
the Initial Cut-Off Date, in the case of Receivables arising in the Initial
Accounts, and on each Addition Cut-Off Date, in the case of Receivables arising
in the Additional Accounts, 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 and the right to any Series Enhancement with respect to any
Series, in each case together with all monies due or to become due and all
amounts received or receivable with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. The property described in the
preceding sentence, together with all monies and other property credited to the
Collection Account, the Series Accounts and the Special Funding Account
(including any subaccounts of such account), the rights of the Trust under this
Agreement and the Trust Agreement, the property conveyed to the Trust under any
Participation Interest Supplement and the right to receive Recoveries attributed
to cardholder charges for merchandise and services in the Accounts 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 Owner Trustee (as such or in its individual capacity), the Indenture
Trustee or any Noteholder of any obligation of any Account Owner, any
Transferor, the Servicer 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 Obligors shall not be notified in connection with the creation of
the Trust of the transfer, assignment, set-over and conveyance of the
Receivables to the Trust.

       Each Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables conveyed by such Transferor existing on the Initial Cut-Off Date and
thereafter created 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 transfer and assignment of its interest in 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 Owner Trustee as soon as
practicable after the first Closing Date, in the case of Receivables arising in
the Initial Accounts, and (if any additional filing is so necessary) as soon as
practicable after the applicable Addition Date, in the case of Receivables
arising in Additional Accounts. The Owner 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 transfer and assignment.

       Each Transferor further agrees, at its own expense, on or prior to (i)
the first Closing Date, in the case of the Initial Accounts, (ii) the applicable
Addition Date, in the case of Additional Accounts with respect to such
Transferor, if any, and (iii) the applicable Removal Date, in the case of
Removed Accounts with respect to such Transferor, (a) to cause each Account
Owner to indicate in its respective computer files that Receivables created (or
reassigned, in the case of Removed Accounts) in connection with the Accounts
have been

                                       15
<PAGE>

conveyed to the Trust pursuant to this Agreement (or conveyed to each such
Transferor or its designee in accordance with Section 2.10, in the case of
Removed Accounts) by including (or deleting in the case of Removed Accounts) in
such computer files a clearly specified code correctly indicating the Trust's
ownership of the Receivables, and (b) to deliver to the Owner Trustee a computer
file or microfiche list containing a true and complete list of all such Accounts
specifying for each such Account, as of the Initial Cut-Off Date, in the case of
the Initial Accounts, the applicable Addition Cut-Off Date in the case of
Additional Accounts, and the applicable Removal Date in the case of Removed
Accounts, its account number and the aggregate amount outstanding in such
Account. Each such file or list, as supplemented, from time to time, to reflect
Additional Accounts and Removed Accounts, shall be marked as Schedule 1 to this
Agreement and is hereby incorporated into and made a part of this Agreement.
Each Transferor further agrees not to alter the code referenced in this
paragraph with respect to any Account during the term of this Agreement unless
and until such Account becomes a Removed Account.

       If the arrangements with respect to the Receivables hereunder shall
constitute a loan and not a purchase and sale of such Receivables, it is the
intention of the parties hereto that this Agreement shall constitute a security
agreement under applicable law, and each Transferor hereby grants to the Trust a
first priority perfected security interest in all of such Transferor's right,
title and interest, whether owned on the Initial Cut-Off Date or thereafter
acquired, in, to and under the Trust Assets, and all money, accounts, general
intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of
credit consisting of, arising from or related to the Trust Assets, and all
proceeds thereof, to secure its obligations hereunder.

       To the extent that any Transferor retains any interest in the Trust
Assets, such Transferor grants to the Issuer a security interest in all of such
Transferor's right, title, and interest, whether owned on the Initial Cut-Off
Date or thereafter acquired, in, to and under the Trust Assets, and all money,
accounts, general intangibles, chattel paper, instruments, documents, goods,
investment property, deposit accounts, certificates of deposit, letters of
credit and advices of credit consisting of, arising from, or related to the
Trust Assets, and all proceeds thereof (collectively, the "Indenture
Collateral"), to secure its obligations hereunder. With respect to the Indenture
Collateral, the Issuer shall have all of the rights that it has under the
Indenture and the all of the rights of a secured creditor under the UCC. The
Transferor shall perform all actions necessary to maintain the perfection
priority of Trust's security interest in the Indenture Collateral.

       Section 2.02. Acceptance by Trust.

       (a) The Trust hereby acknowledges its acceptance of all right, title and
interest to the property, now existing and hereafter created, conveyed to the
Trust pursuant to Section 2.01. The Trust further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Transferor
delivered to the Owner Trustee the computer file or microfiche list relating to
the Initial Accounts described in the third paragraph of Section 2.01. The Trust
shall maintain all of its right, title and interest in the Indenture Collateral
until the Lien of the Indenture is released. The Owner Trustee shall maintain a
copy of Schedule 1, as delivered from time to time, at its Corporate Trust
Office.

                                       16
<PAGE>

       (b) The Trust hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche lists marked as Schedule 1 and delivered to the Owner Trustee or the
Trust, from time to time, except (i) to a Successor Servicer or as required by a
Requirement of Law applicable to the Owner Trustee, (ii) in connection with the
performance of the Owner Trustee's or the Trust's duties hereunder, (iii) to the
Indenture Trustee in connection with its duties in enforcing the rights of
Noteholders or (iv) to bona fide creditors or potential creditors of any Account
Owner, the Servicer or any Transferor for the limited purpose of enabling any
such creditor to identify applicable Receivables or Accounts subject to this
Agreement or the Receivables Purchase Agreements. The Trust agrees to take such
measures as shall be reasonably requested by any Transferor to protect and
maintain the security and confidentiality of such information and, in connection
therewith, shall allow each Transferor or its duly authorized representatives to
inspect the Owner Trustee's security and confidentiality arrangements as they
specifically relate to the administration of the Trust from time to time during
normal business hours upon prior written notice. The Trust shall provide the
applicable Transferor with notice five Business Days prior to disclosure of any
information of the type described in this subsection.

       Section 2.03. Corporate Representations and Warranties of Each
Transferor. Each Transferor hereby severally represents and warrants to the
Trust (and agrees that the Owner Trustee and the Indenture Trustee may
conclusively rely on each such representation and warranty in accepting the
Receivables in trust and in authenticating the Notes, respectively) as of each
Closing Date (but only if it was a Transferor on such date) that:

              (a) Organization and Good Standing. Such Transferor is duly
       organized, validly existing and in good standing under the laws of the
       jurisdiction of its organization and has, in all material respects, full
       power and authority to own its properties and conduct its business as
       presently owned or conducted, and to execute, deliver and perform its
       obligations under this Agreement, each Transaction Document to which it
       is a party and each applicable Participation Interest Supplement.

              (b) Due Qualification. Such Transferor is duly qualified to do
       business and is in good standing as a foreign limited liability company
       or 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 (i) render any Credit Card Agreement relating to an Account
       specified in a Receivables Purchase Agreement with such Transferor or any
       Receivable conveyed to the Trust by such Transferor unenforceable by such
       Transferor or the Trust or (ii) have a material adverse effect on the
       Noteholders.

              (c) Due Authorization. (i) The execution and delivery of this
       Agreement, each Transaction Document to which it is a party and each
       applicable Participation Interest Supplement by such Transferor and the
       order to the Owner Trustee to have the Notes authenticated and delivered
       and the consummation by such Transferor of the transactions provided for
       in this Agreement, any Receivables Purchase Agreement to which it is a
       party and each applicable Participation Interest Supplement have been
       duly authorized by such Transferor by all necessary limited liability
       company action on the part of such Transferor and (ii) this Agreement,
       each Transaction Document to which it is

                                       17
<PAGE>

       a party and each Participation Interest Supplement will remain, from the
       time of its execution, an official record of such Transferor.

              (d) No Conflict. The execution and delivery by such Transferor of
       this Agreement, each Transaction Document to which it is a party and each
       applicable Participation Interest Supplement, and the performance of the
       transactions contemplated by this Agreement, each Transaction Document to
       which it is a party and each applicable Participation Interest Supplement
       and the fulfillment of the terms hereof and thereof applicable to such
       Transferor, will not conflict with or violate any Requirements of Law
       applicable to such 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 such Transferor is a party or by which it or its
       properties are bound.

              (e) No Proceedings. There are no proceedings or investigations,
       pending or, to the best knowledge of such Transferor, threatened against
       such Transferor before any Governmental Authority (i) asserting the
       invalidity of this Agreement, Transaction Document to which it is a party
       or any applicable Participation Interest Supplement, (ii) seeking to
       prevent the consummation of any of the transactions contemplated by this
       Agreement, any Transaction Document to which it is a party or each
       applicable Participation Interest Supplement, (iii) seeking any
       determination or ruling that, in the reasonable judgment of such
       Transferor, would materially and adversely affect the performance by such
       Transferor of its obligations under this Agreement, any Receivables
       Purchase Agreement to which it is a party or each applicable
       Participation Interest Supplement, (iv) seeking any determination or
       ruling that would materially and adversely affect the validity or
       enforceability of this Agreement, any Receivables Purchase Agreement to
       which it is a party or any applicable Participation Interest Supplement
       or (v) seeking to affect adversely the income or franchise tax attributes
       of the Trust under the United States Federal or any State income or
       franchise tax systems.

              (f) All Consents. All authorizations, consents, orders or
       approvals of or registrations or declarations with any Governmental
       Authority required to be obtained, effected or given by such Transferor
       in connection with the execution and delivery by such Transferor of this
       Agreement, each Transaction Document to which it is a party and each
       applicable Participation Interest Supplement and the performance of the
       transactions contemplated by this Agreement, any each Transaction
       Document to which it is a party and each applicable Participation
       Interest Supplement by such Transferor have been duly obtained, effected
       or given and are in full force and effect.

              (g) Insolvency. No Insolvency Event with respect to such
       Transferor has occurred and the transfer of the Receivables by such
       Transferor to the Trust has not been made in contemplation of the
       occurrence thereof or with the intent to hinder, delay or defraud such
       Transferor or the creditors of such Transferor.

       The representations and warranties of each Transferor set forth in this
Section shall survive the transfer and assignment by such Transferor of the
respective Receivables to the

                                       18
<PAGE>

Trust, the pledge of the Receivables to the Indenture Trustee pursuant to the
Indenture, and the issuance of the Notes. Upon discovery by such Transferor, the
Servicer or the Owner Trustee of a breach of any of the representations and
warranties by such Transferor set forth in this Section, the party discovering
such breach shall give prompt written notice to the other parties and the
Indenture Trustee. Such Transferor agrees to cooperate with the Servicer and the
Owner Trustee in attempting to cure any such breach.

       Section 2.04. Other Representations and Warranties of Each Transferor.

       (a) Representations and Warranties. Each Transferor hereby severally
represents and warrants to the Trust as of the Initial Issuance Date, each
Closing Date and, with respect to Additional Accounts, as of the related
Addition Date (but only if, in either case, it was a Transferor on such date)
that:

              (i) each Transaction Document to which it is a party, each
       applicable Participation Interest Supplement and, in the case of
       Additional Accounts, the related Assignment, each constitutes a legal,
       valid and binding obligation of such Transferor enforceable against such
       Transferor 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 or general principles of equity;

              (ii) as of the Initial Cut-Off Date with respect to the Initial
       Accounts (and the Receivables arising therein), and as of the related
       Removal Date or Addition Date with respect to Removed Accounts or
       Additional Accounts, respectively (and the Receivables arising therein),
       the portion of Schedule 1 to this Agreement under such Transferor's name,
       as supplemented to such date, is an accurate and complete listing in all
       material respects of all the Accounts the Receivables in which were
       transferred by such Transferor on the Initial Issuance Date or such
       Addition Cut-Off Date, as the case may be, and the information contained
       therein with respect to the identity of such Accounts and the Receivables
       existing thereunder is true and correct in all material respects as of
       the Initial Cut-Off Date or such Addition Cut-Off Date, as the case may
       be;

              (iii)each Receivable conveyed to the Trust by such Transferor has
       been conveyed to the Trust free and clear of any Lien of any Person
       claiming through or under such Transferor or any of its Affiliates (other
       than Liens permitted under Section 2.07(b)) and in compliance with all
       Requirements of Law applicable to such 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 such Transferor in connection with the
       conveyance by such Transferor of Receivables to the Trust have been duly
       obtained, effected or given and are in full force and effect;

              (v) either this Agreement or, in the case of Additional Accounts,
       the related Assignment constitutes an absolute sale, transfer and
       assignment to the Trust of all right, title and interest of such
       Transferor in the Receivables conveyed to the Trust by such Transferor
       and the proceeds thereof and Recoveries identified as relating to the

                                       19
<PAGE>

       Receivables conveyed to the Trust by such Transferor or, if this
       Agreement or, in the case of Additional Accounts, the related Assignment
       does not constitute a sale of such property, it constitutes a grant of a
       first priority perfected "security interest" (as defined in the UCC) in
       such property to the Trust, which, in the case of existing Receivables
       and the proceeds thereof and said Recoveries, 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. Upon the filing of the financing statements and, in
       the case of Receivables hereafter created and the proceeds thereof, upon
       the creation thereof, the Trust shall have a first priority perfected
       security or ownership interest in such property and proceeds;

              (vi) on the Initial Cut-Off Date, each Initial Account specified
       in Schedule 1 with respect to such Transferor is an Eligible Account and,
       on the applicable Addition Cut-Off Date, each related Additional Account
       specified in Schedule 1 with respect to such Transferor is an Eligible
       Account;

              (vii) on the Initial Cut-Off Date, each Receivable then existing
       and conveyed to the Trust by such Transferor is an Eligible Receivable
       and, on the applicable Addition Cut-Off Date, each Receivable contained
       in the related Additional Accounts and conveyed to the Trust by such
       Transferor is an Eligible Receivable;

              (viii) as of the date of the creation of any new Receivable
       transferred to the Trust by such Transferor, such Receivable is an
       Eligible Receivable;

              (ix) no selection procedures believed by such Transferor to be
       materially adverse to the interests of the Noteholders have been used in
       selecting such Accounts;

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

              (xi) the aggregate amount of Receivables that arises from Accounts
       that (A) have Obligors with a billing address in Canada is less than 1%
       of total amount of Receivables in the Trust, (B) are business charge
       accounts is less than 1% of the total amount of Receivables in the Trust,
       (C) are Starter Accounts is less than 3% of the total amount of the
       Receivables in the Trust and (D) have Obligors that are employees of
       Nordstrom Inc. or any of its affiliates is less 5% of the total amount
       Receivables in the Trust; .

       (b) Notice of Breach. The representations and warranties set forth in
Section 2.03 and this Section shall survive the transfers and assignments of the
Receivables to the Trust, the pledge of the Receivables to the Indenture Trustee
pursuant to the Indenture, and the issuance of the Notes. Upon discovery by any
Transferor or the Servicer of a breach of any of the representations and
warranties set forth in Section 2.03 or this Section, the party discovering such
breach shall give notice to the other parties and to the Indenture Trustee
within three

                                       20
<PAGE>

Business Days following such discovery; provided that the failure to give notice
within three Business Days does not preclude subsequent notice.

       Section 2.05. Reassignment of Ineligible Receivables.

       (a) Reassignment of Receivables. In the event (i) any representation or
warranty contained in Section 2.04(a)(ii), (iv), (vi), (vii), (viii) or (ix) is
not true and correct in any material respect as of the date specified therein
with respect to any Receivable or the related Account and such breach has a
material adverse effect on any Receivable (which determination shall be made
without regard to whether funds are then available pursuant to any Series
Enhancement) unless cured within 60 days (or such longer period, not in excess
of 150 days, as may be agreed to by the Indenture Trustee and the Servicer)
after the earlier to occur of the discovery thereof by the Transferor which
conveyed such Receivables to the Trust or receipt by such Transferor of written
notice thereof given by the Trust, the Indenture Trustee or the Servicer, (ii)
any representation or warranty contained in Section 2.04(a)(iii) is not true and
correct in any material respect as of the date specified therein with respect to
any Receivable and such breach has a material adverse effect on any Receivable
(which determination shall be made without regard to whether funds are then
available pursuant to any Series Enhancement) or (iii) it is so provided in
Section 2.07(a) with respect to any Receivables conveyed to the Trust by such
Transferor, then such Transferor shall accept reassignment of all Receivables in
the related Account ("Ineligible Receivables") on the terms and conditions set
forth in Section 2.05(b).

       (b) Price of Reassignment. The Servicer shall deduct the portion of such
Ineligible Receivables reassigned to each Transferor which are Principal
Receivables from the aggregate amount of Principal Receivables used to calculate
the Transferor Interest. In the event that, following the exclusion of such
Principal Receivables from the calculation of the Transferor Interest, the
Transferor Interest would be less than the Required Transferor Interest, not
later than 1:00 p.m., New York City time, two Business Days after which such
reassignment obligation arises, the applicable 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 Interest would be below the Required
Transferor Interest (up to the amount of such Principal Receivables).

       Upon reassignment of any Ineligible Receivable, the Trust shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to the applicable Transferor or its designee, without
recourse, representation or warranty, all the right, title and interest of the
Trust in and to such Ineligible Receivable, all Recoveries related thereto, all
monies and amounts due or to become due and all proceeds thereof and such
reassigned Ineligible Receivable shall be treated by the Trust as collected in
full as of the date on which it was transferred. The obligation of each
Transferor to accept reassignment of any Ineligible Receivables conveyed to the
Trust by such Transferor, and to make the deposits, if any, required to be made
to the Special Funding Account as provided in this Section, shall constitute the
sole remedy respecting the event giving rise to such obligation available to the
Trust, the Noteholders (or the Indenture Trustee on behalf of the Noteholders)
or any Series Enhancer. Notwithstanding any other provision of this subsection,
a reassignment of an Ineligible Receivable in excess of the amount that would
cause the Transferor Interest to be less than the Required Transferor Interest
shall not occur if the applicable Transferor fails to make any deposit required
by this Section

                                       21
<PAGE>

with respect to such Ineligible Receivable. The Trust shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall reasonably be requested and provided by the applicable Transferor to
effect the conveyance of such Ineligible Receivables pursuant to this
subsection, but only upon receipt of an Officer's Certificate from such
Transferor that states that all conditions set forth in this Section have been
satisfied.

       Section 2.06. Reassignment of Trust Portfolio. In the event any
representation or warranty of a Transferor set forth in Section 2.03(a) or (c)
or Section 2.04(a)(i) or (v) is not true and correct in any material respect and
such breach has a material adverse effect on the Receivables or Participation
Interests conveyed to the Trust by such Transferor or the availability of the
proceeds thereof to the Trust (which determination shall be made without regard
to whether funds are then available pursuant to any Series Enhancement), then
either the Trust, the Indenture Trustee or the Holders of Notes evidencing not
less than 50% of the aggregate unpaid principal amount of all outstanding Notes,
by notice then given to such Transferor and the Servicer (and to the Trust and
Indenture Trustee if given by the Noteholders), may direct such Transferor to
accept a reassignment of the Receivables and any Participation Interests
conveyed to the Trust by such 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 such Transferor shall be obligated to
accept such reassignment on the terms set forth below; provided, however, that
such Receivables and Participation Interests will not be reassigned to such
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) such Transferor shall have
delivered to the Trust a certificate of an authorized officer describing the
nature of such breach and the manner in which the relevant representation and
warranty has become true and correct.

       The applicable Transferor shall deposit in the Collection Account in
immediately available funds not later than 1:00 p.m., New York City time, two
Business Days after 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 Indenture Supplement.
Notwithstanding anything to the contrary in this Agreement, such amounts shall
be distributed to the Noteholders on such Distribution Date in accordance with
the terms of each Indenture Supplement. If the Trust, the Indenture Trustee or
the Noteholders give notice directing the applicable Transferor to accept a
reassignment of the Receivables and Participation Interests as provided above,
the obligation of such Transferor to accept such reassignment pursuant to this
Section and to make the deposit required to be made to the Collection Account as
provided in this paragraph shall constitute the sole remedy respecting an event
of the type specified in the first sentence of this Section available to the
Noteholders (or the Indenture Trustee on behalf of the Noteholders) or any
Series Enhancer. Upon reassignment of the Receivables and the Participation
Interests on such Distribution Date, the Trust shall automatically and without
further action be deemed to transfer, assign, set-over and otherwise convey to
the applicable Transferor, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to the Receivables and the
Participation Interests, all Recoveries allocable to the Trust, and all monies
and amounts due or to become due with respect thereto and all proceeds thereof.
The Trust shall execute such documents and instruments of

                                       22
<PAGE>

transfer or assignment and take such other actions as shall reasonably be
requested by the applicable Transferor to effect the conveyance of such property
pursuant to this Section.

       Section 2.07. Covenants of each Transferor. Each Transferor hereby
severally covenants that:

              (a) Receivables Not Evidenced by Promissory Notes. Except in
       connection with its enforcement or collection of any Receivable, such
       Transferor will take no action to cause any Receivable conveyed 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 a Receivable) it shall be deemed to be
       an Ineligible Receivable and shall be reassigned to such Transferor in
       accordance with Section 2.05(b).

              (b) Security Interests. Except for the conveyances hereunder, such
       Transferor will not sell, pledge, assign or transfer to any other Person,
       or grant, create, incur, assume or suffer to exist any Lien on, any
       Receivable or Participation Interest conveyed by it to the Trust, whether
       now existing or hereafter created, or any interest therein, and such
       Transferor shall defend the right, title and interest of the Trust and
       the Indenture Trustee in, to and under the Receivables and any
       Participation Interest, whether now existing or hereafter created,
       against all claims of third parties claiming through or under such
       Transferor; provided, however, that nothing in this subsection shall
       prevent or be deemed to prohibit such Transferor from suffering to exist
       upon any of the Receivables transferred by it to the Trust any Liens for
       municipal or other local taxes if such taxes shall not at the time be due
       and payable or if such 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.

              (c) Transferor Interest. Except for (i) the conveyances hereunder,
       in connection with any transaction permitted by Section 4.02(a)(i) and as
       provided in Section 2.09(d) of this Agreement or Section 2.12 of the
       Indenture or (ii) conveyances with respect to which the Rating Agency
       Condition shall have been satisfied and a Tax Opinion shall have been
       delivered, such Transferor agrees not to transfer, sell, assign, exchange
       or otherwise convey or pledge, hypothecate or otherwise grant a security
       interest in the Transferor Interest, the Transferor Certificate or any
       Supplemental Certificate and any such attempted transfer, assignment,
       exchange, conveyance, pledge, hypothecation, grant or sale shall be void.

              (d) Delivery of Collections or Recoveries. In the event that such
       Transferor receives Collections or Recoveries, such 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.

              (e) Notice of Liens. Such Transferor shall notify the Trust, the
       Indenture Trustee and each Series Enhancer promptly after becoming aware
       of any Lien on any Receivable (or on the underlying receivable) or
       Participation Interest conveyed by it to

                                       23
<PAGE>

       the Trust other than the conveyances hereunder and under any Receivables
       Purchase Agreement to which it is a party and the Indenture.

              (f) Notice of Change in Credit Card Guidelines. The Transferor
       shall notify the Rating Agencies of any change in the Credit Card
       Guidelines.

              (g) Continuous Perfection. The Transferor shall not change its
       name, identity or structure in any manner that might cause any financing
       or continuation statement filed pursuant to this Agreement to be
       misleading unless the Transferor shall have delivered to the Trust 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 the
       jurisdiction under whose laws it is organized, its chief execution office
       or change the location of its principal records concerning the
       Receivables unless it has delivered to the Trust 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 Trust in the
       Receivables to continue to be perfected with the priority required by
       this Agreement.

       Section 2.08. Covenants of each Transferor with Respect to Receivables
Purchase Agreements.

       (a) Each Transferor hereby covenants that it will at all times enforce
the covenants and agreements of the Account Owners under the terms of the
Receivables Purchase Agreements to which it is a party, including covenants to
the effect set forth below:

              (i) Periodic Rate Finance Charges and Other Fees. Except (A) as
       otherwise required by any Requirements of Law, or (B) as is deemed by the
       Account Owner to be necessary in order for it to maintain its credit card
       business on a competitive basis based on a good faith assessment by it of
       the nature of its competition in the credit card business, it shall not
       at any time reduce the annual percentage rate of the Periodic Rate
       Finance Charges assessed on the Receivables transferred by it to the
       Transferor or other fees charged on any of the Accounts owned by it if
       either (1) as a result of any such reduction, such Account Owner's
       reasonable expectation is that such reduction will cause a Redemption
       Event or Event of Default to occur or (2) such reduction is not also
       applied to all comparable segments of consumer revolving credit card
       accounts owned by such Account Owner which have characteristics the same
       as, or substantially similar to, such Accounts.

              (ii) Credit Card Agreements and Guidelines. Such Account Owner
       shall comply with and perform its obligations under the Credit Card
       Agreements relating to the Accounts owned by it 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
       Noteholders. Subject to compliance with all Requirements of Law Section
       2.08(a)(i), such Account Owner may change the terms and provisions of the
       Credit Card Agreements or the Credit Card Guidelines with respect to any
       of the Accounts owned by it in any respect (including the calculation of
       the amount or the timing of charge-offs and the Periodic Rate Finance
       Charges and other fees to be assessed thereon) only if such

                                       24
<PAGE>

       change is made applicable to all comparable segments of the consumer
       revolving credit card accounts owned by such Account Owner which have
       characteristics the same as, or substantially similar to, such Accounts.
       Notwithstanding the foregoing, unless required by Requirements of Law or
       as permitted by Section 2.08(a), no Account Owner will take any action
       with respect to the applicable Credit Card Agreements or the applicable
       Credit Card Guidelines, which, at the time of such action, the Account
       Owner reasonably believes will have a material adverse effect on the
       Noteholders.

              (iii) Receivables Purchase Agreement. Transferor, in its capacity
       as Purchaser of Receivables from the Seller under the Receivables
       Purchase Agreement, shall enforce the covenants and agreements of the
       Seller as set forth in such Receivables Purchase Agreement, where a
       failure of the Seller to comply would have an Adverse Effect.

       (b) New or Amendments to Receivables Purchase Agreements.

       Each Transferor further covenants that it will not enter into any
amendments to a Receivables Purchase Agreement or enter into a new Receivables
Purchase Agreement unless the Rating Agency Condition has been satisfied.

       Section 2.09. Addition of Accounts.

       (a) Additional Accounts

              (i) Required Additions. If on any Business Day, either (A) the
       Transferor Interest is less than the Required Transferor Interest or (B)
       the total amount of Principal Receivables is less than the Required
       Minimum Principal Balance on such Business Day, the Transferor shall on
       or prior to the close of business on the second Business Day following
       such Business Day (the "Required Designation Date"), unless the
       Transferor Interest exceeds the Required Transferor Interest and the
       total amount of Principal Receivables exceeds the Required Minimum
       Principal Balance, in each case, as of the close of business on such
       Required Designation Date, cause to be designated 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 Interest as of the close of business on
       the applicable Addition Date, is at least equal to the Required
       Transferor Interest and the aggregate principal balance of Principal
       Receivables, plus the then outstanding principal amount of any
       Participation Interests conveyed to the Trust as of the close of business
       on the Addition Date, is at least equal to the Required Minimum Principal
       Balance on such date. The Transferor shall promptly give notice to each
       Rating Agency of any obligation of the Transferor to designate Accounts
       pursuant to the preceding sentence. The failure of any condition set
       forth in Section 2.09(c) 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 clause 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 may nevertheless result in the occurrence of a
       Redemption Event.

                                       25
<PAGE>

              (ii) Optional Participation Interests. In lieu of, or in addition
       to, designating Additional Accounts pursuant to Section 2.09(a)(i), the
       Transferor may, subject to the conditions specified in Section 2.09(c),
       convey to the Trust participations (including 100% participations)
       representing undivided interests in a pool of assets primarily consisting
       of revolving credit card receivables and any interests in any of the
       foregoing, including securities representing or backed by such
       receivables and collections thereon ("Participation Interests"). The
       addition of Participation Interests in the Trust shall be effected by a
       Participation Interest Supplement, dated the applicable Addition Date and
       entered into pursuant to Section 9.01(a).

              (iii) Optional Additions. In addition to designating Additional
       Accounts pursuant to clause (i) above, the Transferor, subject to the
       conditions set forth in this subsection, may elect on any date to
       designate Eligible Accounts to the Trust and/or to automatically convey
       newly originated Eligible Accounts to the Trust upon their establishment.
       The Transferor hereby elects to automatically convey newly originated
       Eligible Accounts to the Trust upon their establishment. The Transferor
       shall be permitted to transfer Eligible Accounts to the Trust pursuant to
       this clause as long as (A) the number of new Accounts and the amount of
       Receivables arising from such Accounts designated during any fiscal year
       do not exceed 20% of the total amount of Accounts designated to the Trust
       and Receivables in the Trust, respectively, as of the first day of such
       year fiscal year or (B) for any fiscal quarter, the number of new
       Accounts and the amount of Receivables arising from such Accounts
       designated during such fiscal quarter do not exceed 15% of the total
       amount of Accounts designated to the Trust and Receivables in the Trust,
       respectively, as of the first day of such quarter. The Transferor shall
       give prompt notice to each Rating Agency if any of the limits set forth
       in the preceding sentence have been exceeded. If the Transferor elects to
       suspend or terminate the Eligible Receivables, it shall do so only upon
       providing the Indenture Trustee, the Rating Agencies and the Servicer
       with notice thereof.

       (b) Restricted Additions. Each Transferor may from time to time, at its
sole discretion, subject to the conditions specified in Section 2.09(c),
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 Required Additions, Optional Participation Interests
and Restricted Additions. On the Addition Date with respect to any Supplemental
Accounts or Participation Interests designated pursuant to Section 2.09(a) or
(b), the Transferor shall transfer the Receivables in such Supplemental Accounts
(and such Supplemental Accounts shall be deemed to be Accounts for purposes of
this Agreement) or shall transfer such Participation Interests, in each case as
of the close of business on the applicable Addition Date, subject to the
satisfaction of the following conditions:

              (i) on or before the tenth Business Day immediately preceding the
       Addition Date, each Participating Transferor shall have given the Trust,
       the Indenture Trustee and each Rating Agency written notice that the
       Supplemental Accounts or Participation Interests will be included and
       specifying the applicable Addition Date, the Addition Cut-Off Date and
       the approximate number of accounts expected to be added and the

                                       26
<PAGE>

       approximate aggregate balances expected to be outstanding in the accounts
       to be added (in the case of Supplemental Accounts);

              (ii) in the case of Supplemental Accounts, the Participating
       Transferor shall have delivered to the Trust and the Indenture 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, no Insolvency Event with respect to the Participating Transferor or
       the Account Owner of the Supplemental Accounts shall have occurred nor
       shall the transfer of the Receivables arising in the Supplemental
       Accounts or of the Participation Interests to the Trust have been made in
       contemplation of the occurrence thereof or with the intent to hinder,
       delay or defraud the Transferor or the creditors of the Transferor;

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

              (v) each Participating Transferor shall have delivered to the
       Trust and the Indenture Trustee an Officer's Certificate, dated the
       Addition Date, stating that (A) in the case of Supplemental Accounts, as
       of the applicable Addition Cut-Off Date, the Supplemental Accounts are
       all Eligible Accounts, (B) to the extent applicable, the conditions set
       forth in Sections 2.09(a)(ii) through (a)(iv) and (a)(viii) have been
       satisfied and (C) such Participating Transferor reasonably believes that
       the addition by such Participating 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 addition, then or thereafter result in an Adverse Effect with
       respect to any Series;

              (vi) on or prior to each Distribution Date, the Participating
       Transferors shall have delivered to the Trust, the Indenture Trustee and
       each Rating Agency, an Opinion of Counsel substantially in the form of
       Exhibit D-2 with respect to the Supplemental Accounts, if any, included
       as Accounts during the related Monthly Periods ending prior to such
       Distribution Date; the opinion delivery requirement set forth in the
       immediately preceding sentence may be modified provided that the Rating
       Agency Condition is satisfied;

              (vii) in the case of designation of Supplemental Accounts,
       Participating Transferors shall have delivered to the Owner Trustee (A)
       the computer file or microfiche list required to be delivered pursuant to
       Section 2.01 with respect to such Supplemental Accounts and (B) a duly
       executed Assignment; and

              (viii) to the extent required by Section 4.03, the Servicer shall
       have deposited in the Collection Account all Collections with respect to
       such Supplemental Accounts since the Addition Cut-off Date.

