-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DD2oyxwHPQ03EeiC/qwxwgyk7kDC1/0zy2gyrNZ0zKVgSsTvTdD2TV6Xb/cfrdz0 jS8uCT+xLg5hpHI2L5bZ0Q== /in/edgar/work/20000531/0000950172-00-001042/0000950172-00-001042.txt : 20000919 0000950172-00-001042.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950172-00-001042 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20000531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TARGET RECEIVABLES CORP CENTRAL INDEX KEY: 0000946115 STANDARD INDUSTRIAL CLASSIFICATION: [6189 ] IRS NUMBER: 411812153 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-95585 FILM NUMBER: 647181 BUSINESS ADDRESS: STREET 1: 80 S EIGHTH ST STREET 2: 14TH FLOOR STE 1401 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: 6123706530 MAIL ADDRESS: STREET 1: 80 SOUTH 8TH STREET STREET 2: 14TH FLOOR STE 1401 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FORMER COMPANY: FORMER CONFORMED NAME: DAYTON HUDSON RECEIVABLES CORP DATE OF NAME CHANGE: 19950602 S-3/A 1 0001.txt S-3 AMENDMENT NO. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 31, 2000 REGISTRATION NO. 333-95585 - ----------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- TARGET CREDIT CARD MASTER TRUST (FORMERLY KNOWN AS DAYTON HUDSON CREDIT CARD MASTER TRUST) (Issuer of the Certificates) (Exact name of Registrant as Specified in its Charter) TARGET RECEIVABLES CORPORATION (FORMERLY KNOWN AS DAYTON HUDSON RECEIVABLES CORPORATION) (Originator of the Trust Described Herein) (Exact name of Registrant as Specified in its Charter) MINNESOTA 41-1812153 (State or Other Jurisdiction (I.R.S. Employer Identification Number) of Incorporation or Organization) TARGET RECEIVABLES CORPORATION 80 SOUTH EIGHTH STREET 14TH FLOOR, SUITE 1401 MINNEAPOLIS, MINNESOTA 55402 (612) 370-6530 (Address, Including Zip Code, and Telephone Number, Including Area Code, of the Registrant's Principal Executive Office) ---------------- STEPHEN C. KOWALKE VICE PRESIDENT AND TREASURER TARGET CORPORATION 777 NICOLLET MALL MINNEAPOLIS, MINNESOTA 55402-2055 (612) 370-6948 (Name, Address Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copies to: ANDREW M. FAULKNER SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP FOUR TIMES SQUARE NEW YORK, NEW YORK 10036 (212) 735-2853 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective as determined by market conditions. If the only securities registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ______________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| ______________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2) Asset Backed Certificates.......$1,500,000,000 100% $1,500,000,000 $396,000.00 (1) Estimated solely for the purpose of calculating the Registration Fee. (2) $264 of which has previously been paid.
--------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. [FLAG] The information in this prospectus supplement and prospectus is not complete and may be changed. We cannot sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. Neither this prospectus supplement nor the prospectus is an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED [ ], 2000 PROSPECTUS SUPPLEMENT TO PROSPECTUS, DATED ________, 2000 TARGET CREDIT CARD MASTER TRUST (FORMERLY KNOWN AS DAYTON HUDSON CREDIT CARD MASTER TRUST) Issuer TARGET RECEIVABLES CORPORATION, Transferor RETAILERS NATIONAL BANK, Servicer % CLASS A ASSET BACKED CERTIFICATES, SERIES 2000-__ Principal Amount $__________ Price $__________ ( %) Underwriters' Commissions $__________ ( %) Proceeds to the Transferor $__________ ( %) Certificate Rate _______ % p.a. Interest Payment Dates monthly on the 25th First Interest Payment Date ___________, 2000 Expected Final Payment Date ___________, 20__ THE CERTIFICATES ARE INTERESTS IN TARGET CREDIT CARD MASTER TRUST AND ARE BACKED ONLY BY THE ASSETS OF THE TRUST. NONE OF THE CERTIFICATES OR THE ASSETS OF THE TRUST ARE OBLIGATIONS OF RETAILERS NATIONAL BANK, TARGET CAPITAL CORPORATION, TARGET RECEIVABLES CORPORATION, OR ANY OF THEIR AFFILIATES OR ARE OBLIGATIONS INSURED BY THE FDIC. THESE SECURITIES ARE HIGHLY STRUCTURED. BEFORE YOU PURCHASE THESE SECURITIES, BE SURE YOU UNDERSTAND THE STRUCTURE AND THE RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE S-12 OF THIS PROSPECTUS SUPPLEMENT. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The underwriters of the Class A certificates have agreed to purchase the Class A certificates, subject to the terms and conditions in the underwriting agreement. The Class B certificates will be retained by Target Receivables Corporation. The date of this Prospectus Supplement is __________, 2000. TABLE OF CONTENTS Page WHERE TO FIND INFORMATION IN THESE DOCUMENTS..............................................................S-4 SUMMARY OF TERMS...........................................................S-5 STRUCTURAL SUMMARY.........................................................S-6 SELECTED TRUST PORTFOLIO SUMMARY DATA .....................................................................S-10 RISK FACTORS..............................................................S-13 Potential Early Repayment or Delayed Payment due to Reduced Portfolio Yield..........................................S-13 RNB May Change the Terms and Conditions of the Accounts.......................................S-13 Accounts Added to the Trust Portfolio May Have Different Terms and Conditions...................................................S-14 TRC May Not be Able to Add Accounts to the Trust............................................S-14 Changes to Consumer Protection Laws May Impede RNB's Collection Efforts...............................................S-14 Cardholders May Make Principal Payments at Any Time.............................................S-15 Dependence on the Target Corporation Stores...........................................................S-15 Negative Carry........................................................S-15 Allocations of Charged-Off Receivables Could Result in a Loss to Your Certificates......................................S-15 Adjustments Due to Rebates, Exchanges and Writedowns Could Reduce Payments to You...........................................................S-16 You May Not Be Able to Resell Your Certificates.........................................S-16 Insolvency or Bankruptcy of TRC, RNB or TCC Could Result in Accelerated, Delayed or Reduced Payments to You...........................................................S-16 You Will Have Limited Control of Trust Actions.........................................S-18 TRUST CREDIT CARD PORTFOLIO...............................................S-19 The RNB Portfolio.....................................................S-19 Delinquency and Loss Experience.......................................S-19 Characteristics of the Trust Portfolio........................................................S-20 MATURITY CONSIDERATIONS...................................................S-25 Accumulation Period...................................................S-25 Early Amortization Event..............................................S-26 Paired Series.........................................................S-26 Historical Payment Rates of the RNB Portfolio....................................................S-26 RECEIVABLE YIELD CONSIDERATIONS...........................................S-27 USE OF PROCEEDS...........................................................S-28 DESCRIPTION OF THE CLASS A CERTIFICATES..........................................................S-28 General...............................................................S-28 Interest Payments.....................................................S-29 Principal Payments....................................................S-30 Postponement of Accumulation Period...........................................................S-32 Subordination.........................................................S-32 Transfer of the Class B Certificates.....................................................S-33 Allocation Percentages................................................S-33 Application of Collections............................................S-34 Reallocation of Cash Flows............................................S-41 Sharing of Excess Finance Charge Collections...............................................S-41 Shared Principal Collections..........................................S-42 Shared Excess Transferor Finance Charge Collections and Shared Transferor Principal Collections.................................S-42 Defaulted Receivables; Investor Charge-Offs......................................................S-43 Principal Funding Account.............................................S-44 Reserve Account.......................................................S-45 Deposits in the Collection Account....................................S-46 Issuance of Additional Certificates...................................S-50 Paired Series.........................................................S-51 Early Amortization Events.............................................S-51 Servicing Fees and Expenses...........................................S-55 Defeasance............................................................S-55 Optional Termination..................................................S-56 Purchase of Class A Certificates by the Transferor................................................S-56 Series Termination....................................................S-56 GENERAL INFORMATION.......................................................S-57 UNDERWRITING..............................................................S-57 OTHER SERIES ISSUED AND OUTSTANDING.......................................S-60 GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT............................................................S-62 WHERE TO FIND INFORMATION IN THESE DOCUMENTS The attached prospectus provides general information about the Target Credit Card Master Trust, including terms and conditions that are generally applicable to certificates issued by the trust. The specific terms of the certificates are described in this prospectus supplement. This prospectus supplement begins with several introductory sections describing your series and the Target Credit Card Master Trust in abbreviated form: o Summary of Terms provides important amounts, dates and other terms of your series, o Structural Summary gives a brief introduction to the key structural features of your series and directions for locating further information, o Receivables Flow Chart illustrates the flow of receivables, o Selected Trust Portfolio Summary Data gives certain financial information about the assets of the trust, and o Risk Factors describes some of the risks that apply to your certificates. As you read through these sections, cross-references will direct you to more detailed descriptions in the attached prospectus and elsewhere in this prospectus supplement. You can also directly reference key topics by looking at the table of contents in this prospectus supplement and the attached prospectus. You should rely only on the information contained or incorporated by reference in this prospectus supplement and the prospectus. We have not authorized anyone to provide you with different information. We are not offering these certificates in any state where the offer is not permitted. We do not make any representation as to the accuracy of the information in this prospectus supplement as of any date other than the date set forth on its cover. - ----------------------------------------------------------------------------- | TO UNDERSTAND THE STRUCTURE AND TERMS OF THESE SECURITIES, YOU MUST READ | | CAREFULLY THE ATTACHED PROSPECTUS AND THIS PROSPECTUS SUPPLEMENT IN THEIR | | ENTIRETY. | - ----------------------------------------------------------------------------- SUMMARY OF TERMS - ----------------------------------------------------------------------------- |Trust: Target Credit Card Master Trust | |Transferor: Target Receivables Corporation--"TRC"| |Servicer: Retailers National Bank--"RNB" | |Trustee: Norwest Bank Minnesota, | | National Association | |Pricing Date: _________, ____ | |Closing Date: _________, ____ | |Clearance and Settlement: DTC/Cedelbank/Euroclear | |Trust Assets: receivables originated in consumer | | open-end credit card accounts of RNB | | and other credit card originators, | | including recoveries on charged-off | | receivables. | - ----------------------------------------------------------------------------- Series Structure: Amount % of Total Series Class A $___________ __% Class B $___________ __% Annual Servicing Fee Rate: 2% Credit Enhancement for Class A: subordination of Class B Class A Certificate Rate: ___% p.a. Interest Accrual Method: 30/360 Interest Payment Dates: monthly on the 25th First Interest Payment Date: ______, 2000 Class A Expected Final Principal Payment Date: ______ distribution date Series 2000-__ Legal Final Maturity: ______ distribution date Commencement of Accumulation Period (subject to adjustment): Last day of ________ Class A CUSIP Number: Class A Anticipated Ratings: (Moody's/Standard & Poor's) [Aaa/AAA] STRUCTURAL SUMMARY This summary briefly describes certain major structural components of Series 2000-__. To fully understand the terms of Series 2000-__ you will need to read both this prospectus supplement and the attached prospectus in their entirety. THE SERIES 2000-__ CERTIFICATES Your certificates represent the right to receive a portion of collections on the underlying trust assets. Your certificates bear interest at the rate stated in the summary of terms. Your certificates will also be allocated a portion of net losses on the receivables. Any collections allocated to your series in excess of the amount owed to you or the servicer of the receivables will be shared with other series of certificates issued by the trust or returned to TRC. In no case will you receive more than the principal and interest owed to you under the terms described in this prospectus supplement. The certificates are backed by interests in a pool of revolving credit card receivables. The receivables currently arise under credit card accounts relating to the sale of merchandise and services by retail stores owned and operated by Target Corporation and its subsidiaries. RNB services these credit card accounts. For more information on the certificates, see "Description of the Class A Certificates" in this prospectus supplement. For more information on the allocation of collections to and payments to Series 2000-__, see "Description of the Class A Certificates--Interest Payments," "--Principal Payments" and "--Allocation Percentages" in this prospectus supplement. TARGET CREDIT CARD MASTER TRUST The trustee maintains the trust for several beneficiaries: o the certificateholders of Series 2000-__ certificates, o certificateholders of other series issued by the trust, o RNB as the holder of a participation interest in the assets of the trust, and o TRC, as the transferor of the receivables to the trust. The certificates will be one of four outstanding series issued by the trust. Each series has a claim to a specific dollar amount of the trust's assets, regardless of the total amount of receivables in the trust at any time. TRC, as holder of the transferor certificate, and RNB, as holder of the participation, hold the remaining claims to the trust's assets. The size of these claims fluctuate with the total amount of receivables in the trust. TRC, as the holder of the transferor certificate, will also have the right to purchase your certificates at any time when the outstanding amount of the Class A certificateholders' interest in the trust is less than or equal to 10% of the original amount of that interest. The price TRC will pay for the outstanding amount of that interest will be equal to the entire unpaid balance of that amount plus accrued and unpaid interest. CREDIT ENHANCEMENT Your Class A certificates feature credit enhancement by means of the subordination of the Class B certificates. This credit enhancement is intended to protect you from losses and shortfalls in cash flow. The effect of subordination of the Class B certificates is that the Class B certificates will absorb any losses allocated to Series 2000-__, and make up any shortfalls in cash flow, before the Class A certificates are affected. If the cash flow and the subordinated Class B certificates do not cover all losses allocated to Series 2000-__, your payments of interest and principal will be reduced and you may suffer a loss of principal. For a more detailed description of the subordination provisions of Series 2000-__, see "Description of the Class A Certificates--Sub-ordination" in this prospectus supplement. EXPECTED FINAL PRINCIPAL PAYMENTS AND POTENTIAL EARLIER OR LATER PAYMENTS The Class A certificates are expected to be paid in full on the ________, 20__ payment date. The trust expects to pay the Class A certificates in full on the expected final payment date, if an early amortization event has not occurred. The trust will accumulate principal collections in a principal funding account during an "accumulation period" to pay the Class A certificates as expected. The length of the accumulation period will be as many months as is expected to be necessary for the accumulation of the Class A payment amount, but will not be less than one month. The accumulation period will end on the expected final payment date for the Class A certificates, when the funds on deposit in the principal funding account are paid to the Class A certificates. If the Class A certificates are not paid in full on their expected final payment date, the Class A certificates will begin to receive monthly payments of principal until they are paid in full. The certificates will mature, and any remaining principal and interest will be payable on [ ], 20__. No further payments on the certificates will be made after that date. For more information on the payment of principal on the certificates and the accumulation period, see "Description of the Class A Certificates-- Principal Payments" and "Maturity Considerations --Accumulation Period" in this prospectus supplement. MINIMUM YIELD ON THE RECEIVABLES; POSSIBLE EARLY PRINCIPAL REPAYMENT OF YOUR SERIES The Class A certificates may be repaid earlier than their expected final payment date if collections on the underlying receivables, together with other amounts available for payment to certificateholders, are too low. The minimum amount that must be available for payment to your series in any month, referred to as the base rate, is generally the weighted average of the Class A and Class B certificate rates, plus the servicing fee rate, in each case for the related interest period. If the average portfolio yield, which reflects a reduction for receivable defaults for your series, for any three consecutive months is less than the average base rate for the same three consecutive months, an early amortization event will occur and the trust will commence early amortization and holders of your series will receive principal payments earlier than the expected final principal payment date. Your series is also subject to several other early amortization events, which could cause your series to amortize. If your series begins to amortize, the Class A certificates will receive monthly payments of principal until they are fully repaid; the Class B certificates will then receive monthly payments of principal until they are fully repaid. In that event, your certificates may be repaid before the expected final payment date. For more information on early amortization events, the portfolio yield and base rate, early principal payment and early amortization, see "Maturity Considerations," "Description of the Class A Certificates--Principal Payments," "--Early Amortization Events" and "--Optional Termination" in this prospectus supplement and "Description of the Certificates--Principal" and "--Early Amortization Events" and "The Pooling and Servicing Agreement--Termination of the Trust" in the attached prospectus. INCOME TAX STATUS OF CLASS A CERTIFICATES AND THE TARGET CREDIT CARD MASTER TRUST Skadden, Arps, Slate, Meagher & Flom LLP, special federal income tax counsel to TRC, is of the opinion that: o under existing law the Class A certificates will be classified as debt for U.S. federal income tax purposes, and o the trust will not be an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. For further information regarding the application of U.S. federal income tax laws, see "Tax Matters" in the attached prospectus. ERISA CONSIDERATIONS The underwriters anticipate that the Class A certificates will meet the criteria for treatment as "publicly-offered securities." If so, subject to important considerations described under "Employee Benefit Plan Considerations" in the attached prospectus, the Class A certificates will be eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. For further information regarding the application of ERISA, see "Employee Benefit Plan Considerations" in the attached prospectus. MAILING ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES The mailing address of Target Receivables Corporation is 80 South Eighth Street, 14th Floor, Suite 1401, Minneapolis, Minnesota 55402 and the telephone number is (612) 370-6530. Receivables Flow Chart [GRAPHIC OMITTED] SELECTED TRUST PORTFOLIO SUMMARY DATA The chart below shows the geographic distribution of the receivables in the trust portfolio among the 50 states and the District of Columbia. Other than the states specifically shown in the chart, no state accounts for more than 5% of receivables in the trust portfolio. [Pie chart with accompanying key showing the following: CA-____%; MI-____%; IL-____%; MN-____%; TX-____%; other-____%] The chart below shows the percentages of the receivables in the trust portfolio arising under accounts within the age brackets shown [Bar chart showing the following: 0-12 months since the account was opened-____%; 13-24 months-____%; 25-36 months-____%; 37-48 months-____%; 49-60 months-____%; 61-120 months-____%; 121+ months- ____%.] The chart below shows the trust yield, payment rate and net charge-off rate for the trust portfolio for each month from January 1997 to December 1999. [CHART] Trust Yield Payment Rate Net Charge-Offs January 1997 February 1997 March 1997 April 1997 May 1997 June 1997 July 1997 August 1997 September 1997 October 1997 November 1997 December 1997 January 1998 February 1998 March 1998 April 1998 May 1998 June 1998 July 1998 August 1998 September 1998 October 1998 November 1998 December 1998 January 1999 February 1999 March 1999 April 1999 May 1999 June 1999 July 1999 August 1999 September 1999 October 1999 November 1999 December 1999 The "trust yield" for any month means the total amount of finance charges and fees collected in that month, expressed as an annualized percentage of the average of the end of the billing cycle balance of principal receivables outstanding in that month. The "payment rate" for any month is the total payments collected during each month as a percentage of total outstanding trust receivables at the beginning of the month. The amount of "net charge-offs" for any month is the amount of charged-off receivables recorded in the month, net of any recoveries from earlier charge-offs on receivables in the trust portfolio, expressed as an annualized percentage of the average of the end of the billing cycle balance of principal receivables outstanding in that month. RISK FACTORS You should consider the following risk factors in deciding whether to purchase the Class A certificates described in this prospectus supplement. POTENTIAL EARLY REPAYMENT OR DELAYED PAYMENT DUE TO REDUCED PORTFOLIO YIELD If there is a decline in the amount of the receivables collected by the trust or another early amortization event, an early amortization of the certificates may occur and you will receive principal payments earlier than the expected final payment date. If the average portfolio yield, which reflects a reduction for receivable defaults for Series 2000-__, for any three consecutive months is less than the average base rate for the same three consecutive months, an "early amortization event" will occur for Series 2000- __. If this occurs, the early amortization of Series 2000-__ will commence, and you will receive principal payments earlier than the expected final principal payment date. Moreover, if principal collections on receivables allocated to other series or the transferor are available to be applied to an early amortization of any outstanding certificates, the period during which that early amortization occurs may be substantially shortened. Conversely, any reduction in collections may cause the period necessary to repay your certificates to go beyond the expected final payment date of your certificates. The following factors could result in reduced collections: RNB MAY CHANGE THE TERMS AND CONDITIONS OF THE ACCOUNTS RNB will sell receivables arising under specified credit card accounts to TCC which will sell those receivables to TRC which will transfer those receivables to the trust, but RNB will continue to own those accounts. As the owner of those accounts, RNB retains the right to change various terms and conditions of those accounts, including finance charges and other fees it charges and the required minimum monthly payment. Certain changes in the terms of the accounts may reduce the amount of receivables arising under the accounts, reduce the portfolio yield, reduce the amount of collections on those receivables or otherwise alter payment patterns. ACCOUNTS ADDED TO THE TRUST PORTFOLIO MAY HAVE DIFFERENT TERMS AND CONDITIONS So long as certain conditions are satisfied, TRC will automatically designate additional accounts for the trust portfolio and transfer the receivables in those accounts to the trust. Any new