       (d) Additional Transferors. Upon satisfaction of the Rating Agency
Condition, the Transferor may designate Additional Transferors under this
Agreement in an amendment hereto

                                       27
<PAGE>

pursuant to subsection 9.01(a) and, in connection with such designation, the
Transferor shall surrender the Transferor Certificate to the Owner Trustee in
exchange for a newly issued Transferor Certificate modified to reflect such
Additional Transferor's interest in the Transferor Interest; provided, however,
that prior to any such designation and exchange the conditions set forth in
clauses (iii) and (v) of subsection 3.06(b) of the Trust Agreement shall have
been satisfied with respect thereto.

       Section 2.10. Removal of Accounts and Participation Interests.

       (a) Once per Monthly Period, each 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 Recoveries related thereto after the Removal Date, all monies due
or to become due and all amounts received or receivable with respect thereto,
and all proceeds thereof in or with respect to certain specified Accounts (the
"Removed Accounts") or Participation Interests conveyed to the Trust by such
Transferor (the "Removed Participation Interests") (unless otherwise set forth
in the applicable Participation Interest Supplement or Indenture Supplement) and
designated for removal by the Transferor, upon satisfaction of the following
conditions:

              (i) on or before the fifth Business Day preceding the Removal
       Date, such Transferor shall have given written notice to the Trust, the
       Indenture Trustee, the Servicer, the Rating Agency and each Series
       Enhancer (unless such notice requirement is otherwise waived) of such
       removal and specifying the Removal Date;

              (ii) on or prior to the date that is five Business Days on or
       before the Removal Date, such Transferor shall amend Schedule 1 by
       delivering to the Owner Trustee a computer file or microfiche list
       containing a true and complete list of the Removed Accounts specifying
       for each such Account, as of the date notice of the Removal Date is
       given, its account number, the aggregate amount outstanding in such
       Account and the aggregate amount of Principal Receivables outstanding in
       such Account;

              (iii) the removal will not cause the Transferor Interest to be
       less than the Required Transferor Interest;

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

              (v) the Rating Agency Condition shall have been satisfied with
       respect to the removal of the Removed Accounts and removed Participation
       Interests;

              (vi) such Transferor shall have delivered to the Trust and the
       Indenture Trustee an Officer's Certificate, dated the Removal Date, to
       the effect that such Transferor reasonably believes that (A) such removal
       will not have a material adverse effect on the Noteholders, (B) such
       removal will not result in the occurrence of a Pay Out Event or Event of
       Default, and (C) no selection procedures believed by such Transferor to
       be materially adverse to the interests of the Noteholders have been used
       in selecting the Removed Accounts; and

                                       28
<PAGE>

              (vii) as of the Removal Date, no more than 10% of the Receivables
       outstanding are more than 30 days Contractually Delinquent.

       (b) Upon satisfaction of the above conditions, the Trust shall execute
and deliver to such Transferor a Reassignment and shall, without further action,
be deemed to transfer, assign, set over and otherwise convey to such 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 and Removed Participation
Interests, all Recoveries related thereto, all monies due and to become due and
all amounts received or receivable with respect thereto after the Removal Date
and all proceeds thereof and any Insurance Proceeds relating thereto. The Trust
and Owner Trustee may conclusively rely on the Officer's Certificate delivered
pursuant to this Section and shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no personal liability in so
relying.

       In addition to the foregoing, on the date when any Receivable in an
Account becomes a Defaulted Receivable, the Trust shall, unless directed
otherwise by the Transferor, automatically and without further action or
consideration be deemed to transfer, set over and otherwise convey to the
Transferor with respect to such Account, without recourse, representation or
warranty, all right, title and interest of the Trust in and to the Defaulted
Receivables in such Account, all monies and amounts due or to become due with
respect thereto and all proceeds thereof; provided that Recoveries of such
Account shall be applied as provided herein.

       Section 2.11. Account Allocations. In the event that a Transfer
Restriction Event occurs with respect to a Transferor, then, (i) such 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
such Transferor's inability to transfer Receivables (up to an aggregate amount
equal to the amount of Receivables transferred to the Trust by such Transferor
in the Trust on such date), (ii) such Transferor and the Servicer agree that
such amounts will be applied as Collections in accordance with Article Eight of
the Indenture and the terms of each Indenture Supplement and (iii) 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 (i) and (ii)
above, Principal Receivables and all amounts which would have constituted
Principal Receivables but for such Transferor's inability to transfer
Receivables to the Trust which are charged off as uncollectible in accordance
with this Agreement shall continue to be allocated in accordance with Article
Eight of the Indenture and the terms of each Indenture Supplement. For the
purpose of the immediately preceding sentence, such 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 such Transferor
and the Servicer are unable pursuant to any Requirements of Law to allocate
Collections as described above, such 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 Eight of the Indenture and the terms of
each Indenture Supplement. The parties hereto agree that Finance Charge
Receivables, whenever created, accrued in respect

                                       29
<PAGE>

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 Eight
of the Indenture and the terms of each Indenture Supplement.

       Section 2.12. Discount Option.

       (a) The Transferor shall have the option to designate at any time and
from time to time a percentage or percentages, which may be a fixed percentage
or a variable percentage based on a formula (the "Discount Percentage"), of all
or any specified portion of Principal Receivables existing on or after the
Discount Option Date to be treated as Discount Option Receivables and thereafter
treated Finance Charge Receivables. As of the Closing Date, the Discount
Percentage is zero. Upon satisfaction of the Rating Agency Condition, the
Transferor shall also have the option of increasing, reducing or withdrawing the
Discount Percentage, at any time and from time to time, on and after the
applicable Discount Option Date. The Transferor shall provide to the Servicer,
the Trustees and any Rating Agency 30 days' prior written notice of the Discount
Option Date, and such designation shall become effective on the Discount Option
Date (i) unless such designation in the reasonable belief of the Transferor
would cause a Redemption Event or Event of Default with respect to any Series to
occur, or an event which, with notice or lapse of time or both, would constitute
a Redemption Event or Event of Default with respect to any Series and (ii) only
if the Rating Agency Condition shall have been satisfied with respect to such
designation.

       (b) After the Discount Option Date, Discount Option Receivable
Collections shall be treated as Collections of Finance Charge Receivables.

       Section 2.13. Representations and Warranties as to the Security Interest
of the Trust in the Receivables. The Transferor makes the following
representations and warranties to the Trust. The representations and warranties
speak as of the execution and delivery of this Agreement and as of each Closing
Date. Such representations and warranties shall survive the sale, transfer and
assignment of the Receivables to the Trust, the pledge thereof to the Indenture
Trustee and the termination of this Agreement and shall not be waived by any
party hereto unless the Rating Agency Condition is satisfied.

              (a) This Agreement creates a valid and continuing security
       interest (as defined in the applicable UCC) in the Indenture Collateral
       in favor of the Trust, which security interest is prior to all other
       Liens other than the Lien of the Indenture, and is enforceable as such as
       against creditors of and purchasers from the Transferor.

              (b) The Receivables constitute "accounts" within the meaning of
       the applicable UCC.

              (c) The Transferor owns and has good and marketable title to the
       Indenture Collateral free and clear of any Lien, claim or encumbrance of
       any Person.

              (d) The Transferor has caused or will have caused, within ten
       days, the filing of all appropriate financing statements in the proper
       filing office in the appropriate

                                       30
<PAGE>

       jurisdictions under applicable law in order to perfect the security
       interest in the Indenture Collateral granted to the Trust hereunder.

              (e) 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
       Indenture Collateral. The Transferor has not authorized the filing of and
       is not aware of any financing statements against the Transferor that
       include a description of collateral covering the Indenture Collateral
       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.

                                       31
<PAGE>

                                  ARTICLE THREE

                          ADMINISTRATION AND SERVICING
                                 OF RECEIVABLES

       Section 3.01. Acceptance of Appointment and Other Matters Relating to the
Servicer.

       (a) Nordstrom fsb agrees to act as the Servicer under this Agreement and
the Noteholders by their acceptance of Notes consent to Nordstrom fsb acting as
Servicer.

       (b) As agent for each Transferor and the Trust, the Servicer shall
service and administer the Receivables (including the underlying receivables)
and any Participation Interests, shall collect and deposit into the Collection
Account amounts received under the Receivables (including the underlying
receivables) and any Participation Interests and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card receivables comparable to the
Receivables and in accordance with the Credit Card Guidelines and the
Transaction Documents. As agent for each Transferor and the Trust, 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 reasonably necessary or
desirable, including, but not limited to, billing, collecting and remitting
Collections, providing customer service and performing other activities
customary in servicing credit card receivables. Without limiting the generality
of the foregoing and subject to Section 7.01, the Servicer or its designee is
hereby authorized and empowered, unless such power is revoked by the Indenture
Trustee on account of the occurrence of a Servicer Default, (i) to instruct the
Owner Trustee or the Indenture Trustee to make withdrawals and payments from the
Collection Account, the Special Funding Account and any Series Account, as set
forth in this Agreement, the Indenture or any Indenture Supplement, (ii) to take
any action required or permitted under any Series Enhancement, as set forth in
this Agreement, the Indenture or any Indenture Supplement, (iii) to execute and
deliver, on behalf of the Trust, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable Requirements of Law, to commence collection
proceedings with respect to such Receivable and (iv) 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 or reporting requirements or other laws or regulations. The
Owner Trustee and the Indenture Trustee upon written request therefor shall
furnish the Servicer with any documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.

       (c) The Servicer shall not, and no Successor Servicer shall, 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 or such Successor Servicer, as the case may be, in
connection with servicing other credit card receivables.

                                       32
<PAGE>

       (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 Noteholders.

       (e) The Servicer shall pay out of its own funds, without reimbursement,
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 Owner Trustee (as such and in its individual capacity
including amounts owed to the Owner Trustee under the Trust Agreement, the
Administrator and the Indenture Trustee (including the reasonable fees and
expenses of its outside counsel) and independent accountants and all other fees
and expenses, including the costs of filing UCC continuation statements, the
costs and expenses relating to obtaining and maintaining the listing of any
Notes on any stock exchange and any stamp, documentary, excise, property
(whether on real, personal or intangible property) or any similar tax levied on
the Trust or the Trust's assets that are not expressly stated in this Agreement
to be payable by the Trust or the Transferor (other than federal, state, local
and foreign income and franchise taxes, if any, or any interest or penalties
with respect thereto, assessed on the Trust).

       (f) Fidelity Bond Coverage. The Servicer agrees at its own cost and
expense to maintain during the term of this Agreement adequate fidelity bond
coverage of the officers and employees of the Servicer (as well as any temporary
personnel if not covered by their agency's insurance) who handle or may have
occasion to handle or control any funds handled by the Servicer, documents
and/or papers relating to the Receivables. Such fidelity bond shall be in form
and substance reasonable and customary for companies which service credit card
receivables, shall protect against losses, including losses resulting from
forgery, theft, embezzlement and fraud, and the coverage under the fidelity bond
shall be at least $5,000,000. The Servicer shall furnish to the Administrator
certification by the carrier of such fidelity coverage attesting to the form or
type of bond evidencing such coverage, together with the amount, term, date of
commencement, anniversary or renewal date and name of insured and affirmatively
assuring the Administrator that such coverage cannot be materially changed,
other than by an increase in amount, or canceled without 30 days' prior written
notice to the Administrator.

       Section 3.02. Servicing Compensation. As 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 the Servicing
Fee with respect to each Monthly Period, payable on the related Distribution
Date. The Monthly Servicing Fee allocable to a Series of Notes with respect to
any Monthly Period (the "Monthly Servicing Fee") shall be determined in
accordance with the relevant Indenture Supplement. The portion of the Servicing
Fee with respect to any Monthly Period not paid pursuant to the preceding
sentence shall be paid by the Holders of the Transferor Certificates on the
related Distribution Date and in no event shall the Trust, the Owner Trustee (as
such or in its individual capacity), the Indenture Trustee, the Noteholders of
any Series or any Series Enhancer be liable for the share of the Servicing Fee
with respect to any Monthly Period to be paid by the Holders of the Transferor
Certificates.

                                       33
<PAGE>

       Section 3.03. Representations, Warranties and Covenants of the Servicer.

       (a) Nordstrom fsb, as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, with respect to itself, on
each Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants on which the Trust and the Indenture
Trustee shall be deemed to have relied in accepting the Receivables in trust and
in entering into the Indenture:

              (i) Organization and Good Standing. The Servicer is a federal
       savings association duly organized and validly existing in good standing
       under the laws of the United States and has, in all material respects,
       full power and authority to own its properties and conduct its credit
       card servicing business as presently owned or conducted, and to execute,
       deliver and perform its obligations under this Agreement.

              (ii) Due Qualification. The Servicer is duly qualified to do
       business and is in good standing as a foreign corporation or other
       foreign entity (or is exempt from such requirements) and has obtained all
       necessary licenses and approvals in each jurisdiction in which the
       servicing of the Receivables (including the underlying receivables) and
       any Participation Interests as required by this Agreement requires such
       qualification except where the failure to so qualify or obtain licenses
       or approvals would not have a material adverse effect on its ability to
       perform its obligations as Servicer under this Agreement.

              (iii) Due Authorization. The execution, delivery, and performance
       of this Agreement and the other agreements and instruments executed or to
       be executed by the Servicer as contemplated hereby, have been duly
       authorized by the Servicer by all necessary action on the part of the
       Servicer.

              (iv) Binding Obligation. This Agreement constitutes a legal, valid
       and binding obligation of the Servicer, enforceable 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 or the
       rights of creditors of federally chartered savings associations the
       deposit accounts of which are issued by the FDIC or which are subject to
       regulation by the FDIC or by general principles of equity.

              (v) No Conflict. The execution and delivery of this Agreement by
       the Servicer, and the performance of the transactions contemplated by
       this Agreement and the other Transaction Documents and the fulfillment of
       the terms hereof and thereof applicable to the Servicer, will not
       conflict with, violate or 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
       Servicer is a party or by which it or its properties are bound.

              (vi) No Violation. The execution and delivery of this Agreement by
       the Servicer, the performance of the transactions contemplated by this
       Agreement and the other Transaction Documents and the fulfillment of the
       terms hereof applicable to the

                                       34
<PAGE>

       Servicer will not conflict with or violate any Requirements of Law
       applicable to the Servicer or 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 default under 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.

              (vii) No Proceedings. There are no proceedings or investigations
       pending or, to the best knowledge of the Servicer, threatened against the
       Servicer before any Governmental Authority seeking to prevent the
       consummation of any of the transactions contemplated by this Agreement or
       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 and the other
       Transaction Documents.

              (viii) Compliance with Requirements of Law. The Servicer shall
       duly satisfy all obligations on its part to be fulfilled under or in
       connection with each Receivable (and the underlying receivable) and the
       related Account, if any, will maintain in effect all qualifications
       required under Requirements of Law in order to service properly each
       Receivable and the related Account, if any, and will comply in all
       material respects with all other Requirements of Law in connection with
       servicing each Receivable and the related Account the failure to comply
       with which would have an Adverse Effect.

              (ix) No Rescission or Cancellation. Subject to Section 3.09, the
       Servicer shall not permit any rescission or cancellation of any
       Receivable (or the underlying receivable) except in accordance with the
       Credit Card Guidelines or as ordered by a court of competent jurisdiction
       or other Governmental Authority.

              (x) Protection of Rights. The Servicer shall take no action which,
       nor omit to take any action the omission of which, would substantially
       impair the rights of the Trust, the Indenture Trustee or the Noteholders
       in any Receivable (or the underlying receivable) or the related Account,
       if any, nor shall it reschedule, revise or defer payments due on any
       Receivable except in accordance with the Credit Card Guidelines.

              (xi) Receivables Not 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 (as 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.

              (xii) All Consents. All authorizations, consents, orders or
       approvals of or registrations or declarations with any Governmental
       Authority required to be obtained, effected or given by the Servicer in
       connection with the execution and delivery of this Agreement by the
       Servicer and the performance of the transactions contemplated by this
       Agreement by the Servicer, have been duly obtained, effected or given and
       are in full force and effect.

                                       35
<PAGE>

       (b) In the event (i) any of the representations, warranties or covenants
of the Servicer contained in Section 3.03(a)(viii), (ix) or (x) with respect to
any Receivable or the related Account is breached, and such breach has a
material adverse effect on such Receivable (which determination shall be made
without regard to whether funds are then available to any Noteholders pursuant
to any Series Enhancement) and is not cured within 60 days (or such longer
period, not in excess of 150 days, as may be agreed to by the Indenture Trustee
and the Transferor) of 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
Indenture Trustee or the Transferor, or (ii) as provided in Section 3.03(a)(xi)
with respect to any Receivable, all Receivables in the Account or Accounts to
which such event relates shall be assigned and transferred to the Servicer on
the terms and conditions set forth below.

       The Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds two Business Days after which
such assignment obligation arises in an amount equal to the amount of such
Receivables.

       Upon each such reassignment or assignment to the Servicer, the Trust
shall automatically and without further action be deemed to sell, transfer,
assign, set over and otherwise convey to the Servicer, without recourse,
representation or warranty, all right, title and interest of the Trust in and to
such Receivables, all Recoveries related thereto, all monies due or to become
due and all amounts received or receivable with respect thereto and all proceeds
thereof. The Trust 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 but only upon receipt of an Officer's Certificate of the Servicer that
states that all conditions set forth in this section have been satisfied. The
obligation of the Servicer to accept reassignment or assignment of such
Receivables, and to make the deposits, if any, required to be made to the
Collection Account as provided in the preceding paragraph, shall constitute the
sole remedy respecting the event giving rise to such obligation available to
Noteholders (or the Indenture Trustee on behalf of Noteholders) or any Series
Enhancer, except as provided in Section 5.04.

       Section 3.04. Reports and Records for the Owner Trustee and the Indenture
Trustee.

       (a) Daily Records. On each Business Day, the Servicer shall make or cause
to be made available at the office of the Servicer for inspection by the Owner
Trustee and the Indenture Trustee upon request a record setting forth (i) the
Collections in respect of Principal Receivables and in respect of Finance Charge
Receivables processed by the Servicer on the second preceding Business Day in
respect of each Account and (ii) the amount of Receivables as of the close of
business on the second preceding Business Day in each Account. The Servicer
shall, at all times, maintain its computer files with respect to the Accounts in
such a manner so that the Accounts may be specifically identified and shall make
available to the Owner Trustee and the Indenture Trustee at the office of the
Servicer on any Business Day any computer programs necessary to make such
identification. The Owner Trustee and the Indenture Trustee shall enter into
such reasonable confidentiality agreements as the Servicer shall deem necessary
to protect its interests and as are reasonably acceptable in form and substance
to the Owner Trustee and the Indenture Trustee.

                                       36
<PAGE>

       (b) Monthly Servicer's Certificate. Not later than the Determination Date
preceding each Distribution Date, the Servicer shall, with respect to each
outstanding Series, deliver to the Owner Trustee, the Indenture Trustee and each
Rating Agency a certificate of an Authorized Officer in substantially the form
set forth in the related Indenture Supplement.

       Section 3.05. Annual Certificate of Servicer. The Servicer shall deliver
to the Owner Trustee, the Indenture Trustee and each Rating Agency on or before
April 30 of each calendar year, beginning with April 30, 2003, an Officer's
Certificate substantially in the form of Exhibit C.

       Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available.

       (a) On or before April 30, of each fiscal year, beginning with April 30,
2003, the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or the
Transferor or any Account Owner) to furnish a report (addressed to the Indenture
Trustee) to the Indenture Trustee, the Servicer and each Rating Agency to the
effect that they have applied certain procedures agreed upon with the Servicer
and examined certain documents and records relating to the servicing of the
Receivables under this Agreement, the Indenture and each Indenture Supplement
for the prior fiscal year (or since the effective date of this Agreement in the
case of the first such report) and that, on the basis of such agreed-upon
procedures, nothing has come to the attention of such accountants that caused
them to believe that the servicing (including the allocation of Collections set
forth in Article Eight of the Indenture and in each Indenture Supplement) has
not been conducted in compliance with the terms and conditions set forth in
Article Three and Section 5.08 of this Agreement, Article Eight of the Indenture
and the applicable provisions of each Indenture Supplement, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such statement. Such report shall set forth the agreed-upon
procedures performed.

       (b) On or before April 30 of each fiscal year, beginning with April 30,
2003, the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or
Transferor) to furnish a report to the Indenture Trustee, the Servicer and each
Rating Agency to the effect that they have applied certain procedures agreed
upon with the Servicer to compare the mathematical calculations of certain
amounts set forth in the Servicer's certificates delivered pursuant to Section
3.04(b) during the period covered by such report with the Servicer's computer
reports that 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.
Such report shall set forth the agreed-upon procedures performed.

       (c) In the event such independent public accountants require the
Indenture Trustee to agree to the procedures to be performed by such firm in any
of the reports required to be prepared pursuant to this Section 3.06, the
Servicer shall direct the Indenture Trustee in writing to so agree; provided,
however, that the Indenture Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Indenture
Trustee will not make

                                       37
<PAGE>

any independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.

       (d) A copy of each certificate and report provided pursuant to Section
3.04(b), or Section 3.05 or 3.06, may be obtained by any Noteholder or Note
Owner by a request in writing to the Indenture Trustee addressed to the
Corporate Trust Office.

       Section 3.07. Tax Treatment. Unless otherwise specified in the Indenture
or an Indenture Supplement with respect to a particular Series, the Transferor
has entered into this Agreement, and the Notes will be issued, with the
intention that, for federal, State and local income and franchise tax purposes,
(i) the Notes of each Series which are characterized as indebtedness at the time
of their issuance will qualify as indebtedness secured by the Receivables and
(ii) the Trust shall not be treated as an association or publicly traded
partnership taxable as a corporation. The Transferor, by entering into this
Agreement, and each Noteholder, by the acceptance of any such Note (and each
Note Owner, by its acceptance of an interest in the applicable Note), agree to
treat such Notes for federal, state and local income and franchise tax purposes
as indebtedness of the Transferor. Each Holder of such Note agrees that it will
cause any Note Owner acquiring an interest in a Note through it to comply with
this Agreement as to treatment as indebtedness under applicable tax law, as
described in this Section. The parties hereto agree that they shall not cause or
permit the making, as applicable, of any election under Treasury Regulation
Section 301.7701-3 whereby the Trust or any portion thereof would be treated as
a corporation for federal income tax purposes and, except as required by Section
6.13 of the Indenture, shall not file tax returns or obtain any federal employer
identification number for the Trust but shall treat the Trust as a security
device for federal income tax purposes. The provisions of this Agreement shall
be construed in furtherance of the foregoing intended tax treatment.

       Section 3.08. Notices to Nordstrom fsb. In the event that Nordstrom fsb
is no longer acting as Servicer, any Successor Servicer shall deliver or make
available to Nordstrom fsb each certificate and report required to be provided
thereafter pursuant to Sections 3.04(b), 3.05 and 3.06.

       Section 3.09. Adjustments.

       (a) If the Servicer adjusts downward the amount of any Receivable because
of a rebate, refund, unauthorized charge or billing error to a cardholder, or
because such Receivable was created in respect of merchandise which was refused
or returned by a cardholder, then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Interest, and (unless otherwise
specified) any other amount required herein or in the Indenture or any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables,
will be reduced by the amount of the adjustment. Similarly, the amount of
Principal Receivables used to calculate the Transferor Interest and (unless
otherwise specified) any other amount required herein or in any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables
will be reduced by the principal amount of any Receivable which was discovered
as having been created through a fraudulent or counterfeit charge or with
respect to which the covenant contained in Section 2.07(b) was breached. Any
adjustment required pursuant to either of the two preceding sentences shall be
made on the second Business Day after

                                       38
<PAGE>

which such adjustment obligation arises. In the event that, following the
exclusion of such Principal Receivables from the calculation of the Transferor
Interest, the Transferor Interest would be less than the Required Transferor
Interest, not later than 1:00 p.m., New York City time, on the second Business
Day after 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 Interest would be less than
the Required Transferor Interest, due to adjustments with respect to Receivables
conveyed by such Transferor (up to the amount of such Principal Receivables).

       (b) If the Servicer (i) 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)
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 foregoing, adjustments made pursuant to this
Section shall not require any change in any report previously delivered pursuant
to Section 3.04(a).

       Section 3.10. Reports to the Commission. The Servicer shall, on behalf of
the Trust, cause to be filed with the Commission all periodic reports required
to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. The Transferor shall, at its own
expense, cooperate in any reasonable request of the Servicer in connection with
such filings.

       Section 3.11. Reports to Rating Agencies. Not later than each
Determination Date, the Servicer shall deliver to each Rating Agency a written
report (unless one or more of such Rating Agencies agrees in writing to waive
receipt of such reports, in which case, the reports need not be delivered to the
Rating Agency or Rating Agencies which waived the requirement) setting forth, as
of the last day of the related Monthly Period, the number of Accounts which were
Starter Accounts, business charge accounts, with Obligors that are employees of
Nordstrom, Inc. or any of its Affiliates and had addresses located in Canada,
the territories or possessions of the United States, or which were military
addresses not located in the United States and the amount of Principal
Receivables in such Accounts; provided that the foregoing report shall not be
required if the number of such Accounts is less than 1% of all Accounts and the
amount of Principal Receivables in such Accounts is less than 1% of all
Principal Receivables, in each case as of the end of such Monthly Period.

                                       39
<PAGE>

                                  ARTICLE FOUR

                            OTHER TRANSFEROR MATTERS

       Section 4.01. Liability of each Transferor. Each Transferor shall be
severally, and not jointly, liable for all obligations, covenants,
representations and warranties of such Transferor arising under or related to
this Agreement. Each Transferor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as a Transferor.

       Section 4.02. Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor.

       (a) No Transferor shall dissolve, liquidate, consolidate with or merge
into any other corporation or convey, transfer or sell its properties and assets
substantially as an entirety to any Person unless:

              (i) (A) the entity formed by such consolidation or into which such
       Transferor is merged or the Person which acquires by conveyance, transfer
       or sale the properties and assets of the Transferor substantially as an
       entirety shall be, if such Transferor is not the surviving entity,
       organized and existing under the laws of the United States or any State,
       and shall be a depository institution or other entity which is not
       eligible to be a debtor in a case under Title 11 of the United States
       Code and, if such Transferor is not the surviving entity, shall expressly
       assume, by an agreement supplemental hereto, executed and delivered to
       the Trust and the Indenture Trustee, in form reasonably satisfactory to
       the Trust and the Indenture Trustee, the performance of every covenant
       and obligation of such Transferor hereunder, and (B) such Transferor or
       the surviving entity, as the case may be, has delivered to the Owner
       Trustee and the Indenture Trustee (with a copy to each Rating Agency) an
       Officer's Certificate and an Opinion of Counsel each stating that such
       consolidation, merger, conveyance, transfer or sale and such supplemental
       agreement comply with this Section, 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 or general principles of
       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; and

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

       (b) Except as permitted by Section 2.07(c), the obligations, rights or
any part thereof of each Transferor hereunder shall not be assignable nor shall
any Person succeed to such obligations or rights of any Transferor hereunder
except (i) for conveyances, mergers,

                                       40
<PAGE>

consolidations, assumptions, sales or transfers in accordance with the
provisions of the foregoing paragraph and (ii) for conveyances, mergers,
consolidations, assumptions, sales or transfers to other entities (A) which such
Transferor and the Servicer determine will not result in an Adverse Effect, (B)
which meet the requirements of Section 4.02(a)(ii) and (a)(iii) and (C) for
which such purchaser, transferee, pledgee or entity shall expressly assume, in
an agreement supplemental hereto, executed and delivered to the Trust and the
Indenture Trustee in writing in form satisfactory to the Trust and the Indenture
Trustee, the performance of every covenant and obligation of such Transferor
thereby conveyed.

       Section 4.03. Limitations on Liability of Each Transferor. Subject to
Section 4.01, no Transferor nor any of the directors, officers, employees,
incorporators or agents of any Transferor acting in such capacities shall be
under any liability to the Trust, the Owner Trustee, the Indenture Trustee, the
Noteholders, any Series Enhancer or any other Person for any action taken, or
for refraining from the taking of any action, in good faith in such capacities
pursuant to this Agreement, it being expressly understood that such liability is
expressly waived and released as a condition of, and consideration for, the
execution of this Agreement, the Indenture and any Indenture Supplement and the
issuance of the Notes; provided, however, that this provision shall not protect
any Transferor 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. Each Transferor and any director, officer, employee or agent
of such Transferor may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person (other than such Transferor)
respecting any matters arising hereunder.

                                       41
<PAGE>

                                  ARTICLE FIVE

                     OTHER MATTERS RELATING TO THE SERVICER

       Section 5.01. Liability of the Servicer. The Servicer shall be liable
under this Article only to the extent of the obligations specifically undertaken
by the Servicer in its capacity as Servicer.

       Section 5.02. 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, transfer or sell its properties and assets
substantially as an entirety to any Person, unless:

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

              (ii) the Servicer has delivered to the Trust, Owner Trustee and
       the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
       each stating that such consolidation, merger, conveyance, transfer or
       sale comply with this Section and that all conditions precedent herein
       provided for relating to such transaction are in compliance; and

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

              (b) 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 in their entirety
       shall be an Eligible Servicer.

       Section 5.03. Limitation on Liability of the Servicer and Others. Except
as provided in Section 3.01(e) and Section 5.04, neither the Servicer nor any of
its directors, officers, employees or agents shall be under any liability to the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders, any Series
Enhancer 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

                                       42
<PAGE>

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
Noteholders with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Noteholders hereunder.

       Section 5.04. Servicer Indemnification of the Trust and the Trustees. The
Servicer shall indemnify and hold harmless each of the Trust, the Owner Trustee
(as such and in its individual capacity), the Indenture Trustee and any trustees
predecessor thereto (including the Indenture Trustee in its capacity as Transfer
Agent and Registrar or as Paying Agent) and their respective directors,
officers, employees and agents from and against any and all loss, liability,
claim, expense or damage suffered or sustained by reason of (i) any acts or
omissions of the Servicer with respect to the Trust pursuant to this Agreement
or (ii) the administration by the Owner Trustee or the Indenture Trustee of the
Trust or the performance by the Indenture Trustee of its duties under the
Indenture (other than such as may arise from the gross negligence or willful
misconduct of the Owner Trustee or the negligence or willful misconduct of the
Indenture Trustee, as applicable), 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. Indemnification pursuant to
this Section shall not be payable from the Trust Assets. The Servicer's
obligations under this Section shall survive the termination of this Agreement
or the Trust or the earlier removal or resignation of the Owner Trustee or the
Indenture Trustee, as applicable. The Servicer agrees that the Indenture Trustee
is a third party beneficiary of this Section and is entitled to enforce the
provisions hereof for the benefit of the Trust and in its individual capacity.

       Section 5.05. Resignation of the Servicer. The Servicer shall not resign
from the obligations and duties hereby imposed on it except (a) upon
determination that (a) the performance of its duties hereunder is no longer
permissible under applicable law and (b) there is no reasonable action which the
Servicer could take to make the performance of its duties hereunder permissible
under applicable law and (ii) upon the assumption, by a supplemental agreement
hereto, executed and delivered to the Trustees, in form satisfactory to each
Trustee, of the obligations and duties of the Servicer hereunder by any of its
Affiliates that is a direct or indirect wholly owned subsidiary of Nordstrom,
Inc. or by any entity the appointment of which shall have satisfied the Rating
Agency Condition and, in either case, qualifies as an Eligible Servicer. Any
determination permitting the resignation of the Servicer shall be evidenced as
to clause (i) above by an Opinion of Counsel to such effect delivered to the
Trust, the Owner Trustee and the Indenture Trustee. No resignation shall become
effective until the Indenture Trustee or a Successor Servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with Section
7.02 hereof. If within 120 days of the date of the determination that the
Servicer may no longer act as Servicer under clause (i) above the Indenture
Trustee is unable to appoint a Successor Servicer, the Indenture Trustee shall
serve as Successor Servicer. Notwithstanding the foregoing, the Indenture
Trustee shall, if it is legally unable so to act, petition a court of competent
jurisdiction to appoint any established institution qualifying as an Eligible
Servicer as the Successor Servicer hereunder. The Trust shall give prompt notice
to each Rating Agency and each Series Enhancer upon the appointment of a
Successor Servicer. Notwithstanding anything in this Agreement to the contrary,
Nordstrom fsb may assign part or all of its obligations and duties as Servicer
under this Agreement to an

                                       43
<PAGE>

Affiliate of Nordstrom fsb so long as Nordstrom fsb shall have fully guaranteed
the performance of such obligations and duties under this Agreement.

       Section 5.06. Access to Certain Documentation and Information Regarding
the Receivables. The Servicer shall provide to the Owner Trustee or the
Indenture Trustee, as applicable, access to the documentation regarding the
Accounts and the Receivables in such cases where the Owner Trustee or the
Indenture Trustee, as applicable, is required in connection with the enforcement
of the rights of Noteholders or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Owner Trustee, the Indenture 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 as a
result of such obligation shall not constitute a breach of this Section.

       Section 5.07. Delegation of Duties. In the ordinary course of business,
the Servicer may at any time delegate its duties hereunder with respect to the
Accounts and the Receivables to any Person that agrees to conduct such duties in
accordance with the Credit Card Guidelines and this Agreement. The Servicer
shall promptly give notice to each Rating Agency of any delegation of duties
hereunder. Such delegation 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 5.05.

       Section 5.08. Examination of Records. Each Transferor and the Servicer
shall indicate generally in their computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trust, pursuant to
this Agreement. Each 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 records and other records to determine that such receivable is not, and
does not include, a Receivable.

                                       44
<PAGE>

                                   ARTICLE SIX

                                INSOLVENCY EVENTS

       Section 6.01. Rights upon the Occurrence of an Insolvency Event. If any
Transferor shall consent or fail to object to the appointment of a bankruptcy
trustee or conservator, receiver or liquidator in any bankruptcy proceeding or
other insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to any Transferor or relating to all or
substantially all of such Transferor's property, or the commencement of an
action seeking a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a bankruptcy trustee
or conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up, insolvency, bankruptcy, reorganization, conservatorship,
receivership or liquidation of such entity's affairs, or notwithstanding an
objection by such Transferor any such action shall have remained undischarged or
unstayed for a period of 60 days or upon entry of any order or decree providing
for such relief; or such Transferor shall admit in writing its inability to pay
its debts generally as they become due, file, or consent or fail to object (or
object without dismissal of any such filing within 60 days of such filing) to
the filing of, a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization, receivership or conservatorship statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or any order or decree providing for relief under any
applicable bankruptcy, insolvency or reorganization, receivership or
conservatorship statute shall be entered (any such act or occurrence with
respect to any Person being an "Insolvency Event"), such Transferor shall, on
the related Appointment Date, immediately cease to transfer Principal
Receivables to the Trust and shall promptly give notice to each Rating Agency,
the Indenture Trustee and the Owner Trustee thereof. Notwithstanding any
cessation of the transfer to the Trust of additional Principal Receivables,
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency Event, Collections in respect of such Principal Receivables and
Finance Charge Receivables (whenever created) accrued in respect of such
Principal Receivables shall continue to be a part of the Trust Assets and shall
be allocated and distributed to Noteholders in accordance with the terms of the
Indenture and each Indenture Supplement.

                                       45
<PAGE>

                                  ARTICLE SEVEN

                                SERVICER DEFAULTS

       Section 7.01. Servicer Defaults.

       (a) If any one of the following events (a "Servicer Default") shall occur
and be continuing:

              (i) any failure by the Servicer to make any payment, transfer or
       deposit or to give instructions or to give notice to the Indenture
       Trustee to make such payment, transfer or deposit 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, the Indenture or any
       Indenture Supplement;

              (ii) failure on the part of the Servicer duly to observe or
       perform in any material respect any other covenants or agreements of the
       Servicer set forth in this Agreement which has an Adverse Effect and
       which continues unremedied for a period of 60 days after the date on
       which notice of such failure, requiring the same to be remedied, shall
       have been given to the Servicer by the Owner Trustee or the Indenture
       Trustee, or to the Servicer, the Owner Trustee and the Indenture Trustee
       by Holders of Notes evidencing not less than 10% of the aggregate unpaid
       principal amount of all Notes (or, with respect to any such failure that
       does not relate to all Series, 10% of the aggregate unpaid principal
       amount of all Series to which such failure relates); or the Servicer
       shall assign or delegate its duties under this Agreement, except as
       permitted by Sections 5.02 and 5.07;

              (iii) any representation, warranty or certification made by the
       Servicer in this Agreement or in any certificate delivered pursuant to
       this Agreement shall prove to have been incorrect when made, which has an
       Adverse Effect on the rights of the Noteholders of any Series (which
       determination shall be made without regard to whether funds are then
       available pursuant to any Series Enhancement) and which Adverse Effect
       continues for a period of 60 days after the date on which notice thereof,
       requiring the same to be remedied, shall have been given to the Servicer
       by the Owner Trustee or the Indenture Trustee, or to the Servicer, the
       Owner Trustee and the Indenture Trustee by the Holders of Notes
       evidencing not less than 10% of the aggregate unpaid principal amount of
       all Notes (or, with respect to any such representation, warranty or
       certification that does not relate to all Series, 10% of the aggregate
       unpaid principal amount of all Series to which such representation,
       warranty or certification relates);

              (iv) the Servicer shall consent to the appointment of a bankruptcy
       trustee or conservator or receiver or liquidator in any bankruptcy
       proceeding or other insolvency, readjustment of debt, marshalling of
       assets and liabilities or similar proceedings of or relating to the
       Servicer or of or relating to all or substantially all its property, or a
       decree or order of a court or agency or supervisory authority having
       jurisdiction in the premises for the appointment of a bankruptcy trustee
       or a conservator or receiver or liquidator in

                                       46
<PAGE>

       any bankruptcy, insolvency, readjustment of debt, marshalling of assets
       and liabilities or similar proceedings, or the winding-up or liquidation
       of its affairs, shall have been entered against the Servicer and such
       decree or order shall have remained in force undischarged or unstayed for
       a period of sixty (60) days; or the Servicer shall admit in writing its
       inability to pay its debts generally as they become due, file a petition
       to take advantage of any applicable bankruptcy, insolvency or
       reorganization statute, make any assignment for the benefit of its
       creditors or voluntarily suspend payment of its obligations; or

              (v) any other Servicer Default described in the related Indenture
       Supplement.

       Notwithstanding the foregoing, a delay in or failure of performance
referred to in Section 7.01(a)(i) for a period of ten Business Days after the
applicable grace period or under Section 7.01(a)(ii) or (a)(iii) for a period of
60 Business Days after the applicable grace period, shall not constitute a
Servicer Default 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 using all commercially reasonable efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Indenture Trustee, Owner Trustee,
each Transferor and any Series Enhancer with an Officer's Certificate giving
prompt notice of such failure or delay by it, together with a description of its
efforts so to perform its obligations.

       (b) Upon the occurrence of a Servicer Default, so long as the Servicer
Default shall not have been remedied, either the Indenture Trustee or the
Holders of Notes evidencing more than 50% of the aggregate unpaid principal
amount of all Notes, by notice then given to the Servicer and the Owner Trustee
(and to the Indenture Trustee if given by the Noteholders) (a "Termination
Notice"), may terminate all but not less than all the rights and obligations of
the Servicer as Servicer under this Agreement; provided, however, if within 60
days of receipt of a Termination Notice the Indenture Trustee does not receive
any bids from Eligible Servicers in accordance with Section 7.02(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 Indenture Trustee shall grant a right
of first refusal to the Transferor which would permit the Transferor at its
option to acquire the Notes on the Distribution Date in the next calendar month.

       The price for the Notes shall be equal to the sum of the amounts
specified therefor with respect to each outstanding Series in the related
Indenture Supplement. The Transferor shall notify the Indenture Trustee prior to
the Record Date for the Distribution Date of the acquisition if it is exercising
such right of first refusal. If the Transferor exercises such right of first
refusal, the Transferor shall deposit the price into the Collection Account not
later than 1:00 p.m., New York City time, on such Distribution Date in
immediately available funds. The price shall be allocated and distributed to
Noteholders in accordance with the terms of the Indenture and each Indenture
Supplement.

                                       47
<PAGE>

       After receipt by the Servicer of a Termination Notice, and on the date
that a Successor Servicer is appointed by the Indenture Trustee pursuant to
Section 7.02, 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 Indenture 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 Service Transfer. The
Servicer agrees to cooperate with the Indenture Trustee and such Successor
Servicer in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder, including the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including 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. The Servicer shall within 20 Business Days 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 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
deems to be confidential, the Successor Servicer shall be required to enter into
such customary licensing and confidentiality agreements as the Servicer shall
deem reasonably necessary to protect its interests.

       Section 7.02. Indenture Trustee To Act; Appointment of Successor.

       (a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.01, 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 Indenture Trustee or until a date mutually
agreed upon by the Servicer and the Indenture Trustee. The Indenture Trustee
shall as promptly as possible after the giving of a Termination Notice notify
each Rating Agency of such Termination Notice and 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
Indenture 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 Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may delegate any of its
servicing obligations to an Affiliate or agent in accordance with Sections
3.01(b) and 5.07. Notwithstanding the foregoing, the Indenture Trustee shall, if
it is legally unable so to act, petition at the expense of the Servicer a court
of competent jurisdiction to appoint any established institution qualifying as
an Eligible Servicer as the Successor Servicer hereunder. The Indenture Trustee
shall give prompt notice to each Rating Agency and each Series Enhancer 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

                                       48
<PAGE>

all the responsibilities, duties and liabilities 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.

       Notwithstanding the foregoing obligations, the Successor Servicer, Wells
Fargo Bank Minnesota, National Association, its successors or assigns, shall
have (i) no liability with respect to any obligation which was required to be
performed by the terminated Servicer prior to the date that the Successor
Servicer becomes the Servicer or any claim of a third party based on any alleged
action or inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase obligations, if any, of the Servicer pursuant to Section 3.03(b)
hereof, (iii) no obligations of the Servicer in accordance with the Credit Card
guidelines, (iv) no obligations to maintain fidelity bond coverage pursuant to
Section 3.01(f) hereof and (v) no liability or obligation with respect to any
Servicer indemnification obligations of any prior Servicer including the
original Servicer.

       (c) In connection with any Termination Notice, the Indenture 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 plus the sum of the amounts with respect to each Series and with respect
to each Distribution Date equal to any Collections of Finance Charge Receivables
allocable to Noteholders of such Series which are payable to the Holders of the
Transferor Certificates after payment of all amounts owing to the Noteholders of
such Series with respect to such Distribution Date or required to be deposited
in the applicable Series Accounts with respect to such Distribution Date and any
amounts required to be paid to any Series Enhancer for such Series with respect
to such Distribution Date pursuant to the terms of any Enhancement Agreement;
provided, however, that the Holders of the Transferor Certificates shall be
responsible for payment of the Transferor's portion of such aggregate Servicing
Fees and all other such amounts in excess of such aggregate Servicing Fees. Each
Holder of the Transferor Certificates agrees that, if Nordstrom fsb (or any
Successor Servicer) is terminated as Servicer hereunder, the portion of the
Collections in respect of Finance Charge Receivables that the Transferor is
entitled to receive pursuant to this Agreement, the Indenture or any Indenture
Supplement shall be reduced by an amount sufficient to pay the Transferor's
share of the compensation of the Successor Servicer.

       (d) All authority and power granted to the Servicer under this Agreement
shall automatically cease and terminate upon termination of the Trust pursuant
to Section 8.01 of the Trust Agreement, 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 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 Servicer agrees to cooperate with the
Transferor in effecting the termination of the responsibilities and rights of
the Servicer to conduct servicing of the Receivables. The Servicer shall
transfer its electronic records relating to the Receivables to the Transferor or
its designee in such electronic form as it may reasonably request and shall
transfer all other records, correspondence and documents to it in the manner and
at such times as it shall reasonably request. To the extent that compliance with
this Section shall require the Servicer to disclose to the Transferor
information of any kind which the Servicer deems to be confidential,

                                       49
<PAGE>

the Transferor shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests.

       (e) Notwithstanding anything contained in the Transfer and Servicing
Agreement to the contrary, Wells Fargo Bank Minnesota, National Association, as
Successor Servicer, is authorized to accept and rely on all of the accounting
records (including computer records) and work of the prior Servicer relating to
the Receivables (collectively, the "Predecessor Servicer Work Product") without
any audit or other examination thereof, and Wells Fargo Bank Minnesota, National
Association shall have no duty, responsibility, obligation or liability for the
acts and omissions of the prior Servicer. If any error, inaccuracy, omission or
incorrect or non-standard practice or procedure (collectively, "Errors") exist
in any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to Wells Fargo
Bank Minnesota, National Association making or continuing any Errors
(collectively, "Continued Errors"). Wells Fargo Bank Minnesota, National
Association shall have no duty, responsibility, obligation or liability to
perform servicing or for such Continued Errors; provided, however, that Wells
Fargo Bank Minnesota, National Association agrees to use its best efforts to
prevent further Continued Errors. In the event that Wells Fargo Bank Minnesota,
National Association becomes aware of Errors or Continued Errors, Wells Fargo
Bank Minnesota, National Association shall, with the prior consent of the
Noteholders representing 66 2/3% of the outstanding Notes, use its best efforts
to reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors. Wells
Fargo Bank Minnesota, National Association shall be entitled to recover its
costs thereby expended in accordance with Section 4.03(a) of the Indenture
Supplement.

       Section 7.03. Notification to Noteholders. Within two Business Days after
the Servicer becomes aware of any Servicer Default, the Servicer shall give
notice thereof to the Owner Trustee, the Indenture Trustee, each Rating Agency
and each Series Enhancer and the Indenture Trustee shall give notice to the
Noteholders. Upon any termination or appointment of a Successor Servicer
pursuant to this Article, the Indenture Trustee shall give prompt notice thereof
to the Noteholders.

                                       50
<PAGE>

                                  ARTICLE EIGHT

                                   TERMINATION

       Section 8.01. Termination of Agreement. This Agreement and the respective
obligations and responsibilities of the parties hereto shall terminate, except
with respect to the duties described in Section 5.04, on the Trust Termination
Date.

                                       51
<PAGE>

                                  ARTICLE NINE

                            MISCELLANEOUS PROVISIONS

       Section 9.01. Amendment; Waiver of Past Defaults.

       (a) This Agreement may be amended by the parties hereto from time to time
prior to, or in connection with, the issuance of the first Series of Notes
hereunder without the requirement of any consents or the satisfaction of any
conditions set forth below. This Agreement may be amended from time to time by
the Servicer, the Transferor and the Trust, by a written instrument signed by
each of them, without the consent of the Indenture Trustee or any of the
Noteholders, provided that (i) the Transferor shall have delivered to the
Trustees an Officer's Certificate, dated the date of any such amendment, stating
that the Transferor reasonably believes that such amendment will not have an
Adverse Effect, such amendment does not affect the rights, duties or obligations
of either Trustee, Servicer or any Successor Servicer hereunder and (ii) the
Rating Agency Condition shall have been satisfied with respect to any such
amendment. Additionally, notwithstanding the preceding sentence, this Agreement
may be amended by the Servicer and the Trust at the direction of the Transferor
without the consent of the Indenture Trustee or any of the Noteholders or Series
Enhancers to add, modify or eliminate such provisions as may be necessary or
advisable in order to enable all or a portion of the Trust (i) to qualify as,
and to permit an election to be made to cause the Trust to be treated as, a
"financial asset securitization investment trust" as described in the provisions
of Section 860L of the Code, and (ii) to avoid the imposition of state or local
income or franchise taxes imposed on the Trust's property or its income;
provided, however, that (i) the Transferor delivers to the Trustees an Officer's
Certificate to the effect that the proposed amendments meet the requirements set
forth in this subsection and (ii) the Rating Agency Condition and such amendment
does not affect the rights, duties or obligations of either Trustee, Servicer or
any Successor Servicer hereunder shall have been satisfied with respect to any
such amendment. The amendments which the Transferor may make without the consent
of Noteholders or Series Enhancers pursuant to the preceding sentence may
include the addition of a sale of Receivables.

       (b) This Agreement may also be amended from time to time by the parties
hereto, with the consent of the Noteholders evidencing not less than 66-2/3% of
the aggregate Outstanding principal amount of the Notes of all affected Series
for which the Transferor has not delivered an Officer's Certificate stating that
there is no Adverse Effect, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided, however,
that such amendment shall satisfy the Rating Agency Condition and shall not (i)
reduce in any manner the amount of or delay the timing of any distributions
(changes in Redemption Events or Events of Default that decrease the likelihood
of the occurrence thereof shall not be considered delays in the timing of
distributions for purposes of this clause) to be made to Noteholders or deposits
of amounts to be so distributed or the amount available under any Series
Enhancement without the consent of each affected Noteholder, (ii) change the
definition of or the manner of calculating the interest of any Noteholder
without the consent of each affected Noteholder, or (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent of each
Noteholder.

                                       52
<PAGE>

       (c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to Section 9.01(a)), the Servicer shall furnish
notification of the substance of such amendment to the Indenture Trustee, each
Noteholder, each Rating Agency and each Series Enhancer.

       (d) It shall not be necessary for the consent of Noteholders under this
Section 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 Noteholders shall be subject to such reasonable requirements as the
Indenture Trustee may prescribe.

       (e) Notwithstanding anything in this Section to the contrary, no
amendment may be made to this Agreement or any Participation Interest Supplement
which would adversely affect in any material respect the interests of any Series
Enhancer without the consent of such Series Enhancer.

       (f) Any Indenture Supplement executed in accordance with the provisions
of Article Ten of the Indenture shall not be considered an amendment of this
Agreement for the purposes of this Section.

       (g) The Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Owner Trustee's rights, duties, benefits,
protections, privileges or immunities under this Agreement or otherwise. In
connection with the execution of any amendment hereunder, the Owner Trustee
shall be entitled to receive the Opinion of Counsel described in Section
9.03(d).

       Section 9.02. Waiver of Transferor or Servicer Defaults.

       The Holders of Notes evidencing more than 66-2/3% of the aggregate unpaid
principal amount of the Notes 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 Notes 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
Noteholders, waive any default by the Transferor or the Servicer in the
performance of their obligations hereunder and its consequences, except the
failure to make any distributions required to be made to Noteholders 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.
Promptly after any such waiver of a past default, the Servicer shall furnish
notification of the substance of such waiver to each Rating Agency.

       Section 9.03. 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 Indenture Trustee's and the Trust's
right, title and interest to the Trust Assets to be promptly recorded,
registered and filed, and at all times to be kept recorded,

                                       53
<PAGE>

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
Indenture Trustee, Noteholders and the Trust hereunder to all property
comprising the Trust Assets. The Transferor shall deliver to the Owner Trustee
and Indenture 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. The Transferor shall cooperate
fully with the Servicer in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the intent of
this paragraph.

       (b) Within 30 days after any Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with Section 9.03(a) seriously
misleading within the meaning of Section 9-506 (or any comparable provision) of
the UCC, such Transferor shall give the Owner Trustee and the Indenture 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
or ownership interest in the Receivables and the proceeds thereof.

       (c) Each Transferor shall give the Owner Trustee and the Indenture
Trustee prompt notice of any relocation of its chief executive office or any
change in the jurisdiction under whose laws it is organized and whether, as a
result of such relocation or change, 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. Each Transferor shall at all times maintain its chief
executive offices within the United States and shall at all times be organized
under the laws of a jurisdiction located within the United States.

       (d) The Transferor shall deliver to the Owner Trustees, the Indenture
Trustees and each Rating Agency (i) upon the execution and delivery of each
amendment of this Agreement, an Opinion of Counsel to the effect specified in
Exhibit D-1; (ii) on each date specified in Section 2.09(c)(vi) with respect to
any Additional Accounts to be designated as Accounts, an Opinion of Counsel
substantially in the form of Exhibit D-2, (iii) on each Addition Date on which
any Participation Interests are to be included in the Trust pursuant to Section
2.09(a) or (b), an Opinion of Counsel covering the same substantive legal issues
addressed by Exhibits D-1 and D-2 but conformed to the extent appropriate to
relate to Participation Interests; and (iv) on or before April 30 of each year,
beginning with April 30, 2002, an Opinion of Counsel substantially in the form
of Exhibit D-3.

       Section 9.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       54
<PAGE>

       Section 9.05. Notices; Payments.

       (a) All 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 Nordstrom Private Label Receivables LLC, at 13531
East Caley Avenue, Englewood, Colorado 80111, Attention: Legal Department
(facsimile no. (303) 397-4767), (ii) in the case of the Servicer, to Nordstrom
fsb, at 13531 East Caley Avenue, Englewood, Colorado 80111, Attention: Legal
Department (facsimile no. (303) 397-4767), (iii) in the case of the Trust or the
Owner Trustee, to Owner Trustee, Rodney Square North, 1100 N. Market St.,
Wilmington, DE 19890-0001, Attention: Corporate Trust Administration, (iv) in
the case of the Rating Agency for a particular Series, the address, if any,
specified in the Indenture Supplement relating to such Series and (v) to any
other Person as specified in the Indenture or any Indenture 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 Notes shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Note Register. No Notice shall be
required to be mailed to a Holder of Bearer Notes 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 Noteholder receives such Notice. In addition, (i) 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 Noteholders shall be published in an Authorized
Newspaper of general circulation in Luxembourg within the time period prescribed
in this Agreement and (ii) in the case of any Series or Class with respect to
which any Bearer Notes are outstanding, any Notice required or permitted to be
given to Noteholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.

       Section 9.06. 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
Notes or the rights of the Noteholders or Note Owners.

       Section 9.07. 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 Owner Trustee
and the Indenture 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 9.08. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trust, the Owner Trustee, the
Indenture Trustee or the Noteholders, 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

                                       55
<PAGE>

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 9.09. 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 9.10. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto and inure to the benefit of
the Owner Trustee, the Noteholders and their respective successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, no other
Person will have any right or obligation hereunder.

       Section 9.11. Actions by Noteholders.

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

       (b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Note shall bind such Holder and every subsequent
Holder of such Note and of any Note 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 Owner Trustee, the Transferor or the Servicer in
reliance thereon, whether or not notation of such action is made upon such Note.

       Section 9.12. Rule 144A Information. For so long as any of the Notes of
any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of the Transferor, the Trust, the
Indenture Trustee, the Servicer and any Series Enhancer agree to cooperate with
each other to provide to any Noteholders of such Series or Class and to any
prospective purchaser of Notes designated by such Noteholder, upon the request
of such Noteholder or prospective purchaser, any information in its possession
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.

       Section 9.13. 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 9.14. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

       Section 9.15. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Notes
evidencing not less than 66-2/3% of the aggregate unpaid principal amount of all
Series of Notes. The Servicer shall give the Rating Agencies prior written
notice of any such assignment.

                                       56
<PAGE>

       Section 9.16. Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, the Servicer, the Owner Trustee, the Indenture Trustee, the
Seller and each Transferor shall not, prior to the date which is one year and
one day after the termination of this Agreement, acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of any Governmental
Authority for the purpose of commencing or sustaining a case against the Trust
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 any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust.

       Section 9.17. Limitation of Liability. Notwithstanding any other
provision herein or elsewhere, this Agreement has been executed and delivered by
the Owner Trustee, not in its individual capacity, but solely in its capacity as
Owner Trustee of the Trust, in no event shall Owner Trustee in its individual
capacity have any liability in respect of the representations, warranties, or
obligations of the Trust hereunder or under any other document, as to all of
which recourse shall be had solely to the assets of the Trust, and for all
purposes of this Agreement and each other document, the Owner Trustee (as such
or in its individual capacity) shall be subject to, and entitled to the benefits
of, the terms and provisions of the Trust Agreement.

                                       57
<PAGE>

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

                                        NORDSTROM PRIVATE LABEL
                                        RECEIVABLES LLC,
                                        as Transferor

                                        By: /s/ Carol S. Powell
                                            ------------------------------------
                                            Name: Carol S. Powell
                                            Title: Treasurer

                                        NORDSTROM FSB,
                                        as Servicer

                                        By: /s/ Carol S. Powell
                                            ------------------------------------
                                            Name: Carol S. Powell
                                            Title: Treasurer

                                        NORDSTROM PRIVATE LABEL CREDIT
                                        CARD MASTER NOTE TRUST,
                                        as Issuer

                                        By: Wilmington Trust Company,
                                            not in its individual capacity but
                                            solely as Owner Trustee of the
                                            Trust,

                                        By: /s/ James P. Lawler
                                            ------------------------------------
                                            Name: James P. Lawler
                                            Title: Vice President

                                        WELLS FARGO BANK MINNESOTA,
                                        NATIONAL ASSOCIATION
                                        not in its individual capacity but
                                        solely as Indenture Trustee

                                        By: /s/ Jennifer C. Davis
                                            ------------------------------------
                                            Name: Jennifer C. Davis
                                            Title: Assistant Vice President

                                       58
<PAGE>

                                                                       EXHIBIT A

            FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
                         (As required by Section 2.09 of
                      the Transfer and Servicing Agreement)

       ASSIGNMENT No. __ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
_____________,(1) among Nordstrom Private Label Receivables LLC, as Transferor
(the "Transferor"), Nordstrom fsb, as Servicer (the "Servicer"), and Nordstrom
Private Label Credit Card Master Note Trust (the "Trust"), pursuant to the
Transfer and Servicing Agreement referred to below.

                                   WITNESSETH

       WHEREAS, the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of October 1, 2001 (as amended and
supplemented, the "Agreement");

       WHEREAS, pursuant to the Agreement, the Transferor wishes to designate
Additional Accounts to be included as Accounts and to convey the Receivables of
such Additional Accounts, whether now existing or hereafter created, to the
Trust; and

       WHEREAS, the Trust is willing to accept such designation and conveyance
subject to the terms and conditions hereof.

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

       1. Defined Terms. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto.

       "Addition Cut-Off Date" means, with respect to the Additional Accounts
designated hereby, ____________, ____.

       "Addition Date" means, with respect to the Additional Accounts designated
hereby, ____________, ____.

       2. Designation of Additional Accounts. On or before the date hereof, the
Transferor will deliver to the Owner Trustee a computer file or microfiche list
containing a true and complete schedule identifying all Additional Accounts
designated hereby (the "Additional Accounts") specifying for each such
Additional Account, as of the Addition Cut-Off Date, its account number and the
aggregate amount outstanding in such Account, which computer file or microfiche
list shall supplement Schedule 1 to the Agreement.

--------

(1)      To be dated as of the applicable Addition Date.

                                      A-1
<PAGE>
       3. Conveyance of Receivables. The Transferor does hereby, transfer,
assign, set over and otherwise convey, without recourse except as set forth in
the Transfer and Servicing Agreement, to the Trust, all its right, title and
interest in, to and under the Receivables of such Additional Accounts existing
at the close of business on the Addition Cut-Off Date and thereafter created
from time to time until the termination of the Trust, all Recoveries related
thereto, all monies due or to become due and all amounts received or receivable
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 Owner Trustee (as such or in its
individual capacity), the Indenture Trustee, any Noteholders or any Series
Enhancer of any obligation of the Servicer, the Transferor 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. If necessary, the Transferor
agrees to record and file, at its own expense, financing statements (and
continuation statements when applicable) with respect to the Receivables in
Additional Accounts existing on the Addition Cut-Off Date and thereafter created
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection of, the sale
and assignment of its interest in 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 Owner Trustee on or prior to the Addition Date. The Owner 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
sale and assignment.

       (b) In connection with such sale, the Transferor further agrees, at its
own expense, on or prior to the date of this Assignment, to indicate in the
appropriate computer files that Receivables created in connection with the
Additional Accounts have been conveyed to the Trust pursuant to the Agreement
and this Assignment.

       (c) The Transferor does hereby grant to the Trust a security interest in
all of its right, title and interest, whether now owned or hereafter acquired,
in and to the Receivables in the Additional Accounts existing on the Addition
Cut-Off Date and thereafter created from time to time until the termination of
the Trust, all Recoveries related thereto, all monies due or to become due and
all amounts received or receivable with respect thereto, all money, accounts,
general intangibles, chattel paper, instruments, documents, goods, investment
property, deposit accounts, certificates of deposit, letters of credit, and
advices of credit consisting of, arising from or related to the foregoing, and
all "proceeds" (including "proceeds" as defined in the UCC) thereof. This
Assignment constitutes a security agreement under the UCC.

       4. Acceptance by Trust. The Trust hereby acknowledges its acceptance 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. The
Trust further acknowledges that, prior to or simultaneously with the execution
and delivery of this Assignment, the Transferor delivered to the Owner Trustee
the computer file or microfiche list described in Section 2 of this Assignment.

       5. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Trust, as the Addition Date that:

                                      A-2
<PAGE>

              (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. As of the Addition Cut-Off Date, each
       Additional 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 Transferor has
       occurred and the transfer by the Transferor of Receivables arising in the
       Additional Accounts to the Trust has not been made in contemplation of
       the occurrence thereof.

              (d) Redemption Event; Event of Default. The Transferor reasonably
       believes that (i) the transfer of the Receivables arising in the
       Additional Accounts will not, based on the facts known to the Transferor,
       then or thereafter cause a Redemption Event or Event of Default to occur
       with respect to any Series and (ii) no selection procedure was utilized
       by the Transferor which would result in the selection of Additional
       Accounts (from among the available Eligible Accounts available to the
       Transferor) that would be materially adverse to the interests of the
       Noteholders of any Series as of the Addition Date.

              (e) Security Interest. This Assignment constitutes a valid sale,
       transfer and assignment to the Trust of all right, title and interest,
       whether owned on the Addition Cut-Off Date or thereafter acquired, of the
       Transferor in the Receivables existing on the Addition Cut-Off Date or
       thereafter created in the Additional Accounts, all Recoveries related
       thereto, all monies due or to become due and all amounts received or
       receivable with respect thereto and the "proceeds" (including "proceeds"
       as defined in the applicable UCC) thereof, or, if this Assignment does
       not constitute a sale of such property, it constitutes a grant of a
       "security interest" (as defined in the applicable 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
       perfected security or ownership interest in such property.

              (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,

                                      A-3
<PAGE>

       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 or (iv) seeking any
       determination or ruling that would materially and adversely affect the
       validity or enforceability of this Assignment.

              (h) All Consents. All authorizations, consents, orders or
       approvals 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
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

       9. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Assignment has been executed and delivered by Wilmington Trust
Company, not in its individual capacity, but solely in its capacity as Owner
Trustee of the Trust, in no event shall Wilmington Trust Company in its
individual capacity have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other document,
as to all of which recourse shall be had solely to the assets of the Trust, and
for all purposes of this Assignment and each other document, the Owner Trustee
(as such or in its individual capacity) shall be subject to, and entitled to the
benefits of, the terms and provisions of the Trust Agreement.

                                      A-4
<PAGE>

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

                                        NORDSTROM PRIVATE LABEL
                                        RECEIVABLES LLC,
                                        as Transferor

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        NORDSTROM FSB,
                                        as Servicer

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        NORDSTROM PRIVATE LABEL CREDIT
                                        CARD MASTER NOTE TRUST,
                                        as Issuer

                                        By: Wilmington Trust Company,
                                            not in its individual capacity
                                            but solely as Owner Trustee
                                            of the Trust,

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      A-5
<PAGE>

                                                                      SCHEDULE 1

                                List of Accounts

                                      S1-1
<PAGE>

                                                                       EXHIBIT B

             FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
                         (As required by Section 2.10 of
                      the Transfer and Servicing Agreement)

       REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________,(2) among
Nordstrom Private Label Receivables LLC, as Transferor (the "Transferor") and
Nordstrom fsb, as Servicer (the "Servicer"), and [Nordstrom Private Label Credit
Card Master Note Trust], (the "Trust"), pursuant to the Transfer and Servicing
Agreement referred to below.

                                   WITNESSETH:

       WHEREAS the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of October 1, 2001 (as amended and
supplemented, the "Agreement");

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

       WHEREAS the Trust 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 and the Trust hereby agree as follows:

       1. Defined Terms. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto.

       "Removal Date" means, with respect to the Removed Accounts designated
hereby, ___________, ____

       "Removal Notice Date" means, with respect to the Removed Accounts
______________, ____

       2. Designation of Removed Accounts. On or before the Removal Date, the
Transferor will deliver to the Owner Trustee a computer file or microfiche 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 and the aggregate amount
outstanding in such Account, which computer file or microfiche list shall
supplement Schedule 1 to the Agreement.