accounts and receivables may have different terms and conditions than the accounts and receivables already in the trust. Credit card accounts purchased by RNB or originated by other credit card originators may be included as additional accounts, if certain conditions are satisfied. The new accounts and receivables may perform differently over time than the accounts and receivables already in the trust and could reduce the amount of collections allocated to your series. TRC MAY NOT BE ABLE TO ADD ACCOUNTS TO THE TRUST If TRC's percentage interest in the accounts of the trust falls to a minimum level, currently 2%, TRC will be required to maintain that level by designating additional accounts for the trust portfolio and transferring the receivables in those accounts to the trust. TRC may not be able to designate additional accounts to be added to the trust portfolio when required. If TRC fails to designate additional accounts when required, an early amortization event will occur and you could receive payment of principal sooner than expected. CHANGES TO CONSUMER PROTECTION LAWS MAY IMPEDE RNB'S COLLECTION EFFORTS Federal and state consumer protection laws regulate the creation and enforcement of consumer loans, including credit card accounts and receivables. Changes or additions to those laws or failure to comply with those laws could make it more difficult for RNB to collect payments on the receivables or could reduce the finance charges and other fees that RNB can charge on credit card account balances, or could render some receivables uncollectible. Receivables that do not comply with consumer protection laws may not be valid or enforceable in accordance with their terms against the obligor on those receivables. RNB, TCC and TRC each make representations and warranties relating to the validity and enforceability of the receivables arising under the accounts in the trust portfolio. No other party will examine the receivables or the related records for the purpose of determining the presence or absence of defects, compliance with representations and warranties or for any other purpose. The only remedy if any representation or warranty is violated, and the violation continues beyond the period of time TRC has to correct the violation, is that TRC must accept reassignment of the receivables affected by the violation, subject to certain conditions. See "The Pooling and Servicing Agreement-- Representations and Warranties" and "Legal Aspects of the Receivables-- Consumer Protection Laws" in the attached prospectus. CARDHOLDERS MAY MAKE PRINCIPAL PAYMENTS AT ANY TIME The receivables transferred to the trust may be paid at any time. We cannot assure the creation of additional receivables in those accounts or that any particular pattern of cardholder payments will occur. DEPENDENCE ON THE TARGET CORPORATION STORES Retailing is highly competitive. Target Corporation and its subsidiaries compete not only with other discount and traditional department stores in the area in which they operate but with direct marketers and numerous types of retail outlets, including on-line retailers. The Target Corporation Stores may not continue to generate new receivables at the same rate as in previous years. Target Corporation may decide at any time to transfer all or any portion of the business or assets of the Target Corporation Stores. The Target Corporation Stores currently accept most major credit cards. A significant decline in the amount of new receivables generated by the accounts in the trust could result in reduced collections on those receivables. See "Maturity Considerations" in this prospectus supplement. NEGATIVE CARRY Any amounts deposited in the special funding account and the principal funding account may be invested in investments earning a rate that is less than the yield from collections of finance charge receivables and that may be less than the base rate, resulting in a reduction of amounts available to make payments to certificateholders. ALLOCATIONS OF CHARGED-OFF RECEIVABLES COULD RESULT IN A LOSS TO YOUR CERTIFICATES RNB will write off as uncollectible some portion of the receivables arising in accounts in the trust portfolio. Each class of certificates will be allocated a portion of those charged-off receivables. If the amount of charged-off receivables allocated to any class of certificates exceeds the amount of other funds available for reimbursement of those charge-offs--which could occur if the limited amount of Class B certificates is reduced to zero--the holders of the Class A certificates may not receive the full amount of principal and interest due to them. See "Trust Credit Card Portfolio--Delinquency and Loss Experience" and "Description of the Class A Certificates--Reallocation of Cash Flows," "--Application of Collections" and "--Defaulted Receivables; Investor Charge-Offs" in this prospectus supplement. ADJUSTMENTS DUE TO REBATES, EXCHANGES AND WRITEDOWNS COULD REDUCE PAYMENTS TO YOU A portion of the receivables will not be collected as a result of rebates, exchanges, write-downs and similar occurrences. TRC will be obligated to make payments to compensate the holders of the certificates for the amount of receivables which become uncollectible for these reasons. If TRC fails to make any of these payments, the amount of the resulting insufficiency will be allocated to TRC's interest. If the amount of TRC's interest does not cover this insufficiency, the available credit enhancement may be reduced and you may not receive the full amount of principal and interest due. YOU MAY NOT BE ABLE TO RESELL YOUR CERTIFICATES The underwriters may assist in resales of your certificates but they are not required to do so. A secondary market for the certificates may not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your certificates. INSOLVENCY OR BANKRUPTCY OF RNB, TCC OR TRC COULD RESULT IN ACCELERATED, DELAYED OR REDUCED PAYMENTS TO YOU The receivables in which you have an interest are conveyed to the trust by TRC. TRC acquires them from TCC which in turn acquired the receivables from RNB. In each instance, the conveyances are intended to be treated as sales. However, a court could conclude that TRC, TCC or RNB still owns the receivables and that the trust only holds a security interest in the receivables. The receivables may then be subject to tax or other governmental liens and to administrative expenses of the bankruptcy or bank receivership proceeding of a predecessor in interest of those receivables. Furthermore, a bankruptcy trustee or a creditor may attempt to cause a predecessor in interest of the receivables or TRC to be substantively consolidated with TRC or the trust. Recharacterization as a pledge or substantive consolidation can delay or even reduce payments on your certificates. RNB is chartered as a national banking association and is subject to regulation and supervision by the Office of the Comptroller of the Currency. If RNB becomes insolvent or is in an unsound condition, the Comptroller is authorized to appoint the FDIC as receiver. Under these circumstances, the FDIC could: o require the trustee of the trust to go through an administrative claims procedure to establish its right to payments collected on the receivables in the trust, o request a stay of proceedings relating to the trust's claims against RNB, or o repudiate the pooling agreement and limit the trust's resulting claim against the receivables to "actual direct compensatory damages" measured as of the date of receivership. See "Legal Aspects of the Receivables--Matters Relating to Bankruptcy or Receivership" in the attached prospectus. If the FDIC were to take any of those actions, payments on your certificates could be delayed and possibly reduced. If specified events related to the conservatorship or receivership of RNB, or the bankruptcy or insolvency of TCC or TRC were to occur then an early amortization event would occur for all outstanding series. The conservator or receiver may have the power: o regardless of the terms of the pooling agreement: - to prevent the beginning of an early amortization period or rapid accumulation period, - to prevent the early sale of the receivables and termination of the trust, - to require new principal receivables to continue being transferred to the trust, - to require the trustee of the trust to go through an administrative claims procedure to establish its right to payments collected on the receivables in the trust, or - to repudiate the pooling agreement which establishes the trust and limit the trust's resulting claim, or o regardless of the instructions of the certificateholders: - to require the early sale of the trust's receivables, - to require termination of the trust and retirement of the trust's certificates including your series, or - to prohibit the continued transfer of principal receivables to the trust. YOU WILL HAVE LIMITED CONTROL OF TRUST ACTIONS You will have limited voting rights relating to actions of the trust and the trustee. You will not have the right to vote to direct the trustee to take any actions other than the right to vote to declare an early amortization event or a servicer default. TRUST CREDIT CARD PORTFOLIO Defined terms are indicated by boldface type. Both the attached prospectus and this prospectus supplement contain a glossary of important terms where definitions can be found. THE RNB PORTFOLIO The following information reflects the composition and historical performance of the RNB portfolio of credit card accounts. However, the amounts presented also include a small amount of receivables in some Target Corporation commercial accounts not included in the RNB portfolio. The trust portfolio is the same as the RNB portfolio. In addition, the composition of the RNB portfolio reflects the expansion of Target Stores, one of Target Corporation's retail operating chains, to 44% of the RNB portfolio at year end 1999. See "Retailers National Bank's Credit Card Business" in the attached prospectus for a description of RNB's credit card business. DELINQUENCY AND LOSS EXPERIENCE The following table provides the delinquency experience for the RNB portfolio as of the indicated dates. In the following table: o "Number of Days Delinquent" means the number of days following the original billing due date, for example, 30 to 59 days delinquent means that the minimum payment was not received 30 or more days after the original billing due date but within 60 days of such due date, o "Delinquent Amount" represents the sum of the outstanding amount of receivables that are delinquent in each delinquency category at the end of the various monthly billing cycle periods; these amounts may differ from the amount of delinquencies in each delinquency category on the last day of the month, and o the percentages result from dividing the "Delinquent Amount" by the sum of billed balances at the end of the various monthly billing cycle periods during the month ending on the specified date.
DELINQUENCY EXPERIENCE FOR RNB PORTFOLIO (DOLLARS IN THOUSANDS) AS OF DECEMBER 31, -------------------------------------------------------------------------- 1999 1998 1997 ------------------------ ------------------------ ------------------------ NUMBER OF DAYS DELINQUENT DELINQUENT DELINQUENT DELINQUENT AMOUNT % AMOUNT % AMOUNT % - ----------------------------- ---------- ------------- ---------- -------------- --------- 30 to 59 Days... $86,847 3.22% $81,317 3.22% $82,830 3.37% 60 to 89 Days... 43,567 1.62 40,453 1.60 36,879 1.50 90 Days or More. 89,050 3.31 78,186 3.10 76,217 3.10 ------------- ---------- ------------- ---------- -------------- --------- TOTAL...... $219,464 8.15% $199,956 7.92% $195,926 7.97% ============= ========== ============= ========== ============== =========
The following table provides the loss experience for the RNB portfolio for the indicated periods. "Average Receivables Outstanding" is the average for each month from January through December of the indicated year of the sum of receivables outstanding at the end of the billing cycles in that month; these amounts may differ from the average of month-end receivables outstanding. "Gross Charge-Offs" shown exclude charge-offs of finance charge receivables and late payment fees. "Recoveries" exclude finance charge receivables and late payment fee recoveries and include sales tax recoveries and are net of collection agency fees.
LOSS EXPERIENCE FOR RNB PORTFOLIO (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 31, ------------------------------------------------ 1999 1998 1997 -------------- -------------- -------------- Average Receivables Outstanding................ $2,342,611 $2,237,722 $2,100,064 Gross Charge-Offs.............................. 191,044 200,289 182,196 Recoveries..................................... 28,997 27,415 25,332 Net Charge-Offs................................ 162,047 172,874 156,864 Net Charge-Offs as a Percentage of Average Principal Receivables Outstanding................................. 6.92% 7.73% 7.47%
As of December 31, 1999, accounts 30 or more days delinquent were 8.15% of total receivables compared with 7.92% and 7.97% of total receivables as of December 31, 1998 and 1997, respectively. Delinquencies are a leading indicator of future charge-offs. For the 12 month period ended December 31, 1999, net charge-offs as a percentage of average receivables outstanding were 6.92% compared with 7.73% and 7.47% for the year ended December 31, 1998 and 1997, respectively. Delinquencies and charge-offs depend on a variety of factors, including o general economic conditions and trends in consumer bankruptcy filings, o the availability of other sources of credit, o terms and conditions of the accounts, and o growth and maturity of the portfolio. CHARACTERISTICS OF THE TRUST PORTFOLIO The assets of the trust include credit card receivables generated through accounts that TRC has designated as trust accounts. The trust accounts are: o accounts designated when the trust was established, o AUTOMATIC ADDITIONAL ACCOUNTS automatically added to the trust as they are created, and o SUPPLEMENTAL ACCOUNTS that have been designated since the trust was established. To date, no SUPPLEMENTAL ACCOUNTS have been added to the trust. TRC is permitted to add accounts, and at times is required to add accounts, to the trust. TRC can remove accounts from the trust if the conditions to removal are satisfied. As a result, the composition of the trust is expected to change over time. See "The Receivables" in the attached prospectus for a general description of the receivables in the trust. The receivables and the accounts in the trust portfolio, as of the end of the day on _____ ___, 1999: o included approximately $____ billion of receivables, representing the total receivables balance at the close of the ______ ___, 1999 billing cycle periods for Mervyn's and actual ______ ___, 1999 receivables balances for the Department Stores and Target Stores, o included approximately $____ billion of PRINCIPAL RECEIVABLES and $____ billion of FINANCE CHARGE RECEIVABLES, with FINANCE CHARGE RECEIVABLES making up approximately ___% of the total receivables, o had an average receivables balance of $_____, excluding accounts with a zero balance, o had an average credit limit of $_____, of which the average receivables balance represented approximately ___%, excluding accounts with a zero balance, o had an average account age of ___ months, o had billing addresses in all 50 states, the District of Columbia and in U.S. territories and possessions and on U.S. military bases, and less than 1% of the obligors have billing addresses outside of the United States, and o included the following approximate percentages of outstanding PRINCIPAL RECEIVABLES balances from Target Corporation's retail operating chains: Target Stores ___%, the Department Stores ___%, and Mervyn's ___%. The following tables summarize characteristics of the trust portfolio as of the end of the day on _____ ___, 1999. Because the composition of the trust portfolio may change in the future, these tables are not necessarily indicative of the composition of the trust portfolio at any later time.
COMPOSITION BY ACCOUNT BALANCE TRUST PORTFOLIO NUMBER OF PERCENTAGE PERCENTAGE ACCOUNTS OF TOTAL OF TOTAL NUMBER RECEIVABLES RECEIVABLES ACCOUNT BALANCE RANGE OF ACCOUNTS OUTSTANDING OUTSTANDING - --------------------- ---------- ---------- -------------- ----------- Credit Balance........................ % $ % $0.................................... $0.01 to $500.00...................... $500.01 to $1,000.00.................. $1,000.01 to $3,000.00................ $3,000.01 to $5,000.00................ $5,000.01 to $10,000.00............... Over $10,000.00....................... ---------- ---------- -------------- ----------- TOTAL......................... % $ % ========== ========== ============== =========== COMPOSITION BY CREDIT LIMIT TRUST PORTFOLIO NUMBER OF PERCENTAGE PERCENTAGE ACCOUNTS OF TOTAL OF TOTAL NUMBER RECEIVABLES RECEIVABLES CREDIT LIMIT RANGE OF ACCOUNTS OUTSTANDING OUTSTANDING - ------------------ ---------- ---------- -------------- ----------- $0 to $199........................... % $ % $200 to $399......................... $400 to $499......................... $500 to $699......................... $700 to $999......................... $1,000 to $1,499..................... $1,500 to $2,999..................... $3,000 to $4,999..................... $5,000 to $9,999..................... $10,000 to $14,999................... $15,000 to $24,999................... Over $24,999......................... ---------- ---------- -------------- ----------- TOTAL........................ % $ % ========== ========== ============== =========== COMPOSITION BY PERIOD OF DELINQUENCY TRUST PORTFOLIO NUMBER OF PERCENTAGE PERCENTAGE ACCOUNTS OF TOTAL OF TOTAL NUMBER RECEIVABLES RECEIVABLES NUMBER OF DAYS DELINQUENT OF ACCOUNTS OUTSTANDING OUTSTANDING - ------------------------- ---------- ---------- -------------- ----------- Current.............................. % $ % 1 to 29 days......................... 30 to 59 days........................ 60 to 89 days........................ 90 days or more...................... ---------- ---------- -------------- ----------- TOTAL........................ % $ % ========== ========== ============== =========== In "Composition by Account Age" below, "Account Age" is determined by the number of months elapsed since the account was originally opened. COMPOSITION BY ACCOUNT AGE TRUST PORTFOLIO NUMBER OF PERCENTAGE PERCENTAGE ACCOUNTS OF TOTAL OF TOTAL NUMBER RECEIVABLES RECEIVABLES ACCOUNT AGE N OF ACCOUNTS OUTSTANDING OUTSTANDING - ------------ ---------- ---------- -------------- ----------- Less than or equal to 1 year......... % $ % Over 1 year to 2 years............... Over 2 years to 3 years.............. Over 3 years to 5 years.............. Over 5 years......................... ---------- ---------- -------------- ----------- TOTAL........................ % $ % ========== ========== ============== =========== In "Composition of Accounts by Top Five States," "Other" means not in excess of 5% of the percentage of total number of accounts and includes U.S. military, U.S. territories and non-U.S. accounts. COMPOSITION OF ACCOUNTS BY TOP FIVE STATES TRUST PORTFOLIO NUMBER OF PERCENTAGE PERCENTAGE ACCOUNTS OF TOTAL OF TOTAL NUMBER RECEIVABLES RECEIVABLES STATE OF ACCOUNTS OUTSTANDING OUTSTANDING - ----- ---------- ---------- -------------- ----------- California........................... % $ % Michigan............................. Illinois............................. Minnesota............................ Texas................................ Other................................ ---------- ---------- -------------- ----------- TOTAL........................ % $ % ========== ========== ============== ===========
MATURITY CONSIDERATIONS The Class A certificates are scheduled to receive principal on the ____________ DISTRIBUTION DATE. Principal may be paid earlier if an EARLY AMORTIZATION EVENT occurs. Final payment of principal may also be delayed if this series is paired with another series. ACCUMULATION PERIOD Collections of PRINCIPAL RECEIVABLES for the Class A certificates will be deposited in the PRINCIPAL FUNDING ACCOUNT until the amount deposited in this account is equal to the CLASS A INVESTED AMOUNT. On each DISTRIBUTION DATE, the CLASS A PRINCIPAL to be deposited in the PRINCIPAL FUNDING ACCOUNT will generally be the least of: o the PRINCIPAL ALLOCATION PERCENTAGE of PRINCIPAL RECEIVABLES collected during the previous MONTHLY PERIOD plus the SHARED PRINCIPAL COLLECTIONS and SHARED TRANSFEROR PRINCIPAL COLLECTIONS allocated to the Class A certificates, o the CLASS A CONTROLLED DEPOSIT AMOUNT, and o the CLASS A ADJUSTED INVESTED AMOUNT. The ability of the trust to distribute payments of principal on the final payment date may depend on one or more of the following factors: o the monthly payment rates on the receivables may vary due to the following: - cardholders fail to make a required minimum payment, - cardholders pay only the minimum required amount, - cardholders pay off the entire outstanding balance, - seasonal purchasing, and - payment habits of cardholders, and o the amount of outstanding receivables, charge-offs and new borrowings may vary due to: - changes in credit terms and conditions, - seasonal variations, - changes in cardholders, - the availability of other sources of credit, - legal factors, - general economic conditions, - spending and borrowing habits of individual cardholders, and - other factors, and o the potential issuance by the trust of additional series. EARLY AMORTIZATION EVENT If an EARLY AMORTIZATION EVENT occurs, you will receive payments of principal on each SPECIAL PAYMENT DATE after the MONTHLY PERIOD in which the event has occurred. These payments will continue until the earlier of the payment in full of the INVESTED AMOUNT or the SERIES 2000-__ TERMINATION DATE. The average life and maturity of your certificates can be significantly reduced if an EARLY AMORTIZATION EVENT occurs. See "Description of the Class A Certificates--Early Amortization Events" for additional discussion. PAIRED SERIES The transferor may cause the trust to issue another series after the ACCUMULATION PERIOD begins that will be paired with your series. The outstanding principal amount of that paired series may vary and the interest rate for that series will be established on its date of issuance. If an early amortization event occurs for the other paired series before payment is made in full on your certificates, the final payment of principal on your certificates may be delayed. For example, the denominator of the PRINCIPAL ALLOCATION PERCENTAGE may increase if an early amortization event occurs on the other paired series. This could cause a reduction of the percentage of collections of PRINCIPAL RECEIVABLES for your series. See "Description of the Class A Certificates--Paired Series" for additional discussion. HISTORICAL PAYMENT RATES OF THE RNB PORTFOLIO The following table provides you with the highest and lowest and average cardholder monthly payment rates for the RNB portfolio during any month in the periods shown. These payment rates are calculated as total payments collected during each month as a percentage of total outstanding trust receivables at the beginning of the month, calculated on a sum of billing cycles basis. Monthly averages are shown as an arithmetic average of the payment rate for each month during the indicated period. Payment rates shown in this table are based on total cash payments toward principal and finance charges made by cardholders. Merchant fees and deferred billing fees are not included in the total cash payments. The trust portfolio is the same as the RNB portfolio.
SUMMARY PAYMENT RATE INFORMATION YEAR ENDED DECEMBER 31, -------------------------------------------------------------- 2000 1999 1998 ------------------ ------------------ ------------------ PAYMENT RATES ------------------ ------------------ Highest Monthly Rate.............. % % % Lowest Monthly Rate............... % % % Average Monthly Rate.............. % % %
Because the future composition of the portfolios may change over time, this table does not necessarily indicate the composition or performance of the RNB portfolio or the trust portfolio at any later time. RECEIVABLE YIELD CONSIDERATIONS Gross revenues from finance charges and fees collected from accounts in the RNB portfolio for each of the three calendar years 1999, 1998 and 1997 and for the ____ months ended on ______ ___, 2000 and ______ ___, 1999 are set forth in the following table. In the following table: o all figures represent amounts billed to customers after deductions due to charge-offs, fraud, returned goods, customer disputes or other customer service adjustments, o "Average Principal Receivables Outstanding" is the average of the end of the billing cycle balance of PRINCIPAL RECEIVABLES outstanding in each month from January through December of the year, which may differ from the month-end receivables outstanding, o "Finance Charges and Fees" include finance charges, late fees, return check fees, credit division miscellaneous income, and RNB merchant fees and deferred billing fees, o "Yield from Finance Charges and Fees" is calculated as a percentage of "Average Principal Receivables Outstanding," o historical yield figures are calculated on a billed basis, and o the percentages reflected for the _____ months ended ______ ___, 2000 and ______ ___, 1999 are annualized figures.
REVENUE EXPERIENCE RNB PORTFOLIO (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 31, -------------------------------------------------- 2000 1999 1998 --------------- -------------- --------------- Average Principal Receivables Outstanding................................ $ $ $ Finance Charges and Fees...................... Yield from Finance Charges % % % and Fees...................................