--------

(2)    To be dated as of the Removal Date.

                                      B-1
<PAGE>

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

       In connection with such transfer, the Trust agrees to execute and deliver
to the Transferor on or prior to the date this Reassignment is delivered,
applicable termination statements prepared by the Transferor 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 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);
       and

              (b) Redemption Event; Event of Default. 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 a Redemption Event or Event of Default to occur with
       respect to any Series and (B) no selection procedure was utilized by the
       Transferor which would result in a selection of Removed Accounts that
       would be materially adverse to the interests of the Noteholders of any
       Series as of the Removal Date.

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

       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.

       7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW

                                      B-2
<PAGE>

YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

       8. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Reassignment has been executed and delivered by [Owner Trustee],
not in its individual capacity, but solely in its capacity as Owner Trustee of
the Trust, in no event shall [Owner Trustee] in its individual capacity have any
liability in respect of the representations, warranties, or obligations of the
Trust hereunder or under any other document, as to all of which recourse shall
be had solely to the assets of the Trust, and for all purposes of this
Reassignment and each other document, the Owner Trustee (as such or in its
individual capacity) shall be subject to, and entitled to the benefits of, the
terms and provisions of the Trust Agreement.

                                      B-3
<PAGE>

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

                                        NORDSTROM PRIVATE LABEL
                                        RECEIVABLES LLC,
                                        as Transferor

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        NORDSTROM FSB,
                                        as Servicer

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        NORDSTROM PRIVATE LABEL CREDIT
                                        CARD MASTER NOTE TRUST,
                                        as Issuer

                                        By: Wilmington Trust Company
                                            not in its individual capacity
                                            but solely as Owner Trustee
                                            of the Trust,

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      B-4
<PAGE>

                                                                       EXHIBIT C

                      FORM OF ANNUAL SERVICER'S CERTIFICATE

                    (To be delivered on or before March 31 of
                each calendar year beginning with March 31, 2002,
                  pursuant to Section 3.05 of the Transfer and
                     Servicing Agreement referred to below)

                     NORDSTROM CREDIT CARD MASTER NOTE TRUST

       The undersigned, a duly authorized representative of Nordstrom fsb, as
Servicer (the "Servicer") and Nordstrom Private Label Receivables LLC, as
Transferor (the "Transferor"), pursuant to the Transfer and Servicing Agreement,
dated as of October 1, 2001 (as amended and supplemented, the "Agreement"),
among Nordstrom Private Label Receivables LLC, Nordstrom fsb and Nordstrom
Private Label Credit Card Mater Note Trust, does hereby certify that:

              1. Nordstrom fsb 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 an Authorized Officer who is duly authorized
       pursuant to the Agreement to execute and deliver this Certificate to the
       Trust.

              3. A review of the activities of the Servicer during the year
       ended December 31, ____, 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 year
       ended December 31, ____ 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."]

                                       C-1
<PAGE>

       IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ____ day of __________________, 20__.

                                        NORDSTROM FSB,
                                        as Servicer

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                      C-2
<PAGE>

                                                                     EXHIBIT D-1

                           FORM OF OPINION OF COUNSEL
                           WITH RESPECT TO AMENDMENTS

                          Provisions to be included in
                   Opinion of Counsel to be delivered pursuant
                            to subsection 9.02(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 Transfer and Servicing Agreement,
       attached hereto as Schedule 1 (the "Amendment" ), has been duly
       authorized, executed and delivered by the Transferor and constitutes the
       legal, valid and binding agreement of the Transferor, 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.
       The enforceability of the Transferor's obligations 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 9.01 of the Transfer and Servicing
       Agreement.

                                     D-1-1
<PAGE>

                                                                     EXHIBIT D-2

                           FORM OF OPINION OF COUNSEL
                            WITH RESPECT TO ACCOUNTS

                          Provisions to be included in
                            Opinion of Counsel to be
                              delivered pursuant to
                          Section 9.02(d)(ii) or (iii)

       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) To the extent that the transfer of Additional Receivables by
       the Transferor to the Trust pursuant to the Assignment does not
       constitute an absolute assignment by the Transferor to the Trust of such
       Additional Receivables or the proceeds thereof, the Assignment creates in
       favor of the Trust a security interest in the rights of the Transferor in
       such Additional Receivables and the proceeds thereof.

              (ii) The security interests described in paragraph 1 above is
       perfected and of first priority.

                                     D-2-1
<PAGE>

                                                                     EXHIBIT D-3

                          PROVISIONS TO BE INCLUDED IN
                            ANNUAL OPINION OF COUNSEL

       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 with respect to similar matters. Unless
otherwise indicated, all capitalized terms used herein has the meanings ascribed
to them in the Transfer and Servicing Agreement.

              (i) No filing or other action, other than such filing or other
       action described in such opinion, is necessary from the date of such
       opinion through April 30 of the following year to continue the perfected
       status of the security interest of the Trust in the Receivables described
       in the financing statements referenced in such opinion.

                                     D-3-1
<PAGE>

                                                                      SCHEDULE 1

                                List of Accounts

                   [Original list delivered to Owner Trustee]

                                     S-1-1<PAGE>
                                                                   Exhibit 10.23

                                                                  EXECUTION COPY

================================================================================

             NORDSTROM PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST,

                                   as Issuer,

                                       and

                Wells Fargo Bank Minnesota, National Association,

                              as Indenture Trustee

                         -----------------------------
                                MASTER INDENTURE

                          Dated as of October 1, 2001
                         -----------------------------

================================================================================

<PAGE>

                         ------------------------------

                 RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
                     ACT OF 1939 AND INDENTURE PROVISIONS*

<TABLE>
<CAPTION>
Trust Indenture
  Act Section                                                  Indenture Section
---------------                                                -----------------
<S>                                                            <C>
  310(a)(1).............................................               6.11
      (a)(2)............................................               6.11
      (a)(3)............................................               6.10
      (a)(4)............................................           Not Applicable
      (a)(5)............................................               6.11
      (b)...............................................               6.08, 6.11
      (c)...............................................           Not Applicable
  311(a)................................................               6.12
      (b)...............................................               6.12
      (c)...............................................           Not Applicable
  312(a)................................................               7.01, 7.02(a)
      (b)...............................................               7.02(b)
      (c)...............................................               7.02(c)
  313(a)................................................               7.04
      (b)...............................................               7.04
      (c)...............................................               7.03, 7.04
      (d)...............................................               7.04
  314(a)................................................               3.09, 7.03(a)
      (b)...............................................               3.06
      (c)(1)............................................               2.11, 8.09(c), 12.01(a)
      (c)(2)............................................               2.11, 8.09(c), 12.01(a)
      (c)(3)............................................               2.11, 8.09(c), 12.01(a)
      (d)(1)............................................               2.11, 8.09(c), 12.01(b)
      (d)(2)............................................           Not Applicable
      (d)(3)............................................           Not Applicable
      (e)...............................................               12.01(a)
  315(a)................................................               6.01(b)
      (b)...............................................               6.02
      (c)...............................................               6.01(c)
      (d)...............................................               6.01(d)
      (d)(1)............................................               6.01(d)
      (d)(2)............................................               6.01(d)
      (d)(3)............................................               6.01(d)
      (e)...............................................               5.14
  316(a)(1)(A)..........................................               5.12
  316(a)(1)(B)..........................................               5.13
  316(a)(2).............................................           Not Applicable
  316(b)................................................               5.08
  317(a)(1).............................................               5.04
  317(a)(2).............................................               5.04(d)
  317(b)................................................               5.04(a)
  318(a)................................................               12.07
</TABLE>

--------

*     This reconciliation and tie shall not, for any purpose, be deemed to be
      part of the within indenture.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
                                   ARTICLE ONE

                                   DEFINITIONS

<S>            <C>                                                                         <C>
Section 1.01.  Definitions...............................................................   2
Section 1.02.  Other Definitional Provisions.............................................  16

                                   ARTICLE TWO

                                    THE NOTES

Section 2.01.  Form Generally............................................................  18
Section 2.02.  Denominations.............................................................  18
Section 2.03.  Execution, Authentication and Delivery....................................  18
Section 2.04.  Authenticating Agent......................................................  19
Section 2.05.  Registration of and Limitations on Transfer and Exchange of Notes.........  20
Section 2.06.  Mutilated, Destroyed, Lost or Stolen Notes................................  21
Section 2.07.  Persons Deemed Owners.....................................................  22
Section 2.08.  Appointment of Paying Agent...............................................  23
Section 2.09.  Access to List of Noteholders' Names and Addresses........................  23
Section 2.10.  Cancellation..............................................................  24
Section 2.11.  Release of Collateral.....................................................  24
Section 2.12.  New Issuances.............................................................  24
Section 2.13.  Book-Entry Notes..........................................................  26
Section 2.14.  Notices to Clearing Agency or Foreign Clearing Agency.....................  27
Section 2.15.  Definitive Notes..........................................................  27
Section 2.16.  Global Notes..............................................................  27
Section 2.17.  Meetings of Noteholders...................................................  28
Section 2.18.  Uncertificated Classes....................................................  28

                                  ARTICLE THREE

                               COVENANTS OF ISSUER

Section 3.01.  Payment of Principal and Interest.........................................  29
Section 3.02.  Maintenance of Office or Agency...........................................  29
Section 3.03.  Money for Note Payments to Be Held in Trust...............................  29
Section 3.04.  Existence.................................................................  30
Section 3.05.  Protection of Trust.......................................................  30
Section 3.06.  Opinions as to Collateral.................................................  31
Section 3.07.  Performance of Obligations; Servicing of Receivables......................  32
Section 3.08.  Negative Covenants........................................................  33
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
<S>            <C>                                                                         <C>
Section 3.09.  Statements as to Compliance...............................................  34
Section 3.10.  Issuer May Consolidate, Etc., Only on Certain Terms.......................  34
Section 3.11.  Successor Substituted.....................................................  36
Section 3.12.  No Other Business.........................................................  36
Section 3.13.  No Borrowing..............................................................  36
Section 3.14.  Servicer's Obligations....................................................  36
Section 3.15.  Guarantees, Loans, Advances and Other Liabilities.........................  36
Section 3.16.  Capital Expenditures......................................................  37
Section 3.17.  Removal of Administrator..................................................  37
Section 3.18.  Restricted Payments.......................................................  37
Section 3.19.  Notice of Events of Default...............................................  37
Section 3.20.  Further Instruments and Acts..............................................  37
Section 3.21.  Representations and Warranties as to the Security Interest of the
               Indenture Trustee in the Receivables......................................  37

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 4.01.  Satisfaction and Discharge of this Indenture..............................  39
Section 4.02.  Application of Trust Money................................................  40

                                  ARTICLE FIVE

                      PAY OUT EVENTS, DEFAULTS AND REMEDIES

Section 5.01.  Pay Out Events............................................................  41
Section 5.02.  Events of Default.........................................................  41
Section 5.03.  Acceleration of Maturity; Rescission and Annulment........................  42
Section 5.04.  Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.  43
Section 5.05.  Remedies; Priorities......................................................  45
Section 5.06.  Optional Preservation of the Collateral...................................  47
Section 5.07.  Limitation on Suits.......................................................  47
Section 5.08.  Unconditional Rights of Noteholders to Receive Principal and Interest.....  48
Section 5.09.  Restoration of Rights and Remedies........................................  48
Section 5.10.  Rights and Remedies Cumulative............................................  48
Section 5.11.  Delay or Omission Not Waiver..............................................  49
Section 5.12.  Rights of Noteholders to Direct Indenture Trustee.........................  49
Section 5.13.  Waiver of Past Defaults...................................................  49
Section 5.14.  Undertaking for Costs.....................................................  50
Section 5.15.  Waiver of Stay or Extension Laws..........................................  50
Section 5.16.  Sale of Receivables.......................................................  50
</TABLE>

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
<S>            <C>                                                                         <C>
Section 5.17.  Action on Notes...........................................................  51

                                   ARTICLE SIX

                              THE INDENTURE TRUSTEE

Section 6.01.  Duties of the Indenture Trustee...........................................  52
Section 6.02.  Notice of Pay Out Event or Event of Default...............................  54
Section 6.03.  Rights of Indenture Trustee...............................................  54
Section 6.04.  Not Responsible for Recitals or Issuance of Notes.........................  55
Section 6.05.  May Hold Notes............................................................  55
Section 6.06.  Money Held in Trust.......................................................  55
Section 6.07.  Compensation, Reimbursement and Indemnification...........................  55
Section 6.08.  Replacement of Indenture Trustee..........................................  56
Section 6.09.  Successor Indenture Trustee by Merger.....................................  57
Section 6.10.  Appointment of Co-Indenture Trustee or Separate Indenture Trustee.........  57
Section 6.11.  Eligibility; Disqualification.............................................  58
Section 6.12.  Preferential Collection of Claims Against.................................  59
Section 6.13.  Tax Returns...............................................................  59
Section 6.14.  Representations and Covenants of the Indenture Trustee....................  59
Section 6.15.  Custody of the Collateral.................................................  59

                                  ARTICLE SEVEN

          NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER

Section 7.01.  Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders....  61
Section 7.02.  Preservation of Information; Communications to Noteholders................  61
Section 7.03.  Reports by Issuer.........................................................  61
Section 7.04.  Reports by Indenture Trustee..............................................  62

                                  ARTICLE EIGHT

                    ALLOCATION AND APPLICATION OF COLLECTIONS

Section 8.01.  Collection of Money.......................................................  63
Section 8.02.  Rights of Noteholders.....................................................  63
Section 8.03.  Establishment of Collection Account and Special Funding Account...........  63
Section 8.04.  Collections and Allocations...............................................  65
Section 8.05.  Shared Principal Collections..............................................  67
Section 8.06.  Allocation of Collateral to Series or Groups..............................  67
Section 8.07.  Excess Finance Charge Collections.........................................  68
Section 8.08.  Release of Collateral; Eligible Loan Documents............................  68
</TABLE>

                                      iii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
<S>            <C>                                                                         <C>
Section 8.09.  Opinion of Counsel........................................................  69

                                  ARTICLE NINE

                    DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS

Section 9.01.  Distributions and Reports to Noteholders..................................  70

                                   ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

Section 10.01.  Supplemental Indentures Without Consent of Noteholders...................  71
Section 10.02.  Supplemental Indentures with Consent of Noteholders......................  72
Section 10.03.  Execution of Supplemental Indentures.....................................  74
Section 10.04.  Effect of Supplemental Indenture.........................................  74
Section 10.05.  Conformity With Trust Indenture Act......................................  74
Section 10.06.  Reference in Notes to Supplemental Indentures............................  74

                                 ARTICLE ELEVEN

                                   TERMINATION

Section 11.01.  Termination of Trust.....................................................  75
Section 11.02.  Final Distribution.......................................................  75
Section 11.03.  Termination Distributions................................................  76
Section 11.04.  Defeasance...............................................................  76

                                 ARTICLE TWELVE

                                  MISCELLANEOUS

Section 12.01.  Compliance Certificates and Opinions etc.................................  78
Section 12.02.  Form of Documents Delivered to Indenture Trustee.........................  79
Section 12.03.  Acts of Noteholders......................................................  80
Section 12.04.  Notices, Etc. to Indenture Trustee and Issuer............................  81
Section 12.05.  Notices to Noteholders; Waiver...........................................  81
Section 12.06.  Alternate Payment and Notice Provisions..................................  82
Section 12.07.  Conflict with Trust Indenture Act........................................  82
Section 12.08.  Effect of Headings and Table of Contents.................................  82
Section 12.09.  Successors and Assigns...................................................  82
Section 12.10.  Severability.............................................................  82
Section 12.11.  Benefits of Indenture....................................................  82
Section 12.12.  Legal Holidays...........................................................  82
</TABLE>

                                       iv

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
<S>            <C>                                                                         <C>
Section 12.13.  GOVERNING LAW............................................................  82
Section 12.14.  Counterparts.............................................................  83
Section 12.15.  Trust Obligations........................................................  83
Section 12.16.  No Petition..............................................................  83
</TABLE>

                                       v

<PAGE>

        This MASTER INDENTURE, dated as of October 1, 2001 (the "Master
Indenture"), is between Nordstrom Private Label Credit Card Master Note Trust, a
business trust organized under the laws of the State of Delaware (herein,
together with its permitted successors and assigns, the "Issuer"), and Wells
Fargo Bank Minnesota, National Association, a national banking association, as
indenture trustee (herein, together with its successors in the trusts hereunder,
the "Indenture Trustee").

                              PRELIMINARY STATEMENT

        The Issuer has duly authorized the execution and delivery of this Master
Indenture to provide for an issue of its asset backed notes (the "Notes") as
provided in this Master Indenture. All covenants and agreements made by the
Issuer herein are for the benefit and security of the Noteholders. The Issuer is
entering into this Indenture, and the Indenture Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.

        Simultaneously with the delivery of this Master Indenture, the Issuer is
entering into the Transfer and Servicing Agreement with Nordstrom Private Label
Receivables LLC, a Delaware limited liability company, as Transferor (the
"Transferor") and Nordstrom fsb, a federal banking association, as Servicer (the
"Servicer"), pursuant to which (a) the Transferor will convey to the Issuer all
of its right, title and interest in, to and under the Receivables and (b) the
Servicer will agree to service the Receivables and make collections thereon on
behalf of the Noteholders.

        Under the Transfer and Servicing Agreement, Receivables arising in the
Accounts from time to time will be conveyed thereunder to the Issuer.

                                GRANTING CLAUSES

        The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Notes and the Enhancement Providers, all of the Issuer's
right, title and interest, whether now owned or hereafter acquired, in, to and
under (a) the Receivables, (b) collections and all Recoveries allocable to the
Issuer as provided in the Transfer and Servicing Agreement and all monies due or
to become due and all amounts received or receivable with respect thereto, (c)
all Eligible Investments and all monies, investment properties, instruments and
other property credited to the Collection Account, the Series Accounts and the
Special Funding Account, and all interest, dividends, earnings, income and other
distributions from time to time received, receivable or otherwise distributed or
distributable thereto or in respect thereof (including any accrued discount
realized on liquidation of any investment purchased at a discount), (d) all
rights, remedies, powers, privileges and claims of the Issuer under or with
respect to any Series Enhancement, the Trust Agreement or the Transfer and
Servicing Agreement (whether arising pursuant to the terms of such Enhancement
Agreement, the Trust Agreement or the Transfer and Servicing Agreement or
otherwise available to the Issuer at law or in equity), including the rights of
the Issuer to enforce such Enhancement Agreement, the Trust Agreement or the
Transfer and Servicing Agreement, and to give or withhold any and all consents,
requests, notices, directions, approvals, extensions or waivers under or with
respect to such Series Enhancement, the Trust Agreement or the Transfer and
Servicing Agreement to the same extent as the Issuer could but for the
assignment and security interest granted to the Indenture Trustee for the
benefit of the

<PAGE>

Noteholders, (e) the property conveyed to the Issuer under any Participation
Interest Supplement and the right to receive Recoveries attributed to cardholder
charges for merchandise and services in the Accounts, (f) all money, accounts,
general intangibles, chattel paper, instruments, documents, goods, investment
property, deposit accounts, certificates of deposit, letters of credit and
advices of credit consisting of, arising from, or related to the foregoing, (g)
all proceeds of any derivative contracts between the Trust and a counterparty,
as described in the Indenture Supplement, (h) all other property of the Issuer,
and (i) all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds, products, rents, receipts or profits of the
conversion, voluntary or involuntary, into cash or other property, all cash and
non-cash proceeds, and other property consisting of, arising from or relating to
all or any part of any of the foregoing; in each case, excluding the Transferor
Interest and all amounts distributable to the Holders of any Certificates
pursuant to the terms of any Transaction Document (in each case as such
capitalized terms are defined herein) (collectively, the "Collateral").

                                LIMITED RECOURSE

        The obligation of the Issuer to make payments of principal of, interest
on and other amounts with respect to, the Notes is limited by recourse only to
the Collateral.

                                   ARTICLE ONE

                                   DEFINITIONS

        Section 1.01. Definitions. Whenever used in this Indenture, the
following words and phrases shall have the following meanings:

        "Account Owner" has the meaning specified in the Transfer and Servicing
Agreement.

        "Accounts" has the meaning set forth in the Transfer and Servicing
Agreement.

        "Accumulation Period" means, with respect to any Series, or any Class
within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Noteholders of such Series or Class, which shall be the
controlled accumulation period, the principal accumulation period, the early
accumulation period, the optional accumulation period, the limited accumulation
period or other accumulation period, in each case as defined with respect to
such Series or Class in the related Indenture Supplement.

        "Act" has the meaning specified in Section 12.03(a).

        "Adjusted Invested Amount" has the meaning set forth in the related
Indenture Supplement.

        "Administration Agreement" means the Administration Agreement, dated as
of October 1, 2001 between the Issuer and the Administrator, as the same may be
amended, supplemented or otherwise modified from time to time.

                                       2
<PAGE>

        "Administrator" means Nordstrom fsb, or its successors and permitted
assigns, or any successor Administrator under the Administration Agreement.

        "Adverse Effect" has the meaning specified in the Transfer and Servicing
Agreement.

        "Affiliate" has the meaning set forth in the Transfer and Servicing
Agreement.

        "Aggregate Investor Percentage" means, with respect to Principal
Receivables, Finance Charge Receivables and Defaulted Receivables, as the case
may be, as of any date of determination, the sum of such Series Percentages of
all Series of Notes issued and outstanding on such date of determination;
provided, however, that the Aggregate Investor Percentage shall not exceed 100%.

        "Agreement" means this Indenture, as the same may be amended,
supplemented or otherwise modified from time to time, including, with respect to
any Series or Class, the related Indenture Supplement.

        "Amortization Period" means, with respect to any Series, or any Class
within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are distributed to the related Noteholders
of such Series or Class, which shall be the controlled amortization period, the
principal amortization period, the optional amortization period, the limited
amortization period, the early amortization period or other amortization period,
in each case as defined with respect to such Series in the related Indenture
Supplement.

        "Applicants" has the meaning specified in Section 2.09(a).

        "Authorized Officer" means, with respect to:

               (i) the Issuer, any officer of the Owner Trustee who is
        authorized to act for the Owner Trustee in matters relating to the
        Issuer and any Vice President or more senior officer of the
        Administrator who is authorized to act for the Administrator in matters
        relating to the Issuer and to be acted upon by the Administrator
        pursuant to the Administration Agreement and who is identified on the
        list of Authorized Officers (containing the specimen signatures of such
        officers) delivered by the Administrator to the Indenture Trustee on the
        Closing Date (as such list may be modified or supplemented from time to
        time thereafter);

               (ii) the Transferor, any officer of the Transferor who is
        authorized to act for the Transferor in matters relating to the
        Transferor and who is identified on the list of Authorized Officers,
        containing the specimen signature of each such Person, delivered by the
        Transferor to the Indenture Trustee on the Closing Date (as such list
        may be modified or supplemented from time to time thereafter);

               (iii) the Servicer, any officer of the Servicer who is authorized
        to act for the Servicer in matters relating to the Servicer and who is
        identified on the list of Authorized Officers, containing the specimen
        signature of each such Person, delivered by the Servicer to the
        Indenture Trustee on the Closing Date (as such list may be modified or
        supplemented from time to time thereafter); and

                                       3
<PAGE>

               (iv) the Seller, any officer of the Seller who is authorized to
        act for the Seller in matters relating to the Seller and who is
        identified on the list of Authorized Officers, containing the specimen
        signature of each such Person, delivered by the Seller to the Indenture
        Trustee on the Closing Date (as such list may be modified or
        supplemented from time to time thereafter).

        "Bearer Notes" means any Series or Class of Notes, together with the
Indenture Trustee's certificate of authentication related thereto, issued in
bearer form.

        "Beneficial Owner" means, with respect to a Book-Entry Note, the Person
who is the owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or Foreign Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency or Foreign Clearing Agency
(directly as a Clearing Agency Participant or as an Indirect Participant, in
accordance with the rules of such Clearing Agency or Foreign Clearing Agency).

        "Book-Entry Notes" means beneficial interests in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
or Foreign Clearing Agency as described in Section 2.13.

        "Business Account Operating Agreement" means the operating agreement,
dated as of February 1, 1997, between Nordstrom, Inc. and Nordstrom Credit,
Inc., as amended by the First Amendment to Business Account Operating Agreement
for Nordstrom Proprietary Accounts and Receivables, dated as of October 1, 2001,
in each case between the Nordstrom, Inc. and Nordstrom Credit, Inc., as amended
and supplemented from time to time.

        "Business Day" has the meaning set forth in the Transfer and Servicing
Agreement.

        "Certificates" has the meaning specified in the Trust Agreement.

        "Class" means, with respect to any Series, any one of the classes of
Notes of that Series.

        "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, and serving as clearing
agency for a Series or Class of Book-Entry Notes.

        "Clearing Agency Participant" means 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.

        "Clearstream" means Clearstream Banking, societe anonyme, a professional
depository incorporated under the laws of Luxembourg, and its successors.

        "Closing Date" means, with respect to any Series, the closing date
specified in the related Indenture Supplement.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Collateral" has the meaning specified in the Granting Clause of this
Indenture.

                                       4
<PAGE>

        "Collection Account" has the meaning specified in Section 8.03.

        "Collections" has the meaning specified in the Transfer and Servicing
Agreement.

        "Commission" means the Securities and Exchange Commission, and its
successors.

        "Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at date of the execution of this Indenture is located
at MAC N9311-161, 6th Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services-Asset Backed Administration, or at such
other address as the Indenture Trustee may designate from time to time by notice
to the Noteholders and the Transferor, or the principal corporate trust office
of any successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Transferor); provided that for the
purposes of Section 3.02, the address of any such office shall be at MAC
N9311-161, 6th Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services-Asset Backed Administration,

        "Coupon" means, collectively, the interest coupons and any special
coupon attached to Bearer Notes.

        "Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.

        "Defaulted Receivables" has the meaning specified in the Transfer and
Servicing Agreement.

        "Defeasance" has the meaning specified in Section 11.04(a).

        "Defeased Series" has the meaning specified in Section 11.04(a).

        "Definitive Notes" means Notes issued in definitive, fully registered
form.

        "Deposit Date" means each day on which the Servicer deposits Collections
in the Collection Account.

        "Determination Date" means, unless otherwise specified in the Indenture
Supplement for a particular Series, fifth Business Day preceding the
Distribution Date.

        "Discount Percentage" has the meaning specified in the Transfer and
Servicing Agreement.

        "Distribution Date" has the meaning, with respect to any Series, set
forth in the applicable Indenture Supplement.

        "Dollars", "$" or "U.S. $" means United States dollars.

        "DTC" means The Depository Trust Company, and its successors.

                                       5
<PAGE>

        "Eligible Institution" means a depository institution organized under
the laws of the United States or any one of the States thereof, (or any domestic
branch of a foreign bank) which at all times (i) has either (a) a long-term
unsecured debt rating of As3 or better by Moody's or (b) a certificate of
deposit rating of Prime-1 by Moody's, (ii) has either a long-term unsecured debt
rating of AA- or better or a certificate of deposit rating of A-1+ by Standard &
Poor's and (iii) is a member of the FDIC. Notwithstanding the previous sentence,
any institution the appointment of which satisfies the Rating Agency Condition
shall be considered an Eligible Institution. If so qualified, the Indenture
Trustee may be considered an Eligible Institution for the purposes of this
definition.

               "Eligible Investments" means, as of any date of determination,
the following instruments, investment property, or other property:

               (i) direct obligations of, or obligations fully guaranteed as to
        timely payment by, the United States;

               (ii) 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 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 debt rating of such depository institution or trust company shall be
        the highest short-term debt rating of each Rating Agency, or with
        respect to ratings issued by Moody's, have a long-term debt rating of at
        least A2 and/or a short-term debt rating of Prime-1;

               (iii) commercial paper or other short-term obligations (having
        original or remaining maturities of no more than 30 days) (including
        short-term obligations of Nordstrom, Inc. and the Bank) having, at the
        time of investment or contractual commitment to invest therein, the
        highest credit rating for such obligation issued by Standard & Poor's or
        be a long-term debt rating of at least A2 and/or a short-term debt
        rating of Prime-1 issued by Moody's;

               (iv) demand deposits, time deposits and certificates of deposit
        which (a) are scheduled to mature on a date occurring no later than the
        Transfer Date in the Monthly Period immediately succeeding the Monthly
        Period in which such investment is made, (b) are fully insured by the
        FDIC and (c) have, at the time of the Trust's investment therein, a
        rating in the highest rating category of each Rating Agency;

               (v) bankers' acceptances (having original maturities of no more
        than 365 days) issued by any depository institution or trust company
        referred to in clause (ii) above;

               (vi) money market funds having, at the time of the Trust's
        investment therein, a rating in the highest rating category of each
        Rating Agency (including funds for which the Indenture Trustee or any of
        its Affiliates is investment manager or advisor);

                                       6
<PAGE>

               (vii) time deposits (other than those referred to in clause (iv)
        above), with a Person the commercial paper of which has a credit rating
        satisfactory to each Rating Agency and which are scheduled to mature on
        a date occurring no later than the Transfer Date in the Monthly Period
        immediately succeeding the Monthly Period in which such investment is
        made; or

               (viii) any other relatively risk free investment of a type or
        rating that satisfies the Rating Agency Condition.

        "Eligible Servicer" has the meaning specified in the Transfer and
Servicing Agreement.

        "Enhancement Agreement" means any agreement, instrument or document
governing the terms of any Series Enhancement or pursuant to which any Series
Enhancement is issued or outstanding.

        "Euroclear Operator" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System.

        "Event of Default" has the meaning specified in Section 5.02.

        "Excess Allocation Series" means a Series that, pursuant to the related
Indenture Supplement, is entitled to receive certain excess Collections of
Finance Charge Receivables, as more specifically set forth in such Indenture
Supplement. If so specified in the Indenture Supplement for a Group of Series,
each such Series may be an Excess Allocation Series only for the other Series in
such Group.

        "Excess Finance Charge Collections" means, with respect to a
Distribution Date, the aggregate amount for all outstanding Series of
Collections of Finance Charge Receivables which the related Supplements specify
are to be treated as "Excess Finance Charge Collections" for such Distribution
Date.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Fitch" has the meaning set forth in the Transfer and Servicing
Agreement

        "Finance Charge Receivables" has the meaning specified in the Transfer
and Servicing Agreement.

        "Finance Charge Shortfalls" means, with respect to a Distribution Date,
the aggregate amount for all outstanding Series which the related Supplements
specify are "Finance Charge Shortfalls" for such Series and such Distribution
Date.

        "Foreign Clearing Agency" means Clearstream and the Euroclear Operator.

        "GAAP" means generally accepted accounting principles in the United
States in effect from time to time.

        "Global Note" has the meaning specified in Section 2.16.

                                       7
<PAGE>

        "Grant" means to mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other monies payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.

        "Group" means, with respect to any Series, the group of Series, if any,
in which the related Indenture Supplement specifies such Series is to be
included.

        "Indenture" means this master indenture, dated as of October 1, 2001,
between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.

        "Indenture Supplement" means, with respect to any Series, a supplement
to the Indenture, executed by the parties hereto and delivered in connection
with the original issuance of the Notes of such Series pursuant to Section
10.01, and an amendment to the Indenture executed pursuant to Sections 10.01 or
10.02, and, in either case, including all amendments thereof and supplements
thereto.

        "Indenture Trustee" means Wells Fargo Bank Minnesota, National
Association, in its capacity as trustee under the Agreement, its successors in
interest and any successor indenture trustee under the Agreement.

        "Independent" means, when used with respect to any specified Person,
that the Person (i) is in fact independent of the Issuer, any other obligor upon
the Notes, the Transferor, the Seller and any of their respective Affiliates,
(ii) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Transferor, the
Seller or any of their respective Affiliates and (iii) is not connected with the
Issuer, any such other obligor, the Transferor, the Seller or any of their
respective Affiliates as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

        "Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01, made by an
Independent appraiser or other expert appointed by an Issuer Order, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

        "Indirect Participant" means other Persons such as securities brokers
and dealers, banks and trust companies that clear or maintain a custodial
relationship with a participant of DTC, either directly or indirectly.

                                       8
<PAGE>

        "Initial Cut-Off Date" has the meaning specified in the Transfer and
Servicing Agreement.

        "Insolvency Event" has the meaning specified in the Transfer and
Servicing Agreement.

        "Invested Amount" means, with respect to any Series and for any date, an
amount equal to the "Invested Amount" or "Adjusted Invested Amount," as
applicable, specified in the related Indenture Supplement.

        "Investment Company Act" means the Investment Company Act of 1940, as
amended.

        "Issuer" means the Trust, and its successors.

        "Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.

        "Lien" has the meaning specified in the Transfer and Servicing
Agreement.

        "Monthly Period" means, with respect to each Distribution Date, unless
otherwise provided in an Indenture Supplement, the period from and including the
first day of the preceding calendar month to and including the last day of such
calendar month; provided, however, that the initial Monthly Period with respect
to any Series will commence on the Closing Date with respect to such Series.

        "Moody's" has the meaning specified in the Transfer and Servicing
Agreement.

        "New Issuance" has the meaning specified in Section 2.12(a).

        "Note Interest Rate" means, as of any particular date of determination
and with respect to any Series or Class, the interest rate as of such date
specified therefor in the related Indenture Supplement.

        "Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an Indirect Participant,
in accordance with the rules of such Clearing Agency).

        "Note Register" has the meaning specified in Section 2.05.

        "Noteholder" or "Holder" means the Person in whose name a Note is
registered on the Note Register and, if applicable, the holder of any Bearer
Note, Global Note, or Coupon, as the case may be, or such other Person deemed to
be a "Noteholder" or "Holder" in any related Indenture Supplement.

        "Notes" means all Series of Notes issued by the Trust pursuant to the
Indenture and the applicable Indenture Supplement.

        "Notice of Default" has the meaning specified in Section 5.02(c).

                                       9
<PAGE>

        "Officer's Certificate" means, unless otherwise specified in this
Indenture, a certificate delivered to the Indenture Trustee signed by any
Authorized Officer of the Issuer, Seller, Transferor or the Servicer, as
applicable, under the circumstances described in, and otherwise complying with,
the applicable requirements of Section 12.01.

        "Operating Agreement" means the operating agreement for Nordstrom
proprietary accounts and receivables, dated August 31, 1991, between the
Nordstrom fsb and Nordstrom Credit, Inc., as amended by the First Amendment to
Operating Agreement for Nordstrom Proprietary Accounts and Receivables, dated as
of March 1, 2000, and the Second Amendment to Operating Agreement for Nordstrom
Proprietary Accounts and Receivables, dated as of October 1, 2001 (as amended,
the "Operating Agreement"), in each case between the Nordstrom fsb and Nordstrom
Credit, Inc., as amended or supplemented from time to time.

        "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Person providing the opinion and who shall
be reasonably acceptable to the Indenture Trustee; provided that a Tax Opinion
shall be an opinion of nationally recognized tax counsel.

        "Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:

               (i) Notes theretofore canceled by the Transfer Agent and
        Registrar or delivered to the Transfer Agent and Registrar for
        cancellation;

               (ii) Notes or portions thereof the payment for which money in the
        necessary amount has been theretofore deposited with the Indenture
        Trustee or any Paying Agent in trust for the Holders of such Notes
        (provided, however, that if such Notes are to be redeemed, notice of
        such redemption has been duly given pursuant to this Indenture or
        provision therefor, satisfactory to the Indenture Trustee, has been
        made); and

               (iii) Notes in exchange for or in lieu of other Notes which have
        been authenticated and delivered pursuant to this Indenture unless proof
        satisfactory to the Indenture Trustee is presented that any such Notes
        are held by a Protected Purchaser;

provided that, in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Issuer, any other
obligor upon the Notes, the Transferor, the Servicer or any Affiliate of any
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Indenture Trustee actually knows to be
so owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Transferor, the Servicer or any of their respective Affiliates. In
making any such determination, the Indenture Trustee may rely on the
representations of the pledgee and shall not be required to undertake any
independent investigation.

                                       10
<PAGE>

        "Outstanding Amount" means the aggregate principal amount of all Notes
Outstanding at the date of determination and, with respect to the Notes of a
particular Series, the aggregate principal amount of all Notes of such Series
which are Outstanding at the date of determination.

        "Owner Trustee" means Wilmington Trust Company, not in its individual
capacity, but solely as owner trustee under the Trust Agreement, its successors
in interest and any successor owner trustee under the Trust Agreement.

        "Paired Series" means (i) each Series which has been paired with another
Series (which Series may be prefunded or partially prefunded), such that the
reduction of the Invested Amount or Adjusted Invested Amount of such Series
results in the increase of the Invested Amount of such other Series, as
described in the related Indenture Supplements, and (ii) such other Series.

        "Participation Interest Supplements" has the meaning set forth in the
Transfer and Servicing Agreement.

        "Pay Out Event" means, with respect to any Series, a Trust Pay Out Event
or a Series Pay Out Event.

        "Paying Agent" means any paying agent appointed pursuant to Section 2.08
and shall initially be the Indenture Trustee; provided that if the Indenture
Supplement for a Series so provides, a separate or additional Paying Agent may
be appointed with respect to such Series.

        "Permitted Assignee" means any Person who, if it were to purchase
Receivables (or interests therein) in connection with a sale thereof pursuant to
Sections 5.05(a) and 5.16, would not cause the Trust to be taxable as a publicly
traded partnership for federal income tax purposes.

        "Person" has the meaning specified in the Transfer and Servicing
Agreement.

        "Principal Receivables" has the meaning specified in the Transfer and
Servicing Agreement.

        "Principal Sharing Series" means a Series that, pursuant to the
Indenture Supplement therefor, is entitled to receive Shared Principal
Collections. If so specified in the Indenture Supplement for a Group of Series,
each such Series may be Principal Sharing Series only for the other Series in
such Group.

        "Principal Shortfalls" means, with respect to a Distribution Date, the
aggregate amount for all outstanding Series which the related Indenture
Supplements specify are "Principal Shortfalls" for such Series and for such
Distribution Date.

        "Principal Terms" means, with respect to any Series, (i) the name or
designation; (ii) the initial principal amount (or method for calculating such
amount), the Invested Amount and the Required Transferor Interest; (iii) the
Note Interest Rate for each Class of Notes of such Series (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
Noteholders; (vi) the designation of any Series Accounts and the terms governing
the operation of any such Series Accounts; (vii) the Servicing Fee; (viii) the
issuer and terms of any form of Series

                                       11
<PAGE>

Enhancements with respect thereto; (ix) the terms on which the Notes of such
Series may be exchanged for Notes of another Series, repurchased by the
Transferor or remarketed to other investors; (x) the Series Final Maturity Date;
(xi) the number of Classes of Notes of such Series and, if more than one Class,
the rights and priorities of each such Class; (xii) the extent to which the
Notes of such Series will be issuable in temporary or permanent global form
(and, in such case, the depositary for such global note or notes, the terms and
conditions, if any, upon which such global note may be exchanged, in whole or in
part, for Definitive Notes, and the manner in which any interest payable on a
temporary or global note will be paid); (xiii) whether the Notes of such Series
may be issued in bearer form and any limitations imposed thereon; (xiv) the
priority of such Series with respect to any other Series; (xv) whether such
Series will be part of a Group; (xvi) whether such Series will be a Principal
Sharing Series; (xvii) whether such Series will be an Excess Allocation Series;
(xviii) the Distribution Date; (xix) whether such Series will or may be a Paired
Series and the Series with which it will be paired, if applicable; and (xx) any
other terms of such Series.

        "Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.

        "Protected Purchaser" has the meaning set forth in the New York Uniform
Commercial Code.

        "Qualified Account" means either (i) a segregated account with an
Eligible Institution or (ii) 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, (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 unsecured, unguaranteed senior debt securities of such depository
institution shall have a credit rating from each Rating Agency in one of its
generic credit rating categories that signifies investment grade.

        "Rating Agency" means, with respect to any outstanding Series or Class,
each rating agency, as specified in the applicable Indenture Supplement,
selected by the Transferor to rate the Notes of such Series or Class.

        "Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have notified the Transferor and the Indenture Trustee in
writing that such action will not result in a reduction or withdrawal of their
current rating of any outstanding Series or Class with respect to which it is a
Rating Agency or, with respect to any outstanding Series or Class not rated by
any Rating Agency, the written consent of the Noteholders of such Series or
Class as specified in the Indenture Supplement for such Series.

        "Reallocated Principal Collections" has, with respect to any series, the
meaning set forth in the related Indenture Supplement.

        "Receivables" has the meaning specified in the Transfer and Servicing
Agreement.

                                       12
<PAGE>

        "Receivables Purchase Agreement" means the receivables purchase
agreement, dated as of October 1, 2001, between the Seller and the Transferor or
any other receivables transfer agreement entered into by the Seller and the
Transfer.

        "Recoveries" has the meaning set forth in the Transfer and Servicing
Agreement.

        "Record Date" means, with respect to any Distribution Date, (i) for
Definitive Notes the last day of the calendar month immediately preceding such
Distribution Date or (ii) the Business Day immediately preceding such
Distribution Date unless otherwise specified for a Series in the related
Indenture Supplement.

        "Redemption Date" means, with respect to any Series, the date or dates,
if any, specified in the related Indenture Supplement.

        "Registered Notes" means any Series or Class of Notes, together with the
Indenture Trustee's certificate of authentication related thereto, issued in
fully registered form.

        "Removed Accounts" has the meaning set forth in the Transfer and
Servicing Agreement.

        "Required Transferor Interest" means, with respect to any date, an
amount equal to the product of (i) the Required Transferor Percentage and (ii)
the aggregate amount of Principal Receivables.

        "Required Transferor Percentage" means 8%; provided, however, that the
Transferor may reduce the Required Transferor Percentage upon (i) 30 days' prior
notice to the Indenture Trustee and each Rating Agency, (ii) satisfaction of the
Rating Agency Condition with respect thereto and (iii) delivery to the Indenture
Trustee of a certificate of a Vice President or more senior officer of the
Transferor stating that the Transferor reasonably believes that such reduction
will not, based on the facts known to such officer at the time of such
certification, then or thereafter have an Adverse Effect.

        "Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer (i) within the Corporate Trust Office including any vice
president, assistant vice president, assistant treasurer, assistant secretary,
trust officer or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by the individuals who at the
time shall be such officers or to whom any corporate trust matter is referred at
the Corporate Trust Office because of such officer's knowledge of and
familiarity with the particular subject and (ii) who shall have direct
responsibility for the administration of the Agreement and the other Transaction
Documents.

        "Revolving Period" means, with respect to each Series, the period
specified in the related Indenture Supplement.

        "Securities Act" means the Securities Act of 1933, as amended.

        "Seller" means Nordstrom Credit, Inc., in its capacity as seller under
the Receivables Purchase Agreement, or any other seller under a Receivables
Purchase Agreement, and their respective successor.

                                       13
<PAGE>

        "Series" means any series of Notes issued pursuant to this Indenture and
the related Indenture Supplement.

        "Series Account" means any deposit, trust, securities escrow or similar
account maintained for the benefit of the Noteholders of any Series or Class, as
specified in any Indenture Supplement.

        "Series Enhancement" means the rights and benefits provided to the Trust
or the Noteholders of any Series or Class pursuant to any letter of credit,
surety bond, cash collateral account, collateral invested amount, spread
account, reserve account, guaranteed rate agreement, maturity liquidity
facility, tax protection agreement, interest rate swap agreement, interest rate
cap agreement or other similar arrangement. The subordination of any Series or
Class to another Series or Class shall be deemed to be a Series Enhancement.

        "Series Enhancer" means the Person or Persons providing any Series
Enhancement, other than (except to the extent otherwise provided with respect to
any Series in the related Indenture Supplement) the Noteholders of any Series or
Class which is subordinated to another Series or Class.

        "Series Final Maturity Date" means, with respect to any Series, the
final maturity date for such Series specified in the related Indenture
Supplement.

        "Series Issuance Date" means, with respect to any Series, the date on
which the Notes of such Series are to be originally issued in accordance with
Section 2.12 and the related Indenture Supplement.

        "Series Pay Out Event" has, with respect to any Series, the meaning
specified pursuant to the related Indenture Supplement.

        "Servicer" has the meaning specified in the Transfer and Servicing
Agreement.

        "Servicer Default" has the meaning specified in the Transfer and
Servicing Agreement.

        "Servicing Fee" has the meaning specified in the Transfer and Servicing
Agreement.

        "Shared Excess Finance Charge Collections" means, with respect to any
Distribution Date, the aggregate amount for all outstanding Series that the
related Indenture Supplements specify are to be treated as "Shared Excess
Finance Charge Collections" for such Distribution Date.

        "Shared Principal Collections" means, with respect to a Distribution
Date, the aggregate amount for all outstanding Series of Collections of
Principal Receivables which the related Indenture Supplements specify are to be
treated as "Shared Principal Collections" for such Distribution Date.

        "Special Funding Account" has the meaning specified in Section 8.03.

                                       14
<PAGE>

        "Special Funding Amount" means the amount on deposit in the Special
Funding Account.

        "Standard & Poor's" has the meaning specified in the Transfer and
Servicing Agreement.

        "State" means any state of the United States and the District of
Columbia.

        "Successor Servicer" has the meaning specified in the Transfer and
Servicing Agreement.

        "Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for federal income tax purposes, such action will not (i)
adversely affect the tax characterization as debt of the Notes of any
outstanding Series or Class that were characterized as debt at the time of their
issuance, (ii) cause the Trust to be deemed to be an association (or publicly
traded partnership) taxable as a corporation and (iii) cause or constitute an
event in which gain or loss would be recognized by any Noteholder.

        "Termination Notice" has the meaning specified in the Transfer and
Servicing Agreement.

        "Transaction Documents" means, with respect to any Series of Notes, the
Certificate of Trust, the Trust Agreement, each related Receivables Purchase
Agreement, the Transfer and Servicing Agreement, this Indenture, the related
Indenture Supplement, any Enhancement Agreement, the Administration Agreement,
the Operating Agreement, the Business Account Operating Agreement and such other
documents and certificates delivered in connection therewith.

        "Transfer Agent and Registrar" has the meaning specified in Section
2.05.

        "Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement, dated as of October 1, 2001, among the Transferor, the Servicer and
the Issuer, as the same may be amended, supplemented or otherwise modified from
time to time.

        "Transfer Restriction Event" has the meaning specified in the Transfer
and Servicing Agreement.

        "Transfer Date" means the Business Day immediately preceding each
Distribution Date.

        "Transferor" has the meaning specified in the Transfer and Servicing
Agreement.

        "Transferor Interest" means on any date of determination an amount equal
to (i) the sum of (a) an amount equal to the aggregate balance of Principal
Receivables plus (b) the Special Funding Amount, in each case, at the end of the
day immediately prior to such date of determination, minus (c) the aggregated
Invested Amounts with respect to all Series of Notes issued and outstanding on
such date of determination.

        "Transferor Percentage" means, on any date of determination, when used
with respect to Principal Receivables, Finance Charge Receivables and Defaulted
Receivables, a percentage

                                       15
<PAGE>

equal to 100% minus the Aggregate Investor Percentage with respect to such
category of Receivables.

        "Trust" means the Nordstrom Private Label Credit Card Master Note Trust.

        "Trust Agreement" means the Trust Agreement relating to the Trust, dated
as of October 1, 2001, between Nordstrom Private Label Receivables LLC, as
transferor, and the Owner Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.

        "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended.

        "Trust Pay Out Event" has the meaning specified in Section 5.01.

        "Trustees" means the Indenture Trustee and the Owner Trustee.

        "UCC" shall have the meaning specified in the Transfer and Servicing
Agreement.

        "United States" means the United States of America.

        Section 1.02. Other Definitional Provisions.

        (a) With respect to any Series, capitalized terms used herein that are
not otherwise defined shall have the meanings ascribed thereto in the Trust
Agreement, the Transfer and Servicing Agreement or the related Indenture
Supplement, as the case may be.

        (b)  All terms defined in this Indenture 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 Indenture and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Indenture or in any such certificate or other document, and accounting
terms partly defined in this Indenture or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Indenture or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Indenture
or in any such certificate or other document shall control.

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

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

        (f) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

                                       16
<PAGE>

            "indenture securities" means the Notes.

            "indenture security holder" means a Noteholder.

            "indenture to be qualified" means this Indenture.

            "indenture trustee" or "institutional trustee" means the Indenture
Trustee.

            "obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.

        All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.

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

                                       17
<PAGE>

                                   ARTICLE TWO

                                    THE NOTES

        Section 2.01. Form Generally. Any Series or Class of Notes, together
with the Indenture Trustee's certificate of authentication related thereto, may
be issued in bearer form with attached interest coupons and a special coupon or
in fully registered form and shall be in substantially the form of an exhibit to
the related Indenture Supplement with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or such Indenture Supplement, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of such Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note. The terms of any Notes set forth in an exhibit
to the related Indenture Supplement are part of the terms of this Indenture, as
applicable.

        The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the officers executing such Notes, as evidenced by its execution of such Notes.

        Each Note will be dated the Closing Date and each Definitive Note will
be dated as of the date of its authentication.

        Section 2.02. Denominations. Except as otherwise specified in the
related Indenture Supplement and the Notes, each class of Notes of each Series
shall be issued in fully registered form in minimum amounts of $100,000 and in
integral multiples of $1,000 in excess thereof (except that one Note of each
Class may be issued in a different amount, so long as such amount exceeds the
applicable minimum denomination for such Class), and shall be issued upon
initial issuance as one or more Notes in an aggregate original principal amount
equal to the applicable Invested Amount for such Class or Series.

        Section 2.03. Execution, Authentication and Delivery. Each Note shall be
executed by manual or facsimile signature on behalf of the Issuer by an
Authorized Officer. Notes 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 Issuer shall not be rendered invalid, notwithstanding the
fact that such individual ceased to be so authorized prior to the authentication
and delivery of such Notes or does not hold such office at the date of issuance
of such Notes.

        At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Indenture Trustee for authentication and delivery, and the Indenture Trustee
shall authenticate at the written direction of the Issuer and deliver such Notes
as provided in this Indenture or the related Indenture Supplement and not
otherwise. Each Note shall be dated its date of authentication.

        No Note shall be entitled to any benefit under this Indenture or the
applicable Indenture Supplement or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of authentication substantially
in the form provided for herein or in the related

                                       18
<PAGE>

Indenture Supplement executed by or on behalf of the Indenture Trustee by the
manual signature of a duly authorized signatory, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.

        Section 2.04. Authenticating Agent.

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

        (c) An authenticating agent may at any time resign by giving written
notice of resignation to the Indenture Trustee, the Issuer and the Servicer. The
Indenture Trustee may at any time terminate the agency of an authenticating
agent by giving notice of termination to such authenticating agent and to the
Issuer and the Servicer. 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 Indenture Trustee or the Issuer and the Servicer, the
Indenture Trustee may promptly 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
Issuer and the Servicer.

        (d) The Issuer agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section.

        (e) The provisions of Sections 6.01 and 6.04 shall be applicable to any
authenticating agent.

        (f) Pursuant to an appointment made under this Section, the Notes may
have endorsed thereon, in lieu of or in addition to the Indenture Trustee's
certificate of authentication, an alternative certificate of authentication in
substantially the following form:

                                       19
<PAGE>

        This is one of the Notes described in the within-mentioned Agreement.

                          ------------------------------------------------------

                          ------------------------------------------------------
                          as Authenticating Agent
                          for the Indenture Trustee

                          By:
                               -------------------------------------------------
                                          Authorized Signatory

        Section 2.05. Registration of and Limitations on Transfer and Exchange
of Notes. The Issuer shall cause to be kept a register (the "Note Register") in
which the entity acting as transfer agent and registrar (the "Transfer Agent and
Registrar") shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the Transfer Agent
and Registrar for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Transfer Agent and Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Transfer Agent and Registrar.

        If a Person other than the Indenture Trustee is appointed by the Issuer
as Transfer Agent and Registrar, the Issuer will give the Indenture Trustee
prompt written notice of the appointment of a Transfer Agent and Registrar and
of the location, and any change in the location, of the Transfer Agent and
Registrar and Note Register. The Indenture Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies thereof,
and the Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Transfer Agent and Registrar by an officer thereof as
to the names and addresses of the Noteholders and the principal amounts and
numbers of such Notes.

        Upon surrender for registration of transfer of any Note at the office or
agency of the Transfer Agent and Registrar, to be maintained as provided in
Section 3.02, if the requirements of Section 8-401 of the UCC are met, the
Issuer shall execute, and upon receipt of such surrendered Note the Indenture
Trustee shall authenticate and deliver to the Noteholder, in the name of the
designated transferee or transferees, one or more new Notes (of the same Series
and Class) in any authorized denominations of like aggregate principal amount.

        At the option of a Noteholder, Notes may be exchanged for other Notes
(of the same Series and Class) in any authorized denominations and of like
aggregate principal amount, upon surrender of such Notes to be exchanged at the
office or agency of the Transfer Agent and Registrar. Whenever any Notes are so
surrendered for exchange, if the requirements of Section 8-401 of the UCC are
met, the Issuer shall execute, and upon receipt of such surrendered Note the
Indenture Trustee shall authenticate and deliver to the Noteholder, the Notes
which the Noteholder making the exchange is entitled to receive.

                                       20
<PAGE>

        All Notes issued upon any registration of transfer or exchange of Notes
shall evidence the same obligations, evidence the same debt, and be entitled to
the same rights and privileges under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

        Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in a form satisfactory to the Indenture Trustee duly executed by, the
Noteholder thereof or its attorney-in-fact duly authorized in writing, and by
such other documents as the Indenture Trustee may reasonably require.

        The registration of transfer of any Note shall be subject to the
additional requirements, if any, set forth in the related Indenture Supplement.

        No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer 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 registration of transfer or exchange of such Notes.

        All Notes surrendered for registration of transfer and exchange shall be
canceled by the Issuer and delivered to the Indenture Trustee for subsequent
destruction without liability on the part of either. The Indenture Trustee shall
destroy the Global Note upon its exchange in full for Definitive Notes and shall
deliver a certificate of destruction to the Transferor. Such certificate shall
also state that a certificate or certificates of each Foreign Clearing Agency
referred to in the applicable Indenture Supplement was received with respect to
each portion of the Global Note exchanged for Definitive Notes.

        Unless otherwise set forth in an Indenture Supplement, the preceding
provisions of this Section notwithstanding, the Issuer shall not be required to
make, and the Transfer Agent and Registrar need not register, transfers or
exchanges of Notes for a period of 20 days preceding the due date for any
payment with respect to the Note.

        If and so long as any Series of Notes are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Indenture Trustee shall appoint
a co-transfer agent and co-registrar in Luxembourg or another European city. Any
reference in this Indenture to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context otherwise requires.
The Indenture Trustee will enter into any appropriate agency agreement with any
co-transfer agent and co-registrar not a party to this Indenture, which will
implement the provisions of this Indenture that relate to such agent. The
Indenture Trustee initially appoints Kredietbank S.A. Luxembourgeoise, at its
office located at 43 Boulevard Royal, L-2955 Luxembourg, as Transfer Agent and
Registrar for each Series of Notes listed on the Luxembourg Stock Exchange.

        Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its reasonable satisfaction of the destruction, loss or
theft of any Note, and (ii) in case of destruction, loss, or theft there is
delivered to the Indenture Trustee such security or indemnity as may be required
by it to hold the Issuer, the Noteholders, the Transfer Agent, the Registrar and
the Indenture Trustee harmless, then, in the absence of notice to the Issuer,
the Transfer

                                       21
<PAGE>

Agent and Registrar or the Indenture Trustee that such Note has been acquired by
a Protected Purchaser, the Issuer shall execute, and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of like tenor (including the
same date of issuance) and principal amount, bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Note shall have become or within seven days shall be
due and payable, or shall have been selected or called for redemption, instead
of issuing a replacement Note, the Issuer may pay such Note without surrender
thereof, except that any mutilated Note shall be surrendered. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a Protected Purchaser of the
original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a Protected Purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.

        Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee or the Transfer Agent and Registrar) connected therewith.

        Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute complete and
indefeasible evidence of debt of the Trust, as if originally issued, whether or
not the mutilated, destroyed, lost or stolen Note shall be found at any time,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

        The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

        Section 2.07. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Transferor, the Issuer or the Indenture Trustee shall treat the
Person in whose name any Note is registered as the owner of such Note for the
purpose of receiving distributions pursuant to the terms of the applicable
Indenture Supplement and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Issuer, the Transferor, the Indenture Trustee
nor any agent of the Issuer, the Transferor or the Indenture Trustee shall be
affected by any notice to the contrary.

                                       22
<PAGE>

        Section 2.08. Appointment of Paying Agent.

        (a) The Issuer reserves the right at any time to vary or terminate the
appointment of a Paying Agent for the Notes, and to appoint additional or other
Paying Agents, provided that it will at all times maintain the Indenture Trustee
as Paying Agent.

        If and so long as any Notes are listed on the Luxembourg Stock Exchange
and such exchange shall so require, the Indenture Trustee will appoint a
co-paying agent in Luxembourg or another European city. The Indenture Trustee
will enter into any appropriate agency agreement with any co-paying agent not a
party to this Indenture, which will implement the provisions of this Indenture
that relate to such agent. The Indenture Trustee initially appoints Kredietbank
S.A. Luxembourgeoise, at its office located at 43 Boulevard Royal, L-2955
Luxembourg, as Paying Agent for each Series of Notes listed on the Luxembourg
Stock Exchange.

        Notice of all changes in the identity or specified office of a Paying
Agent will be delivered promptly to the Noteholders by the Indenture Trustee.

        (b) The Indenture Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee that it will hold all
sums, if any, held by it for payment to the Noteholders in trust for the benefit
of the Noteholders entitled thereto until such sums shall be paid to such
Noteholders and shall agree, and if the Indenture Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Code regarding
the withholding by the Indenture Trustee of payments in respect of federal
income taxes due from the Beneficial Owners.

        Section 2.09. Access to List of Noteholders' Names and Addresses.

        (a) The Indenture Trustee will furnish or cause to be furnished to the
Issuer, the Servicer, any Noteholder or the Paying Agent, within five Business
Days after receipt by the Indenture Trustee of a written request therefor from
the Issuer, the Servicer, such Noteholder or the Paying Agent, respectively, a
list of the names and addresses of the Noteholders. Unless otherwise provided in
the related Indenture Supplement, holders of 10% of the Outstanding Amount of
the Notes of any Series (the "Applicants") may apply in writing to the Indenture
Trustee, and if such application states that the Applicants desire to
communicate with other Noteholders of any Series with respect to their rights
under this Indenture or under the Notes and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Indenture
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 Noteholders held by the Indenture Trustee and shall give the Servicer
notice that such request has been made, 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.

        (b) Every Noteholder, by receiving and holding a Note, agrees that none
of the Issuer, the Owner Trustee, the Indenture Trustee, the Transfer Agent and
Registrar and the Servicer or any of their respective agents and employees shall
be held accountable by reason of the

                                       23
<PAGE>

disclosure of any such information as to the names and addresses of the
Noteholders hereunder, regardless of the sources from which such information was
derived.

        Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by it. Pursuant to an Issuer Request, the Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any lawful manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated in
lieu of or in exchange for any Notes canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Notes held by the
Indenture Trustee shall be destroyed unless the Issuer shall direct by a timely
order that they be returned to it.

        Section 2.11. Release of Collateral. Subject to Section 12.01, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and Independent Certificates in accordance with TIA Section
314(c) and 314(d) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.

        Section 2.12. New Issuances.

        (a) Pursuant to one or more Indenture Supplements, the Transferor may
from time to time direct the Owner Trustee in writing, on behalf of the Issuer,
to issue one or more new Series of Notes (each, a "New Issuance"). The Notes of
all outstanding Series shall be equally and ratably entitled as provided herein
to the benefits of this Indenture without preference, priority or distinction,
all in accordance with the terms and provisions of this Indenture and the
applicable Indenture Supplement except, with respect to any Series or Class, as
provided in the related Indenture Supplement. Interest on and principal of the
Notes of each outstanding Series shall be paid on each Distribution Date as
specified in the Indenture Supplement relating to such outstanding Series.

        (b) On or before the Series Issuance Date relating to any new Series of
Notes, the parties hereto will execute and deliver an Indenture Supplement which
will specify the Principal Terms of such Series. The terms of such Indenture
Supplement may modify or amend the terms of this Indenture solely as applied to
such new Series. The obligation of the Owner Trustee to execute, on behalf of
the Issuer, the Notes of any Series and of the Indenture Trustee to authenticate
such Notes and to execute and deliver the related Indenture Supplement (other
than any Series issued pursuant to an Indenture Supplement dated as of October
1, 2001) is subject to the satisfaction of the following conditions:

               (i) on or before the fifth day immediately preceding the Series
        Issuance Date, the Transferor shall have given the Trustees, the
        Servicer and each Rating Agency notice (unless such notice requirement
        is otherwise waived) of such issuance and the Series Issuance Date;

                                       24
<PAGE>

               (ii) the Transferor shall have delivered to the Trustees any
        related Indenture Supplement, in form satisfactory to the Owner Trustee
        (as such and in its individual capacity) and the Indenture Trustee,
        executed by the parties thereto;

               (iii) the Transferor shall have delivered to the Trustees any
        related Enhancement Agreement executed by the parties thereto;

               (iv) the Transferor shall have delivered to the Trustees (with a
        copy to each Rating Agency) a Tax Opinion, dated the Series Issuance
        Date;

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

               (vi) such issuance will not result in any Adverse Effect and the
        Transferor shall have delivered to the Trustees an Officer's
        Certificate, dated the Series Issuance Date, to the effect that (A) the
        Transferor reasonably believes that such issuance will not, based on the
        facts known to such officer at the time of such certification, result in
        an Adverse Effect, and (B) all conditions precedent to such execution,
        authentication, and delivery have been satisfied;

               (vii) the aggregate amount of Principal Receivables shall be
        greater than the Required Minimum Principal Balance and the Transferor
        Interest shall be greater than the Required Transferor Interest, each as
        of the Series Issuance Date and after giving effect to such issuance.

Any Note held by the Transferor at any time after the date of its initial
issuance may be transferred or exchanged only upon the delivery to the Trust and
the Indenture Trustee of a Tax Opinion dated as of the date of such transfer or
exchange, as the case may be, with respect to such transfer or exchange.

        (c) Upon satisfaction of the above conditions, pursuant to Section 2.03,
the Owner Trustee, on behalf of the Issuer, shall execute and the Indenture
Trustee shall authenticate and deliver the Notes of such Series as provided in
this Indenture and the applicable Indenture Supplement. Notwithstanding the
provisions of this Section, prior to the execution of any Indenture Supplement
(other than any Indenture Supplement dated as of October 1, 2001), the Indenture
Trustee and Owner Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such Indenture Supplement is authorized
or permitted by this Indenture and any Indenture Supplement related to any
outstanding Series. The Indenture Trustee and Owner Trustee may, but shall not
be obligated to, enter into any such Indenture Supplement which adversely
affects the Indenture Trustee's or Owner Trustee's (as such or in its individual
capacity) own rights, duties, benefits, protections, privileges or immunities
under this Indenture.

        (d) The Issuer may direct the Indenture Trustee to deposit the net
proceeds from any New Issuance in the Special Funding Account. The Issuer may
also specify that on any Transfer Date the proceeds from the sale of any new
Series may be withdrawn from the Special Funding Account and treated as Shared
Principal Collections.

                                       25
<PAGE>

        Section 2.13. Book-Entry Notes. Unless otherwise provided in any related
Indenture Supplement, the Notes, upon original issuance, shall be issued in the
form of Global Notes representing the Book-Entry Notes.

        The Global Notes of each Series representing the Book-Entry Notes shall,
unless otherwise provided in the related Indenture Supplement, initially be
registered in the Note Register in the name of the nominee of the Clearing
Agency or Foreign Clearing Agency for such Book-Entry Notes and shall be
delivered to the Indenture Trustee or, pursuant to such Clearing Agency's or
Foreign Clearing Agency's instructions held by the Indenture Trustee's agent as
custodian for the Clearing Agency or Foreign Clearing Agency.