USE OF PROCEEDS The net proceeds from the sale of the Class A certificates will be paid to TRC. TRC will use the net proceeds for general corporate purposes. DESCRIPTION OF THE CLASS A CERTIFICATES The following is a summary of the material provisions of the Class A certificates. This summary is not a complete description of the terms of the Class A certificates. You should refer to "Description of the Certificates" and "The Pooling and Servicing Agreement" in the attached prospectus as well as the Pooling Agreement and the Series 2000-__ Supplement for a complete description. GENERAL The Class A certificates will be issued under the POOLING AGREEMENT and the SERIES 2000-__ SUPPLEMENT. Each Class A certificate represents the right to receive allocations of cardholder payments that have been received from receivables transferred to the trust. In particular, the certificates will be allocated: o a percentage of collections of FINANCE CHARGE RECEIVABLES that will be a floating percentage for so long as an EARLY AMORTIZATION EVENT does not occur, o a floating percentage of DEFAULTED AMOUNTS that will reduce your INVESTED AMOUNT if not paid from collections of FINANCE CHARGE RECEIVABLES or REALLOCATED CLASS B PRINCIPAL COLLECTIONS, o during the REVOLVING PERIOD, a floating percentage of collections of PRINCIPAL RECEIVABLES, and o during the ACCUMULATION PERIOD or the EARLY AMORTIZATION PERIOD, a percentage of collections of PRINCIPAL RECEIVABLES determined based on a fraction whose numerator will be fixed at the end of the REVOLVING PERIOD. In addition to representing the right to payment from collections of FINANCE CHARGE RECEIVABLES and PRINCIPAL RECEIVABLES allocated to your series, each Class A certificate also represents the right to receive payments from: o EXCESS FINANCE CHARGE COLLECTIONS, o EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS, o SHARED PRINCIPAL COLLECTIONS, and o SHARED TRANSFEROR PRINCIPAL COLLECTIONS. Class A certificates will also be entitled to amounts in the PRINCIPAL FUNDING ACCOUNT and the RESERVE ACCOUNT, and the series share of amounts in the SPECIAL FUNDING ACCOUNT and the COLLECTION ACCOUNT, and investment earnings on amounts in these accounts. Class A certificates will be issued in $1,000 denominations and will be available only in book-entry form through DTC. As described in the attached prospectus, as long as the Class A certificates are held in book-entry form, you will only be able to transfer your Class A certificates through the facilities of DTC. You will receive payments and notices through DTC and its participants. Payments of interest and principal will be made on each DISTRIBUTION DATE to Class A certificateholders in whose names certificates are registered on the RECORD DATE, to the extent of available funds. The Series 2000-__ certificates are included in GROUP I. The series listed under "Other Series Issued and Outstanding" are also included in GROUP I. Additional series issued by the trust may also be included in GROUP I. See "Description of the Certificates--Investor Percentage" in the attached prospectus. The trust has also issued the TRANSFEROR CERTIFICATE and a PARTICIPATION. TRC initially will own the TRANSFEROR CERTIFICATE. RNB owns the PARTICIPATION. TRC may transfer the TRANSFEROR CERTIFICATE in whole or in part under the limitations and conditions described in the POOLING AGREEMENT. See "Description of the Certificates--The Transferor Certificate" in the attached prospectus. INTEREST PAYMENTS If you purchase Class A certificates you will receive from available funds a payment of CLASS A MONTHLY INTEREST plus CARRYOVER CLASS A INTEREST on the 25th day of each month that the Class A certificates are outstanding. If that date is not a business day you will be paid on the next business day. On each DISTRIBUTION DATE, you will receive an interest payment based on the interest rate for your Class A certificates and the outstanding balance of your Class A certificates as follows: Interest on the Class A certificates for each DISTRIBUTION DATE will be paid to you by multiplying: o the CLASS A CERTIFICATE RATE which is ___% per annum, by o the outstanding principal balance of the Class A certificates as of the last day of the preceding MONTHLY PERIOD, by o a fraction equal to 30 divided by 360. If you do not receive your interest in full on any DISTRIBUTION DATE, you will be paid the shortfall on the next succeeding DISTRIBUTION DATE together with interest on the shortfall amount if there are funds available to make that payment. Interest payments will be funded from: o FINANCE CHARGE RECEIVABLES allocated to your series for the related MONTHLY PERIOD, and o to the extent FINANCE CHARGE RECEIVABLES allocated to your series are insufficient to pay the interest, from: - EXCESS FINANCE CHARGE COLLECTIONS allocated to your series - EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocated to your series, and - REALLOCATED CLASS B PRINCIPAL COLLECTIONS. PRINCIPAL PAYMENTS Principal payments on the Class A certificates will be funded from: o collections of PRINCIPAL RECEIVABLES allocated to your series, plus o SHARED PRINCIPAL COLLECTIONS allocated to your series, plus O SHARED TRANSFEROR PRINCIPAL COLLECTIONS allocated to your series. If there is a shortfall in the amount of collections of FINANCE CHARGE RECEIVABLES available to pay the CLASS A REQUIRED AMOUNT, collections of PRINCIPAL RECEIVABLES allocated to the Class B certificates will be reallocated to pay the shortfall amount. These REALLOCATED CLASS B PRINCIPAL COLLECTIONS will not be available to make principal payments to the Class A certificates unless they are applied to cover INVESTOR DEFAULT AMOUNTS, INVESTOR CHARGE-OFFS or unpaid ADJUSTMENT PAYMENTS. Collections of PRINCIPAL RECEIVABLES allocated to your series but not needed to make payments to your series may be reallocated to other series. Revolving Period. During the REVOLVING PERIOD no principal payments will be made to Class A certificateholders. The REVOLVING PERIOD begins on the CLOSING DATE and ends on the day before the ACCUMULATION PERIOD or EARLY AMORTIZATION PERIOD begins. On each DISTRIBUTION DATE during the REVOLVING PERIOD, collections of PRINCIPAL RECEIVABLES allocated to your series will be: o treated as REALLOCATED CLASS B PRINCIPAL COLLECTIONS used to pay the CLASS A REQUIRED AMOUNT, o treated as SHARED PRINCIPAL COLLECTIONS used to pay principal to other series, o paid to TRC, or o if the rating agencies have confirmed that a requested reduction of the CLASS B INVESTED AMOUNT will not result in a RATINGS EFFECT, used to reduce the CLASS B INVESTED AMOUNT. Accumulation Period. During the ACCUMULATION PERIOD, collections of PRINCIPAL RECEIVABLES will be deposited in the PRINCIPAL FUNDING ACCOUNT on each DISTRIBUTION DATE in an amount equal to CLASS A PRINCIPAL which will generally be equal to the least of: o the PRINCIPAL ALLOCATION PERCENTAGE of PRINCIPAL RECEIVABLES collected during the previous MONTHLY PERIOD plus the SHARED PRINCIPAL COLLECTIONS and SHARED TRANSFEROR PRINCIPAL COLLECTIONS allocated to the Class A certificates., o the CLASS A CONTROLLED DEPOSIT AMOUNT, and o the CLASS A ADJUSTED INVESTED AMOUNT. On the CLASS A EXPECTED FINAL PAYMENT DATE, the trustee will pay to Class A certificateholders the amount on deposit in the PRINCIPAL FUNDING ACCOUNT. If an EARLY AMORTIZATION EVENT occurs during the ACCUMULATION PERIOD, the amount on deposit in the PRINCIPAL FUNDING ACCOUNT will be paid to Class A certificateholders on the first SPECIAL PAYMENT DATE. During the ACCUMULATION PERIOD until the final principal payment to Class A certificateholders, the portion of principal collections not applied to CLASS A PRINCIPAL will generally be treated as SHARED PRINCIPAL COLLECTIONS or, under specified circumstances, deposited in the SPECIAL FUNDING ACCOUNT. Early Amortization Period. On each SPECIAL PAYMENT DATE during the EARLY AMORTIZATION PERIOD: o the Class A certificateholders will be entitled to receive collections for the related MONTHLY PERIOD until the earlier of: - the date the CLASS A INVESTED AMOUNT has been paid in full, and - the SERIES 2000-__ TERMINATION DATE, and o after payment in full of the CLASS A INVESTED AMOUNT, Class B certificateholders will be entitled to receive collections for the related MONTHLY PERIOD until the earlier of: - the date the CLASS B INVESTED AMOUNT has been paid in full, and - the SERIES 2000-__ TERMINATION DATE. POSTPONEMENT OF ACCUMULATION PERIOD The ACCUMULATION PERIOD is scheduled to last 12 months. However, the servicer may elect to extend the REVOLVING PERIOD and postpone the start of the ACCUMULATION PERIOD. The servicer may make this election only if the number of months needed to fund the PRINCIPAL FUNDING ACCOUNT to pay the Class A certificates is less than 12. On the third business day before each DISTRIBUTION DATE beginning in _________, ____ until the ACCUMULATION PERIOD begins, the servicer will determine the length of the ACCUMULATION PERIOD needed to fund the PRINCIPAL FUNDING ACCOUNT to allow the CLASS A INVESTED AMOUNT to be paid in full on the CLASS A EXPECTED FINAL PAYMENT DATE. In making this determination, the servicer is required to assume that: o the principal payment rate will be no greater than the lowest monthly payment rate for the previous 12 months, o no additional series will be issued, o the total amount of PRINCIPAL RECEIVABLES will remain the same throughout the ACCUMULATION PERIOD, and o no EARLY AMORTIZATION EVENT will occur for any series. If the number of months determined to be required to fund the PRINCIPAL FUNDING ACCOUNT is less than 12 months, the servicer may elect to postpone the start of the ACCUMULATION PERIOD so that the number of months included in the ACCUMULATION PERIOD will be equal to or exceed the length of the required ACCUMULATION PERIOD as determined by the servicer. After making an election to postpone the start of the ACCUMULATION PERIOD but before the ACCUMULATION PERIOD begins, the Servicer may elect to further postpone the start of the ACCUMULATION PERIOD or be required to extend the ACCUMULATION PERIOD in accordance with the requirements described above. The length of the ACCUMULATION PERIOD will not be less than one month. SUBORDINATION The Class B certificates will be subordinated to the Class A certificates. At the closing, the Class B certificates will not have a stated interest rate and will not be entitled to payments of interest. Principal payments on the Class B certificates will not begin until the Class A certificates have been paid in full unless: o TRC requests a reduction of the CLASS B INVESTED AMOUNT during the REVOLVING PERIOD, and o the rating agencies confirm that a reduction will not result in a RATINGS EFFECT. If there are insufficient funds on any DISTRIBUTION DATE to pay the CLASS A REQUIRED AMOUNT, principal payments allocable to Class B certificateholders will be reallocated to cover amounts due on the Class A certificates and the CLASS B INVESTED AMOUNT will be reduced. If these REALLOCATED CLASS B PRINCIPAL COLLECTIONS are not sufficient to fund the remaining CLASS A REQUIRED AMOUNT, then the CLASS B INVESTED AMOUNT will be reallocated to the Class A certificates as needed to absorb reductions in the INVESTED AMOUNT of your series due to DEFAULTED AMOUNTS. The CLASS B INVESTED AMOUNT may be reimbursed from subsequent collections of FINANCE CHARGE RECEIVABLES. TRANSFER OF THE CLASS B CERTIFICATES TRC will initially retain the Class B certificates. TRC may sell all or a portion of the Class B certificates. If TRC does sell the Class B certificates, TRC will enter into an agreement with the trustee that will specify the interest rate for the Class B certificates as well as other relevant provisions of those certificates. TRC can only sell Class B certificates if: o TRC notifies the trustee, the servicer and the rating agencies of the proposed transfer of the Class B certificates, o the rating agencies advise the trustee that the transfer will not have a RATINGS EFFECT, o no EARLY AMORTIZATION EVENT occurs before the transfer, o TRC delivers an officer's certificate to the trustee stating that the transferor believes that the transfer will not cause an EARLY AMORTIZATION EVENT to occur, and o the transferor delivers a tax opinion to the trustee regarding the transfer. ALLOCATION PERCENTAGES For each MONTHLY PERIOD, the servicer will allocate collections of FINANCE CHARGE RECEIVABLES, PRINCIPAL RECEIVABLES and all DEFAULTED AMOUNTS among: o your series, o the interests of certificateholders for all other series issued and outstanding, o the TRANSFEROR'S INTEREST, and o the interests of the holders of any PARTICIPATIONS. The trustee will use the FLOATING ALLOCATION PERCENTAGE to allocate to your series DEFAULTED AMOUNTS and collections of FINANCE CHARGE RECEIVABLES. The trustee will use the PRINCIPAL ALLOCATION PERCENTAGE to allocate to your series collections of PRINCIPAL RECEIVABLES. The FLOATING ALLOCATION PERCENTAGE as determined at any time is generally a proportionate share equal to a fraction: o whose numerator is the ADJUSTED INVESTED AMOUNT at the end of the previous month, and o whose denominator is the total amount of PRINCIPAL RECEIVABLES at the end of the previous month. If an EARLY AMORTIZATION EVENT occurs, the numerator and denominator of the FLOATING ALLOCATION PERCENTAGE used for purposes of allocating collections of FINANCE CHARGE RECEIVABLES will be fixed at the relevant amounts outstanding at the end of the month before the month during which the EARLY AMORTIZATION EVENT occurs. The PRINCIPAL ALLOCATION PERCENTAGE as determined at any time is generally equal to a fraction: o whose numerator during the REVOLVING PERIOD is the INVESTED AMOUNT at the end of the previous month and, during the ACCUMULATION PERIOD or the EARLY AMORTIZATION PERIOD, is the INVESTED AMOUNT at the end of the REVOLVING PERIOD, and o whose denominator is the total amount of PRINCIPAL RECEIVABLES at the end of the previous month or, for the ACCUMULATION PERIOD or the EARLY AMORTIZATION PERIOD when no other series are outstanding, at the end of the REVOLVING PERIOD. APPLICATION OF COLLECTIONS Payment of Interest, Fees and Other Items. On each DISTRIBUTION DATE, AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS for the related MONTHLY PERIOD will be applied in the following order: o to pay CLASS A MONTHLY INTEREST and CARRYOVER CLASS A INTEREST, o to pay the MONTHLY SERVICING FEE, o an amount equal to the total CLASS A INVESTOR DEFAULTED AMOUNT for that DISTRIBUTION DATE will be: - treated as SHARED PRINCIPAL COLLECTIONS during the REVOLVING PERIOD, and - during the ACCUMULATION PERIOD, on and before the date the CLASS A INVESTED AMOUNT is paid in full or available in the PRINCIPAL FUNDING ACCOUNT, deposited in the PRINCIPAL FUNDING ACCOUNT or during the EARLY AMORTIZATION PERIOD deposited in the COLLECTION ACCOUNT for payment to Class A certificateholders, o an amount equal to the total CLASS B INVESTOR DEFAULTED AMOUNT for that DISTRIBUTION DATE will be: - treated as SHARED PRINCIPAL COLLECTIONS during the REVOLVING PERIOD, and - during the ACCUMULATION PERIOD, on and before the date the CLASS A INVESTED AMOUNT is paid in full or available in the PRINCIPAL FUNDING ACCOUNT, deposited in the PRINCIPAL FUNDING ACCOUNT or during the EARLY AMORTIZATION PERIOD deposited in the COLLECTION ACCOUNT for payment to Class A certificateholders or Class B certificateholders, o an amount equal to the SERIES 2000-__ ALLOCATION PERCENTAGE of any ADJUSTMENT PAYMENT that TRC is required but fails to make under the POOLING AGREEMENT will be: - treated as SHARED PRINCIPAL COLLECTIONS during the REVOLVING PERIOD, - during the ACCUMULATION PERIOD, on and before the date an amount equal to the CLASS A INVESTED AMOUNT is paid in full or deposited in the PRINCIPAL FUNDING ACCOUNT, deposited in the PRINCIPAL FUNDING ACCOUNT or during the EARLY AMORTIZATION PERIOD deposited in the COLLECTION ACCOUNT for payment to Class A certificateholders or Class B certificateholders, o an amount equal to the unreimbursed CLASS A INVESTOR CHARGE-OFFS, if any, will be applied to reimburse CLASS A INVESTOR CHARGE-OFFS, and this amount will be: - treated as SHARED PRINCIPAL COLLECTIONS during the REVOLVING PERIOD, and - during the ACCUMULATION PERIOD, on and before the date an amount equal to the CLASS A INVESTED AMOUNT is paid in full or deposited in the PRINCIPAL FUNDING ACCOUNT, deposited in the PRINCIPAL FUNDING ACCOUNT or during the EARLY AMORTIZATION PERIOD deposited in the COLLECTION AMOUNT for payment to Class A certificateholders, o an amount equal to the unreimbursed reductions in the CLASS B INVESTED AMOUNT because of CLASS B INVESTOR CHARGE-OFFS and REALLOCATED CLASS B PRINCIPAL COLLECTIONS, if any, will be: - treated as SHARED PRINCIPAL COLLECTIONS during the REVOLVING PERIOD, and - during the ACCUMULATION PERIOD, on and before the date an amount equal to the CLASS A INVESTED AMOUNT is paid in full or deposited in the PRINCIPAL FUNDING ACCOUNT, deposited in the PRINCIPAL FUNDING ACCOUNT or during the EARLY AMORTIZATION PERIOD deposited in the COLLECTION ACCOUNT for payment to Class A certificateholders or Class B certificateholders, o to pay CLASS B MONTHLY INTEREST and CARRYOVER CLASS B INTEREST, if any, o on each DISTRIBUTION DATE from and after the RESERVE ACCOUNT FUNDING DATE, but before the date the RESERVE ACCOUNT is terminated, an amount up to the excess, if any, of the REQUIRED RESERVE ACCOUNT AMOUNT over the AVAILABLE RESERVE ACCOUNT AMOUNT, will be deposited in the RESERVE ACCOUNT, and o the balance, if any, will constitute EXCESS FINANCE CHARGE COLLECTIONS. The following diagram provides you with an outline of the allocation of collections of FINANCE CHARGE RECEIVABLES. This diagram is a simplified demonstration of the allocation and payment provisions contained in this prospectus supplement and the attached prospectus. [GRAPHIC?OMITTED] Excess Finance Charge Collections. On each DISTRIBUTION DATE, EXCESS FINANCE CHARGE COLLECTIONS allocated to Series 2000-__ will be applied in the following order: o to pay the REQUIRED AMOUNT, if any, and o as EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS. EXCESS FINANCE CHARGE COLLECTIONS from Series 2000-__ will be applied in the following order: o to pay certificateholders of other series in GROUP I to the extent of any shortfalls, o to pay any unpaid expenses or liabilities of the trust, and o as EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS. Excess Transferor Finance Charge Collections. On each DISTRIBUTION DATE, the trustee will apply EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocated to your series in the following order: o to pay the REQUIRED AMOUNT remaining after applying EXCESS FINANCE CHARGE COLLECTIONS, and o as SHARED TRANSFEROR PRINCIPAL COLLECTIONS. Payment of Principal. On each DISTRIBUTION DATE during the REVOLVING PERIOD, the product of: o the PRINCIPAL ALLOCATION PERCENTAGE, and o collections of PRINCIPAL RECEIVABLES for that DISTRIBUTION DATE, will be treated as SHARED PRINCIPAL COLLECTIONS except that any reduction of the required CLASS B INVESTED AMOUNT during the REVOLVING PERIOD will be paid to Class B certificateholders. On each DISTRIBUTION DATE related to the ACCUMULATION PERIOD, collections of PRINCIPAL RECEIVABLES allocated to Class A certificateholders equal to CLASS A PRINCIPAL but not more than the CLASS A CONTROLLED DEPOSIT AMOUNT will be deposited in the PRINCIPAL FUNDING ACCOUNT for payment to Class A certificateholders on the CLASS A EXPECTED FINAL PAYMENT DATE. On each SPECIAL PAYMENT DATE after the CLASS A EXPECTED FINAL PAYMENT DATE and, if earlier, after an EARLY AMORTIZATION EVENT occurs, the trustee will apply the amount on deposit in the COLLECTION ACCOUNT and available for payment of principal in the following order: o an amount equal to CLASS A PRINCIPAL to Class A certificateholders, o after the CLASS A INVESTED AMOUNT has been paid, an amount equal to CLASS B PRINCIPAL to Class B certificateholders, and o an amount equal to the excess, if any, will be treated as SHARED PRINCIPAL COLLECTIONS. On each DISTRIBUTION DATE during the ACCUMULATION PERIOD or EARLY AMORTIZATION PERIOD, funds on deposit in the SPECIAL FUNDING ACCOUNT distributable to Series 2000-__ will be applied in the following order: o until the CLASS A INVESTED AMOUNT is paid in full, to Class A certificateholders in an amount equal to the lesser of: - the shortfall in amounts to be paid from collections of PRINCIPAL RECEIVABLES for Series 2000-__, and - the amount allocated to Series 2000-__ under the POOLING AGREEMENT, but not more than CLASS A PRINCIPAL, less amounts to be deposited in the COLLECTION ACCOUNT, and o on and after the DISTRIBUTION DATE on which the CLASS A INVESTED AMOUNT is paid in full, to Class B certificateholders in an amount not to exceed: - the CLASS B INVESTED AMOUNT, less - amounts to be deposited in the COLLECTION ACCOUNT. You will receive the final payment of principal and interest on the Class A certificates no later than _______. After _______ the trust will have no further obligation to pay principal or interest on the Class A certificates. The following diagram provides you with an outline of the allocation of collections of PRINCIPAL RECEIVABLES. This diagram is a simplified demonstration of the allocation and payment provisions contained in this prospectus supplement and the attached prospectus. [GRAPHIC?OMITTED] REALLOCATION OF CASH FLOWS For each DISTRIBUTION DATE, the servicer will calculate the CLASS A REQUIRED AMOUNT, which is generally equal to the excess, if any, of (1) CLASS A MONTHLY INTEREST, CARRYOVER CLASS A INTEREST, the CLASS A SERVICING FEE and the CLASS A INVESTOR DEFAULTED AMOUNT plus the portion of any unpaid ADJUSTMENT PAYMENTS allocated to the Class A certificates over (2) the AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS plus any available EXCESS FINANCE CHARGE COLLECTIONS from other series, plus EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocable to your series. The CLASS A REQUIRED AMOUNT will be paid from REALLOCATED CLASS B PRINCIPAL COLLECTIONS. If REALLOCATED CLASS B PRINCIPAL COLLECTIONS are not sufficient to fund the CLASS A REQUIRED AMOUNT, then the CLASS B INVESTED AMOUNT will be reduced to the extent of the INVESTOR DEFAULTED AMOUNT plus the SERIES 2000-__ ALLOCATION PERCENTAGE of any unpaid ADJUSTMENT PAYMENTS but in no event shall it be reduced below zero. The CLASS A INVESTED AMOUNT will be reduced by the excess, if any, of the INVESTOR DEFAULTED AMOUNT plus the SERIES 2000-__ ALLOCATION PERCENTAGE of any unpaid ADJUSTMENT PAYMENTS over the amount of the reductions, if any, to the CLASS B INVESTED AMOUNT to fund the CLASS A REQUIRED AMOUNT. Any reduction in the CLASS A INVESTED AMOUNT will have the effect of slowing or reducing the return of principal and interest to Class A certificateholders. If the CLASS B INVESTED AMOUNT is reduced to zero, Class A certificateholders will bear directly the credit and other risks associated with their interests in the trust. See "--Defaulted Receivables; Investor Charge-Offs" for additional discussion. Reductions of the CLASS A INVESTED AMOUNT and the CLASS B INVESTED AMOUNT described in the three preceding paragraphs will be reimbursed, and the CLASS A INVESTED AMOUNT and the CLASS B INVESTED AMOUNT increased, on later DISTRIBUTION DATES to the extent of: o AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS, o EXCESS FINANCE CHARGE COLLECTIONS from other series, and o EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS available for that purpose on each DISTRIBUTION DATE. SHARING OF EXCESS FINANCE CHARGE COLLECTIONS Collections of FINANCE CHARGE