        Unless and until Definitive Notes are issued under the limited
circumstances described in Section 2.15, no Beneficial Owner shall be entitled
to receive a Definitive Note representing such Beneficial Owner's interest in
such Note. Unless and until Definitive Notes have been issued to the Beneficial
Owners pursuant to Section 2.15:

               (a) the provisions of this Section shall be in full force and
        effect with respect to each such Series;

               (b) the Indenture Trustee shall be entitled to deal with the
        Clearing Agency or Foreign Clearing Agency and the Clearing Agency
        Participants for all purposes of this Indenture (including the payment
        of principal of and interest on the Notes of each such Series) as the
        authorized representatives of the Beneficial Owners;

               (c) to the extent that the provisions of this Section conflict
        with any other provisions of this Indenture, the provisions of this
        Section shall control with respect to each such Series;

               (d) the rights of Beneficial Owners of each such Series shall be
        exercised only through the Clearing Agency or Foreign Clearing Agency
        and the applicable Clearing Agency Participants and shall be limited to
        those established by law and agreements between such Beneficial Owners
        and the Clearing Agency or Foreign Clearing Agency and/or the Clearing
        Agency Participants; pursuant to the depository agreement applicable to
        a Series, unless and until Definitive Notes of such Series are issued
        pursuant to Section 2.15, the initial Clearing Agency shall make
        book-entry transfers among the Clearing Agency Participants and receive
        and transmit distributions of principal and interest on the Notes to
        such Clearing Agency Participants; and

               (e) whenever this Indenture requires or permits actions to be
        taken based upon instructions or directions of the Holders of Notes
        evidencing a specified percentage of the Outstanding Amount of the
        Notes, the Clearing Agency or Foreign Clearing Agency shall be deemed to
        represent such percentage only to the extent that they have received
        instructions to such effect from the Beneficial Owners and/or Clearing
        Agency Participants owning or representing, respectively, such required
        percentage of the beneficial interest in the Notes and has delivered
        such instructions to a Responsible Officer of the Indenture Trustee.

                                       26
<PAGE>

        Section 2.14. Notices to Clearing Agency or Foreign Clearing Agency.
Whenever a notice or other communication to the Noteholders is required under
this Indenture, unless and until Definitive Notes shall have been issued to
Beneficial Owners pursuant to Section 2.15, the Indenture Trustee shall give all
such notices and communications specified herein to be given to Noteholders to
the Clearing Agency or Foreign Clearing Agency, as applicable, and shall have no
obligation to the Beneficial Owners.

        Section 2.15. Definitive Notes. If so specified in the related Indenture
Supplement, Notes may be issued as Definitive Notes. If (i) (a) the Issuer
advises the Indenture Trustee in writing that the Clearing Agency or Foreign
Clearing Agency is no longer willing or able to discharge properly its
responsibilities as Clearing Agency or Foreign Clearing Agency with respect to
the Book-Entry Notes of a given Class and (b) the Indenture Trustee or Issuer is
unable to locate and reach an agreement on satisfactory terms with a qualified
successor, (ii) the Issuer, at its option, advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or Foreign Clearing Agency with respect to such Class or (iii) after the
occurrence of a Servicer Default, Beneficial Owners aggregating a majority of
the Outstanding Amount of the Notes (or such other percentage as specified in
the related Indenture Supplement) of such Class advise the Indenture Trustee and
the applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system is no longer in the best interests of the Beneficial Owners of such
Class, the Clearing Agency or Foreign Clearing Agency, as the case may be, shall
notify all Beneficial Owners of such Class of the occurrence of such event and
of the availability of Definitive Notes to Beneficial Owners of such Class
requesting the same. Upon surrender to the Indenture Trustee of the Notes of
such Class, accompanied by registration instructions from the applicable
Clearing Agency, the Issuer shall execute and the Indenture Trustee shall
authenticate Definitive Notes of such Class and shall recognize the registered
holders of such Definitive Notes as Noteholders under this Indenture. Neither
the Issuer nor the Indenture Trustee shall be liable for any delay in delivery
of such instructions, and the Issuer and the Indenture Trustee may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Notes of such Series, all references herein to
obligations imposed upon or to be performed by the applicable Clearing Agency or
Foreign Clearing Agency shall be deemed to be imposed upon and performed by the
Indenture Trustee, to the extent applicable with respect to such Definitive
Notes to the extent that the Indenture Trustee is able to so perform, and the
Indenture Trustee shall recognize the registered holders of the Definitive Notes
of such Series as Noteholders of such Series hereunder. Definitive Notes will be
transferable and exchangeable at the offices of the Transfer Agent and
Registrar.

        Section 2.16. Global Notes. Unless otherwise specified in the related
Indenture Supplement for any Series, Notes may be initially issued in the form
of temporary or permanent Global Notes (each, a "Global Note") in bearer form,
without interest coupons, in the denomination of the initial Invested Amount and
substantially in the form attached to the related Indenture Supplement. Unless
otherwise specified in the related Indenture Supplement, the provisions of this
Section shall apply to such Global Notes. Each Global Note will be authenticated
by the Indenture Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Notes. The Global Note may be
exchanged in the manner described in the related Indenture Supplement for
Registered Notes or Bearer

                                       27
<PAGE>

Notes in definitive form. Except as otherwise specifically provided in the
Indenture Supplement, any Notes that are issued in bearer form pursuant to this
Indenture shall be issued in accordance with the requirements of Code Section
163(f)(2).

        Section 2.17. Meetings of Noteholders. To the extent provided by the
Indenture Supplement for any Series issued in whole or in part in Bearer Notes,
the Servicer or the Indenture Trustee may at any time call a meeting of the
Noteholders of such Series, to be held at such time and at such place as the
Servicer or the Indenture Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Indenture with respect to such
Series or in the Notes of such Series, subject to Article Ten.

        Section 2.18. Uncertificated Classes. Notwithstanding anything to the
contrary contained in this Article or in Article Eleven, unless otherwise
specified in any Indenture Supplement, any provisions contained in this Article
and in Article Eleven relating to the registration, form, execution,
authentication, delivery, presentation, cancellation and surrender of Notes
shall not be applicable to any uncertificated Notes, provided, however, that,
except as otherwise specifically provided in the Indenture Supplement, any such
uncertificated Notes shall be issued in "registered form" within the meaning of
Code Section 163(f)(1).

                                       28
<PAGE>

                                  ARTICLE THREE

                               COVENANTS OF ISSUER

        Section 3.01. Payment of Principal and Interest.

        (a) The Issuer will duly and punctually pay principal and interest in
accordance with the terms of the Notes as specified in the relevant Indenture
Supplement.

        (b) The Noteholders of a Series as of the Record Date in respect of a
Distribution Date shall be entitled to the interest accrued and payable and
principal payable on such Distribution Date as specified in the related
Indenture Supplement. All payment obligations under a Note are discharged to the
extent such payments are made to the Noteholder of record.

        Section 3.02. Maintenance of Office or Agency. The Issuer will maintain
an office or agency within the city of Minneapolis, Minnesota and such other
locations as may be set forth in an Indenture Supplement where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee at its Corporate Trust Office to
serve as its agent for the foregoing purposes. The Issuer will give prompt
written notice to the Indenture Trustee and the Noteholders of the location, and
of any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Indenture Trustee at its Corporate Trust Office as
its agent to receive all such presentations, surrenders, notices and demands.

        Section 3.03. Money for Note Payments to Be Held in Trust. As specified
in Section 8.03 and in the related Indenture Supplement, all payments of amounts
due and payable with respect to the Notes which are to be made from amounts
withdrawn from the Collection Account and the Special Funding Account shall be
made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent,
and no amounts so withdrawn from the Collection Account or the Special Funding
Account shall be paid over to or at the direction of the Issuer except as
provided in this Section and in the related Indenture Supplement.

        Whenever the Issuer shall have a Paying Agent in addition to the
Indenture Trustee, it will, on or before the Business Day next preceding each
Distribution Date, direct the Indenture Trustee to deposit with such Paying
Agent on or before such Distribution Date an aggregate sum sufficient to pay the
amounts then becoming due, such sum to be (i) held in trust for the benefit of
Persons entitled thereto and (ii) invested, pursuant to an Issuer Order, by the
Paying Agent in an Eligible Investment in accordance with the terms of the
related Indenture Supplement. For all investments made by a Paying Agent under
this Section, such Paying Agent shall be entitled to all of the rights and
obligations of the Indenture Trustee under the related Indenture Supplement,
such rights and obligations being incorporated in this paragraph by this
reference.

                                       29
<PAGE>

        The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent, in acting as Paying Agent, is an express
agent of the Issuer and, further, that such Paying Agent will:

               (i) hold all sums held by it for the payment of amounts due with
        respect to the Notes in trust for the benefit of the Persons entitled
        thereto until such sums shall be paid to such Persons or otherwise
        disposed of as herein provided and pay such sums to such Persons as
        herein provided;

               (ii) give the Indenture Trustee notice of any default by the
        Issuer (or any other obligor upon the Notes) of which it has actual
        knowledge in the making of any payment required to be made with respect
        to the Notes;

               (iii) at any time during the continuance of any such default,
        upon the written request of the Indenture Trustee, immediately pay to
        the Indenture Trustee all sums so held in trust by such Paying Agent;

               (iv) immediately resign as a Paying Agent and forthwith pay to
        the Indenture Trustee all sums held by it by in trust for the payment of
        Notes if at any time it ceases to meet the standards required to be met
        by a Paying Agent at the time of its appointment; and

               (v) comply with all requirements of the Code with respect to the
        withholding from any payments made by it on any Notes of any applicable
        withholding taxes imposed thereon and with respect to any applicable
        reporting requirements in connection therewith.

        The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

        Section 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States, in which
case the Issuer will keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and will 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
Indenture, the Notes, the Collateral and each other related instrument or
agreement.

        Section 3.05. Protection of Trust. The Issuer will from time to time
prepare, or cause to be prepared, execute and deliver all such supplements and
amendments hereto and all such

                                       30
<PAGE>

financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:

               (a) grant more effectively all or any portion of the Collateral
        as security for the Notes;

               (b) maintain or preserve the lien (and the priority thereof) of
        this Indenture or to carry out more effectively the purposes hereof;

               (c) perfect, publish notice of, or protect the validity of any
        Grant made or to be made under this Indenture;

               (d) enforce any Grant of the Collateral; or

               (e) preserve and defend title to the Collateral securing the
        Notes and the rights therein of the Indenture Trustee and the
        Noteholders secured thereby against the claims of all Persons and
        parties.

        The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section.

        The Issuer shall pay or cause to be paid any taxes levied on all or any
part of the Collateral securing the Notes.

        Section 3.06. Opinions as to Collateral.

        (a) On the Series Issuance Date relating to any new Series of Notes, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel (with a copy
to each Rating Agency) either stating that, in the opinion of such counsel, such
action has been taken to perfect the lien and the security interest of this
Indenture, including without limitation with respect to the recording and filing
of this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are so necessary and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to maintain the lien and the perfection of such security
interest, and that such perfected security interest is of first priority.

        (b) On or before April 30 in each calendar year, beginning in 2003, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel (with a copy
to each Rating Agency) either stating that, in the opinion of such counsel, such
action has been taken to perfect the lien and security interest of this
Indenture, including with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is so necessary and reciting
the details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain the lien and the perfection of such
security interest, and that such perfected security interest is of first
priority. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and

                                       31
<PAGE>

filing of any financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the perfection of the lien and
security interest of this Indenture until May 30 in the following calendar year.

        Section 3.07. Performance of Obligations; Servicing of Receivables.

        (a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement or
such other instrument or agreement.

        (b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.

        (c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Transaction
Documents and in the instruments and agreements relating to the Collateral,
including but not limited to filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Transfer and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise expressly
provided herein or therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Transaction Document or any provision thereof
without the consent of the Holders of at least 662/3% of the Outstanding Amount
of the Notes of each adversely affected Series.

        (d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Transfer and Servicing Agreement, the Issuer shall cause the
Indenture Trustee to promptly notify the Rating Agencies thereof, and shall
cause the Indenture Trustee to specify in such notice the action, if any, being
taken with respect to such default. If a Servicer Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Transfer and Servicing Agreement with respect to the Receivables, the Issuer
shall take all reasonable steps available to it to remedy such failure.

        (e) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.01 of the Transfer and Servicing Agreement, the Servicer
shall continue to perform all servicing functions under the Transfer and
Servicing Agreement until the date specified in the Termination Notice or
otherwise specified by the Indenture Trustee or until a date mutually agreed
upon by the Servicer and the Indenture Trustee. As promptly as possible after
the giving of a Termination Notice to the Servicer, the Indenture Trustee shall
appoint a Successor Servicer, and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer,

                                       32
<PAGE>

the Indenture Trustee without further action shall automatically be appointed
the Successor Servicer. The Indenture Trustee may delegate any of its servicing
obligations to an Affiliate or agent in accordance with Section 3.01(b) and
Section 5.07 of the Transfer and Servicing Agreement. Notwithstanding the
foregoing, the Indenture Trustee shall, if it is legally unable so to act,
petition at the expense of the Servicer a court of competent jurisdiction to
appoint any established institution qualifying as an Eligible Servicer as the
Successor Servicer. The Indenture Trustee shall give prompt notice to each
Rating Agency and each Series Enhancer upon the appointment of a Successor
Servicer. Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer with respect to servicing functions under the
Transfer and Servicing Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions thereof, and all references in this Indenture to the
Servicer shall be deemed to refer to the Successor Servicer. In connection with
any Termination Notice, the Indenture 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, subject to the limitations set forth in Section 7.02 of the
Transfer and Servicing Agreement.

        (f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the
prior written consent of the Indenture Trustee and holders of at least 66-2/3%
of the Outstanding Amount of the Notes of each Series, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Transfer and Servicing
Agreement) or the Transaction Documents (except to the extent otherwise provided
in the Transaction Documents), or waive timely performance or observance by the
Servicer or the Transferor under the Transfer and Servicing Agreement and (ii)
that any such amendment shall not (A) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
Receivables or distributions that are required to be made for the benefit of the
Noteholders or (B) reduce the aforesaid percentage of the Notes that is required
to consent to any such amendment, without the consent of the Holders of all the
Outstanding Notes. If any such amendment, modification, supplement or waiver
shall be so consented to by the Indenture Trustee and such Noteholders, the
Issuer agrees, promptly following a request by the Indenture Trustee to do so,
to execute and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances and to provide each Rating Agency
with notice of such amendment, modification, supplement or waiver.

        Section 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Issuer will not:

               (a) sell, transfer, exchange, or otherwise dispose of any part of
        the Collateral except as expressly permitted by this Indenture, any
        Indenture Supplement, the Trust Agreement or the Transfer and Servicing
        Agreement;

               (b) claim any credit on, or make any deduction from, the
        principal and interest payable in respect of the Notes (other than
        amounts properly withheld from such

                                       33
<PAGE>

        payments under the Code or applicable state law) or assert any claim
        against any present or former Noteholder by reason of the payment of any
        taxes levied or assessed upon any part of the Collateral;

               (c) (i) permit the validity or effectiveness of this Indenture to
        be impaired, or permit the lien of this Indenture to be amended,
        hypothecated, subordinated, terminated or discharged, or permit any
        Person to be released from any covenants or obligations with respect to
        the Notes under this Indenture except as may be expressly permitted
        hereby, (ii) permit any Lien, charge, excise, claim, security interest,
        mortgage or other encumbrance (other than the lien of this Indenture) to
        be created on or extend to or otherwise arise upon or burden the
        Collateral or any part thereof or any interest therein or the proceeds
        thereof or (iii) permit the lien of this Indenture not to constitute a
        valid first priority security interest in the Collateral; or

               (d) voluntarily dissolve or liquidate in whole or in part.

        Section 3.09. Statements as to Compliance. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing within 120 days after the end of the fiscal year 2003), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that

               (i) a review of the activities of the Issuer during the 12-month
        period ending at the end of such fiscal year (or in the case of the
        fiscal year ending January 31, 2002, the period from the Closing Date to
        January 31, 2002) and of performance under this Indenture has been made
        and

               (ii) based on such review, the Issuer has complied with all
        conditions and covenants under this Indenture throughout such year, or,
        if there has been a default in the compliance of any such condition or
        covenant, specifying each such default and the nature and status
        thereof.

        Section 3.10. Issuer May Consolidate, Etc., Only on Certain Terms.

        (a) The Issuer shall not consolidate or merge with or into any other
        Person, unless:

               (i) the Person (if other than the Issuer) formed by or surviving
        such consolidation or merger (A) shall be a Person organized and
        existing under the laws of the United States or any State, (B) shall not
        be subject to regulation as an "investment company" under the Investment
        Company Act and (C) shall expressly assume, by an indenture supplemental
        hereto, executed and delivered to the Indenture Trustee, in a form
        satisfactory to the Indenture Trustee, the obligation to make due and
        punctual payment of the principal of and interest on all Notes and the
        performance of every covenant of this Indenture on the part of the
        Issuer to be performed or observed;

               (ii) immediately after giving effect to such transaction, no
        Event of Default, no Pay Out Event shall have occurred and be
        continuing;

                                       34
<PAGE>

               (iii) the Issuer shall have delivered to the Indenture Trustee an
        Officer's Certificate and an Opinion of Counsel each stating that (A)
        such consolidation or merger and such supplemental indenture comply with
        this Section, (B) all conditions precedent in this Section relating to
        such transaction have been complied with (including any filing required
        by the Exchange Act), and (iii) such supplemental indenture is duly
        authorized, executed and delivered and is valid, binding and enforceable
        against such person;

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

               (v) the Issuer shall have received a Tax Opinion and an Opinion
        of Counsel dated the date of such consolidation or merger (and shall
        have delivered copies thereof to the Indenture Trustee and each Rating
        Agency) to the effect that such transaction will not have any material
        adverse tax consequence to any Noteholder; and

               (vi) any action that is necessary to maintain the lien and
        security interest created by this Indenture shall have been taken.

        (b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Collateral, substantially as an entirety
to any Person, unless:

               (i) the Person that acquires by conveyance or transfer the
        properties and assets of the Issuer the conveyance or transfer of which
        is hereby restricted, shall (A) be a United States citizen or a Person
        organized and existing under the laws of the United States or any State,
        (B) expressly assume, by a supplemental indenture hereto, executed and
        delivered to the Indenture Trustee, in form satisfactory to the
        Indenture Trustee, the obligation to make due and punctual payment of
        the principal of and interest on all Notes and the performance or
        observance of every agreement and covenant of this Indenture on the part
        of the Issuer to be performed or observed, all as provided herein, (C)
        expressly agree by means of such supplemental indenture that all right,
        title and interest so conveyed or transferred shall be subject and
        subordinate to the rights of Holders of the Notes, (D) unless otherwise
        provided in such supplemental indenture, expressly agree to indemnify,
        defend and hold harmless the Issuer against and from any loss, liability
        or expense arising under or related to this Indenture and the Notes, (E)
        expressly agree by means of such supplemental indenture that such Person
        (or if a group of Persons, then one specified Person) shall make all
        filings with the Commission (and any other appropriate Person) required
        by the Exchange Act in connection with the Notes and (F) not be an
        "investment company" as defined in the Investment Company Act;

               (ii) immediately after giving effect to such transaction, no
        Event of Default, no Pay Out Event shall have occurred and be
        continuing;

               (iii) the Rating Agency Condition shall have been satisfied with
        respect to such transaction;

                                       35
<PAGE>

               (iv) the Issuer shall have received a Tax Opinion and an Opinion
        of Counsel (and shall have delivered copies thereof to the Indenture
        Trustee) to the effect that such transaction will not have any material
        adverse tax consequence to any Noteholder;

               (v) any action that is necessary to maintain the lien and
        security interest created by this Indenture shall have been taken; and

               (vi) the Issuer shall have delivered to the Indenture Trustee an
        Officer's Certificate and an Opinion of Counsel each stating that such
        conveyance or transfer and such supplemental indenture comply with this
        Section and that all conditions precedent herein provided for relating
        to such transaction have been complied with (including any filing
        required by the Exchange Act).

        Section 3.11. Successor Substituted. Upon any consolidation or merger,
or any conveyance or transfer of the properties and assets of the Issuer
substantially as an entirety in accordance with Section 3.10, the Person formed
by or surviving such consolidation or merger (if other than the Issuer) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the Issuer in the first paragraph of this Indenture or any successor which
shall theretofore have become such in the manner prescribed in this Section
shall be released from its obligations under this Indenture as issued
immediately upon the effectiveness of such conveyance or transfer, provided that
the Issuer shall not be released from any obligations or liabilities to the
Indenture Trustee or the Noteholders arising prior to such effectiveness.

        Section 3.12. No Other Business. The Issuer shall not engage in any
business other than the activities set forth in Section 2.03 of the Trust
Agreement and all activities incidental thereto or other than as required or
authorized by the terms of the Transaction Documents.

        Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except as expressly provided for pursuant to the terms of the
Transaction Documents and the Notes.

        Section 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with all of its obligations under the Transaction Documents.

        Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the Transfer and Servicing Agreement, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.

                                       36
<PAGE>

        Section 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

        Section 3.17. Removal of Administrator. So long as any Notes are
outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.

        Section 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amounts for any such purpose.
Notwithstanding the foregoing, the Issuer may make, or cause to be made, (a)
distributions as contemplated by, and to the extent funds are available for such
purpose under, the Transfer and Servicing Agreement or the Trust Agreement and
(b) payments to the Indenture Trustee pursuant to Section 6.07. The Issuer will
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with the Transaction Documents.

        Section 3.19. Notice of Events of Default. The Issuer agrees to give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and, immediately after obtaining knowledge of any of the
following occurrences, written notice of each default on the part of the
Servicer or the Transferor of its obligations under the Transfer and Servicing
Agreement, each default on the part of a Seller of its obligations under the
Receivables Purchase Agreement and any action taken by the Indenture Trustee
pursuant to Section 5.05.

        Section 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.

        Section 3.21. Representations and Warranties as to the Security Interest
of the Indenture Trustee in the Receivables. The Trust makes the following
representations and warranties to the Indenture Trustee. The representations and
warranties speak as of the execution and delivery of this Agreement and as of
each Closing Date. Such representations and warranties shall survive the pledge
of the Receivables by the Trust to the Indenture Trustee and the termination of
this Agreement and shall not be waived by any party hereto unless the Rating
Agency Condition is satisfied.

               (a) This Agreement creates a valid and continuing security
        interest (as defined in the applicable UCC) in the Collateral in favor
        of the Indenture Trustee, which security interest is prior to all other
        Liens, and is enforceable as such as against creditors of and purchasers
        from the Trust.

               (b) The Receivables constitute "accounts" within the meaning of
        the applicable UCC.

                                       37
<PAGE>

               (c) The Trust owns and has good and marketable title to the
        Collateral free and clear of any Lien, claim or encumbrance of any
        Person.

               (d) The Trust has caused or will have caused, within ten days,
        the filing of all appropriate financing statements in the proper filing
        office in the appropriate jurisdictions under applicable law in order to
        perfect the security interest in the Collateral granted to the Indenture
        Trustee hereunder.

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

                                       38
<PAGE>

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

        Section 4.01. Satisfaction and Discharge of this Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (a) rights of registration of transfer and exchange, (b) substitution of
mutilated, destroyed, lost or stolen Notes, (c) the rights of Noteholders to
receive payments of principal thereof and interest thereon, (d) Sections 3.03,
3.07, 3.08, 3.11, 3.12 and 12.16, (e) the rights and immunities of the Indenture
Trustee hereunder, including the rights of the Indenture Trustee under Section
6.07, and the obligations of the Indenture Trustee under Section 4.02, and (f)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee and payable to all or any of them, and
the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes when:

               (i) either

                        (A) all Notes theretofore authenticated and delivered
                (other than (1) Notes which have been destroyed, lost or stolen
                and which have been replaced, or paid as provided in Section
                2.06, and (2) Notes for whose full payment (principal and
                interest) money has theretofore been deposited in trust or
                segregated and held in trust by the Indenture Trustee) have been
                delivered to the Indenture Trustee for cancellation; or

                        (B) all Notes not theretofore delivered to the Indenture
                Trustee for cancellation:

                                (1) have become due and payable;

                                (2) will become due and payable at the Series
                        Final Maturity Date for such Class or Series of Notes;
                        or

                                (3) are to be called for redemption within one
                        year under arrangements satisfactory to the Indenture
                        Trustee for the giving of notice of redemption by the
                        Indenture Trustee in the name, and at the expense, of
                        the Issuer;

               and the Issuer, in the case of (1), (2) or (3) above, has
               irrevocably deposited or caused to be irrevocably deposited with
               the Indenture Trustee cash or direct obligations of or
               obligations guaranteed by the United States (which will mature
               prior to the date such amounts are payable), in trust for such
               purpose, in an amount sufficient to pay and discharge the entire
               indebtedness on such Notes not theretofore delivered to the
               Indenture Trustee for cancellation when due at the Series Final
               Maturity Date for such Class or Series of Notes or the Redemption
               Date (if Notes shall have been called for redemption pursuant to
               the related Indenture Supplement), as the case may be;

                                       39
<PAGE>

               (ii) the Issuer has paid or caused to be paid all other sums
        payable hereunder by the Issuer; and

               (iii) the Issuer has delivered to the Indenture Trustee an
        Officer's Certificate, an Opinion of Counsel and (if required by the TIA
        or the Indenture Trustee) an Independent Certificate from a firm of
        certified public accountants, each meeting the applicable requirements
        of Section 12.01(a) and each stating that all conditions precedent
        herein provided for relating to the satisfaction and discharge of this
        Indenture have been complied with.

        Section 4.02. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by
it, in accordance with the provisions of the Notes, this Indenture and the
applicable Indenture Supplement, to make payments, either directly or through
any Paying Agent, as the Indenture Trustee may determine, to the Noteholders and
for the payment in respect of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or in the Transfer and Servicing Agreement or required by
law.

                                       40
<PAGE>

                                  ARTICLE FIVE

                      PAY OUT EVENTS, DEFAULTS AND REMEDIES

        Section 5.01. Pay Out Events. If any one of the following events (each,
a "Trust Pay Out Event") shall occur:

               (a) An Insolvency Event occurs with respect to Nordstrom,
        Nordstrom fsb, the Seller, the Transferor or any of the Account Owners;
        provided, however, that if the Rating Agency Condition is first
        satisfied with respect to an Insolvency Event with respect to Nordstrom
        or the Seller, such Insolvency Event shall not be a Trust Pay Out Event;

               (b) a Transfer Restriction Event shall occur; or

               (c) the Trust shall become subject to regulation by the
        Commission as an "investment company" within the meaning of the
        Investment Company Act;

then a Pay Out Event with respect to all Series of Notes shall occur without any
notice or other action on the part of the Indenture Trustee or the Noteholders
immediately upon the occurrence of such event.

        Upon the occurrence of a Pay Out Event, an Amortization Period or Early
Accumulation, as specified in the related Indenture Supplement shall commence
and payment on the Notes of each Series will be made in accordance with the
terms of the related Indenture Supplement.

        Section 5.02. Events of Default. "Event of Default", wherever used
herein, means with respect to any Series any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

               (a) default in the payment of the principal of any Note of that
        Series, if and to the extent not previously paid, when the same becomes
        due and payable;

               (b) default in the payment of any interest on any Note of that
        Series when the same becomes due and payable, and such default shall
        continue for a period of 35 days;

               (c) default in the observance or performance of any covenant or
        agreement of the Issuer made in this Indenture made in respect of the
        Notes of such Series (other than a covenant, or agreement, a default in
        the observance or performance of which is elsewhere in this Section
        specifically dealt with) (all of such covenants and agreements in this
        Indenture which are not expressly stated to be for the benefit of a
        particular Series being deemed to be in respect of the Notes of all
        Series for this purpose), and such default shall continue or not be
        cured for a period of 60 days after there shall have been given, by
        written registered, certified mail or overnight delivery by a nationally
        recognized carrier, return receipt requested to the Issuer by the
        Indenture Trustee or to the Issuer and the Indenture Trustee by the
        Holders of at least 25% of the Outstanding Amount of the Notes

                                       41
<PAGE>

        of such Series, a written notice specifying such default and requiring
        it to be remedied and stating that such notice is a "Notice of Default"
        hereunder and, as a result of such default, the interests of the Holders
        of the Notes are materially and adversely affected and will continue to
        be materially and adversely affected during the 60-day period;

               (d) the filing of a decree or order for relief by a court having
        jurisdiction in the premises in respect of the Issuer in an involuntary
        case under any applicable federal or state bankruptcy, insolvency or
        other similar law now or hereafter in effect, or appointing a receiver,
        conservator, liquidator, assignee, custodian, trustee, sequestrator or
        similar official for the Issuer or ordering the winding-up or
        liquidation of the Issuer's affairs, and such decree or order shall
        remain unstayed and in effect for a period of 60 consecutive days;

               (e) the commencement by the Issuer of a voluntary case under any
        applicable federal or state bankruptcy, insolvency or other similar law
        now or hereafter in effect, or the consent by the Issuer to the entry of
        an order for relief in an involuntary case under any such law, or the
        consent by the Issuer to the appointment of or the taking possession by
        a receiver, liquidator, assignee, custodian, trustee, sequestrator,
        conservator or similar official of the Issuer, or the making by the
        Issuer of any general assignment for the benefit of creditors, or the
        failure by the Issuer generally to pay, or the admission in writing by
        the Issuer of its inability to pay, its debts as such debts become due,
        or the taking of action by the Issuer in furtherance of any of the
        foregoing; or

               (f) any additional events specified in the Indenture Supplement
        related to such Series.

        The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default, its status and what action the Issuer is
taking or proposes to take with respect thereto.

        Section 5.03. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default described in paragraph (a), (b) or (c) of Section 5.02 should
occur and be continuing with respect to a Series, then and in every such case
the Indenture Trustee or the Holders of Notes representing at least 25% of the
Outstanding Amount of such Series may declare all the Notes of such Series to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if declared by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.

        If an Event of Default described in paragraph (d) or (e) of Section 5.02
should occur and be continuing, then the unpaid principal of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
automatically become, and shall be deemed to be declared, due and payable.

        At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as

                                       42
<PAGE>

hereinafter in this Article provided, the Holders of Notes representing not less
than a majority of the Outstanding Amount of the Notes of such Series, by
written notice to the Issuer and the Indenture Trustee and in accordance with
Section 5.13, may rescind and annul such declaration and its consequences;
provided, that:

               (a) the Issuer has paid or deposited with the Indenture Trustee a
        sum sufficient to pay:

                      (i) all payments of principal of and interest on all Notes
               and all other amounts that would then be due hereunder or upon
               such Notes if the Event of Default giving rise to such
               acceleration had not occurred; and

                      (ii) all sums paid by the Indenture Trustee hereunder and
               the reasonable compensation, expenses and disbursements of the
               Indenture Trustee and its agents and counsel; and

        (b) all Events of Default, other than the nonpayment of the principal of
the Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.

        No such rescission shall affect any subsequent default or impair any
right consequent thereto.

        Section 5.04. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.

        (a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues for a period of 35 days following the date on which such interest
became due and payable, or (ii) default is made in the payment of principal of
any Note, if and to the extent not previously paid, when the same becomes due
and payable, the Issuer will, upon demand of the Indenture Trustee, pay to it,
for the benefit of the Holders of the Notes of the affected Series, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, interest upon overdue installments of
interest, at the applicable Note Interest Rate borne by the Notes of such
Series, and in addition thereto will pay such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

        (b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.

        (c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.05, in its discretion,
proceed to protect and enforce its rights

                                       43
<PAGE>

and the rights of the Noteholders of the affected Series, by such appropriate
Proceedings as the Indenture Trustee shall deem necessary to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.

        (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes of the affected Series, or any Person having or claiming
an ownership interest in the Collateral, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or in case a
receiver, conservator, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator, custodian or other similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes of such Series, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:

               (i) to file and prove a claim or claims for the whole amount of
        principal and interest owing and unpaid in respect of the Notes of such
        Series and to file such other papers or documents as may be necessary or
        advisable in order to have the claims of the Indenture Trustee
        (including any claim for reasonable compensation to the Indenture
        Trustee and each predecessor Indenture Trustee, and their respective
        agents, attorneys and counsel, and for reimbursement of all expenses and
        liabilities incurred, and all advances made, by the Indenture Trustee
        and each predecessor Indenture Trustee, except as a result of negligence
        or bad faith) and of the Noteholders of such Series allowed in such
        Proceedings;

               (ii) unless prohibited by applicable law and regulations, to vote
        on behalf of the Holders of Notes of such Series in any election of a
        trustee, a standby trustee or Person performing similar functions in any
        such Proceedings;

               (iii) to collect and receive any monies or other property payable
        or deliverable on any such claims and to distribute all amounts received
        with respect to the claims of the Noteholders of such Series and of the
        Indenture Trustee on their behalf; and

               (iv) to file such proofs of claim and other papers or documents
        as may be necessary or advisable in order to have the claims of the
        Indenture Trustee or the Holders of Notes of such Series allowed in any
        judicial Proceedings relative to the Issuer, its creditors and its
        property;

and any trustee, receiver, conservator, liquidator, custodian, assignee,
sequestrator or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee
such

                                       44
<PAGE>

amounts as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.

        (e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

        (f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
benefit of the Holders of the Notes of the affected Series as provided herein.

        (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes of the affected Series, and it
shall not be necessary to make any such Noteholder a party to any such
Proceedings.

        Section 5.05. Remedies; Priorities.

        (a) If an Event of Default shall have occurred and be continuing with
respect to any Series, and the Notes of such Series have been accelerated
pursuant to Section 5.03, the Indenture Trustee may do one or more of the
following (subject to Sections 5.06 and 12.16):

               (i) institute Proceedings in its own name and as trustee of an
        express trust for the collection of all amounts then payable on the
        Notes of the affected Series or under this Indenture with respect
        thereto, whether by declaration or otherwise, enforce any judgment
        obtained, and collect from the Issuer and any other obligor upon such
        Notes monies adjudged due;

               (ii) subject to the last paragraph of this Section 5.05(a), take
        any other appropriate action to protect and enforce the rights and
        remedies of the Indenture Trustee and the Holders of the Notes of the
        affected Series;

               (iii) at the direction of the Holders of a majority of the
        Outstanding Amount of such Notes, cause the Issuer to sell Principal
        Receivables in an amount equal to the Invested Amount with respect to
        the accelerated Series and the related Finance Charge Receivables (or
        interests therein) in accordance with Section 5.16;

                                       45
<PAGE>

provided, however, that the Indenture Trustee may not exercise the remedy
described in subparagraph (iii) above unless (A) the Holders of 100% of the
Outstanding Amount of the Notes of the affected Series consent in writing
thereto, (B) the Indenture Trustee determines that any proceeds of such exercise
distributable to the Noteholders of the affected Series are sufficient to
discharge in full all amounts then due and unpaid upon the Notes for principal
and interest or (C) the Indenture Trustee determines that the Collateral may not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Holders of at least 66-2/3% of the Outstanding Amount of each Class of the Notes
of such Series. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Collateral for such purpose.

        The remedies provided in this Section are the exclusive remedies
provided to the Noteholders with respect to an Event of Default and each of the
Noteholders (by their acceptance of their respective interests in the Notes) and
the Indenture Trustee hereby expressly waive any other remedy that may be
available under the applicable UCC.

        (b) If the Indenture Trustee collects any money or property pursuant to
this Article following the acceleration of the maturities of the Notes of the
affected Series pursuant to Section 5.03 (so long as such declaration shall not
have been rescinded or annulled), it shall pay the money or property in the
following order:

               (i) to the Indenture Trustee for amounts due pursuant to Section
        6.07;

               (ii) to Holders of the Class A Notes of such Series for amounts
        due and unpaid on such Class A Notes for interest and principal,
        ratably, without preference or priority of any kind, according to the
        amounts due and payable on such Class A Notes for interest and
        principal;

               (iii) to Holders of the Class B Notes of such Series for amounts
        due and unpaid on such Class B Notes for interest and principal,
        ratably, without preference or priority of any kind, according to the
        amounts due and payable on such Class B Notes for interest and
        principal;

               (iv) to the Holders of the Class C Notes of such Series for
        amounts due and unpaid on such Class C Notes for interest and principal,
        ratably, without preference or priority of any kind, according to the
        amounts due and payable on such Class C Notes for interest and
        principal;

               (v) to the Holders of all other Classes of Notes, if any, of such
        Series for amounts due and unpaid on such Notes for interest and
        principal, according to the amounts due and payable on each such Class
        of Notes for interest and principal, sequentially in the priority for
        payment under the related Indenture Supplement; and

                                       46
<PAGE>

               (vi) to the Issuer for distribution pursuant to Article Four of
        the related Indenture Supplement.

        (c) The Indenture Trustee may, upon notification to the Issuer, fix a
record date and payment date for any payment to Noteholders of the affected
Series pursuant to this Section. At least 15 days before such record date, the
Indenture Trustee shall mail or send by facsimile to each such Noteholder a
notice that states the record date, the payment date and the amount to be paid.

        (d) In addition to the application of money or property referred to in
Section 5.05(b) for an accelerated Series, amounts then held in the Collection
Account, Special Funding Account or any Series Accounts for such Series and any
amounts available under the Series Enhancement for such Series shall be used to
make payments to the Holders of the Notes of such Series and the Series Enhancer
for such Series in accordance with the terms of this Indenture, the related
Indenture Supplement and the Series Enhancement for such Series. Following the
sale of any Principal Receivables and related Finance Charge Receivables
pursuant to Section 5.5(a)(iii) (or interests therein) for a Series and the
application of the proceeds of such sale to such Series and the application of
the amounts then held in the Collection Account, the Special Funding Account and
any Series Accounts for such Series as are allocated to such Series and any
amounts available under the Series Enhancement for such Series, such Series
shall no longer be entitled to any allocation of Collections or other property
constituting the Collateral under this Indenture and the Notes of such Series
shall no longer be Outstanding.

        Section 5.06. Optional Preservation of the Collateral. If the Notes of
any Series have been declared to be due and payable under Section 5.03 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, and the Indenture Trustee has not received directions
from the Noteholders pursuant to Section 5.12, the Indenture Trustee may, but
need not, elect to maintain possession of the portion of the Collateral which
secures such Notes and apply proceeds of the Collateral to make payments on such
Notes to the extent such proceeds are available therefor. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to maintain possession of the Collateral. In determining whether to
maintain possession of the Collateral, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Collateral for such purpose.

        Section 5.07. Limitation on Suits. No Noteholder shall have any right to
institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

               (a) the Holders of not less than 25% of the Outstanding Amount of
        any affected Series of Notes have made written request to the Indenture
        Trustee to institute such proceeding in its own name as indenture
        trustee;

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<PAGE>

               (b) such Noteholder or Noteholders has previously given written
        notice to the Indenture Trustee of a continuing Event of Default;

               (c) such Noteholder or Noteholders has offered to the Indenture
        Trustee reasonable indemnity against the costs, expenses and liabilities
        to be incurred in compliance with such request;

               (d) the Indenture Trustee for 60 days after its receipt of such
        request and offer of indemnity has failed to institute any such
        Proceeding; and

               (e) no direction inconsistent with such written request has been
        given to the Indenture Trustee during such 60-day period by a majority
        of the Outstanding Amount of the Notes of such Series;

it being understood and intended that no one or more Noteholders of the affected
Series shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Noteholders of such Series or to obtain or to seek to obtain
priority or preference over any other Noteholders of such Series or to enforce
any right under this Indenture, except in the manner herein provided.

        In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders of
such affected Series, each representing less than a majority of the Outstanding
Amount of such Notes, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.

        Section 5.08. Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provision in this Indenture, each Holder
of a Note shall have the right which is absolute and unconditional to receive
payment of the principal of and interest in respect of such Note as such
principal and interest becomes due and payable and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.

        Section 5.09. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned, or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholder shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.

        Section 5.10. Rights and Remedies Cumulative. No right, remedy, power or
privilege herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right, remedy, power or
privilege, and every right, remedy, power or privilege shall, to the extent
permitted by law, be cumulative and in addition to every other right, remedy,
power or privilege given hereunder or now or hereafter existing at law or in

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equity or otherwise. The assertion or exercise of any right or remedy shall not
preclude any other further assertion or the exercise of any other appropriate
right or remedy.

        Section 5.11. Delay or Omission Not Waiver. No failure to exercise and
no delay in exercising, on the part of the Indenture Trustee or of any
Noteholder or other Person, any right or remedy occurring hereunder upon any
Event of Default shall impair any such right or remedy or constitute a waiver
thereof of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

        Section 5.12. Rights of Noteholders to Direct Indenture Trustee. Holders
of at least a majority of the Outstanding Amount of the Notes of any affected
Series (if an Event of Default with respect to such Series has occurred and is
continuing) shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with
respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee with respect to the Notes; provided, however, that subject to Section
6.01 the Indenture Trustee shall have the right to decline any such direction
if:

               (a) the Indenture Trustee, after being advised by counsel,
        determines that the action so directed is in conflict with any rule of
        law or with this Indenture, and

               (b) the Indenture Trustee in good faith shall, by a Responsible
        Officer of the Indenture Trustee, determine that the Proceedings so
        directed would be illegal or involve the Indenture Trustee in personal
        liability or be unjustly prejudicial to the Noteholders not parties to
        such direction.

        Section 5.13. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes of the affected Series as provided in
Section 5.03, 66 2/3% of the Outstanding Amount of the Notes of such Series (or
with respect to any such Series with two or more Classes, of each Class) may, on
behalf of all such Noteholders, waive by written notice to the Issuer and the
Indenture Trustee any past default with respect to such Notes and its
consequences, except a default:

               (a) in the payment of the principal or interest in respect of any
        Note of such Series, or

               (b) in respect of a covenant or provision hereof that under
        Section 10.02 cannot be modified or amended without the consent of the
        Noteholder of each Outstanding Note affected.

        Upon any such written waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. The Servicer shall give
each Rating Agency prompt notice of any waiver of an Event of Default.

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<PAGE>

        Section 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by its acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Noteholder, or group of
Noteholders (in compliance with Section 5.08), holding in the aggregate more
than 10% of the principal balance of the Outstanding Notes of the affected
Series, or to any suit instituted by any Noteholder for the enforcement of the
payment of the principal or interest in respect of any Note on or after the
Distribution Date on which any of such amounts was due (or, in the case of
redemption, on or after the applicable Redemption Date).

        Section 5.15. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may adversely affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

        Section 5.16. Sale of Receivables.

        (a) The method, manner, time, place and terms of any sale of Receivables
(or interests therein) pursuant to Section 5.05(a)(iii) shall be commercially
reasonable. The Indenture Trustee may from time to time postpone any sale by
public announcement made at the time and place of such sale. The Indenture
Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any sale.

        (b) The Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer in connection with any sale of Receivables
pursuant to Section 5.05(a)(iii). No purchaser or transferee at any such sale
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.

        (c) In its exercise of the foreclosure remedy pursuant to Section
5.05(a)(iii), the Indenture Trustee shall solicit bids from Permitted Assignees
for the sale of Principal Receivables in an amount equal to the product of (i)
the Invested Amount with respect to the affected Series of Notes at the time of
sale and (ii) a fraction, the numerator of which is one and the denominator of
which is equal to the difference between one and the Discount Percentage, and
the related Finance Charge Receivables (or interests therein).

                                       50
<PAGE>

        Section 5.17. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking or obtaining of or application for any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied as specified in the applicable Indenture
Supplement.

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<PAGE>

                                   ARTICLE SIX

                              THE INDENTURE TRUSTEE

        Section 6.01. Duties of the Indenture Trustee.

        (a) If an Event of Default has occurred and is continuing with respect
to a Series of Notes and a Responsible Officer shall have actual knowledge or
written notice of such Event of Default, the Indenture Trustee shall, prior to
the receipt of directions, if any, from at least 25% of the Outstanding Amount
of the Notes of such Series, exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

        (b) Except during the continuance of an Event of Default:

               (i) the Indenture Trustee undertakes to perform such duties and
        only such duties as are specifically set forth in this Indenture, and no
        implied covenants or obligations shall be read into this Indenture
        against the Indenture Trustee; and

               (ii) in the absence of bad faith or negligence on its part, the
        Indenture Trustee may conclusively rely, as to the truth of the
        statements and the correctness of the opinions expressed therein, upon
        certificates or opinions furnished to the Indenture Trustee and
        conforming to the requirements of this Indenture; provided, however, the
        Indenture Trustee, upon receipt of any resolutions, certificates,
        statements, opinions, reports, documents, orders or other instruments
        furnished to the Indenture Trustee which are specifically required to be
        furnished pursuant to any provision of this Indenture or any Indenture
        Supplement, shall examine them to determine whether they substantially
        conform to the requirements of this Indenture or any Indenture
        Supplement; and the Indenture Trustee shall give prompt written notice
        to the Noteholders of such Series and each Rating Agency of any material
        lack of conformity of any such instrument to the applicable requirements
        of this Indenture or any Indenture Supplement discovered by the
        Indenture Trustee which would entitle a majority of the Outstanding
        Amount of the Notes of such Series to take any action pursuant to this
        Indenture or any Indenture Supplement.

        (c) In case a Pay Out Event has occurred and is continuing with respect
to a Series and a Responsible Officer shall have actual knowledge or written
notice of such Pay Out Event, the Indenture Trustee shall, prior to the receipt
of directions, if any, from a majority of the Outstanding Amount of the Notes of
such Series, exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

        (d) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

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<PAGE>

               (i) this subsection (d) shall not be construed to limit the
        effect of subsection (a) of this Section;

               (ii) the Indenture Trustee shall not be liable for any error of
        judgment made in good faith, unless it shall be proved that the
        Indenture Trustee was negligent in ascertaining the pertinent facts; and

               (iii) the Indenture Trustee shall not be liable with respect to
        any action taken, suffered or omitted to be taken by it in good faith in
        accordance with this Indenture and/or the direction of a majority of the
        Outstanding Amount of the Notes of each outstanding Series of Notes
        relating to the time, method and place of conducting any proceeding for
        any remedy available to the Indenture Trustee, or for exercising any
        trust or power conferred upon the Indenture Trustee, under this
        Indenture; and the Indenture Trustee shall not be liable for any action
        taken, suffered or omitted to be taken by it in good faith in accordance
        with the direction of the Servicer, the Transferor or the Trust in
        compliance with the terms of this Indenture or any Indenture Supplement.

        (e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

        (f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to subsections (a), (b), (c), (d) and (e) of this
Section.

        (g) Except as expressly provided in this Indenture, the Indenture
Trustee shall have no power to vary the Collateral, including, without
limitation, by (i) accepting any substitute payment obligation for a Receivable
initially transferred to the Trust under the Transfer and Servicing Agreement,
(ii) adding any other investment, obligation or security to the Trust or (iii)
withdrawing from the Trust any Receivable (except as otherwise provided in the
Transfer and Servicing Agreement).

        (h) The Indenture Trustee shall have no responsibility or liability for
investment losses on Eligible Investments (other than Eligible Investments on
which the institution acting as Indenture Trustee is an obligor).

        (i) The Indenture Trustee shall notify each Rating Agency (i) of any
change in any rating of the Notes by any other Rating Agency of which a
Responsible Officer has actual knowledge, (ii) immediately of the occurrence of
any Event of Default or Pay Out Event of which a Responsible Officer has actual
knowledge and (iii) immediately of potential Pay Out Events or Events of Default
of which a Responsible Officer has actual notice from the Servicer .

        (j) For all purposes under this Indenture, the Indenture Trustee shall
not be deemed to have notice or knowledge of any Event of Default, Pay Out Event
or Servicer Default unless a Responsible Officer has actual knowledge thereof or
has received written notice thereof. For purposes of determining the Indenture
Trustee's responsibility and liability hereunder, any

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<PAGE>

reference to an Event of Default, Pay Out Event or Servicer Default shall be
construed to refer only to such event of which the Indenture Trustee is deemed
to have notice as described in this subsection.

        Section 6.02. Notice of Pay Out Event or Event of Default. Upon the
occurrence of any Pay Out Event or Event of Default of which a Responsible
Officer has actual knowledge or has received notice thereof, the Indenture
Trustee shall transmit by mail to all Noteholders as their names and addresses
appear on the Note Register and the Rating Agencies, notice of such Pay Out
Event or Event of Default hereunder known to the Indenture Trustee within 30
days after it occurs or within ten Business Days after it receives such notice
or obtains actual notice, if later.

        Section 6.03. Rights of Indenture Trustee. Except as otherwise provided
in Section 6.01:

               (a) the Indenture Trustee may conclusively rely and shall fully
        be protected in acting or refraining from acting upon any resolution,
        certificate, statement, instrument, opinion, report, notice, request,
        direction, consent, order, bond, note or other paper or document
        reasonably believed by it to be genuine and to have been signed or
        presented by the proper party or parties;

               (b) whenever in the administration of this Indenture the
        Indenture Trustee shall deem it desirable that a matter be proved or
        established prior to taking, suffering or omitting any action hereunder,
        the Indenture Trustee (unless other evidence is specifically prescribed
        herein) may, in the absence of bad faith on its part, rely upon an
        Officer's Certificate of the Issuer; the Issuer shall provide a copy of
        such Officer's Certificate to the Noteholders at or prior to the time
        the Indenture Trustee receives such Officer's Certificate;

               (c) as a condition to the taking, suffering or omitting of any
        action by it hereunder, the Indenture Trustee may consult with counsel
        and the advice of such counsel or any Opinion of Counsel shall be full
        and complete authorization and protection in respect of any action
        taken, suffered or omitted by it hereunder in-good faith and in reliance
        thereon;

               (d) the Indenture Trustee shall be under no obligation to
        exercise any of the rights or powers vested in it by this Indenture or
        to honor the request or direction of any of the Noteholders pursuant to
        this Indenture, unless such Noteholders shall have offered to the
        Indenture Trustee reasonable security or indemnity against the costs,
        expenses and liabilities which might be incurred by it in compliance
        with such request or direction;

               (e) the Indenture Trustee shall not be bound to make any
        investigation into the facts or matters stated in any resolution,
        certificate, statement, instrument, opinion, report, notice, request,
        direction, consent, order, bond, note or other paper or document, but
        the Indenture Trustee, in its discretion, may make such further inquiry
        or investigation into such facts or matters as it may see fit, and, if
        the Indenture Trustee shall determine to make such further inquiry or
        investigation, it shall be entitled to examine the

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<PAGE>

        books, records and premises of the Issuer and the Servicer, personally
        or by agent or attorney;

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

               (g) the Indenture Trustee shall not be liable for any actions
        taken, suffered or omitted by it in good faith and believed by it to be
        authorized or within the discretion or rights conferred upon the
        Indenture Trustee by this Indenture; and

               (h) in the event that the Indenture Trustee is also acting as
        Paying Agent and Transfer Agent and Registrar, the rights and
        protections afforded to the Indenture Trustee pursuant to this Article
        shall also be afforded to such Paying Agent and Transfer Agent and
        Registrar.

        Section 6.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the certificate of
authentication of the Indenture Trustee, shall be taken as the statements of the
Issuer, and the Indenture Trustee assumes no responsibility for their
correctness. The Indenture Trustee makes no representation as to the validity or
sufficiency of the Agreement, the Notes, or any related document. The Indenture
Trustee shall not be accountable for the use or application by the Issuer of the
proceeds from the Notes.

        Section 6.05. May Hold Notes. The Indenture Trustee, any Paying Agent,
Transfer Agent and Registrar or any other agent of the Issuer, in its individual
or any other capacity, may become the owner or pledgee of Notes and may
otherwise deal with the Issuer with the same rights it would have if it were not
Indenture Trustee, Paying Agent, Transfer Agent and Registrar or such other
agent.

        Section 6.06. Money Held in Trust. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds held by the Indenture
Trustee in trust hereunder except to the extent required herein or required by
law. The Indenture Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing by the
Indenture Trustee and the Issuer.

        Section 6.07. Compensation, Reimbursement and Indemnification. The
Servicer shall pay to the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee under this
Agreement (which compensation shall not be limited by any law on compensation of
a trustee of an express trust). The Servicer shall reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. Pursuant to the Transfer and Servicing Agreement, the
Issuer shall direct the Servicer to indemnify and the Servicer shall

                                       55
<PAGE>

indemnify the Indenture Trustee against any and all loss, liability or expense
(including the fees of either in-house counsel or outside counsel, but not both)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Servicer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall
not relieve the Issuer or the Servicer of its obligations hereunder unless such
loss, liability or expense could have been avoided with such prompt notification
and then only to the extent of such loss, expense or liability which could have
been so avoided. The Servicer shall defend any claim against the Indenture
Trustee; the Indenture Trustee may have separate counsel and, if it does, the
Servicer shall pay the fees and expenses of such counsel. The Servicer need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.

        The Servicer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.02(d) or (e) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.

        Notwithstanding anything herein to the contrary, the Indenture Trustee's
right to enforce any of the Servicer's payment obligations pursuant to this
Section shall be subject to the provisions of Section 12.16.

        Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section. The Indenture Trustee may
resign at any time by giving 30 days written notice to the Issuer. Holders of a
majority of the Outstanding Amount of the Notes, upon delivery of notice of such
removal to the Issuer, may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:

            (a) the Indenture Trustee fails to comply with Section 6.11;

            (b) an Insolvency Event with respect to the Indenture Trustee
occurs; or

            (c) the Indenture Trustee otherwise becomes legally unable to act.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee. The Issuer shall furnish each
Rating Agency with a copy of any notice of resignation or removal of a retiring
Indenture Trustee pursuant to this Section promptly after receiving such notice,
in the case of a resignation by a retiring Indenture Trustee, or delivering such
notice, in the case of a removal of a retiring Indenture Trustee by the Issuer
or Holders of a majority of the Outstanding Amount of the Notes.

                                       56
<PAGE>

        A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Administrator and the Issuer.
Thereupon the resignation or removal of the retiring Indenture Trustee shall
become effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to all of the
Noteholders and each Rating Agency. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.

        If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

        If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

        Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

        Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation or
banking association without any further act shall be the successor Indenture
Trustee; provided that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall
give each Rating Agency notice of any such transaction.

        In case at the time such successor or successors by merger, conversion,
consolidation or transfer to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor Indenture Trustee and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes in the name of the successor to the Indenture Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.

        Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.

        (a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Collateral may at the time be located, the Indenture 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 Collateral, and to vest in such
Person or

                                       57
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Persons, in such capacity and for the benefit of the Noteholders, such title to
the Collateral, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and no notice to Noteholders of the appointment of
any co-trustee or separate trustee shall be required under Section 6.08.

        (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 Indenture Trustee shall be conferred or imposed upon
        and exercised or performed by the Indenture 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
        Indenture Trustee joining in such act), except to the extent that under
        any law of any jurisdiction in which any particular act or acts are to
        be performed the Indenture 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 Collateral 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 Indenture Trustee;

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

               (iii) the Indenture 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 Indenture 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 Indenture and
the conditions of this Article. 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 Indenture
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Indenture Trustee. Every such instrument shall be filed with the
Indenture Trustee.

        (d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 of
this Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

        Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall have a combined

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capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition and its long-term unsecured debt shall be
rated at least Baa3 by Moody's, at least BBB- by Standard & Poor's and, if rated
by Fitch, at least BBB-by Fitch. The Indenture Trustee shall comply with TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.

        Section 6.12. Preferential Collection of Claims Against. The Indenture
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.

        Section 6.13. Tax Returns. In the event the Trust shall be required to
file tax returns, the Servicer shall prepare or shall cause to be prepared such
tax returns and shall provide such tax returns with instruction to the Owner
Trustee for signature at least five days before such tax returns are due to be
filed and shall file such returns. The Servicer, in accordance with the terms of
each Indenture Supplement, shall also prepare or shall cause to be prepared all
tax information required by law to be distributed to Noteholders and shall
deliver such information to the Owner Trustee at least five days prior to the
date it is required by law to be distributed to Noteholders. The Owner Trustee,
upon written request, will furnish the Servicer with all such information known
to the Owner Trustee as may be reasonably requested and required in connection
with the preparation of all tax returns of the Trust, and shall, upon request,
execute such returns. In no event shall the Owner Trustee be personally liable
for any liabilities, costs or expenses of the Trust or any Noteholder arising
under any tax law, including without limitation, federal, state or local income
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto arising from a failure to comply
therewith).

        Section 6.14. Representations and Covenants of the Indenture Trustee.
The Indenture Trustee represents, warrants and covenants that:

               (a) it is a national banking association duly organized and
        validly existing under the federal laws of the United States;

               (b) it has full power and authority to deliver and perform this
        Indenture and has taken all necessary action to authorize the execution,
        delivery and performance by it of this Indenture and other Transaction
        Documents to which it is a party; and

               (c) each of this Indenture and other Transaction Documents to
        which it is a party has been duly executed and delivered by the
        Indenture Trustee and constitutes its legal, valid and binding
        obligation in accordance with its terms.

        Section 6.15. Custody of the Collateral. The Indenture Trustee shall
hold such of the Collateral as consists of instruments, deposit accounts,
negotiable documents, money, goods, letters of credit, and advices of credit in
the State of Minnesota. The Indenture Trustee shall

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hold such of the Collateral as constitutes investment property through a
securities intermediary, which securities intermediary shall agree with the
Indenture Trustee that (i) such investment property shall at all times be
credited to a securities account of the Indenture Trustee, (ii) such securities
intermediary shall treat the Indenture Trustee as entitled to exercise the
rights that comprise each financial asset credited to such securities account,
(iii) all property credited to such securities account shall be treated as
financial assets, (iv) such securities intermediary shall comply with
entitlement orders originated by the Indenture Trustee without the further
consent of any other person or entity, (v) such securities intermediary shall
not agree with any person or entity other than the Indenture Trustee to comply
with entitlement orders originated by any person or entity other than the
Indenture Trustee, (vi) such securities accounts and the property credited
thereto shall not be subject to any lien, security interest, right of set-off,
or encumbrance in favor of such securities intermediary or anyone claiming
through it (other than the Indenture Trustee), and (vii) such agreement shall be
governed by the laws of the State of New York. Terms used in this Section that
are defined in the New York UCC and not otherwise defined herein shall have the
meaning set forth in the UCC of the State of New York. Except as permitted by
this Section, the Indenture Trustee shall not hold any part of the Collateral
through an agent or a nominee.

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                                  ARTICLE SEVEN

          NOTEHOLDERS' LIST AND REPORTS BY INDENTURE TRUSTEE AND ISSUER

        Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (i) upon each transfer of a Note, a list, in such form as the Indenture
Trustee may reasonably require, of the names, addresses and taxpayer
identification numbers of the Noteholders as they appear on the Note Register as
of the most recent Record Date, and (ii) at such other times, as the Indenture
Trustee may request in writing, within ten days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
ten days prior to the time such list is furnished; provided, however, that for
so long as the Indenture Trustee is the Transfer Agent and Registrar, no such
list shall be required to be furnished.

        Section 7.02. Preservation of Information; Communications to
Noteholders.

        (a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01 and the names, addresses and taxpayer identification numbers of the
Noteholders received by the Indenture Trustee in its capacity as Transfer Agent
and Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.

        (b) Noteholders may communicate, pursuant to TIA Section 312(b), with
other Noteholders with respect to their rights under this Indenture or under the
Notes.

        (c) The Issuer, the Indenture Trustee and the Transfer Agent and
Registrar shall have the protection of TIA Section 312(c).

        Section 7.03. Reports by Issuer.

        (a) The Issuer shall:

               (i) file with the Indenture Trustee, within 15 days after the
        Issuer is required to file the same with the Commission, copies of the
        annual reports and of the information, documents and other reports (or
        copies of such portions of any of the foregoing as the Commission may
        from time to time by rules and regulations prescribe) which the Issuer
        may be required to file with the Commission pursuant to Section 13 or
        15(d) of the Exchange Act;

               (ii) file with the Indenture Trustee and the Commission in
        accordance with rules and regulations prescribed from time to time by
        the Commission such additional information, documents and reports with
        respect to compliance by the Issuer with the conditions and covenants of
        this Indenture as may be required from time to time by such rules and
        regulations; and

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<PAGE>

               (iii) supply to the Indenture Trustee (and the Indenture Trustee
        shall transmit by mail to all Noteholders) such summaries of any
        information, documents and reports required to be filed by the Issuer
        pursuant to clauses (i) and (ii) of this subsection as may be required
        by rules and regulations prescribed from time to time by the Commission.

        (b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on January 31 of each year.

        Section 7.04. Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each March 31 beginning with March 31, 2002, the
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). The Indenture Trustee also shall comply with TIA Section 313(b).

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                                  ARTICLE EIGHT

                    ALLOCATION AND APPLICATION OF COLLECTIONS

        Section 8.01. Collection of Money. Except as otherwise expressly
provided herein and in the related Indenture Supplement, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it in trust for the Noteholders and shall apply it as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under the Transfer and Servicing Agreement or any other Transaction Document,
the Indenture Trustee may, and upon the request of at least a majority of the
Holders of the Outstanding Amount of the Notes of an affected Series shall, take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Pay Out Event or a
Default or Event of Default under this Indenture and to proceed thereafter as
provided in Article Five.

        Section 8.02. Rights of Noteholders. The Collateral shall secure the
obligation of the Trust to pay to the Holders of the Notes of each Series
principal and interest and other amounts payable pursuant to this Indenture and
the related Indenture Supplement. Except as specifically set forth in the
Indenture Supplement with respect thereto, the Notes of any Series or Class
shall not have rights to payment from any Series Account or Series Enhancement
allocated for the benefit of any other Series or Class.

        Section 8.03. Establishment of Collection Account and Special Funding
Account. The Servicer, for the benefit of the Noteholders, shall establish and
maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, on behalf of the Trust, one or more Qualified Accounts (including any
subaccount thereof) bearing a designation clearly indicating that the funds and
other property credited thereto are held for the benefit of the Noteholders
(collectively, the "Collection Account"). The Indenture Trustee shall possess
all right, title and interest in all monies, instruments, investment property,
documents, certificates of deposit and other property credited from time to time
to the Collection Account and in all proceeds, earnings, income, revenue,
dividends and distributions thereof for the benefit of the Noteholders.

        The Collection Account shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders. Except as expressly
provided in this Indenture and the Transfer and Servicing Agreement, the
Servicer agrees that it shall have no right of setoff 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 Indenture Trustee, the Trust, any Noteholder or
any Series Enhancer. If, at any time, the Collection Account ceases to be a
Qualified Account, the Indenture Trustee (or the Servicer on its behalf) shall
within ten 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 monies, documents,
instruments, investment property, certificates of deposit and other property to
such new Collection Account and from the date such new Collection Account is
established, it shall

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<PAGE>

be the "Collection Account". Pursuant to the authority granted to the Servicer
in Section 3.01(b) of the Transfer and Servicing Agreement, the Servicer shall
have the power, revocable by the Indenture Trustee, to instruct the Indenture
Trustee to make withdrawals and payments from the Collection Account for the
purposes of carrying out the Servicer's or the Indenture Trustee's duties
hereunder and under the Transfer and Servicing Agreement, as applicable. The
Servicer shall reduce deposits into the Collection Account payable by the
Transferor on any Deposit Date to the extent the Transferor is entitled to
receive funds from the Collection Account on such Deposit Date, but only to the
extent such reduction would not reduce the Transferor Interest to an amount less
than the Required Transferor Interest.

        Funds on deposit in the Collection Account (other than investment
earnings and amounts deposited pursuant to Section 2.06, 6.01 or 7.01 of the
Transfer and Servicing Agreement or Section 11.02 of this Indenture) shall at
the written direction of the Servicer be invested by the Indenture Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Indenture Trustee for the benefit of the Noteholders
pursuant to Section 6.15. Investments of funds representing Collections
collected during any Monthly Period shall be invested in Eligible Investments
that will mature so that such funds will be available no later than the close of
business on each monthly Transfer Date following such Monthly Period. No such
Eligible Investment shall be disposed of prior to its maturity; provided,
however, that the Indenture Trustee may sell, liquidate or dispose of any such
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. In the event that the Indenture Trustee does not receive written
direction from the Servicer, funds on deposit in the Collection Account shall be
deposited by the Indenture Trustee in money market funds having at the time of
the Trust's investment therein, a rating in the highest rating category of each
Rating Agency (including funds for which the Indenture Trustee or any of its
Affiliates is an investment manager or advisor). 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 paid to the Transferor,
except as otherwise specified in any Indenture Supplement. The Indenture Trustee
shall bear no responsibility or liability for any losses resulting from
investment or reinvestment of any funds in accordance with this Section nor for
the selection of Eligible Investments in accordance with the provisions of this
Indenture and any Indenture Supplement (other than Eligible Investments on which
the institution acting as Indenture Trustee is an obligor).