RECEIVABLES--and other amounts treated like collections of FINANCE CHARGE RECEIVABLES--in excess of the amount required to make payments or deposits for the certificates of your series will be made available to other series included in GROUP I whose allocation of collections of FINANCE CHARGE RECEIVABLES is not sufficient to make their required payments or deposits. We call these amounts EXCESS FINANCE CHARGE COLLECTIONS. If the certificates of your series require more collections of FINANCE CHARGE RECEIVABLES than allocated through the INVESTOR PERCENTAGE, you will have access to collections of FINANCE CHARGE RECEIVABLES--and other amounts treated like finance charge collections--from other series in GROUP I. Each series that is part of GROUP I and has a shortfall will receive a share of the total amount of EXCESS FINANCE CHARGE COLLECTIONS available for that month based on the amount of the shortfall for that series divided by the total shortfall for all series in GROUP I for that same month. EXCESS FINANCE CHARGE COLLECTIONS remaining after payment of all shortfalls for other series in GROUP I will be treated as EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS. EXCESS FINANCE CHARGE COLLECTIONS cover shortfalls in amounts payable from collections of FINANCE CHARGE RECEIVABLES by using EXCESS FINANCE CHARGE COLLECTIONS from other series which would otherwise be paid to TRC. SHARED PRINCIPAL COLLECTIONS Collections of PRINCIPAL RECEIVABLES allocated to the Series 2000-__ certificateholders' interest in excess of: o during the REVOLVING PERIOD, the amount of REALLOCATED CLASS B PRINCIPAL COLLECTIONS, o during the ACCUMULATION PERIOD, the CLASS A CONTROLLED DEPOSIT AMOUNT and the amount of REALLOCATED CLASS B PRINCIPAL COLLECTIONS, and o during the EARLY AMORTIZATION PERIOD, the INVESTED AMOUNT of the certificates, will be made available to other series whose allocation of principal collections is not sufficient to make payments or deposits required to be made from principal collections allocated to those series. We call these collections SHARED PRINCIPAL COLLECTIONS. If your certificates require more principal collections than allocated through the INVESTOR PERCENTAGE, you will share in the excess available from other series in GROUP I. Each series that is part of GROUP I and has a shortfall will receive a share of the total amount of SHARED PRINCIPAL COLLECTIONS available for that month based on the amount of the shortfall for that series divided by the total shortfall for all series in GROUP I for that same month. If SHARED PRINCIPAL COLLECTIONS exceed shortfalls for all series, the trustee will distribute the remaining amount to TRC to the extent that the TRANSFEROR AMOUNT exceeds the REQUIRED RETAINED TRANSFEROR AMOUNT or deposit it into the SPECIAL FUNDING ACCOUNT. SHARED PRINCIPAL COLLECTIONS cover PRINCIPAL SHORTFALLS of the Series 2000-__ certificates by using collections of PRINCIPAL RECEIVABLES that would have been paid to TRC and, in specified circumstances, may allow the length of the ACCUMULATION PERIOD to be shortened. This type of reallocation of collections of PRINCIPAL RECEIVABLES will not result in a reduction in the INVESTED AMOUNT of the series to which the collections were initially allocated. There can be no assurance that there will be any SHARED PRINCIPAL COLLECTIONS for any MONTHLY PERIOD. If SHARED PRINCIPAL COLLECTIONS are not sufficient to cover PRINCIPAL SHORTFALLS for your series, SHARED TRANSFEROR PRINCIPAL COLLECTIONS will be applied as described below. SHARED EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS AND SHARED TRANSFEROR PRINCIPAL COLLECTIONS EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS are collections of FINANCE CHARGE RECEIVABLES allocable to the TRANSFEROR'S INTEREST in excess of the amounts necessary to make required payments for any SUPPLEMENTAL CERTIFICATES, and all other collections of FINANCE CHARGE RECEIVABLES paid to TRC, even those initially allocated to series of investor certificates. These collections will be applied to cover any remaining shortfalls in amounts payable from FINANCE CHARGE RECEIVABLES for this series and each other series as designated in the applicable SERIES SUPPLEMENT, based upon the amount of the shortfall, if any, of each series. Any EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS remaining after covering shortfalls for all designated series will be treated as SHARED TRANSFEROR PRINCIPAL COLLECTIONS. EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS cover shortfalls in amounts payable from collections of FINANCE CHARGE RECEIVABLES and EXCESS FINANCE CHARGE COLLECTIONS that are allocable to Series 2000-__ by using collections of FINANCE CHARGE RECEIVABLES which would otherwise be paid to TRC, including those from series not in GROUP I. SHARED TRANSFEROR PRINCIPAL COLLECTIONS are collections of PRINCIPAL RECEIVABLES allocated to the TRANSFEROR'S INTEREST but not due to the holder of any SUPPLEMENTAL CERTIFICATE and other amounts payable to the transferor from collections of PRINCIPAL RECEIVABLES plus the amount of EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS remaining after being applied to amounts payable from collections of FINANCE CHARGE RECEIVABLES. The SHARED TRANSFEROR PRINCIPAL COLLECTIONS will be allocated to cover shortfalls in amounts payable from collections of PRINCIPAL RECEIVABLES that have not been covered out of the SHARED PRINCIPAL COLLECTIONS for this series and each other series entitled to receive SHARED TRANSFEROR PRINCIPAL COLLECTIONS. If the total PRINCIPAL SHORTFALL remaining after applying SHARED PRINCIPAL COLLECTIONS exceeds the amount of SHARED TRANSFEROR PRINCIPAL COLLECTIONS for any MONTHLY PERIOD, SHARED TRANSFEROR PRINCIPAL COLLECTIONS will be allocated among each designated series, based on the respective remaining PRINCIPAL SHORTFALLS of those series. If SHARED TRANSFEROR PRINCIPAL COLLECTIONS exceed PRINCIPAL SHORTFALLS remaining after applying SHARED PRINCIPAL COLLECTIONS, the balance will be paid to TRC. SHARED TRANSFEROR PRINCIPAL COLLECTIONS cover PRINCIPAL SHORTFALLS for Series 2000-__ certificates remaining after applying SHARED PRINCIPAL COLLECTIONS by using collections that would have been paid to TRC and, in specified circumstances, may allow the length of the ACCUMULATION PERIOD to be shortened. DEFAULTED RECEIVABLES; INVESTOR CHARGE-OFFS The INVESTOR DEFAULTED AMOUNT represents the investor's share of receivables charged-off as uncollectible. On or before the third business day before each DISTRIBUTION DATE, the servicer will calculate the INVESTOR DEFAULTED AMOUNT for your series by multiplying: o the FLOATING ALLOCATION PERCENTAGE for that month, by o the total amount of receivables in trust portfolio accounts that were charged-off as uncollectible for that month. The INVESTOR DEFAULTED AMOUNT will be further allocated: o to Class A--as the CLASS A INVESTOR DEFAULTED AMOUNT--based on the CLASS A FLOATING ALLOCATION PERCENTAGE, and o to Class B--as the CLASS B INVESTOR DEFAULTED AMOUNT--based on the CLASS B FLOATING ALLOCATION PERCENTAGE. The CLASS A INVESTOR DEFAULTED AMOUNT for each MONTHLY PERIOD will be paid from: o AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS, o EXCESS FINANCE CHARGE COLLECTIONS from other series allocated to Series 2000-__, o EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocated to Series 2000-__, and o REALLOCATED CLASS B PRINCIPAL COLLECTIONS. The CLASS B INVESTOR DEFAULTED AMOUNT for each MONTHLY PERIOD will be paid from: o AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS, o EXCESS FINANCE CHARGE COLLECTIONS allocated to Series 2000-__, and o EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocated to Series 2000-__. If on any DISTRIBUTION DATE, the REQUIRED AMOUNT exceeds the sum of: o EXCESS FINANCE CHARGE COLLECTIONS allocable to Series 2000-__, o EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocable to Series 2000-__, and o REALLOCATED CLASS B PRINCIPAL COLLECTIONS, then the CLASS B INVESTED AMOUNT will be reduced by the amount of that excess but not more than the INVESTOR DEFAULTED AMOUNT plus the SERIES 2000-__ ALLOCATION PERCENTAGE of any unpaid ADJUSTMENT PAYMENTS for that DISTRIBUTION DATE. This type of reduction is called a CLASS B INVESTOR CHARGE-OFF. If this reduction causes the CLASS B INVESTED AMOUNT to be a negative number, then: o the CLASS B INVESTED AMOUNT will be reduced to zero, and o the CLASS A INVESTED AMOUNT will be reduced by the amount by which the CLASS B INVESTED AMOUNT would have been reduced below zero, but not more than the INVESTOR DEFAULTED AMOUNT plus the SERIES 2000-__ ALLOCATION PERCENTAGE of any unpaid ADJUSTMENT PAYMENTS for that DISTRIBUTION DATE less the amount of the reduction of the CLASS B INVESTED AMOUNT. This type of reduction is called a CLASS A INVESTOR CHARGE-OFF. PRINCIPAL FUNDING ACCOUNT Under the SERIES 2000-__ SUPPLEMENT, the trustee will establish and maintain a PRINCIPAL FUNDING ACCOUNT in which it will collect CLASS A PRINCIPAL during the ACCUMULATION PERIOD. Amounts collected in the PRINCIPAL FUNDING ACCOUNT will be used to pay principal to Class A certificateholders on the earlier of: o the CLASS A EXPECTED FINAL PAYMENT DATE, and o if an EARLY AMORTIZATION EVENT occurs during the ACCUMULATION PERIOD, the first SPECIAL PAYMENT DATE. Amounts on deposit in the PRINCIPAL FUNDING ACCOUNT will be invested until the following DISTRIBUTION DATE by the trustee in ELIGIBLE INVESTMENTS. The proceeds from these investments will be deposited in the COLLECTION ACCOUNT on each DISTRIBUTION DATE and applied as AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS. RESERVE ACCOUNT The trustee will establish the RESERVE ACCOUNT that it will use to fund investment earnings shortfalls during the ACCUMULATION PERIOD. On and after the RESERVE ACCOUNT FUNDING DATE, the trustee will begin to deposit FINANCE CHARGE COLLECTIONS into this account until the account balance equals the REQUIRED RESERVE ACCOUNT AMOUNT. TRC will invest money on deposit in this account in ELIGIBLE INVESTMENTS. Investment earnings, net of expenses and losses, will be retained in this account. Interest and investment income in this account in excess of the REQUIRED RESERVE ACCOUNT AMOUNT on each TRANSFER DATE will be withdrawn and applied as AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS. On each TRANSFER DATE during the ACCUMULATION PERIOD and on the first TRANSFER DATE during the EARLY AMORTIZATION PERIOD, the servicer will withdraw from the RESERVE ACCOUNT and apply as AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS the lesser of: o the amount available to be withdrawn from the RESERVE ACCOUNT, and o the PRINCIPAL FUNDING INVESTMENT SHORTFALL for that TRANSFER DATE. The RESERVE ACCOUNT will end on the earliest to occur of: o the termination date of the trust, o the date the CLASS A INVESTED AMOUNT is paid in full, and o if the ACCUMULATION PERIOD has not begun, the occurrence of an EARLY AMORTIZATION EVENT, and o if the ACCUMULATION PERIOD has begun, the earlier of: - the first TRANSFER DATE for the EARLY AMORTIZATION PERIOD, and - the CLASS A EXPECTED FINAL PAYMENT DATE. Upon termination of this account, funds in this account will be applied according to the priority of payments specified under "--Application of Collections--Payment of Interest, Fees and Other Items." DEPOSITS IN THE COLLECTION ACCOUNT The servicer will generally deposit all collections received from the receivables in each MONTHLY PERIOD into the COLLECTION ACCOUNT not later than two business days after the date of processing unless the conditions described below are satisfied. RNB, as servicer, may use for its own benefit all collections received from the receivables in each MONTHLY PERIOD until the business day preceding the related DISTRIBUTION DATE if: o RNB gives the trustee a letter of credit covering collection risk of the servicer acceptable to each rating agency, or o Target Corporation has and maintains a commercial paper rating of at least "A-1" by Standard & Poor's and at least "P-1" by Moody's. RNB currently has not given a letter of credit to the trustee and Target Corporation currently does not maintain the required rating for use of the collections. Revolving Period. For each date of processing during the REVOLVING PERIOD, the servicer shall allocate: o to Series 2000-__ certificateholders and deposit in the COLLECTION ACCOUNT an amount equal to the product of: - the FLOATING ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of FINANCE CHARGE RECEIVABLES on that date of processing; except that for each MONTHLY PERIOD, that amount will only be deposited until the time the amount deposited in the COLLECTION ACCOUNT equals the sum of: - CLASS A MONTHLY INTEREST, - CLASS B MONTHLY INTEREST, if any, - CARRYOVER INTEREST, if any, and - if RNB is not the servicer, the servicing fee due on the next DISTRIBUTION DATE, and o to Series 2000-__ certificateholders an amount equal to the product of: - the PRINCIPAL ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of PRINCIPAL RECEIVABLES on that date of processing, and pay that amount to TRC as the holder of the TRANSFEROR CERTIFICATE, except that the amount to be paid to the holder of the TRANSFEROR CERTIFICATE on any date of processing will be applied in the following order: o if any other PRINCIPAL SHARING SERIES is outstanding and in its AMORTIZATION PERIOD, deposited in the COLLECTION ACCOUNT to be applied, if necessary, as SHARED PRINCIPAL COLLECTIONS on the related DISTRIBUTION DATE, and o paid to the holder of the TRANSFEROR CERTIFICATE only if on that date of processing the TRANSFEROR AMOUNT, minus the interest represented by any SUPPLEMENTAL CERTIFICATE, is greater than the REQUIRED RETAINED TRANSFEROR AMOUNT after all PRINCIPAL RECEIVABLES have been transferred to the trust on that day. Otherwise, funds will be deposited in the SPECIAL FUNDING ACCOUNT until the TRANSFEROR AMOUNT, minus the interest represented by any SUPPLEMENTAL CERTIFICATE, is at least equal to the REQUIRED RETAINED TRANSFEROR AMOUNT. These amounts will be paid to the holder of the TRANSFEROR CERTIFICATE during a MONTHLY PERIOD subject to the obligation of the transferor to make an amount equal to the REALLOCATED CLASS B PRINCIPAL COLLECTIONS for each MONTHLY PERIOD available on the related DISTRIBUTION DATE. Accumulation Period. For each date of processing during the ACCUMULATION PERIOD, the servicer will allocate: o to Series 2000-__ certificateholders and deposit in the COLLECTION ACCOUNT an amount equal to the product of: - the FLOATING ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of FINANCE CHARGE RECEIVABLES on that date of processing; except that for each MONTHLY PERIOD, this amount will only be deposited until the time the amount deposited in the COLLECTION ACCOUNT equals the sum of: - CLASS A MONTHLY INTEREST, - CLASS B MONTHLY INTEREST, if any, - CARRYOVER INTEREST, if any, and - if RNB is not the servicer, the servicing fee due on the next DISTRIBUTION DATE, and o before the payment in full of the CLASS A INVESTED AMOUNT, to Series 2000-__ certificateholders and deposit in the COLLECTION ACCOUNT an amount equal to the product of: - the PRINCIPAL ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of PRINCIPAL RECEIVABLES on that date of processing; except that if these amounts for the same MONTHLY PERIOD are more than the CLASS A CONTROLLED DEPOSIT AMOUNT for the related DISTRIBUTION DATE, then that excess will be applied in the following order: o if any other PRINCIPAL SHARING SERIES is outstanding and in its AMORTIZATION PERIOD, deposited in the COLLECTION ACCOUNT to be applied, if necessary, as SHARED PRINCIPAL COLLECTIONS on the related DISTRIBUTION DATE, and o paid to the holder of the TRANSFEROR CERTIFICATE if the TRANSFEROR AMOUNT, minus the interest represented by any SUPPLEMENTAL CERTIFICATE, is greater than the REQUIRED RETAINED TRANSFEROR AMOUNT after all PRINCIPAL RECEIVABLES have been transferred to the trust on that day. Otherwise, funds will be deposited in the SPECIAL FUNDING ACCOUNT until the TRANSFEROR AMOUNT, minus the interest represented by any SUPPLEMENTAL CERTIFICATE, is at least equal to the REQUIRED RETAINED TRANSFEROR AMOUNT. These amounts will be paid to the holder of the TRANSFEROR CERTIFICATE during a MONTHLY PERIOD subject to the obligation of the transferor to make an amount equal to the REALLOCATED CLASS B PRINCIPAL COLLECTIONS for each MONTHLY PERIOD available on the related DISTRIBUTION DATE. Early Amortization Period. For each date of processing during the EARLY AMORTIZATION PERIOD, the servicer will allocate: o to Series 2000-__ certificateholders and deposit in the COLLECTION ACCOUNT an amount equal to the product of: - the FLOATING ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of FINANCE CHARGE RECEIVABLES on that date of processing, and o to Series 2000-__ certificateholders and deposit in the COLLECTION ACCOUNT an amount equal to the product of: - the PRINCIPAL ALLOCATION PERCENTAGE on that date of processing, and - the total amount of collections of PRINCIPAL RECEIVABLES on that date of processing; except that after the date that collections equal to the INVESTED AMOUNT have been deposited in the COLLECTION ACCOUNT for payment to Series 2000-__ certificateholders, this amount will be applied in the following order: o if any other PRINCIPAL SHARING SERIES is outstanding and in its AMORTIZATION PERIOD, deposited in the COLLECTION ACCOUNT to be applied, if necessary, as SHARED PRINCIPAL COLLECTIONS on the related DISTRIBUTION DATE, and o paid to the holder of the TRANSFEROR CERTIFICATE if the TRANSFEROR AMOUNT, minus the interest represented by any SUPPLEMENTAL CERTIFICATE, is greater than the REQUIRED RETAINED TRANSFEROR AMOUNT after all PRINCIPAL RECEIVABLES have been transferred to the trust on that day. Otherwise funds will be deposited in the SPECIAL FUNDING ACCOUNT. During the REVOLVING PERIOD and the ACCUMULATION PERIOD, the servicer will allocate to Class A certificateholders and deposit in the COLLECTION ACCOUNT on each TRANSFER DATE an amount equal to the sum of: o the amount equal to: - the lesser of: o the sum of: - the product of (1) the FLOATING ALLOCATION PERCENTAGE for the preceding MONTHLY PERIOD and (2) the total amount of collections of FINANCE CHARGE RECEIVABLES for the related MONTHLY PERIOD, - the amount of EXCESS FINANCE CHARGE COLLECTIONS allocated to Series 2000-__ for the related MONTHLY PERIOD, and - the amount of EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS allocated to Series 2000-__ for the related MONTHLY PERIOD, and o the total of the amounts to be paid on the related DISTRIBUTION DATE described under "--Application of Collections--Payment of Interest, Fees and Other Items," less - the daily amounts retained in the COLLECTION ACCOUNT during the related MONTHLY PERIOD as described above for the REVOLVING PERIOD and the ACCUMULATION PERIOD, respectively, o the excess of the amount of REALLOCATED CLASS B PRINCIPAL COLLECTIONS over the amount of collections of PRINCIPAL RECEIVABLES retained in the COLLECTION ACCOUNT as described above for the REVOLVING PERIOD and the ACCUMULATION PERIOD, o an amount equal to the portion allocable to Series 2000-__ of shortfalls in amounts payable from collections of FINANCE CHARGE RECEIVABLES relating to other series in GROUP I. This amount cannot exceed the EXCESS FINANCE CHARGE COLLECTIONS for the related DISTRIBUTION DATE, o an amount equal to the amount of SHARED PRINCIPAL COLLECTIONS to be applied for the benefit of other PRINCIPAL SHARING SERIES from amounts that were originally allocated to Series 2000-__ not to exceed: - during the REVOLVING PERIOD, the PRINCIPAL ALLOCATION PERCENTAGE of collections of PRINCIPAL RECEIVABLES for the related MONTHLY PERIOD, or - during the ACCUMULATION PERIOD, the PRINCIPAL ALLOCATION PERCENTAGE of collections of PRINCIPAL RECEIVABLES for the related MONTHLY PERIOD less the amount of those collections applied to pay CLASS A PRINCIPAL on the related DISTRIBUTION DATE, and o the amount of SHARED TRANSFEROR PRINCIPAL COLLECTIONS to be applied to make payments of CLASS A PRINCIPAL and CLASS B PRINCIPAL on the related DISTRIBUTION DATE. On the CLOSING DATE, TRC will make a deposit to the COLLECTION ACCOUNT in the amount of $[ ] to be allocated to the Series 2000-__ certificates and applied as AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS. ISSUANCE OF ADDITIONAL CERTIFICATES During the REVOLVING PERIOD, the transferor may, subject to certain conditions, cause the trustee to issue additional certificates. When issued, the additional certificates will be identical in all material respects to the other outstanding certificates and will be entitled to the benefits of the POOLING AGREEMENT and the SERIES 2000-__ SUPPLEMENT. Upon any additional issuance: o the CLASS A INVESTED AMOUNT and the CLASS B INVESTED AMOUNT each shall be increased proportionately, and o the CLASS A CONTROLLED ACCUMULATION AMOUNT shall be increased to reflect any additional principal amount of Class A certificates represented by the additional certificates. Additional certificates will be issued under the following conditions: o before the date they are issued, the transferor will have given the trustee, the servicer and the rating agencies notice of the date and terms of the additional issuance, o the total amount of PRINCIPAL RECEIVABLES will equal or exceed the REQUIRED PRINCIPAL BALANCE after the additional issuance, o the transferor will have received written notice from each rating agency that the additional issuance will not cause a RATINGS EFFECT, o the transferor will have delivered to the trustee a certificate which states that, the transferor believes that the additional issuance will not have a material adverse effect on the Class A certificates or Class B certificates, o as of the date of the additional issuance, the amount of unreimbursed CLASS A INVESTOR CHARGE-OFFS and CLASS B INVESTOR CHARGE-OFFS shall be zero, and o the transferor will have delivered to the trustee a tax opinion relating to the additional issuance. PAIRED SERIES The Series 2000-__ certificates may be paired with one or more other series. The paired series either: o will be prefunded with an initial deposit in a PRE-FUNDING ACCOUNT up to the initial principal balance of that paired series, or o will have a variable principal amount. Any PRE-FUNDING ACCOUNT will be for the benefit of the paired series. As principal is paid to the Series 2000-__ certificates, either: o in the case of a prefunded paired series, an equal amount of funds on deposit in any PRE-FUNDING ACCOUNT for that paired series will be released to TRC, or o in the case of a paired series with a variable principal amount, an interest in that paired series up to the amount paid to your series may be sold by the trust. The invested amount in the trust of that paired series will increase by an amount equal to the principal paid on your series. Upon payment of the Series 2000-__ certificates, assuming no unreimbursed charge-offs for any related paired series, the total invested amount of the related paired series will have been increased by an amount up to the total amount paid to Series 2000-__ certificateholders since the issuance of that paired series. EARLY AMORTIZATION EVENTS The REVOLVING PERIOD shall continue until the earlier of: o the start of the ACCUMULATION PERIOD, or o the occurrence of an EARLY AMORTIZATION EVENT. The following chart indicates whether each EARLY AMORTIZATION EVENT is an event which automatically triggers an EARLY AMORTIZATION PERIOD or an event which requires the vote of a majority of the certificateholders or the trustee to trigger an EARLY AMORTIZATION PERIOD.