        The Servicer, for the benefit of the Noteholders, shall establish and
maintain with the Indenture Trustee or its nominee in the name of the Indenture
Trustee, on behalf of the Trust, a Qualified Account (including any subaccounts
thereof) bearing a designation clearly indicating that the funds and other
property credited thereto are held for the benefit of the Noteholders (the
"Special Funding Account"). The Indenture Trustee shall possess all right, title
and interest in all monies, instruments, investment property, documents,
certificates of deposit and other property credited from time to time to the
Special Funding Account and in all proceeds, dividends, distributions, earnings,
income and revenue thereof for the benefit of the Noteholders. The Special
Funding Account shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders. Except as expressly provided in this
Indenture and

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<PAGE>

the Transfer and Servicing Agreement, the Servicer shall have no right of setoff
or banker's lien against, and no right to otherwise deduct from, any funds and
other property held in the Special Funding Account for any amount owed to it by
the Indenture Trustee, the Trust, any Noteholder or any Series Enhancer. If, at
any time, the Special Funding Account ceases to be a Qualified Account, the
Indenture Trustee (or the Servicer on its behalf) shall within ten 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 monies, documents, instruments,
investment property, certificates of deposit and other property 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 written
direction of the Servicer be invested by the Indenture Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Indenture Trustee for the benefit of the Noteholders pursuant to
Section 6.15. Funds on deposit in the Special Funding Account on any
Distribution Date will be invested in Eligible Investments that will mature so
that such funds will be available no later than the close of business on the
Transfer Date following such Monthly Period. No such Eligible Investment shall
be disposed of prior to its maturity; provided, however, that the Indenture
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. In the event that the Indenture
Trustee does not receive written direction from the Servicer, funds on deposit
in the Collection Account shall be deposited by the Indenture Trustee in money
market funds having at the time of the Trust's investment therein, a rating in
the highest rating category of each Rating Agency (including funds for which the
Indenture Trustee or any of its Affiliates is an investment manager or advisor).
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 Indenture Supplement. On each Business Day on which
funds are on deposit in the Special Funding Account and on which no Series is in
an Accumulation Period or Amortization Period, the Servicer shall determine the
amount (if any) by which the Transferor Interest exceeds the Required Transferor
Interest on such date and shall instruct the Indenture Trustee to withdraw any
such excess from the Special Funding Account and pay such amount to the Holders
of the Transferor Certificates; provided, however, that, if an Accumulation
Period or Amortization Period has commenced and is continuing with respect to
one or more outstanding Series, any funds on deposit in the Special Funding
Account shall be treated as Shared Principal Collections and shall be allocated
and distributed in accordance with Section 8.05 and the terms of each Indenture
Supplement.

        Section 8.04. Collections and Allocations.

        (a) The Servicer will apply or will instruct the Indenture Trustee to
apply all funds on deposit in the Collection Account as described in this
Article and in each Indenture Supplement. Except as otherwise provided below,
the Servicer shall deposit Collections into the Collection Account as promptly
as possible after the Date of Processing of such Collections, but in no event

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<PAGE>

later than the second Business Day following the date of processing. Subject to
the terms of any Indenture Supplement, but notwithstanding anything else in this
Indenture or the Transfer and Servicing Agreement to the contrary, if one or
more of the following conditions is satisfied: (i) Nordstrom fsb remains the
Servicer; Nordstrom guarantees the performance of the Servicer's obligations
(unless the Rating Agencies shall consent to the deletion of such guarantee) and
achieves and maintains a commercial paper rating of not less than A-1 by
Standard & Poor's, not less than Prime-1 by Moody's and, if rated by Fitch, not
less than F1 by Fitch, and Nordstrom fsb remains a wholly-owned subsidiary
(directly or indirectly) of Nordstrom and in the event that there is any
material change in the financing relationship between Nordstrom fsb and
Nordstrom, (A) Nordstrom fsb shall have notified each Rating Agency and (B) the
Rating Agency Condition shall be satisfied with respect to such material change,
or (ii) any other arrangements are made such that the Rating Agency Condition is
satisfied with respect thereto, and for two Business Days following any
reduction of any such rating or change in ownership, 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 1:00 p.m., New York City time, on the
Transfer Date immediately preceding the Distribution Date following the Monthly
Period with respect to which such deposit relates. Subject to the first proviso
in Section 8.05, but notwithstanding anything else in this Indenture or the
Transfer and Servicing Agreement to the contrary, with respect to any Monthly
Period, whether the Servicer is required to make deposits of collections
pursuant to the first or the second preceding sentence, (i) the Servicer will
only be required to deposit Collections into the Collection Account up to the
aggregate amount of Collections required to be deposited into any Series Account
or, without duplication, distributed on or prior to the related Distribution
Date to Noteholders or to any Series Enhancer pursuant to the terms of any
Indenture Supplement or Enhancement Agreement and (ii) if at any time prior to
such Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to cause the Indenture Trustee to withdraw
the excess from the Collection Account and pay such amounts pursuant to the
terms of the Transaction Documents. Subject to the immediately preceding
sentence, the Servicer may retain its Servicing Fee with respect to a Series and
shall not be required to deposit it in the Collection Account. To the extent
that, in accordance with this subsection, the Servicer has retained amounts
which would otherwise be required to be deposited into the Collection Account or
any Series Account with respect to any Monthly Period, the Servicer shall be
required to deposit such amounts in the Collection Account or such Series
Account on the related Transfer Date to the extent necessary to make required
distributions on the related Distribution Date, including any amounts which are
required to be applied as Reallocated Principal Collections, and pay any amounts
remaining after making such deposit pursuant to the terms of the Transaction
Documents.

        (b) Collections of Finance Charge Receivables, Principal Receivables and
Defaulted Receivables will be allocated to each Series of Notes and to the
Holders of the Transferor Certificates in accordance with this Article and each
Indenture Supplement and amounts so allocated to any Series will not, except as
specified in the related Indenture Supplement, be available to the Noteholders
of any other Series. Allocations of the foregoing amounts between the Holders of
the Notes and the Holders of the Transferor Certificates, among the Series and
among the Classes in any Series, shall be set forth in the related Indenture
Supplement or

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Indenture Supplements. In-store payments made with respect to Finance Charge
Receivables and Principal Receivables shall be treated as Collections and be
deemed to be received by the Servicer on the day such payment was made by the
cardholder.

        Section 8.05. Shared Principal Collections. On each Distribution Date,
(i) 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 (ii) the Servicer shall cause the Indenture
Trustee to withdraw from the Collection Account and pay to the Holders of the
Transferor Certificates an amount equal to the excess, if any, of Shared
Principal Collections over Principal Shortfalls; provided, however, that if the
Transferor Interest as of such Distribution Date (determined after giving effect
to the Principal Receivables or Participation Interests transferred to the Trust
on such date) is less than the Required Transferor Interest, the Servicer will
not direct the Indenture Trustee to distribute to the Holders of the Transferor
Certificates any such amounts that otherwise would be distributed to the Holders
of the Transferor Certificates, but shall deposit such funds in the Special
Funding Account. The Transferor may, at its option, instruct the Indenture
Trustee to deposit Shared Principal Collections which are otherwise payable to
the Holders of the Transferor Certificates pursuant to the provisions set forth
above into the Special Funding Account. Notwithstanding the foregoing, a Group
of Series may specify in their related Indenture Supplements that Shared
Principal Collections from such Series shall be allocated as provided above but
only among the Series in such Group.

        Section 8.06. Additional Withdrawals from the Collection Account. On or
before the Determination Date with respect to any Monthly Period, the Servicer
may direct the Indenture Trustee in writing to withdraw from the Collection
Account any amounts it has determined do not constitute Trust Assets and were
erroneously deposited into the Collection Account, due to an accounting error or
otherwise.

        Section 8.07. Allocation of Collateral to Series or Groups. To the
extent so provided in the Indenture Supplement for any Series or in an Indenture
Supplement otherwise executed pursuant to Section 10.01, Receivables conveyed to
the Trust pursuant to Section 2.01 of the Transfer and Servicing Agreement and
Receivables or Participation Interests conveyed to the Trust pursuant to Section
2.09 of the Transfer and Servicing Agreement or any Participation Interest
Supplement, and all Collections received with respect thereto may be allocated
or applied in whole or in part to one or more Series or Groups as may be
provided in such Indenture Supplement; provided, however, that any such
allocation or application shall be effective only upon satisfaction of the
following conditions:

               (a) on or before the fifth Business Day immediately preceding
        such allocation, the Servicer shall have given the Indenture Trustee and
        each Rating Agency written notice of such allocation;

               (b) the Rating Agency Condition shall have been satisfied with
        respect to such allocation; and

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               (c) the Servicer shall have delivered to the Indenture Trustee an
        Officer's Certificate, dated the date of such allocation, to the effect
        that the Servicer reasonably believes that such allocation will not
        result in an Adverse Effect.

        Any such Indenture Supplement may provide that (i) such allocation to
one or more particular Series or Groups may terminate upon the occurrence of
certain events specified therein and (ii) upon the occurrence of any such event,
such assets and any Collections with respect thereto, shall be reallocated to
other Series or Groups or to all Series, all as shall be provided in such
Indenture Supplement.

        Section 8.08. Excess Finance Charge Collections. On each Distribution
Date, the Servicer shall (i) allocate Excess Finance Charge Collections to each
Excess Allocation Series, pro rata, in proportion to the Finance Charge
Shortfalls, if any, with respect to each such Series and (ii) withdraw from the
Collection Account and pay to the Holders of the Transferor Certificates an
amount equal to the excess, if any, of Excess Finance Charge Collections over
Finance Charge Shortfalls; provided, however, that the sharing of Excess Finance
Charge Collections among Series will continue only until such time, if any, at
which the Transferor shall deliver to the Indenture 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 would have
adverse regulatory implications with respect to an Account Owner.
Notwithstanding the foregoing, a Group of Series may specify in their related
Indenture Supplements that Excess Finance Charge Collections from such Series
shall be allocated as provided above but only among the Series in such Group.

        Section 8.09. Release of Collateral; Eligible Loan Documents.

        (a) The Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances which are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.

        (b) In order to facilitate the servicing of the Receivables by the
Servicer, the Indenture Trustee upon Issuer Order shall authorize the Servicer
to execute in the name and on behalf of the Indenture Trustee instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
other comparable instruments with respect to the Receivables (and the Indenture
Trustee shall execute any such documents on request of the Servicer), subject to
the obligations of the Servicer under the Transfer and Servicing Agreement.

        (c) The Indenture Trustee shall, at such time as there are no Notes
outstanding, release and transfer, without recourse, all of the Collateral that
secured the Notes (other than any cash held for the payment of the Notes
pursuant to Section 4.02). The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Section only upon receipt of an Issuer
Order accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the

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TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 12.01.

        (d) Notwithstanding anything to the contrary in this Indenture, the
Transfer and Servicing Agreement and the Trust Agreement, immediately prior to
the release of any portion of the Collateral or any funds on deposit in the
Series Accounts pursuant to this Indenture, the Indenture Trustee shall remit to
the Transferor for its own account any funds that, upon such release, would
otherwise be remitted to the Issuer.

        Section 8.10. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days notice when requested by the Issuer to take any action pursuant
to Section 8.09(a), accompanied by copies of any instruments involved, and the
Indenture Trustee shall also require, as a condition to such action, an Opinion
of Counsel, in form and substance reasonably satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Collateral. The Indenture Trustee and
counsel rendering any such opinion may rely, without independent investigation,
on the accuracy and validity of any certificate or other instrument delivered to
the Indenture Trustee in connection with any such action.

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                                  ARTICLE NINE

                    DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS

        Section 9.01. Distributions and Reports to Noteholders. Distributions
shall be made to, and reports shall be provided to, Noteholders as set forth in
the applicable Indenture Supplement. The identity of the Noteholders with
respect to distributions and reports shall be determined according to the
immediately preceding Record Date.

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                                   ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

        Section 10.01. Supplemental Indentures Without Consent of Noteholders.

        (a) Without the consent of the Holders of any Notes, but upon
satisfaction of the Rating Agency Condition, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto (which shall conform
to the provisions of the TIA as in force at the date of the execution thereof),
in form satisfactory to the Indenture Trustee, for any of the following
purposes:

               (i) to correct or amplify the description of any property at any
        time subject to the lien of this Indenture, or better to assure, convey
        and confirm unto the Indenture Trustee any property subject or required
        to be subjected to the lien of this Indenture, or to subject to the lien
        of this Indenture additional property;

               (ii) to evidence the succession, in compliance with Section 3.11,
        of another Person to the Issuer, and the assumption by any such
        successor of the covenants of the Issuer herein and in the Notes
        contained;

               (iii) to add to the covenants of the Issuer, for the benefit of
        the Holders of the Notes, or to surrender any right or power herein
        conferred upon the Issuer;

               (iv) to convey, transfer, assign, mortgage or pledge any property
        to or with the Indenture Trustee;

               (v) to cure any ambiguity, to correct or supplement any provision
        herein or in any supplemental indenture that may be inconsistent with
        any other provision herein or in any supplemental indenture or to make
        any other provisions with respect to matters or questions arising under
        this Indenture or in any supplemental indenture; provided that such
        action shall not adversely affect the interests of the Holders of the
        Notes;

               (vi) to evidence and provide for the acceptance of the
        appointment hereunder by a successor indenture trustee with respect to
        the Notes and to add to or change any of the provisions of this
        Indenture as shall be necessary to facilitate the administration of the
        trusts hereunder by more than one indenture trustee, pursuant to the
        requirements of Article Six;

               (vii) to modify, eliminate or add to the provisions of this
        Indenture to such extent as shall be necessary to effect the
        qualification of this Indenture under the TIA or under any similar
        federal statute hereafter enacted and to add to this Indenture such
        other provisions as may be expressly required by the TIA;

               (viii) to provide for the issuance of one or more new Series of
        Notes, in accordance with the provisions of Section 2.12; or

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               (ix) to provide for the termination of any interest rate swap
        agreement or other form of credit enhancement in accordance with the
        provisions of the related Indenture Supplement.

The Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

        (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any Noteholders of any Series then
Outstanding but upon satisfaction of the Rating Agency Condition with respect to
the Notes of all Series, enter into an indenture or supplemental indentures
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however that (i) the Transferor shall have delivered to the Indenture Trustee an
Officer's Certificate, dated the date of any such action, stating that all
requirements for such amendments contained in the Agreement have been met and
the Transferor reasonably believes that such action will not result in an
Adverse Effect, (ii) a Tax Opinion shall have been delivered to each Rating
Agency and (iii) such amendment does not affect the rights, duties or
obligations of the Indenture Trustee or the Owner Trustee hereunder.
Additionally, notwithstanding the preceding sentence, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, may, without the consent
of any Noteholders of any Series then Outstanding or the Series Enhancers for
any Series, enter into an indenture or supplemental indentures hereto to add,
modify or eliminate such provisions as may be necessary or advisable in order to
enable all or a portion of the Trust (i) to qualify as, and to permit an
election to be made to cause the Trust to be treated as, a "financial asset
securitization investment trust" as described in the provisions of Section 860L
of the Code, and (ii) to avoid the imposition of state or local income or
franchise taxes imposed on the Trust's property or its income; provided,
however, that (A) the Transferor delivers to the Indenture Trustee and the Owner
Trustee an Officer's Certificate to the effect that the proposed amendments meet
the requirements set forth in this subsection 10.01(b), (B) the Rating Agency
Condition will have been satisfied and (C) such amendment does not affect the
rights, duties or obligations of the Indenture Trustee or the Owner Trustee
hereunder. The amendments which the Transferor may make without the consent of
Noteholders pursuant to the preceding sentence may include, without limitation,
the addition of a sale of Receivables.

        Section 10.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
upon satisfaction of the Rating Agency Condition and with the consent of the
Holders of at least 66-2/3% of the Outstanding Amount of the Notes of each
adversely affected Series of Notes, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or supplemental
indentures hereto for the purpose of adding any provisions to, changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of such Noteholders under this Indenture; provided,
however that no such supplemental indenture shall, without the consent of the
Holder of each outstanding Note affected thereby:

               (a) change the due date of any installment of principal of or
        interest on any Note, or reduce the principal amount thereof, the
        interest rate specified thereon or the

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        redemption price with respect thereto or change any place of payment
        where, or the coin or currency in which, any Note or any interest
        thereon is payable;

               (b) impair the right to institute suit for the enforcement of the
        provisions of this Indenture requiring the application of funds
        available therefor, as provided in Article Five, to the payment of any
        such amount due on the Notes on or after the respective due dates
        thereof (or, in the case of redemption, on or after the Redemption
        Date);

               (c) reduce the percentage of the Outstanding Amount of the Notes
        of any Series outstanding the consent of the Holders of which is
        required for any such supplemental indenture, or the consent of the
        Holders of which is required for any waiver of compliance with certain
        provisions of this Indenture or certain defaults hereunder and their
        consequences as provided for in this Indenture;

               (d) reduce the percentage of the aggregate outstanding amount of
        any Notes, the consent of the Holders of which is required to direct the
        Indenture Trustee to sell or liquidate the Collateral if the proceeds of
        such sale would be insufficient to pay the principal amount and accrued
        but unpaid interest on the outstanding Notes of such Series;

               (e) decrease the percentage of the aggregate principal amount of
        the Notes required to amend the sections of this Indenture which specify
        the applicable percentage of the aggregate principal amount of the Notes
        of such Series necessary to amend the Indenture or any Transaction
        Documents which require such consent;

               (f) modify or alter the provisions of this Indenture prohibiting
        the voting of Notes held by the Trust, any other obligor on the Notes, a
        Seller or any affiliate thereof; or

               (g) permit the creation of any Lien ranking prior to or on a
        parity with the lien of this Indenture with respect to any part of the
        Collateral for any Notes or, except as otherwise permitted or
        contemplated herein, terminate the lien of this Indenture on any such
        Collateral at any time subject hereto or deprive the Holder of any Note
        of the security provided by the lien of this Indenture.

        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.

        It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

        Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates written notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

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        Section 10.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modification thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee or Owner
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture that affects the Indenture Trustee's or Owner Trustee's (as such or in
its individual capacity) own rights, duties, liabilities, benefits, protections,
privileges or immunities under this Indenture or otherwise.

        Section 10.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes, and every Holder of Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

        Section 10.05. Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the TIA as then in effect so long
as this Indenture shall then be qualified under the TIA.

        Section 10.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Indenture Trustee and
the Issuer, to any such supplemental indenture may be prepared and executed by
the Issuer and authenticated and delivered by the Indenture Trustee in exchange
for the outstanding Notes.

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                                 ARTICLE ELEVEN

                                   TERMINATION

        Section 11.01. Termination of Trust. The Trust and the respective
obligations and responsibilities of the Indenture Trustee created hereby (other
than the obligation of the Indenture Trustee to make payments to Noteholders as
hereinafter set forth) shall terminate, except with respect to the duties
described in Section 11.02(b), as provided in the Trust Agreement.

        Section 11.02. Final Distribution.

        (a) The Servicer shall give the Indenture Trustee at least 30 days prior
notice of the Distribution Date on which the Noteholders of any Series or Class
may surrender their Notes for payment of the final distribution on and
cancellation of such Notes (or, in the event of a final distribution resulting
from the application of Section 2.06, 6.01 or 7.01 of the Transfer and Servicing
Agreement, 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 3.05 of the Transfer and Servicing Agreement 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 Noteholders, the Indenture Trustee shall
provide notice to Noteholders 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 Notes 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 Notes at the office or offices
therein specified (which, in the case of Bearer Notes, shall be outside the
United States). The Indenture Trustee shall give such notice to the Transfer
Agent and Registrar and the Paying Agent at the time such notice is given to
Noteholders.

        (b) Notwithstanding a final distribution to the Noteholders 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 and any
Series Account allocated to such Noteholders shall continue to be held in trust
for the benefit of such Noteholders and the Paying Agent or the Indenture
Trustee shall pay such funds to such Noteholders upon surrender of their Notes,
if certificated (and any excess shall be paid in accordance with the terms of
any Enhancement Agreement). In the event that all such Noteholders shall not
surrender their Notes for cancellation within six months after the date
specified in the notice from the Indenture Trustee described in Section 11.02(a)
the Indenture Trustee shall give a second notice to the remaining such
Noteholders to surrender their Notes for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the case of
Bearer Notes, shall be outside the United States). If within one year after the
second notice all such Notes shall not have been surrendered for cancellation,
the Indenture Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds in
the Collection Account or

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any Series Account held for the benefit of such Noteholders. The Indenture
Trustee and the Paying Agent shall pay to the Issuer any monies held by them for
the payment of principal or interest that remains unclaimed for two years. After
payment to the Issuer, Noteholders entitled to the money must look to the Issuer
for payment as general creditors unless an applicable abandoned property law
designates another Person.

        Section 11.03. Termination Distributions. Upon the termination of the
Trust pursuant to the terms of the Trust Agreement, the Indenture Trustee shall
assign and convey to the holders of the Transferor Certificates or any of their
designees, without recourse, representation or warranty, all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, and Recoveries related thereto, all monies due or to become due and all
amounts received or receivable with respect thereto (including all monies then
held in the Collection Account or any Series Account) and all proceeds thereof,
except for amounts held by the Indenture Trustee pursuant to Section 11.02(b).
The Indenture Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the holders of the Transferor Certificates to vest in the holders of the
Transferor Certificates or any of their designees all right, title and interest
which the Indenture Trustee had in the Collateral and such other property.

        Section 11.04. Defeasance. Notwithstanding anything to the contrary in
this Indenture and unless otherwise specified with respect to any Series in the
applicable Indenture Supplement:

               (a) The Issuer may at its option be discharged from its
        obligations hereunder with respect to any Series or all outstanding
        Series (each, a "Defeased Series") on the date the applicable conditions
        set forth in Section 11.04(c) are satisfied (a "Defeasance"); provided,
        however, that the following rights, obligations, powers, duties and
        immunities shall survive with respect to each Defeased Series until
        otherwise terminated or discharged hereunder: (i) the rights of the
        Holders of Notes of the Defeased Series to receive, solely from the
        trust fund provided for in Section 11.04(c), payments in respect of
        principal of and interest on such Notes when such payments are due; (ii)
        the Issuer's obligations with respect to such Notes under Sections 2.05
        and 2.06; (iii) the rights, powers, trusts, duties, and immunities of
        the Indenture Trustee, the Paying Agent and the Registrar hereunder; and
        (iv) this Section and Section 12.16.

               (b) Subject to Section 11.04(c), the Issuer at its option may
        cause Collections allocated to each 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 precedent to any
        Defeasance under Section 11.04(a):

                      (i) the Issuer irrevocably shall have deposited or caused
               to be deposited with the Indenture Trustee (such deposit to be
               made from other than the Issuer's or any Affiliate of the
               Issuer's funds), under the terms of an irrevocable trust
               agreement in form and substance satisfactory to the Indenture
               Trustee, as trust funds in trust for making the payments
               described below, (A) Dollars in an

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               amount equal to, 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 equal to, or (C) a combination thereof, in
               each case sufficient to pay and discharge (without relying on
               income or gain from reinvestment of such amount), and which shall
               be applied by the Indenture Trustee to pay and discharge, all
               remaining scheduled interest and principal payments on all
               outstanding Notes of each Defeased Series on the dates scheduled
               for such payments in this Indenture and the applicable Indenture
               Supplements and all amounts owing to the Series Enhancers with
               respect to each Defeased Series;

                          (ii) a statement from a firm of nationally recognized
               independent public accountants (who may also render other
               services to the Issuer) to the effect that such deposit is
               sufficient to pay the amounts specified in clause (i) above;

                          (iii) prior to its exercise of its right pursuant to
               this Section with respect to any Defeased Series to substitute
               money or Eligible Investments for Receivables, the Issuer shall
               have delivered to the Indenture Trustee an Opinion of Counsel to
               the effect contemplated by clause (ii) of the definition of the
               term "Tax Opinion" (the preparation and delivery of which shall
               not be at the expense of the Indenture Trustee) 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 under the Investment Company
               Act;

                          (iv) the Issuer shall have delivered to the Indenture
               Trustee 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 a Pay
               Out Event with respect to any Series or any event that, with the
               giving of notice or the lapse of time, would result in the
               occurrence of a Pay Out Event with respect to any Series; and

                          (v) the Rating Agency Condition shall have been
               satisfied and the Issuer shall have delivered copies of such
               written notice to the Servicer and the Indenture Trustee.

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                                 ARTICLE TWELVE

                                  MISCELLANEOUS

        Section 12.01. Compliance Certificates and Opinions etc.

        (a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.

        Except to the extent that the Owner Trustee Authorized Officer executes
the certificate on behalf of the Issuer, every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:

               (i) a statement that each signatory of such certificate or
        opinion has read or has caused to be read such covenant or condition and
        the definitions herein relating thereto;

               (ii) a brief statement as to the nature and scope of the
        examination or investigation upon which the statements or opinions
        contained in such certificate or opinion are based;

               (iii) a statement that, in the opinion of each such signatory,
        such signatory has made such examination or investigation as is
        necessary to enable such signatory to express an informed opinion as to
        whether or not such covenant or condition has been complied with; and

               (iv) a statement as to whether, in the opinion of each such
        signatory, such condition or covenant has been complied with.

        (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 12.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.

               (ii) Whenever the Issuer is required to furnish to the Indenture
        Trustee an Officer's Certificate certifying or stating the opinion of
        any signer thereof as to the matters described in clause (i) above, the
        Issuer shall also deliver to the Indenture Trustee (if required by the
        TIA) an Independent Certificate as to the same matters, if the fair

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        value to the Issuer of the securities to be so deposited and of all
        other such securities made the basis of any such withdrawal or release
        since the commencement of the then-current fiscal year of the Issuer, as
        set forth in the certificates delivered pursuant to clause (i) above and
        this clause (ii), is 10% or more of the Outstanding Amount of the Notes,
        but such a certificate need not be furnished with respect to any
        securities so deposited if the fair value thereof to the Issuer as set
        forth in the related Officer's Certificate is less than $25,000 or less
        than one percent of the Outstanding Amount of the Notes.

               (iii) Other than with respect to the release of any Defaulted
        Receivables and Receivables in Removed Accounts, whenever any property
        or securities is to be released from the lien of this Indenture, the
        Issuer shall also furnish to the Indenture Trustee an Officer's
        Certificate certifying or stating the opinion of each person signing
        such certificate as to the fair value (within 90 days of such release)
        of the property or investment property proposed to be released and
        stating that in the opinion of such person the proposed release will not
        impair the security under this Indenture in contravention of the
        provisions hereof.

               (iv) Whenever the Issuer is required to furnish to the Indenture
        Trustee an Officer's Certificate certifying or stating the opinion of
        any signer thereof as to the matters described in clause (iii) above,
        the Issuer shall also furnish to the Indenture Trustee (if required by
        the TIA) an Independent Certificate as to the same matters if the fair
        value of the property or securities and of all other property, other
        than Defaulted Receivables and Receivables in Removed Accounts, or
        securities released from the lien of this Indenture since the
        commencement of the then current calendar year, as set forth in the
        certificates required by clause (iii) above and this clause, equals 10%
        or more of the Outstanding Amount of the Notes, but such certificate
        need not be furnished in the case of any release of property or
        securities if the fair value thereof as set forth in the related
        Officer's Certificate is less than $25,000 or less than one percent of
        the then Outstanding Amount of the Notes.

               (v) Notwithstanding Section 2.11 or any other provision of this
        Section, the Issuer may collect, liquidate, sell or otherwise dispose of
        Receivables as and to the extent permitted or required by the
        Transaction Documents and make cash payments out of the Series Accounts
        as and to the extent permitted or required by the Transaction Documents.

        Section 12.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

        Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or

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opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, a Seller, a Transferor, the Issuer or the Administrator, stating
that the information with respect to such factual matters is in the possession
of the Servicer, a Seller, a Transferor, the Issuer or the Administrator, unless
such an Authorized Officer or Counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.

        Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

        Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article Six.

        Section 12.03. Acts of Noteholders.

        (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by their
agents duly appointed in writing and satisfying any requisite percentages as to
minimum number or dollar value of outstanding principal amount represented by
such Noteholders; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Indenture Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.

        (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Indenture Trustee
deems sufficient.

        (c) The ownership of Notes shall be proved by the Note Register.

        (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of every Note issued upon the registration thereof in
exchange therefor or in lieu thereof, in respect of anything

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done, omitted or suffered to be done by the Indenture Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

        Section 12.04. Notices, Etc. to Indenture Trustee and Issuer. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by the Agreement to be made
upon, given or furnished to, or filed with:

               (a) the Indenture Trustee by any Noteholder or by the Issuer
        shall be sufficient for every purpose hereunder if made, given,
        furnished or filed in writing to a Responsible Officer, by facsimile
        transmission or by other means acceptable to the Indenture Trustee to or
        with the Indenture Trustee at its Corporate Trust Office; or

               (b) the Issuer by the Indenture Trustee or by any Noteholder
        shall be sufficient for every purpose hereunder if in writing and
        mailed, first-class postage prepaid, to the Issuer addressed to it at
        Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
        Wilmington, Delaware 19890-0001, Attention: Corporate Trust
        Administration, or at any other address previously furnished in writing
        to the Indenture Trustee by the Issuer; a copy of each notice to the
        Issuer shall be sent in writing and mailed, first-class postage prepaid,
        to the Administrator at 13531 East Caley Avenue, Englewood, Colorado
        80111.

        Section 12.05. Notices to Noteholders; Waiver. Where the Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed by registered or certified mail or first class postage prepaid or
national overnight courier service to each Noteholder affected by such event, at
its address as it appears on the Note Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Noteholders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Noteholder shall affect the sufficiency of such notice with respect
to other Noteholders, and any notice which is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.

        Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

        In the event that, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.

        Where this Indenture provides for notice to any Rating Agency, failure
to give such notice shall not affect any other rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.

                                       81
<PAGE>

        Section 12.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer,
with the consent of the Indenture Trustee, may enter into any agreement with any
Holder of a Note providing for a method of payment, or notice by the Indenture
Trustee or any Paying Agent to such Holder, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer will
furnish to the Indenture Trustee a copy of each such agreement and the Indenture
Trustee will cause payments to be made and notices to be given in accordance
with such agreements.

        Section 12.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.

        The provisions of TIA Section 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

        Section 12.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

        Section 12.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Issuer shall bind its successors and assigns, whether so
expressed or not.

        Section 12.10. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

        Section 12.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Noteholders, the Servicer and the
Transferor, any benefit.

        Section 12.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

        Section 12.13. GOVERNING LAW. THE INDENTURE AND EACH NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       82
<PAGE>

        Section 12.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

        Section 12.15. Trust Obligations. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations hereunder, the
Owner Trustee (as such or in its individual capacity) shall be subject to, and
entitled to the benefits of, the terms and provisions of the Trust Agreement.

        Section 12.16. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Issuer or the Transferor,
or join in instituting against the Issuer or the Transferor, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.

                                       83
<PAGE>

        IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers thereunto duly
authorized and attested, all as of the day and year first above written.

                                       NORDSTROM PRIVATE LABEL CREDIT CARD
                                       MASTER NOTE TRUST, as Issuer

                                       By:    WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              but solely as Owner Trustee

                                       By:  /s/ James P. Lawler
                                            ------------------------------------
                                            Name: James P. Lawler
                                            Title: Vice President

                                       WELLS FARGO BANK MINNESOTA,
                                       NATIONAL ASSOCIATION,
                                       as Indenture Trustee

                                       By:  /s/ Jennifer C. Davis
                                            ------------------------------------
                                            Name: Jennifer C. Davis
                                            Title: Assistant Vice President

Acknowledged and Accepted:

NORDSTROM PRIVATE LABEL
RECEIVABLES LLC, as Transferor

By:  /s/ Carol S. Powell
    -----------------------------------
    Name: Carol S. Powell
    Title: Treasurer

NORDSTROM FSB,
as Servicer

By: /s/ Carol S. Powell
    -----------------------------------
    Name: Carol S. Powell
    Title: Treasurer

                                       84

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