REQUIRES A AUTOMATICALLY MAJORITY VOTE OF CAUSES AN EARLY CERTIFICATEHOLDERS AMORTIZATION OF EARLY AMORTIZATION EVENTS OR THE TRUSTEE SERIES 2000-__ - ------------------------- ---------------------- ------------------- 1. The transferor fails to make a payment or deposit when required to under the POOLING X AGREEMENT or the SERIES 2000-___ SUPPLEMENT within five business days after the required date. 2. The sale, pledge, assignment or transfer by the transferor or grant of any lien on any X receivable other than as permitted under the POOLING AGREEMENT or the SERIES 2000-__ SUPPLEMENT. 3. The transferor fails to observe or perform any covenant or agreement and that failure X has a material adverse effect on you and the failure continues unremedied for 60 days after written notice to the transferor. 4. The transferor makes a representation or warranty in the POOLING AGREEMENT or the X SERIES 2000-___ SUPPLEMENT that was materially incorrect when made and that continues to be materially incorrect for 60 days after written notice to the transferor and as a result you are materially and adversely affected, unless the transferor accepts designation of the related receivables as INELIGIBLE RECEIVABLES. 5. The average of the PORTFOLIO YIELDS for three consecutive MONTHLY PERIODs is less than X the average of the BASE RATES for the same period. 6. TCC or the transferor fails to transfer receivables under ADDITIONAL ACCOUNTS or X PARTICIPATIONS when required under the POOLING AGREEMENT or the CLASS B INVESTED AMOUNT is less than 5% of the initial INVESTED AMOUNT. 7. A SERVICER DEFAULT occurs which has a material adverse effect on you. X 8. Any of RNB, TCC or any holder of the TRANSFEROR CERTIFICATE or the transferor admits X in writing its inability to pay its debts, or is subject to a bankruptcy proceeding that with respect to the transferor or any holder of the TRANSFEROR CERTIFICATE is in effect and not dismissed for 60 days or enters receivership or conservatorship or otherwise becomes subject to an insolvency event. 9. The transferor becomes unable to transfer receivables to the trust in X accordance with the POOLING AGREEMENT. 10. The trust becomes subject to regulation as an "investment company" under the X Investment Company Act. 11. The amount in the SPECIAL FUNDING ACCOUNT as a percentage of the sum of (1) the total X amount of PRINCIPAL RECEIVABLES plus (2) the balance of the SPECIAL FUNDING ACCOUNT, shall equal or exceed 30% on the last day of three consecutive MONTHLY PERIODS. 12. The TRANSFEROR AMOUNT is less than the REQUIRED RETAINED TRANSFEROR AMOUNT. X SERVICING FEES AND EXPENSES The MONTHLY SERVICING FEE allocable to your series shall equal one-twelfth of the product of: o 2%, and o an amount equal to: - the sum of the CLASS A ADJUSTED INVESTED AMOUNT and the CLASS B INVESTED AMOUNT at the end of the MONTHLY PERIOD second preceding the related DISTRIBUTION DATE, minus - the product of the amount, if any, on deposit in the SPECIAL FUNDING ACCOUNT as of the last day of the MONTHLY PERIOD second preceding that DISTRIBUTION DATE and the FLOATING ALLOCATION PERCENTAGE for that MONTHLY PERIOD. The portion of the MONTHLY SERVICING FEE allocable to Class A certificateholders is the CLASS A SERVICING FEE. The portion of the MONTHLY SERVICING FEE allocable to Class B certificateholders is the CLASS B SERVICING FEE. The remainder of the servicing fee will be paid from amounts allocable to the holder of the TRANSFEROR CERTIFICATE, holders of PARTICIPATIONS or the certificateholders of other series. The trust, the trustee or the Series 2000-__ certificateholders will not be liable for the share of the servicing fee to be paid from amounts allocable to the holder of the TRANSFEROR CERTIFICATE, holders of PARTICIPATIONS or the certificateholders of any other series. DEFEASANCE On any date before the EARLY AMORTIZATION PERIOD that: o the transferor has deposited: - in the PRINCIPAL FUNDING ACCOUNT, an amount equal to the outstanding principal balance of the Class A certificates, and - in the RESERVE ACCOUNT, an amount equal to or greater than the CLASS A COVERED AMOUNT, as estimated by the transferor, for the period from the date of the deposit to the PRINCIPAL FUNDING ACCOUNT through the CLASS A EXPECTED FINAL PAYMENT DATE, o the transferor has delivered to the trustee an opinion of counsel that the deposit and termination of obligations will not result in the trust being required to register as an "investment company" within the meaning of the Investment Company Act and that following the deposit none of the trust, the RESERVE ACCOUNT or the PRINCIPAL FUNDING ACCOUNT will be considered to be an association, or publicly traded partnership, taxable as a corporation, o the transferor has delivered to the trustee, a certificate of an officer of the transferor stating that it believes that the deposit and termination of its obligations will not constitute an EARLY AMORTIZATION EVENT or any event that would cause an EARLY AMORTIZATION EVENT to occur, and o a RATINGS EFFECT has not occurred; then the Series 2000-__ certificates will no longer be entitled to the security interest of the trust in the receivables and, except those set forth in the first bullet above, the other trust assets, and the INVESTOR PERCENTAGES applicable to the allocation to the Series 2000-__ certificateholders of collections of PRINCIPAL RECEIVABLES, FINANCE CHARGE RECEIVABLES and the DEFAULTED AMOUNT will be reduced to zero. Upon the satisfaction of these conditions, the CLASS B INVESTED AMOUNT will be reduced to zero. OPTIONAL TERMINATION The Class A certificates may be repurchased by the transferor after the CLASS A INVESTED AMOUNT is less than or equal to 10% of the CLASS A INITIAL INVESTED AMOUNT. The purchase price for the Class A certificates will equal: o the CLASS A INVESTED AMOUNT, plus o accrued and unpaid interest on the unpaid principal amount of the Class A certificates through the day preceding that DISTRIBUTION DATE at the CLASS A CERTIFICATE RATE. PURCHASE OF CLASS A CERTIFICATES BY THE TRANSFEROR The transferor may purchase Class A certificates in the secondary market and request that the trustee cancel those Class A certificates and reduce the CLASS A INVESTED AMOUNT by a corresponding amount. SERIES TERMINATION RNB will solicit bids for the sale of some of the PRINCIPAL RECEIVABLES together with the related FINANCE CHARGE RECEIVABLES if the INVESTED AMOUNT is greater than zero on the DISTRIBUTION DATE two months before the SERIES 2000-___ TERMINATION DATE. The amount of receivables to be sold will not be more than 110% of the INVESTED AMOUNT on the SERIES 2000-__ TERMINATION DATE. TRC will be allowed to participate in, and to receive a copy of, each bid submitted in connection with any bidding process. RNB will determine: o which bid is the highest cash purchase offer, and o the amount of collections that will be available in the COLLECTION ACCOUNT on the SERIES 2000-__ TERMINATION DATE for distribution to you. RNB will sell these receivables on the SERIES 2000-__ TERMINATION DATE to the bidder who provided the highest cash bid and will deposit the proceeds in the COLLECTION ACCOUNT for allocation to your certificates. You will incur a loss if the proceeds of the sale, together with the amount of collections available in the COLLECTION ACCOUNT, are less than the CLASS A ADJUSTED INVESTED AMOUNT plus accrued and unpaid interest on your certificates. GENERAL INFORMATION Copies of the POOLING AGREEMENT, the SERIES 2000-___ SUPPLEMENT, the annual report of independent certified public accountants described in "The Pooling and Servicing Agreement--Evidence as to Compliance" in the attached prospectus, the documents listed under "Where You Can Find More Information" and the reports to certificateholders referred to under "Reports to Certificateholders" and "Description of the Certificates--Reports to Certificateholders" in the attached prospectus may be obtained ___________. Financial information regarding TRC is included in the consolidated financial statements of ___________ in its Annual Report on Form 10-K for the fiscal year ended _________________. The certificates, the POOLING AGREEMENT and the SERIES 2000-___ SUPPLEMENT are governed by the laws of the State of Delaware. UNDERWRITING TRC has agreed to sell to the underwriters listed below the amount of Class A certificates indicated next to each underwriter's name. Each underwriter has agreed to purchase that amount of the Class A certificates. UNDERWRITERS PRINCIPAL AMOUNT OF CLASS A CERTIFICATES ----------- ---------------- ----------- ........................ $ ----------- ........................ ----------- ........................ ----------- ........................ ----------- ---------------- Total.................................... $ ----------- ================ The purchase commitment of the underwriters may be increased or ended if any underwriter defaults. The price to public, underwriters' discounts and commission, the concessions that the underwriters may allow to some dealers, and the discounts that those dealers may reallow to other dealers, each expressed as a percentage of the principal amount of the Class A certificates, shall be as follows:
UNDERWRITING SELLING PRICE TO DISCOUNT AND CONCESSIONS, REALLOWANCE PUBLIC COMMISSIONS NOT TO EXCEED NOT TO EXCEED -------------- --------------- --------------- -------------- Class A certificates............. % % % %
After the offering is completed, TRC will receive the proceeds, after deduction of the underwriting and other expenses, listed below:
PROCEEDS TO TRC (AS % OF THE PRINCIPAL AMOUNT OF UNDERWRITING PROCEEDS TO THE CLASS A DISCOUNTS AND TRC CERTIFICATES) COMMISSIONS ------------------ ------------------ ------------------ Class A certificates.................. $ % $
After the public offering, the public offering price and other selling terms may be changed by the underwriters. Additional offering expenses are estimated to be $________. Any underwriter may engage in the following transactions, to the extent permitted by Regulation M under the Securities Exchange Act: o over-allotment transactions, which involve syndicate sales in excess of the offering size creating a syndicate short position, o stabilizing transactions, which permit bids to purchase the Class A certificates so long as the stabilizing bids do not exceed a specified maximum, o syndicate covering transactions, which involve purchases of the Class A certificates in the open market after the distribution has been completed to cover syndicate short positions, and o penalty bids, which permit the underwriters to reclaim a selling concession from a syndicate member when the Class A certificates originally sold by the syndicate member are purchased in a syndicate covering transaction. The use of the above transactions may cause the price of the Class A certificates to be higher than it would otherwise be. These transactions, if or once commenced, may be stopped without notice. Each underwriter has represented and agreed that: o it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Class A certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996, as amended, or who is a person to whom the document may otherwise lawfully be issued or passed on, o it has complied and will comply with all provisions of the Financial Services Act 1986 and other laws and regulations for anything done by it which apply to the Class A certificates in, from or otherwise involving the United Kingdom, and o if that underwriter is an authorized person under the Financial Services Act 1986, it has only promoted and will only promote, as that term is defined in Regulation 1.02 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991, to any person in the United Kingdom the scheme described in this prospectus supplement if that person is of a kind described either in Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991. TRC may indemnify the underwriters against liabilities which include liabilities under the securities laws. TRC may also contribute to payments the underwriters may be required to make on these liabilities. The underwriters and their respective affiliates have engaged and may in the future engage in investment banking or commercial banking transactions with TCC, TRC and their affiliates. OTHER SERIES ISSUED AND OUTSTANDING The trust has previously issued three other series that remain outstanding. The table below discusses the principal characteristics of these series. For more specific information relating to any series, any prospective investor should contact the transferor at (612) 370-6530. The transferor will provide, without charge, to any prospective purchaser of the certificates, a copy of the disclosure documents for any previous publicly issued series. SERIES 1996-1 VARIABLE FUNDING CERTIFICATES Class A Invested Amount as of [pricing date for Series 2000-___]................$[100,000,000] Class A Maximum Investment Amount...............................................$[100,000,000] Class B Invested Amount as of [pricing date for Series 2000-___].................$[17,647,059] Certificate Rate......................................................................Variable Commencement of Amortization Period.................[January 26, 2001] (subject to adjustment) Annual Servicing Fee Percentage.............................................................2% Scheduled Series Termination Date....................December 25, 2001 (subject to adjustment) Series Issuance Date...........................................................August 28, 1996 SERIES 1997-1 1. CLASS A CERTIFICATES Class A Initial Invested Amount...................................................$400,000,000 Certificate Rate.........................................................................6.25% Class A Controlled Accumulation Amount..........................................$33,333,333.34 Commencement of Accumulation Period....................October 7, 2001 (subject to adjustment) Annual Servicing Fee Rate...................................................................2% Credit Support.............................Subordination of Series 1997-1 Class B Certificates Class A Expected Final Payment Date...........................................October 25, 2002 Scheduled Series Termination Date..............................................August 25, 2005 Series Issuance Date..........................................................October 15, 1997 2. CLASS B CERTIFICATES Class B Initial Invested Amount...................................................$122,875,817 Annual Servicing Fee Rate...................................................................2% Scheduled Series Termination Date..............................................August 25, 2005 Series Issuance Date..........................................................October 15, 1997 SERIES 1998-1 1. CLASS A CERTIFICATES Class A Initial Invested Amount...................................................$400,000,000 Certificate Rate.........................................................................5.90% Class A Controlled Accumulation Amount..........................................$33,333,333.34 Commencement of Accumulation Period.......................July 7, 2002 (subject to adjustment) Annual Servicing Fee Rate...................................................................2% Credit Support.............................Subordination of Series 1998-1 Class B Certificates Class A Expected Final Payment Date..............................................July 25, 2003 Scheduled Series Termination Date.................................................May 25, 2006 Series Issuance Date...........................................................August 12, 1998 2. CLASS B CERTIFICATES Class B Initial Invested Amount...................................................$122,875,817 Annual Servicing Fee Rate...................................................................2% Scheduled Series Termination Date.................................................May 25, 2006 Series Issuance Date...........................................................August 12, 1998
GLOSSARY OF TERMS FOR PROSPECTUS SUPPLEMENT "ACCUMULATION PERIOD" means for Series 2000-__, the period: o beginning on the first day of the _____ 20___ Monthly Period, and o ending on the earliest of: - the date an Early Amortization Event occurs, - the end of the _____ 20___ Monthly Period, and - the Trust Termination Date; and during which collections of Principal Receivables up to the Class A Invested Amount are accumulated in a Principal Funding Account for payment to Class A certificateholders on the Class A Expected Final Payment Date. "ADJUSTED INVESTED AMOUNT" means for any business day, an amount equal to: o the Class A Adjusted Invested Amount on that day, plus o the Class B Invested Amount on that day. "AVAILABLE RESERVE ACCOUNT AMOUNT" equals for any Transfer Date, the lesser of: o the amount on deposit in the Reserve Account, before any deposits or withdrawals to that account on that date, and o the Required Reserve Account Amount on that date. "AVAILABLE SERIES 2000-__ FINANCE CHARGE COLLECTIONS" means for any Distribution Date, the sum of: o the Floating Allocation Percentage of collections of Finance Charge Receivables from the preceding Monthly Period, o any available investment earnings on amounts on deposit in the Principal Funding Account and the Reserve Account, and o the lesser of the Principal Funding Investment Shortfall and the Available Reserve Account Amount for the related Monthly Period allocated and distributed to Series 2000-__ as indicated under "Description of the Class A Certificates -- Application of Collections." "AVAILABLE SHARED PRINCIPAL COLLECTIONS" means for any Monthly Period, Shared Principal Collections available to be allocated to the Series 2000-__ certificates from each other series that has a controlled or scheduled amortization or accumulation period beginning after the ________ Distribution Date. "BASE RATE" means for any Monthly Period, the annualized percentage equivalent of the sum of: o a fraction: - whose numerator is the sum of the Class A Monthly Interest, and the Class B Monthly Interest for the related Interest Period, and - whose denominator is the Invested Amount on the last business day of that Monthly Period, and o a fraction: - whose numerator is the Monthly Servicing Fee for that Monthly Period, and - whose denominator is the Invested Amount on the last business day of the preceding Monthly Period. "CARRYOVER CLASS A INTEREST" means for any Distribution Date: o any Class A Monthly Interest due but not paid on any previous Distribution Date, plus o any Class A Additional Interest. "CARRYOVER CLASS B INTEREST" means for any Distribution Date: o any Class B Monthly Interest due but not paid on any previous Distribution Date, plus o any Class B Additional Interest. "CARRYOVER INTEREST" means for any Distribution Date, the sum of Carryover Class A Interest and Carryover Class B Interest. "CLASS A ADDITIONAL INTEREST" means for any Distribution Date, an amount equal to one-twelfth of the product of: o the excess, if any, of Class A Monthly Interest for the preceding Distribution Date over the amount available to be paid to Class A certificateholders relating to interest on that preceding Distribution Date, and o the sum of the Class A Certificate Rate plus 2% per annum. "CLASS A ADJUSTED INVESTED AMOUNT" means for any business day, an amount equal to: o the Class A Invested Amount, minus o the total amount on deposit in the Principal Funding Account on that day. "CLASS A CERTIFICATE RATE" means a rate of ____% per annum. "CLASS A CONTROLLED ACCUMULATION AMOUNT" means for any Distribution Date during the Accumulation Period, $__________; except if the servicer postpones the start of the Accumulation Period: o the Class A Controlled Accumulation Amount will exceed the amount stated above and will be determined by the servicer according to the Pooling Agreement, and o the sum of the Class A Controlled Accumulation Amounts for all Distribution Dates for that modified Accumulation Period shall not be less than the Class A Invested Amount. This amount may be increased if the trust issues additional certificates. "CLASS A CONTROLLED DEPOSIT AMOUNT" means for any Distribution Date during the Accumulation Period, an amount equal to: o the Class A Controlled Accumulation Amount, plus o any Class A Deficit Controlled Accumulation Amount for the preceding Distribution Date. "CLASS A COVERED AMOUNT" equals for any Interest Period, one-twelfth of the product of: o the Class A Certificate Rate for that Interest Period, and o the balance of the Principal Funding Account on the first day of that Interest Period. "CLASS A DEFICIT CONTROLLED ACCUMULATION AMOUNT" means on each Distribution Date during the Accumulation Period, the excess, if any, of: o the Class A Controlled Deposit Amount for that Distribution Date over o the amount distributed from the Collection Account as Class A Principal for that Distribution Date. "CLASS A EXPECTED FINAL PAYMENT DATE" means the ________ Distribution Date. "CLASS A FLOATING ALLOCATION PERCENTAGE" means for any Monthly Period, the percentage equivalent of a fraction: o whose numerator equals the Class A Adjusted Invested Amount on the last business day of: - the preceding Monthly Period, or in the case of the first Monthly Period, the Closing Date, during the Revolving Period or the Accumulation Period for collections of Finance Charge Receivables and at all times for Defaulted Amounts, and - the Monthly Period before an Early Amortization Event occurs during the Early Amortization Period for collections of Finance Charge Receivables, and o whose denominator equals the greater of: - the sum of Principal Receivables in the trust and any amount on deposit in the Special Funding Account on the last business day of the same Monthly Period used to determine the numerator, and - the sum of the numerators used to calculate the applicable allocation percentages for collections of Finance Charge Receivables for all classes of all series and Participations then outstanding. "CLASS A INITIAL INVESTED AMOUNT" means $_____. "CLASS A INVESTED AMOUNT" means for any date, an amount equal to: o the Class A Initial Invested Amount, minus o the total amount of principal paid to Class A certificateholders before that date, minus o the excess, if any, of the total amount of Class A Investor Charge-Offs for all previous Distributions Dates over the total amount of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates before that date, plus o the amount of any increase in the Class A Invested Amount because of the issuance of additional certificates, minus o the amount of any reduction in the Class A Invested Amount because of the purchase by the transferor and later cancellation of Class A certificates. "CLASS A INVESTOR CHARGE-OFF" means for any Monthly Period, the amount by which the Class A Invested Amount is reduced after the Class B Invested Amount has been reduced to zero because of Investor Charge-Offs resulting from the allocation of the Investor Defaulted Amount and the Series 2000-__ Allocation Percentage of any unpaid Adjustment Payments. "CLASS A INVESTOR DEFAULTED AMOUNT" means a portion of the Investor Defaulted Amount that is allocated to Class A certificateholders on each Distribution Date in an amount equal to the product of: o the Class A Floating Allocation Percentage for the related Monthly Period, and o the Defaulted Amount for that Monthly Period. "CLASS A MONTHLY INTEREST" means for any Distribution Date, an amount equal to one-twelfth of the product of: o the Class A Certificate Rate, and o the outstanding principal balance of the Class A certificates on the last business day of the preceding Monthly Period; except for the initial Distribution Date, Class A Monthly Interest will equal $__________. "CLASS A PERCENTAGE" means the percentage equivalent of a fraction: o whose numerator is the Class A Adjusted Invested Amount, and o whose denominator is the Series Invested Amount. "CLASS A PRINCIPAL" for any Distribution Date relating to the Accumulation Period or the Early Amortization Period will equal the sum of: o an amount equal to the product of the Principal Allocation Percentage and the total amount of collections of Principal Receivables for the preceding Monthly Period, o any amount on deposit in the Special Funding Account that is distributable to the Class A certificates for the preceding Monthly Period, o the amount, if any, that is allocated to the Class A certificates as described under "Description of the Class A Certificates--Application of Collections--Payment of Interest, Fees and Other Items," o the amount of Shared Principal Collections allocated to the Class A certificates for the preceding Monthly Period, and o the amount of Shared Transferor Principal Collections allocated to the Class A certificates for the preceding Monthly Period; except for: o any Distribution Date during the Accumulation Period, Class A Principal may not exceed the Class A Controlled Deposit Amount for that Distribution Date, o any Distribution Date, Class A Principal may not exceed the Class A Adjusted Invested Amount, and o the Series 2000-__ Termination Date, Class A Principal shall be an amount equal to the Class A Adjusted Invested Amount. "CLASS A REQUIRED AMOUNT" means the amount required to be paid for the benefit of the Class A certificates described under "Description of the Class A Certificates--Reallocation of Cash Flows." "CLASS A SERVICING FEE" means the share of the Monthly Servicing Fee allocable to Class A certificateholders for any Distribution Date equal to the product of: o the Class A Percentage, and o the Monthly Servicing Fee; except for the first Distribution Date, the Class A Servicing Fee will be $_______. "CLASS B ADDITIONAL INTEREST" means for any Distribution Date on and after the setting of an interest rate for the Class B certificates, an amount equal to one-twelfth of the product of: o the excess, if any, of Class B Monthly Interest for the preceding Distribution Date over the amount available to be paid to Class B certificateholders relating to interest on that preceding Distribution Date, and o the sum of the interest rate set for the Class B certificates plus 2% per annum. "CLASS B FLOATING ALLOCATION PERCENTAGE" means for any Monthly Period, the percentage equivalent of a fraction: o whose numerator equals the Class B Invested Amount on the last business day of: - the preceding Monthly Period, or in the case of the first Monthly Period, the Closing Date, during the Revolving Period or the Accumulation Period for collections of Finance Charge Receivables and during any period for Defaulted Amounts, and - the Monthly Period before an Early Amortization Event occurs during the Early Amortization Period for collections of Finance Charge Receivables, and o whose denominator equals the greater of: - the sum of Principal Receivables in the trust and any amount on deposit in the Special Funding Account on the last business day of the same Monthly Period used to determine the numerator, and - the sum of the numerators used to calculate the applicable allocation percentages for collections of Finance Charge Receivables for all classes of all series and Participations then outstanding. "CLASS B INITIAL INVESTED AMOUNT" means $______. "CLASS B INVESTED AMOUNT" means for any date, an amount equal to: o the Class B Initial Invested Amount, minus o the total amount of principal paid to Class B certificateholders before that date, minus o the total amount of Class B Investor Charge-Offs for all previous Distribution Dates, minus o the total amount of Reallocated Class B Principal Collections for all previous Distribution Dates for which the Class B Invested Amount has been reduced for those previous dates, plus o the sum of any reimbursed Class B Investor Charge-Offs and Reallocated Class B Principal Collections, plus o the amount of any increase in the Class B Invested Amount because of the issuance of additional certificates. "CLASS B INVESTOR CHARGE-OFF" means for any Monthly Period, the amount by which the Class B Invested Amount is reduced because of Investor Charge-Offs resulting from the application of Reallocated Principal Collections and the allocation of the Investor Defaulted Amount, and the Series 2000-__ Allocation Percentage of any unpaid Adjustment Payments in excess of Reallocated Class B Principal Collections. "CLASS B INVESTOR DEFAULTED AMOUNT" means a portion of the Investor Defaulted Amount that is allocated to Class B certificateholders on each Distribution Date in an amount equal to the product of: o the Class B Floating Allocation Percentage for the related Monthly Period, and o the Defaulted Amount for that Monthly Period. "CLASS B MONTHLY INTEREST" means, initially, zero. However, TRC may, after issuing the Series 2000-__ certificates, set an interest rate for the Class B certificates without the consent of Class A certificateholders. "CLASS B PERCENTAGE" means the percentage equivalent of a fraction: o whose numerator is the Class B Invested Amount, and o whose denominator is the Series Invested Amount. "CLASS B PRINCIPAL" for any Distribution Date relating to the Accumulation Period or the Early Amortization Period, on or after the Distribution Date on which the Class A Invested Amount is paid in full, will equal the lesser of: o the sum of: - an amount equal to the product of the Principal Allocation Percentage and collections of Principal Receivables minus the amount of Reallocated Class B Principal Collections for the preceding Monthly Period, - any amount on deposit in the Special Funding Account that is distributable to the Class B certificates for the preceding Monthly Period, - the amount, if any, that is allocated to the Class B certificates as described under "Description of the Class A Certificates--Application of Collections--Payment of Interest, Fees and Other Items," - the amount, if any, of principal allocable to the Class A certificates for the payment of Class A Principal, but remaining after distributions have been made to Class A certificateholders, - the amount of Shared Principal Collections allocated to the Class B certificates for the preceding Monthly Period, and - the amount of Shared Transferor Principal Collections allocated to the Class B certificates for the preceding Monthly Period, and o the Class B Invested Amount; except for the Series 2000-__ Termination Date, Class B Principal shall be an amount equal to the Class B Invested Amount. "CLASS B SERVICING FEE" means the share of the Monthly Servicing Fee allocable to Class B certificateholders for any Distribution Date equal to the product of: o the Class B Percentage, and o the Monthly Servicing Fee; except for the first Distribution Date, the Class B Servicing Fee will be $_______. "CLOSING DATE" means _______ ___, 2000. "DISTRIBUTION DATE" means the 25th day of each month, or if the 25th day is not a business day, the next business day. "EARLY AMORTIZATION EVENT" means any of the events described under "Description of the Class A Certificates--Early Amortization Events." "EARLY AMORTIZATION PERIOD" means for Series 2000-__, the period: o beginning on the earlier of the day an Early Amortization Event occurs or the Class A Expected Final Payment Date if the Class A Invested Amount has not been paid in full on that date, and o ending on the earlier of: - the date the Invested Amount has been paid in full, and - the Series 2000-__ Termination Date; and during which collections of Principal Receivables allocable to Series 2000-__ will be paid on each Special Payment Date to certificateholders. "FLOATING ALLOCATION PERCENTAGE" means the Class A Floating Allocation Percentage plus the Class B Floating Allocation Percentage. "GROUP I" means the group of series under the trust to which the Series 2000-__ certificates belong. "INTEREST PERIOD" means in relation to any Distribution Date, the period from the previous Distribution Date through the day before that Distribution Date, except the first Interest Period begins on the Closing Date and ends on the day before the first Distribution Date. "INVESTED AMOUNT" means the sum of the Class A Invested Amount and the Class B Invested Amount. "INVESTOR CHARGE-OFF" means for any Monthly Period for Series 2000-__ the sum of the Class A Investor Charge-Offs and the Class B Investor Charge-Offs. "INVESTOR DEFAULTED AMOUNT" means for any Monthly Period, an amount equal to the product of the Defaulted Amount and the Floating Allocation Percentage as of the related Distribution Date. "MONTHLY INTEREST" means Class A Monthly Interest and Class B Monthly Interest. "MONTHLY SERVICING FEE" means for any Distribution Date, the amount determined as described under "Description of the Class A Certificates--Servicing Fees and Expenses." "PORTFOLIO YIELD" means for any Monthly Period, the annualized percentage equivalent of a fraction: o whose numerator is the sum of: - the total amount of Available Series 2000-__ Finance Charge Collections for that Monthly Period, minus - the total Investor Defaulted Amount for that Monthly Period and the Series 2000-__ Allocation Percentage of any Adjustment Payments not made on or before the related Distribution Date, and o whose denominator is the Invested Amount as of the last business day of the preceding Monthly Period. "PRINCIPAL ALLOCATION PERCENTAGE" means for any Monthly Period, the percentage equivalent of a fraction: o whose numerator equals: - during the Revolving Period, the Invested Amount as of the last day of the immediately preceding Monthly Period, and - during the Accumulation Period, the Invested Amount as of the last day of the Revolving Period; provided that on the date of issuance of any new series during the Accumulation Period, this amount may be reduced by TRC to an amount not less than the greater of: o the Adjusted Invested Amount on that date, and o the amount that would result in a Principal Allocation Percentage that when multiplied by collections of Principal Receivables for the preceding Monthly Period would equal: - the Class A Controlled Deposit Amount for that Monthly Period plus 10% of the Class A Controlled Accumulation Amount or, if that date is on or after the Class A Expected Final Payment Date and the Class A Invested Amount has been paid in full, the Class B Invested Amount, minus - the amount of any Available Shared Principal Collections for that Monthly Period, and - during the Early Amortization Period, the Invested Amount as of the last day of the Revolving Period or, if less, the last numerator used to calculate the Principal Allocation Percentage in the Accumulation Period, if any, and o whose denominator equals the greater of: - if only one series is outstanding: o during the Revolving Period, the sum of the total amount of Principal Receivables in the trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period, and o during the Accumulation Period and the Early Amortization Period, the sum of the total amount of Principal Receivables in the trust and the principal amount on deposit in the Special Funding Account as of the last day of the Revolving Period, and if more than one series is outstanding, the sum of: o the total amount of Principal Receivables in the trust, plus o the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period, and - the sum of the numerators used to calculate the Principal Allocation Percentages for all series and Participations outstanding as of the date of determination. "PRINCIPAL FUNDING ACCOUNT" means an Eligible Deposit Account held for the benefit of the Class A certificateholders in which collections of Principal Receivables allocated to the Class A certificateholders are accumulated during the Accumulation Period as described under "Description of the Class A Certificates--Principal Funding Account." "PRINCIPAL FUNDING INVESTMENT PROCEEDS" means on each Distribution Date during the Accumulation Period: o the investment earnings on funds in the Principal Funding Account, minus o investment expenses and losses, for the related Interest Period. "PRINCIPAL FUNDING INVESTMENT SHORTFALL" means for any Distribution Date during the Accumulation Period, the deficiency that occurs if the Principal Funding Investment Proceeds are less than the Class A Covered Amount for the related Interest Period. "PRINCIPAL SHARING SERIES" means a series that, under the terms of its Series Supplement, is entitled to receive Shared Principal Collections. "REALLOCATED CLASS B PRINCIPAL COLLECTIONS" means for each Monthly Period, collections of Principal Receivables allocable to the Class B certificates for that Monthly Period in an amount not to exceed the greater of: o the Class B Invested Amount, and o the amount applied to fund the Class A Required Amount, if any. "RECORD DATE" means the last business day of the calendar month preceding a Distribution Date which is the day a certificateholder must be the registered holder of a certificate to receive a payment on that Distribution Date. "REQUIRED AMOUNT" means for any Monthly Period, the amount by which: o the sum of (1) Monthly Interest and Carryover Interest, (2) Monthly Servicing Fee, (3) the Investor Defaulted Amount, (4) the Series 2000-__ Allocation Percentage of Adjustment Payments not made on or before the related Distribution Date, (5) unreimbursed Investor Charge-Offs and unreimbursed Reallocated Class B Principal Collections and (6) the amount by which the Required Reserve Account Amount is less than the Available Reserve Account Amount, exceeds o the Available Series 2000-__ Finance Charge Collections. "REQUIRED RESERVE ACCOUNT AMOUNT" means for any Distribution Date on or after the Reserve Account Funding Date, an amount specified by the transferor. "REQUIRED RETAINED TRANSFEROR'S PERCENTAGE" means 2% as may be adjusted from time to time under the Series 2000-__ Supplement. "RESERVE ACCOUNT" means an Eligible Deposit Account in which the servicer will deposit the Required Reserve Account Amount on or after the Reserve Account Funding Date to provide additional funds from which to make payments of interest on the certificates during the Accumulation Period. "RESERVE ACCOUNT FUNDING DATE" means the date specified by the transferor for the start of funding of the Reserve Account. "SERIES 2000-__ ALLOCATION PERCENTAGE" means on any date of determination, the percentage equivalent of a fraction: o whose numerator is the Series Invested Amount, and o whose denominator is the sum of the invested amounts, or adjusted invested amounts, as applicable, of all then outstanding series. "SERIES 2000-__ SUPPLEMENT" means the supplement to the Pooling Agreement relating to the Series 2000-__ certificates. "SERIES 2000-__ TERMINATION DATE" means the ______ Distribution Date "SERIES INVESTED AMOUNT" means for any date, an amount equal to the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount on that date. "SPECIAL PAYMENT DATE" means each Distribution Date following: o the Monthly Period in which an Early Amortization Event occurs, and o the Class A Expected Final Payment Date. - ------------------------------------------------------------------------------ Prospectus Supplement TARGET CREDIT CARD MASTER TRUST (FORMERLY KNOWN AS DAYTON HUDSON CREDIT CARD MASTER TRUST) SERIES 2000-__ [$------------] [---%] CLASS A ASSET BACKED CERTIFICATES TARGET RECEIVABLES CORPORATION Transferor RETAILERS NATIONAL BANK Servicer You should rely only on the information contained or incorporated by reference in this prospectus supplement and the prospectus. We have not authorized anyone to provide you with different information. We are not offering these certificates in any state where the offer is not permitted. Dealers will deliver a prospectus supplement and prospectus when acting as underwriters of these certificates and with respect to their unsold allotments or subscriptions. In addition, all dealers selling these certificates will deliver a prospectus supplement and prospectus until ________ ___, 2000. - ------------------------------------------------------------------------------ [FLAG] The information in this prospectus is not complete and may be changed. We cannot sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED MAY 31, 2000 Prospectus TARGET CREDIT CARD MASTER TRUST Issuer TARGET RECEIVABLES CORPORATION Transferor RETAILERS NATIONAL BANK Servicer ASSET BACKED SECURITIES - ------------------------------------------------------------------------------ |A security is not a deposit and neither the securities nor the | |underlying accounts or receivables are insured or guaranteed by the FDIC or | |any other governmental agency. | | | |The securities will represent an interest in the trusts only and do not | |represent interests in or recourse obligations of Retailers National Bank, | |Target Capital Corporation or Target Receivables Corporation or any of | |their affiliates. | | | |This prospectus may be used to offer and sell any series of securities only | |if accompanied by the prospectus supplement for that series. | - ------------------------------------------------------------------------------ THE TRUST-- o may periodically issue asset backed certificates in one or more series with one or more classes, and o will own-- o receivables in a portfolio of consumer open end credit card accounts, o payments due on those receivables, and o other property described in this prospectus and in the prospectus supplement. THE SECURITIES-- o will represent interests in the trust and will be paid only from the assets of the trust, o offered by this prospectus will be rated in one of the four highest rating categories by at least one nationally recognized statistical rating organization, o may have one or more forms of enhancement, and o will be issued as part of a series which may include one or more classes of securities and enhancement. THE SECURITYHOLDERS-- o will receive interest and principal payments from a varying percentage of credit card account collections. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THIS PROSPECTUS AND THE ATTACHED PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is May 31, 2000 TABLE OF CONTENTS Page Page OVERVIEW OF THE INFORMATION IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT..........................................................4 THE TARGET CREDIT CARD MASTER TRUST........................................................5 TARGET CORPORATION.......................................................5 RETAILERS NATIONAL BANK..................................................6 TARGET CAPITAL CORPORATION...............................................6 TARGET RECEIVABLES CORPORATION...........................................6 RETAILERS NATIONAL BANK'S CREDIT CARD BUSINESS............................................................7 Credit Card Business................................................7 Target Corporation Financial Services...............................7 Marketing Programs and Account Origination......................................................8 RNB's Underwriting Processes and Authorizations...................................................8 Servicing of Accounts...............................................9 Delinquency and Collections Procedures for RNB Credit Cards............................................10 Year 2000 Readiness Disclosure.....................................10 THE RECEIVABLES.........................................................11 Addition of Accounts...............................................11 Removal of Accounts................................................12 Additional Information in the Prospectus Supplement...........................................13 MATURITY CONSIDERATIONS.................................................13 DESCRIPTION OF THE CERTIFICATES.........................................14 Form of Your Certificates..........................................16 DTC................................................................16 Cedelbank..........................................................18 Euroclear..........................................................19 Book-Entry Registration............................................20 Definitive Certificates............................................23 Initial Settlement.................................................24 Secondary Market Trading...........................................24 Investor Percentage................................................27 Interest...........................................................28 Principal..........................................................29 Discount Option....................................................29 The Transferor Certificate.........................................30 New Issuances......................................................31 Collection Account.................................................33 Deposits in Collection Account.....................................34 Sharing of Excess Finance Charge Collections and Excess Transferor Finance Charge Collections......................................35 Shared Principal Collections and Transferor Principal Collections................................36 Special Funding Account............................................37 Paired Series......................................................38 Funding Period.....................................................38 Defaulted Receivables..............................................39 Dilution...........................................................39 Early Amortization Events..........................................40 Defeasance.........................................................40 Reports to Certificateholders......................................41 List of Certificateholders.........................................42 ENHANCEMENT.............................................................42 Specific Forms of Enhancement......................................44 THE POOLING AND SERVICING AGREEMENT.....................................47 Conveyance of Receivables..........................................47 Addition of Trust Assets...........................................48 Removal of Accounts................................................51 Representations and Warranties.....................................52 Indemnification....................................................56 Collection and Other Servicing Procedures......................................................57 Servicing Compensation and Payment of Expenses........................................................58 Servicer Covenants.................................................59 Certain Matters Regarding the Servicer........................................................60 Servicer Default ..................................................60 Evidence as to Compliance..........................................62 Amendments.........................................................62 Trustee............................................................64 Termination of the Trust...........................................65 THE BANK RECEIVABLES PURCHASE AGREEMENT AND THE RECEIVABLES PURCHASE AGREEMENT ................................................65 Sale of the Receivables............................................65 Representations and Warranties.....................................67 Covenants..........................................................69 Transfer of Accounts and Assumption of RNB's, TCC's and TRC's Obligations ...............................................................70 Amendment..........................................................71 Termination........................................................72 SECURITY RATINGS........................................................72 LEGAL ASPECTS OF THE RECEIVABLES........................................73 Transfer of Receivables............................................73 Matters Relating to Bankruptcy or Receivership....................................................74 Consumer Protection Laws...........................................76 Claims and Defenses of Cardholders Against the Trust...............................................78 TAX MATTERS.............................................................80 Tax Characterization of the Trust..................................81 Tax Considerations Relating to Certificateholders...........................................82 Non-U.S. Certificate Owners........................................85 Information Reporting and Backup Withholding..............................................88 State and Local Taxation...........................................89 EMPLOYEE BENEFIT PLAN CONSIDERATIONS....................................90 Regulation Under ERISA and the Tax Code............................................................90 Final Regulation Issued by the DOL.................................90 Exemptions to Prohibited Transactions..............................91 Special Considerations for Insurance Companies.......................................................92 General Investment Considerations..................................92 PLAN OF DISTRIBUTION FOR THE OFFERED CERTIFICATES.......................................................93 LEGAL MATTERS...........................................................94 REPORTS TO CERTIFICATEHOLDERS...........................................94 WHERE YOU CAN FIND MORE INFORMATION.....................................94 GLOSSARY OF TERMS FOR PROSPECTUS........................................96 OVERVIEW OF THE INFORMATION IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT We provide information to you about the securities in two separate documents that progressively provide more detail: (1) this prospectus, which provides general information, some of which may not apply to a particular series of securities, including your series, and (2) the prospectus supplement, which will describe the specific terms of your series of securities, including: o the timing and amount of interest and principal payments; o information about the receivables; o information about enhancement for each offered class; o credit ratings; and o the method for selling the securities. You should rely only on the information provided in this prospectus and the prospectus supplement, including the information incorporated by reference. We have not authorized anyone to provide you with different information. We include cross-references in this prospectus and in the prospectus supplement to captions in these materials where you can find further related discussions. The preceding table of contents and the table of contents included in the prospectus supplement provide the pages these captions are located. You can find a glossary of the defined terms that appear in this document in bold faced type under the caption "Glossary of Terms for Prospectus" beginning on page 88 in this prospectus. THE TARGET CREDIT CARD MASTER TRUST The Target Credit Card Master Trust (formerly known as the Dayton Hudson Credit Card Master Trust) was formed when TRC (formerly known as Dayton Hudson Receivables Corporation), as the transferor of the receivables, RNB, as the servicer and originator of the receivables, and Norwest Bank Minnesota, National Association, as trustee, entered into the POOLING AGREEMENT. The POOLING AGREEMENT is governed by the laws of the State of Delaware. The trust was formed to issue certificates representing interests in a pool of credit card receivables held by the trust. Certificates issued by the trust will be issued in amounts, at prices and on terms to be determined at the time of sale as described in the attached prospectus supplement. The trust will only engage in the following business activities: o acquiring and holding receivables, o issuing series of certificates, PARTICIPATIONS, and a TRANSFEROR CERTIFICATE, o making payments on these certificates and PARTICIPATIONS, o obtaining any credit enhancement or entering into any enhancement contract necessary to issue certificates, and o engaging in related activities. Because of the restricted nature of its activities, we do not expect that the claims against the trust will ever exceed the value of its assets. TARGET CORPORATION Target Corporation is one of America's largest general merchandise retailers with 1,238 stores in 44 states as of February 29, 2000. Target Corporation currently conducts its store operations through three retail operating divisions operating under five brand names (Target Corporation Stores): o Target Stores, o Department Stores (operating Dayton's, Hudson's and Marshall Field's stores), and o Mervyn's. The Dayton Company was founded in 1902 and Dayton Hudson Corporation was formed in 1969 through the merger of the Dayton Company and J.L. Hudson Company. Effective on January 30, 2000 the name of Dayton Hudson Corporation was changed to Target Corporation. In 1962, the Dayton Company started Target Stores, an upscale discounter. In 1978, Dayton Hudson Corporation acquired Mervyn's department stores. In 1990, Dayton Hudson Corporation acquired Marshall Field & Co. Target Corporation is a public company and is listed on the New York Stock Exchange and the Pacific Stock Exchange under the symbol TGT. Target Corporation's revenues and net earnings for the past three years are as follows (in millions): 1998 1997 1996 ------------------- ------------------ ------------------ Revenues $ 30,951 $ 27,757 $ 25,371 Net Earnings $935 $751 $463 RETAILERS NATIONAL BANK RNB is chartered as a national banking association and is subject to regulation and supervision by the Office of the Comptroller of the Currency. RNB is a wholly owned subsidiary of Target Corporation. It was formed on January 7, 1994, to streamline Target Corporation's credit operations by eliminating inefficiencies associated with the different retail credit regulations of the various states in which Target Corporation operates. RNB issues and services the proprietary credit cards of the Target Corporation Stores. TARGET CAPITAL CORPORATION TCC, formerly known as Dayton Hudson Capital Corporation and prior to that as Dayton Hudson Investment Corporation, was formed in Minnesota on September 27, 1994, for general business purposes. TCC is a wholly owned subsidiary of Target Corporation. TARGET RECEIVABLES CORPORATION TRC, formerly known as Dayton Hudson Receivables Corporation, is a wholly owned subsidiary of TCC. Its executive offices are located at 80 South Eighth Street, 14th Floor, Suite 1401, Minneapolis, Minnesota 55402. It was formed in Minnesota on May 15, 1995 for the purposes of: o issuing certificates including the certificates offered by this prospectus and each prospectus supplement, o buying, holding and selling receivables, and o engaging in other related activities. TCC and TRC's board of directors do not intend to change these business purposes. RETAILERS NATIONAL BANK'S CREDIT CARD BUSINESS CREDIT CARD BUSINESS The Target Corporation Stores have offered proprietary credit to their customers for over 80 years. Although Target Corporation Stores accept VISA, MasterCard, Discover Card and American Express, RNB credit cards represented approximately 15% of the total sales of Target Corporation Stores in 1999. Currently, the receivables conveyed to the trust are generated from transactions made by consumers using RNB credit cards to purchase products from Target Corporation Stores. These transactions primarily take place in the Target Corporation Stores and on-line through websites established by the Target Corporation Stores. Receivables may also be generated from transactions not involving purchases from Target Corporation Stores. RNB may test and introduce new credit card products from time to time. Credit cards issued by RNB in the future may contain terms different from RNB's current credit cards. RNB's current credit cards are listed in the table below showing their composition in the receivables pool. RETAILERS NATIONAL BANK COMPOSITION OF RECEIVABLES POOL CREDIT CARDS AS OF DECEMBER 31, 1999 - -------------------------- --------------------------- Target Stores 43% The Department Stores 29% Mervyn's 28% RNB credit cards are offered under the brand name of the Target Corporation Store through which the account was opened. TARGET CORPORATION FINANCIAL SERVICES RNB has contracted with the Financial Services Operations of Target Corporation to provide certain services to the RNB credit cards including: o marketing, o underwriting, o authorizations, o guest service, o collections, and o systems support. MARKETING PROGRAMS AND ACCOUNT ORIGINATION In-Store Account Solicitation. The major vehicle used by RNB for in-store account origination is "instant credit." Applicants provide a limited amount of information, including name, address, and social security number, which allows the credit underwriting department to access their credit bureau report and to score their application. For identification purposes, applicants must also present a valid picture identification and major credit card. At the Target Stores, store team members obtain this information and enter it into a terminal located at the guest service desk. In Mervyn's and the Department Stores, the same information is entered by the store team member directly into the point-of-sale terminal. New Accounts. Application information on all new accounts is entered into a new account processing system. Each application is source-coded to allow future tracking of activation rates, sales trends, delinquencies and charge-offs for various new account sources and promotional programs. Opening a new credit card account may entitle the cardholder to discounts on purchases. For approved applications, the account is automatically established, a credit card is generated at RNB in Sioux Falls, South Dakota and then mailed along with the terms of the account to the new cardholders. For instant credit accounts, a temporary card is issued which can be used immediately for purchases. RNB also takes applications on-line through the Target Corporation Stores' websites. Stimulation of Account Usage. Each of the Target Corporation Stores operates various account loyalty and purchase frequency reward programs. Target Stores encourage cardholder usage by contributing an amount equal to 1% of cardholder purchases to the cardholder's designated K-12 school. Account usage is stimulated at Mervyn's and in the Department Stores by rewarding cardholders with discounts on future purchases. Additional account loyalty and reward programs may be used in the future. In addition, as part of its retail marketing strategy, RNB, in cooperation with the Target Corporation Stores, periodically offers various deferred billing programs through the credit cards. Cardholders can purchase merchandise in select departments without incurring finance charges on those purchases for one or several months, except for a minimum purchase requirement. Average deferred balances represented approximately 3% of total average customer accounts receivable in 1998. The Target Corporation Stores currently pay RNB a deferred billing fee of 12% per annum of deferred balances. RNB'S UNDERWRITING PROCESSES AND AUTHORIZATIONS Account Underwriting and Credit Guidelines. RNB develops or adopts systems and specifications for underwriting and authorizations. It contracts with Target Corporation Financial Services for services, including the implementation of these systems and of the underwriting and authorization specifications. RNB's underwriting process involves the purchase of credit bureau information for each applicant. RNB obtains credit reports from one of three credit bureaus: o Experian, Inc., o Equifax Credit Information Services, Inc., or o Trans Union Corp., based on the applicant's mailing address and the perceived strength of each credit bureau service in that geographic region. The information obtained is electronically fed into proprietary scoring models developed for RNB to develop a credit score. RNB periodically analyzes performance trends of accounts originated at different score levels as compared to projected performance, and adjusts the minimum score or the opening limit to manage risk. Ongoing Credit Monitoring. To monitor and control the quality of its portfolio of credit cards, RNB uses behavioral scoring models to score each active account on its monthly cycle date. The behavioral scoring models are used to dynamically evaluate whether or not credit limits should be increased or decreased. RNB relies heavily on its behavioral scoring models combined with credit bureau information as a predictor of future loss probability. Credit Authorization. Point-of-sale terminals in Target Corporation Stores have an on-line connection with RNB's credit authorization system and allow real-time updating of accounts. Every sales transaction is passed through a proprietary authorization system which looks at a variety of behavioral and risk factors to determine whether each transaction should be approved "as is," with a credit limit increase, or with an over credit limit allowance. SERVICING OF ACCOUNTS RNB performs at its offices in Sioux Falls the majority of full application new account data entry, review of new account worklists, all billing statement preparation and mailing, the production and mailing of the credit cards, the mailed communication of adverse credit decisions, and the mailing of collection letters. Credit card production is performed in a secured environment, including a separately alarmed secure area and audit procedures that are designed to maintain an accurate count of all cards produced, stored, destroyed and mailed. RNB sends monthly billing statements to cardholders. Statement mailing is highly automated, utilizing pre-sorting, bar coding and an on-site postal representative to increase efficiency. The billing statements present the total amount due and show the allocation among principal, current fees, current finance charges, and the minimum payment due. Under the account agreement and as allowed by law, late fees and returned check fees are also added to a cardholder's outstanding balance. No issuance, annual, over credit limit, or transaction fees are charged to any cardholders. The processing of cardholder remittances is serviced by Target Corporation Financial Services in Minneapolis, Minnesota, using automated payment processing equipment and systems. Finance charges are calculated by multiplying the daily balance during a billing period by the daily periodic rate and adding these daily calculations together, subject to a minimum finance charge of 50 cents. Finance charges are assessed from the date of purchase, although a grace period of approximately 30 days is available to avoid the finance charge if the account is paid in full by the due date. The annual finance charge rate currently is a fixed rate which ranges from 21.0% to 21.6% depending on the cardholder's state mailing address. RNB may change finance charge rates at any time at its discretion, subject to applicable law. Late payment fees of $20 are assessed each month on accounts that are five or more days delinquent in payment. The RNB accounts generally have a minimum payment of the greater of $10 or 5% of the outstanding balance. Currently, most Target Stores card accounts have a minimum payment of the greater of $20 or 10% of the outstanding balance. DELINQUENCY AND COLLECTIONS PROCEDURES FOR RNB CREDIT CARDS Efforts to collect delinquent receivables are made for RNB by the Target Corporation Financial Services collection department and, if necessary, by collection agencies and outside attorneys. The collection department consists of approximately 600 full-time equivalents. New collectors undergo training which includes courses in professional debt collection, collection laws and regulations and negotiating skills. These courses are also available on a "refresher" basis for experienced collectors. An account is considered delinquent if the minimum payment due is not received by the billing due date. At that time, the account is given a status of one day delinquent. Under current policies, a message requesting payment is printed on a cardholder's billing statement after a scheduled payment has been missed. Soon after an account becomes delinquent, a proprietary collection model automatically scores the risk of the account and assigns a collection strategy to the account. The strategy dictates the contact schedule and collections priority for the account. Target Corporation Financial Services currently engages law firms in Minnesota, Wisconsin, Michigan and Illinois to initiate legal action on accounts meeting certain criteria. Between 1,200 and 1,300 accounts per month are referred to various law firms in those states to assist in collection efforts. Accounts which become 180 days delinquent are charged off. Accounts may be re-aged during delinquency, however, if the obligor demonstrates a willingness and ability to repay by making at least three consecutive minimum payments and other conditions are satisfied. YEAR 2000 READINESS DISCLOSURE Target Corporation began mitigating the risks associated with the year 2000 date conversion in 1993. In 1997, Target Corporation established a corporate-wide, comprehensive plan of action that has, to date, achieved an uninterrupted transition into the year 2000. This project included three major elements: information technology (IT) systems; non-IT, or embedded technology, systems; and relationships with our key business partners. The project was divided into five phases: awareness, assessment, renovation, validation and implementation. Target Corporation completed all phases for the three elements of the project prior to January 1, 2000. Target Corporation continues to test and monitor its IT systems and non-IT systems for year 2000 date conversion and related issues. To date, it has not experienced any material systems issues associated with the date rollover, nor has it experienced any material problems relating to its critical business partners. Target Corporation continues to monitor its systems for such issues in order to address them promptly, should they arise. Target Corporation's year 2000 transition plan included a number of activities. For the IT systems, Target Corporation assessed both existing and newly implemented hardware, application software and operating systems. Target Corporation began addressing non-IT systems, or embedded technology/infrastructure, risks at its stores, distribution centers and headquarters facilities early in its initiative. In planning for the most reasonably likely worst case scenarios, Target Corporation addressed all three major elements in its project. Target Corporation plans to allocate internal resources and retain dedicated consultants and vendor representatives to take action, if necessary. Target Corporation contacted its critical business partners, assessed their year 2000 readiness and finalized the development of contingency plans, as considered necessary. Although Target Corporation values its established relationships with key vendors, substitute products for most of the goods it sells in its stores may be obtained from other vendors. However, the lead time involved in sourcing certain goods may result in temporary shortages of relatively few items. Target Corporation also recognizes the risks if other key suppliers in areas such as utilities, communications, transportation, banking and government are not ready for the year 2000, and has developed contingency plans to minimize the potential adverse impacts of these risks. RNB's systems are supported by Target Corporation. As a result, the foregoing discussion of Target Corporation's year 2000 readiness applies to the status of RNB's year 2000 readiness as well. THE RECEIVABLES The receivables in the trust include PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES. These receivables are generated from eligible accounts selected by RNB from the RNB portfolio to be conveyed to the trust. ADDITION OF ACCOUNTS RNB has sold to TCC, TCC has sold to TRC and TRC has transferred to the trust, all receivables existing in each initial account on the CUT-OFF DATE. Each company has also agreed to sell or transfer receivables existing in any AUTOMATIC ADDITIONAL ACCOUNT on the date of its creation and receivables generated in the initial accounts and the AUTOMATIC ADDITIONAL ACCOUNTS after these dates. At any time after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE, TRC has the right, and in some cases the obligation, to assign additional qualifying consumer open end credit card accounts to the trust. All receivables in these SUPPLEMENTAL ACCOUNTS are then conveyed to the trust, whether these receivables already exist or are later created. Under the BANK RECEIVABLES PURCHASE AGREEMENT and the RECEIVABLES PURCHASE AGREEMENT, RNB has the obligation to sell receivables to TCC and TCC has the obligation to sell receivables to TRC to allow TRC to satisfy its obligations and to exercise its options under the POOLING AGREEMENT. The accounts must meet eligibility requirements, as specified in the POOLING AGREEMENT, as of the date TRC designates that receivables in those accounts will be included in the trust. According to the eligibility requirements, RNB will represent and warrant to TCC, TCC will represent and warrant to TRC and TRC will represent and warrant to the trust that: o the account has not been, and does not have: - any receivables that have been, sold, pledged or assigned to any person except according to the POOLING AGREEMENT, - any receivables that are DEFAULTED RECEIVABLES, and - any receivables identified as having been incurred because of fraudulent use of any related credit cards, and o for any receivable existing under these accounts, the receivable: - has arisen under an eligible account, - was created in compliance with the CREDIT CARD GUIDELINES, and - at the time of transfer to the trust is not under any right of rescission, setoff, counterclaim or other defense except for bankruptcy- and equity-related defenses and adjustments permitted by the POOLING AGREEMENT. There can be no assurance that all the accounts will continue to meet the applicable eligibility requirements throughout the life of the trust. See "The Pooling and Servicing Agreement--Representations and Warranties" for a detailed discussion. It is possible that ADDITIONAL ACCOUNTS will not be accounts of the same type previously included in the trust. There can be no assurance that ADDITIONAL ACCOUNTS will be of the same credit quality as the initial accounts. ADDITIONAL ACCOUNTS may contain receivables which consist of fees, charges and amounts that are different from the fees, charges and amounts described in this prospectus. ADDITIONAL ACCOUNTS may also have different credit limits, balances and ages. As a result, there can be no assurance that the accounts will continue to have the characteristics described in this prospectus as ADDITIONAL ACCOUNTS are added. In addition, the inclusion in the trust of ADDITIONAL ACCOUNTS with lower periodic finance charges may have the effect of reducing the TRUST PORTFOLIO YIELD. TRC intends to file with the SEC, on behalf of the trust, a current report on Form 8-K for any addition of SUPPLEMENTAL ACCOUNTs or removal of accounts which would have a material effect on the composition of the accounts. See "The Pooling and Servicing Agreement--Addition of Trust Assets" and "--Removal of Accounts" for a description of the conditions to addition and removal of accounts. REMOVAL OF ACCOUNTS TRC may also designate accounts as REMOVED ACCOUNTS. The receivables in the REMOVED ACCOUNTS will be removed from the trust and reassigned to TRC. Any account with any receivable that becomes a DEFAULTED RECEIVABLE will become a REMOVED ACCOUNT. Throughout the term of the trust, the trust portfolio will consist of the initial accounts plus any ADDITIONAL ACCOUNTS minus any REMOVED ACCOUNTS and plus any PARTICIPATION INTERESTS. See "The Pooling and Servicing Agreement--Removal of Accounts" for a description of the conditions to any removal of accounts. ADDITIONAL INFORMATION IN THE PROSPECTUS SUPPLEMENT The prospectus supplement for each series of certificates will provide information about the trust portfolio. This information will include: o the total amount of receivables, o the amount of PRINCIPAL RECEIVABLES, o the amount of FINANCE CHARGE RECEIVABLES, o the average receivable balance of the accounts, o the composition of the trust portfolio by account balances, o the composition of the trust portfolio by credit limits, o the composition of the trust portfolio by delinquency period, o the composition of the trust portfolio by account age, o the composition of the trust portfolio by geographic distribution of accounts, and o the delinquency and loss statistics relating to the accounts. MATURITY CONSIDERATIONS Following the REVOLVING PERIOD, each series of certificates is expected to begin to accumulate principal or begin to distribute principal to certificateholders. The attached prospectus supplement describes the conditions under which the ACCUMULATION PERIOD or an AMORTIZATION PERIOD will begin for your class of certificates. Principal will accumulate in a funding account if your series features a CONTROLLED ACCUMULATION PERIOD or RAPID ACCUMULATION PERIOD and one of these principal ACCUMULATION PERIODS begins. As described in the attached prospectus supplement, during a CONTROLLED ACCUMULATION PERIOD on each DISTRIBUTION DATE an amount of principal, up to the amount specified, will be set aside in the funding account. If an EARLY AMORTIZATION EVENT or a similar event described in the related prospectus supplement occurs and your series features a RAPID ACCUMULATION PERIOD, the full amount of principal available to your series will be deposited in a funding account, up to the amount specified in the related prospectus supplement. This accumulated principal will be paid to you on the EXPECTED FINAL PAYMENT DATE for your class of certificates, or earlier if an AMORTIZATION PERIOD begins before your first EXPECTED FINAL PAYMENT DATE. Note that although your series may feature an ACCUMULATION PERIOD, your class of certificates may not make use of it. Principal will be paid to you in increments, up to the amount specified in the attached prospectus supplement, if your class of certificates features a CONTROLLED AMORTIZATION PERIOD and this period begins. Your class of certificates might also begin to pay principal to you if the attached prospectus supplement specifies that your class will begin early amortization. Early amortization will begin, for all classes of your series, when an EARLY AMORTIZATION EVENT occurs. Principal will be paid to you only on a DISTRIBUTION DATE during any AMORTIZATION PERIOD. The prospectus supplement provides the following information about maturity: o the date any ACCUMULATION PERIOD or AMORTIZATION PERIOD is scheduled to begin, o the principal amount of the payments expected or available for each period, o the priority of accumulations and payments among the classes of each series, o any EARLY AMORTIZATION EVENTS that may cause a RAPID ACCUMULATION PERIOD or an EARLY AMORTIZATION PERIOD, o historical data showing payments by cardholders and total charge-offs, and o other information about the RNB portfolio. We can give you no assurance that principal will be available when expected, either to accumulate or to pay you. Collection of principal may or may not be constant from month to month or be similar to any historical experience. Collections may be affected by seasonality, by changes in payment habits of cardholders or by general economic conditions. A slowdown in the payment rate may extend the expected life of your certificates if principal is collected more slowly. This may affect your anticipated yield to maturity. Also, the occurrence of any EARLY AMORTIZATION EVENT may substantially shorten the average life of your certificates. You may find it difficult to reinvest funds in an instrument with a comparable interest rate if the certificates are paid sooner than anticipated. DESCRIPTION OF THE CERTIFICATES Following is a summary describing the material provisions common to each series of certificates. If you are purchasing certificates, the attached prospectus supplement describes any series-specific provisions supplementing the information in this prospectus. Each series of certificates will be issued through the POOLING AGREEMENT and a supplement to that agreement. This prospectus and the attached prospectus supplement do not contain all information about your certificates. For a detailed description of the certificates, also read the POOLING AGREEMENT and the SERIES SUPPLEMENT. The certificates offered through this prospectus and the attached prospectus supplement will be issued in "series" consisting of one or more "classes," which may be senior to other classes. Each series of certificates will represent an interest in the trust distinct from the TRANSFEROR CERTIFICATE and any other series of certificates issued by the trust. Each class of a series will evidence the right to receive a specified portion of principal and finance charge collections on receivables in the trust portfolio. Each class of a series may differ from other classes in some aspects, including: o maturity date, o interest rate, and o availability and amount of enhancement. Payments will be made to certificateholders in whose names the certificates were registered on the RECORD DATES specified in the attached prospectus supplement. For each series of certificates, the INVESTED AMOUNT on any date generally will be equal to the initial INVESTED AMOUNT for that series reduced by: o the amount of principal paid to the related certificateholders, o the amount of unreimbursed INVESTOR CHARGE-OFFS and reallocated principal collections for that series, and o the amount of any reduction in the INVESTED AMOUNT because of the purchase by TRC and later cancellation of any certificates. The INVESTED AMOUNT may further be adjusted by: o the amount of principal on deposit in any specified account, and o any other amount stated in the related prospectus supplement. Each series of certificates may consist of one or more classes, one or more of which may be senior certificates and one or more of which may be subordinated certificates. Each class of a series will have the right to receive a specified portion of each distribution of principal or interest or both. TRC currently owns the TRANSFEROR CERTIFICATE. The TRANSFEROR CERTIFICATE represents the undivided interest in the trust not represented by the certificates or any PARTICIPATION or the rights of any enhancement providers to receive payments from the trust. The holder of the TRANSFEROR CERTIFICATE will have the right to a percentage of all collections on the receivables in the trust. Certificates offered through this prospectus and the attached prospectus supplement will be: o represented by certificates registered in the name of a DTC nominee, o available for purchase in minimum denominations and integral multiples of $1,000, and o available for purchase in book-entry form only. The certificates in book-entry form, in which you will hold a beneficial interest as described under "--Book-Entry Registration," are "global securities." The attached prospectus supplement will specify if: o your series of certificates, or one or more classes of your series, may be issued in a different form, and o your certificates have any other characteristics different from those listed above. The attached prospectus supplement may state that application will be made to list your series or class of certificates on the Luxembourg Stock Exchange or another exchange. FORM OF YOUR CERTIFICATES The following description of the form of your certificates includes how they are transferred and how the trust makes payments to you. One or more of the following clearing systems performs transactions in your certificates: o The Depository Trust Company or "DTC," o Cedelbank, societe anonyme or "CEDELBANK," and o the system operated by Morgan Guaranty Trust Company of New York's Brussels, Belgium office referred to as "EUROCLEAR." DTC provided the information in this section concerning DTC and its book-entry system. TRC has not independently verified the accuracy of this information. DTC has informed TRC that its nominee is Cede & Co. or "Cede." Cede is expected to be the holder of record of each class of certificates offered under this prospectus. This means that you, as an owner of certificates, will only be entitled to a DEFINITIVE CERTIFICATE representing your interest in the issued certificates under specified circumstances. Instead, you will own certificates through a book-entry record maintained by DTC. All references in this document to: o distributions, reports, notices and statements will be made to DTC or Cede, as the registered holder of the certificates, for distribution to you following DTC procedures, and o actions by certificateholders refer to actions taken by DTC upon instructions from DTC PARTICIPANTS. You may hold your certificates through DTC in the U.S., CEDELBANK or EUROCLEAR in Europe or in any other manner described in the attached prospectus supplement. You may hold your certificates directly with one of these systems if you are a participant in the system, or indirectly through organizations which are participants. Descriptions of the clearing systems follow. DTC DTC is: o a limited-purpose trust company organized under the New York Banking Law, o a "banking organization" within the meaning of the New York Banking Law, o a member of the Federal Reserve System, o a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and o a "clearing agency" registered under the Securities Exchange Act of 1934, as amended. DTC performs various services for its participating organizations, referred to as DTC PARTICIPANTS. These services include: o holding securities that DTC PARTICIPANTS deposit with it, and o providing a system where DTC PARTICIPANTS may clear and settle securities transactions, including transfers and pledges, in deposited securities through electronic book-entry changes in their accounts, so there is no physical movement of securities certificates. DTC PARTICIPANTS: o include securities brokers and dealers, banks, trust companies, and clearing corporations, and o may include other organizations, including the underwriters of any series of certificates issued through this document. A number of DTC PARTICIPANTS, the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. own DTC. Securities brokers and dealers, banks, trust companies and other financial organizations that clear through or maintain a custodial relationship with a DTC PARTICIPANT, either directly or indirectly, have indirect access to the DTC system. The rules applicable to DTC and its DTC PARTICIPANTS are on file with the SEC. DTC management is aware that some computer applications and systems used for processing data were written using two digits rather than four to define the year, and so may not recognize a date using "00" as the year 2000. This could result in the inability of these systems to properly process transactions with dates in the year 2000 and beyond. DTC has developed and is implementing a program to address this problem so that its applications and systems continue to function properly as they relate to: o the timely payment of principal and interest and other distributions to securityholders, o book-entry deliveries, and o settlement of trades within DTC. This program includes a technical assessment and a remediation plan, each of which is complete. Additionally, DTC plans to implement a testing phase of this program which is expected to be completed within appropriate time frames. In addition, DTC: o is contacting and will continue to contact third-party vendors that provide services to DTC to determine the extent of their year 2000 compliance, and o will develop contingency plans as it considers appropriate to address failures in year 2000 compliance on the part of third-party vendors. However, there can be no assurance that the systems of third-party vendors will be timely converted and will not adversely affect the proper functioning of DTC's services. CEDELBANK CEDELBANK is incorporated under the laws of Luxembourg as a professional depository and: o holds securities for CEDELBANK CUSTOMERS, o provides a system where CEDELBANK CUSTOMERS may clear and settle securities transactions through electronic book-entry changes in their accounts, so there is no physical movement of securities certificates, o settles transactions in any of 36 currencies, including U.S. dollars, o provides for CEDELBANK CUSTOMERS, among other services, safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing, and o deals with domestic securities markets in over 30 countries through established depository and custodial relationships. CEDELBANK has established an electronic bridge with Morgan Guaranty's Brussels, Belgium office, acting as EUROCLEAR operator, to facilitate settlement of trades between CEDELBANK and EUROCLEAR. CEDELBANK currently accepts over 110,000 securities issues on its books. As a professional depository, CEDELBANK is regulated by the Luxembourg Commission for the Supervision of the Financial Sector, which supervises Luxembourg banks. CEDELBANK CUSTOMERS: o are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and other organizations, o may include the underwriters of any series of certificates issued through this document, and o in the U.S., are limited to securities brokers, dealers and banks. Currently, CEDELBANK has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada and the United States. Banks, brokers, dealers, trust companies and other organizations that clear through or maintain a custodial relationship with a CEDELBANK CUSTOMER, either directly or indirectly, have indirect access to CEDELBANK. EUROCLEAR The EUROCLEAR system was created in 1968: o to hold securities of its participating organizations, referred to as EUROCLEAR PARTICIPANTS, and o to clear and settle transactions between EUROCLEAR PARTICIPANTS through simultaneous electronic book-entry delivery against payment, so there is: - no need for physical movement of securities certificates, and - no risk from lack of simultaneous transfers of securities and cash. The EUROCLEAR system's various services include: o settlement of transactions in any of 34 currencies, including U.S. dollars, and o securities lending and borrowing and interfaces with domestic markets in several countries similar to the arrangements for cross-market transfers with DTC. The EUROCLEAR system is operated by Morgan Guaranty's Brussels, Belgium office, acting as EUROCLEAR operator, under contract with the Euroclear Clearance System, S.C., a Belgian cooperative corporation, which establishes policy for the EUROCLEAR system on behalf of EUROCLEAR PARTICIPANTS. EUROCLEAR PARTICIPANTS: o include central banks and other banks, securities brokers and dealers and other professional financial intermediaries, and o may include the underwriters of any series of certificates offered through this document. Other firms that clear through or maintain a custodial relationship with a EUROCLEAR PARTICIPANT, either directly or indirectly, have indirect access to the EUROCLEAR system. The EUROCLEAR operator conducts all operations for EUROCLEAR, and holds all EUROCLEAR securities clearance accounts and cash accounts. The EUROCLEAR operator is the Belgian branch of a New York banking corporation which is a member bank of the Federal Reserve System. It is regulated and examined by the Board of Governors of the Federal Reserve System and the New York State Banking Department, as well as the Belgian Banking Commission. The Terms and Conditions Governing Use of EUROCLEAR and the related Operating Procedures of the EUROCLEAR system and applicable Belgian law govern: o securities clearance accounts and cash accounts with the EUROCLEAR operator, o transfers of securities and cash within the EUROCLEAR system, o withdrawal of securities and cash from the EUROCLEAR system, and o receipts of payments for securities in the EUROCLEAR system. The EUROCLEAR system holds all securities (1) on a fungible basis and (2) without knowledge of the actual owners holding through EUROCLEAR PARTICIPANTS and to whose accounts the securities are credited. The EUROCLEAR operator acts under these terms and conditions only on behalf of EUROCLEAR PARTICIPANTS and has no record of or relationship with persons holding through EUROCLEAR PARTICIPANTS. BOOK-ENTRY REGISTRATION Cede, as DTC's nominee, holds the global securities. CEDELBANK will hold omnibus positions on behalf of CEDELBANK CUSTOMERS, while EUROCLEAR will do the same on behalf of EUROCLEAR PARTICIPANTS, through customers' securities accounts in CEDELBANK'S and EUROCLEAR'S names on the books of each of their depositaries. These depositaries will, in turn, hold these positions in customers' securities accounts in the depositaries' names on DTC's books. Transfers between: o DTC PARTICIPANTS occur under the DTC rules, and o CEDELBANK CUSTOMERS and EUROCLEAR PARTICIPANTS occur in the ordinary way under their applicable rules and operating procedures. Cross-market transfers occur through DTC, under its rules, on behalf of CEDELBANK or EUROCLEAR by each of their depositaries, whether between persons holding securities directly or indirectly: o through DTC, on the one hand, and o through CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS, on the other hand. However, these cross-market transactions will require delivery of instructions to CEDELBANK or EUROCLEAR by the counterparty in its system under either clearing system's rules and procedures, and within its established European time deadlines. CEDELBANK or EUROCLEAR will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to accomplish final settlement on its behalf by: o delivering or receiving securities in DTC, and o making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. CEDELBANK CUSTOMERS and EUROCLEAR PARTICIPANTS may not deliver instructions directly to the depositaries. Because of time-zone differences, credits of securities in CEDELBANK or EUROCLEAR due to a transaction with a DTC PARTICIPANT will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date. These credits or any other transactions in the securities settled during that processing will be reported to the relevant CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS on that day. Cash received in CEDELBANK or EUROCLEAR because of sales of securities by or through a CEDELBANK CUSTOMER or a EUROCLEAR PARTICIPANT: o will be received with value on the DTC settlement date, and o will only be available in the relevant CEDELBANK or EUROCLEAR cash account only as of the business day following settlement in DTC. Your purchases of certificates under the DTC system must be made by or through DTC PARTICIPANTS, which will receive a credit for the certificates on DTC's records. Your ownership interest is, in turn, recorded on the DTC PARTICIPANTS' and indirect participants' records. You will not receive written confirmation from DTC of their purchase, but you can expect to receive written confirmation providing details of the transaction, as well as periodic statements of your holdings, from the DTC PARTICIPANT or indirect participant through which you entered into the transaction. Transfers of ownership interests in the certificates are accomplished by entries made on the books of DTC PARTICIPANTS acting on behalf of you and other certificateholders. You will not receive certificates representing your ownership interest in the certificates offered through this document, unless use of the book-entry system for these certificates has ended. DTC registers all certificates deposited with it by DTC PARTICIPANTS in the name of its nominee, Cede, to make all later transfers of certificates easier. The deposit of certificates with DTC and their registration in the name of Cede will not change beneficial ownership of the certificates. DTC has no knowledge of the actual owners of the certificates; its records reflect only the identity of the DTC PARTICIPANTS to whose accounts the certificates are credited, which may or may not be the actual certificate owners. DTC PARTICIPANTS remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by: o DTC to DTC PARTICIPANTS, o DTC PARTICIPANTS to indirect participants, and o DTC PARTICIPANTS and indirect participants to certificateholders, will be governed by arrangements among them, under any applicable statutory or regulatory requirements. Neither DTC nor Cede will consent or vote on these certificates. Under its usual procedures, DTC mails an omnibus proxy to TRC as soon as possible after the record date. In this way, DTC assigns Cede's consenting or voting rights to those DTC PARTICIPANTS to whose accounts these certificates are credited on the relevant record date. For each DISTRIBUTION DATE: o the trustee makes principal and interest payments on the certificates to DTC, and o DTC credits each of those payments to DTC PARTICIPANTS' accounts on that date according to each of the participants' holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on that date. Payments by any DTC PARTICIPANT to certificateholders will be: o governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and o the responsibility of that DTC PARTICIPANT and not of DTC, the trustee or TRC, under any applicable statutory or regulatory requirements. The responsibility for: o payment of principal and interest to DTC belongs to the trustee, o disbursement of these payments to DTC PARTICIPANTS belongs to DTC, and o disbursement of these payments to certificateholders belongs to DTC PARTICIPANTS and indirect participants. DTC may stop providing its services as securities depository for these certificates at any time by giving reasonable notice to TRC or the trustee. If this occurs and if a successor securities depository is not obtained, DEFINITIVE CERTIFICATES will be printed and delivered. TRC may decide to end use of the system of book-entry transfers through DTC or a successor securities depository. If so, DEFINITIVE CERTIFICATES will be delivered to each certificateholder. See "--Definitive Certificates" for a description of the circumstances under which the trust will issue Definitive Certificates to you. CEDELBANK or EUROCLEAR will credit distributions on certificates held through it to the cash accounts of CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS under its rules and procedures, to the extent received by its depositary. These distributions will require tax reporting under relevant U.S. tax laws and regulations as described under "Tax Matters." CEDELBANK or the EUROCLEAR operator will take any other action permitted to be taken by a certificateholder under the POOLING AGREEMENT on behalf of a CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT: o only under its relevant rules and procedures, and o to the extent its depositary can carry out those actions on its behalf through DTC. Although DTC, CEDELBANK and EUROCLEAR have agreed to the procedures above to provide a system that makes transfers of certificates among their participants or customers easier: o they are under no obligation to perform or continue to perform these procedures, and o they may stop these procedures at any time. DEFINITIVE CERTIFICATES The certificates offered through this prospectus will be initially issued in book-entry form. DEFINITIVE CERTIFICATES in fully registered, certificated form will not be issued to any party except DTC or its nominee unless: o TRC advises the trustee in writing: - that DTC is no longer willing or able to discharge properly its responsibilities as depository for this series of certificates, and the trustee or TRC is unable to locate a qualified successor, - that it chooses to end the book-entry system through DTC, or o after a SERVICER DEFAULT occurs: - certificateholders representing (1) not less than 50% or (2) another percentage specified in the attached prospectus supplement of the total unpaid principal amount of the certificates advise the trustee and DTC through DTC PARTICIPANTS in writing that the continuation of a book-entry system through DTC or its successor is no longer in the best interests of the certificateholders. If any of these events occurs, DTC must notify all DTC PARTICIPANTS of the availability through DTC of DEFINITIVE CERTIFICATES. Once DTC gives the definitive certificate representing these certificates and instructions for re-registration to the trustee: o the trustee will issue the certificates as DEFINITIVE CERTIFICATES, and o afterwards, the trustee will recognize the holders of these DEFINITIVE CERTIFICATES as holders under the POOLING AGREEMENT. The trustee then makes payments: o directly to holders of DEFINITIVE CERTIFICATES under the procedures provided in this prospectus and in the POOLING AGREEMENT, and o on each DISTRIBUTION DATE, to holders in whose names the DEFINITIVE CERTIFICATES were registered at the close of business on the related RECORD DATE. If you own DEFINITIVE CERTIFICATES, payments will be made by check and mailed to you at an address maintained by the trustee. The final payment will be made only when a certificate is presented and surrendered at the office or agency specified in the notice of final distribution to certificateholders, whether it is: o a DEFINITIVE CERTIFICATE, or o a certificate registered in the name of DTC or its nominee. The trustee will provide this notice to registered certificateholders no later than the fifth day of the month in which the final distribution will occur. DEFINITIVE CERTIFICATES will be transferable and exchangeable at the office of the transfer agent and registrar, which shall initially be the trustee. The transfer agent and registrar will impose no service charge but may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange. The transfer agent and registrar shall not be required to register the transfer or exchange of DEFINITIVE CERTIFICATES for a period of fifteen days preceding the due date for any payment on the DEFINITIVE CERTIFICATES. INITIAL SETTLEMENT Each class of certificates offered under this prospectus and the attached prospectus supplement will be held in book-entry form by DTC in the name of its nominee, Cede. Investors' interests in the certificates will be represented through financial institutions acting on their behalf as direct and indirect participants in DTC. As a result, CEDELBANK and EUROCLEAR will hold positions on behalf of their customers or participants through their respective depositaries, which will hold positions in accounts as DTC PARTICIPANTS. Custody accounts of investors who elect to hold certificates through DTC will be credited with their holdings against payment in same-day funds on the settlement date. Investors who elect to hold certificates through CEDELBANK or EUROCLEAR accounts will follow the settlement procedures that apply to conventional eurobonds, except that there will be no temporary global security and no "lock-up" or restricted period. Certificates will be credited to the securities custody accounts on the settlement date against payment in same-day funds. SECONDARY MARKET TRADING Trading between DTC Participants. Secondary market trading between investors holding certificates through DTC will be conducted according to the rules and procedures for U.S. corporate debt obligations. Secondary market trading between DTC PARTICIPANTS will be settled in same-day funds. Trading between Cedelbank Customers and/or Euroclear Participants. Secondary market trading between investors holding certificates through CEDELBANK and EUROCLEAR will be conducted in the ordinary way under: o their normal rules and operating procedures, and o conventional eurobond practice (which means a seven calendar day settlement). Secondary market trading between CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS will be settled using the procedures for conventional eurobonds in same-day funds. Trading between DTC seller and Cedelbank or Euroclear purchaser. Transfers of certificates from the account of a DTC PARTICIPANT to the account of a CEDELBANK CUSTOMER or a EUROCLEAR PARTICIPANT usually occur as follows: o the purchaser sends instructions to CEDELBANK or EUROCLEAR through that customer or participant at least one business day before settlement, o CEDELBANK or EUROCLEAR instructs its depositary to receive the securities against payment, which includes interest accrued on the securities from and including the last coupon payment date to and excluding the settlement date, o that depositary credits payments to the DTC PARTICIPANT'S account against delivery of the securities, and o after settlement has been completed, the depositary credits securities to the relevant clearing system, which, in turn, under its usual procedures, credits those securities to that customer's or participant's account. The securities credit will appear the next day, European time, and the cash debit will be back-valued to, and the interest on the securities will accrue from, the value date--which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date, which means the trade fails, the CEDELBANK or EUROCLEAR cash debit will be valued instead as of the actual settlement date. CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS will need to make available to each of their clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within CEDELBANK or EUROCLEAR. Under this approach, they may take on credit exposure to CEDELBANK or EUROCLEAR until the securities are credited to their accounts one day later. As an alternative, if CEDELBANK or EUROCLEAR has extended a line of credit to them, CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS can elect not to pre-position funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS purchasing securities would incur overdraft charges for one day, assuming they cleared the overdraft when the securities were credited to their accounts. However, interest on the securities would accrue from the value date. So, the investment income on the securities earned during that one-day period may substantially reduce or offset the amount of the overdraft charges, although this result will depend on each CEDELBANK CUSTOMER'S or EUROCLEAR PARTICIPANT'S particular cost of funds. Since the settlement is taking place during New York business hours, DTC PARTICIPANTS can use their usual procedures for sending securities to their depositaries for the benefit of CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS. The sale proceeds will be available to the DTC seller on the settlement date. In this way, to the DTC PARTICIPANT a cross-market transaction will settle no differently than a trade between two DTC PARTICIPANTS. Trading between Cedelbank or Euroclear seller and DTC purchaser. Due to time zone differences in their favor, CEDELBANK CUSTOMERS and EUROCLEAR PARTICIPANTS may use their customary procedures for transfers of securities by a clearing system, through its depositary, to a DTC Participant. Trading usually occurs as follows: o the seller sends instructions to CEDELBANK or EUROCLEAR through a CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT at least one business day before settlement, o CEDELBANK or EUROCLEAR instructs its depositary to deliver the bonds to the DTC PARTICIPANT'S account against payment, which includes interest accrued on the securities from and including the last coupon payment date to and excluding the settlement date, and o the payment is reflected in the account of that customer or participant the next day, and receipt of the cash proceeds in that customer's or participant's account is back-valued to the value date--the preceding day when settlement occurred in New York. Should the CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT have a line of credit with its clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will cancel out any overdraft charges incurred over that one-day period. If settlement is not completed on the intended value date, which means the trade fails, receipt of the cash proceeds in the CEDELBANK CUSTOMER'S or EUROCLEAR PARTICIPANT'S account would instead be valued as of the actual settlement date. Finally, day traders that use CEDELBANK or EUROCLEAR and that purchase securities from DTC PARTICIPANTS for delivery to CEDELBANK CUSTOMERS or EUROCLEAR PARTICIPANTS should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem: o borrowing through CEDELBANK or EUROCLEAR for one day--until the purchase side of the day trade is reflected in their CEDELBANK or EUROCLEAR accounts--under the clearing system's customary procedure, o borrowing the securities in the U.S. from a DTC PARTICIPANT no later than one day before settlement which would give the securities sufficient time to be reflected in their CEDELBANK or EUROCLEAR account to settle the sale side of the trade, or o staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC PARTICIPANT is at least one day before the value date for the sale to the CEDELBANK CUSTOMER or EUROCLEAR PARTICIPANT. INVESTOR PERCENTAGE The assets of the trust are allocated among: o certificateholders of each series, o providers of uncertificated enhancement backed by receivables, o the holders of PARTICIPATIONS, and o the holder of the TRANSFEROR CERTIFICATE. Each series issued by the trust is backed by an amount of PRINCIPAL RECEIVABLES and amounts on deposit in various trust bank accounts. The attached prospectus supplement may describe how your series' INVESTED AMOUNT will be adjusted by the amount of funds deposited in a bank account or accounts or in any other way. The INVESTED AMOUNT can vary from period to period, and on any date is generally equal to: (initial INVESTED AMOUNT on the series' CLOSING DATE) - (total principal payments made to the series' certificateholders) - (total unreimbursed charge-offs and reallocated principal collections for the series) - (the amount of any TRC purchase and subsequent cancellation of any certificates) Any COLLATERAL INVESTED AMOUNT in a series will also be included in that series' INVESTED AMOUNT. If your series includes a COLLATERAL INVESTED AMOUNT, a description will be included in the attached prospectus supplement. During each series' REVOLVING PERIOD, the INVESTED AMOUNT is expected to remain constant to the extent noted in the attached prospectus supplement unless certificates are purchased by TRC. The total INVESTED AMOUNT in the trust is the sum of the INVESTED AMOUNTS for all series issued from the trust. The certificates of each series represent undivided interests in the assets of the trust, including the right to each series' INVESTOR PERCENTAGE of all cardholder payments on receivables in the trust. Certificateholders of each series will receive varying amounts of collections of principal and finance charges each month, and will also be allocated a varying portion of receivables in defaulted accounts written off during each month. Principal collections, finance charge collections and receivables in defaulted accounts may be allocated to your series in different ways: the attached prospectus supplement will describe how the various INVESTOR PERCENTAGES are calculated. If your series includes multiple classes of certificates, collections allocated to your series may be further allocated among each class. As a certificateholder, your right to collections is limited to the amounts needed to make required payments to you. Collections allocated to your series or your class of certificates might be reallocated. The attached prospectus supplement and the POOLING AGREEMENT explain how collections will be allocated to, or reallocated from, your certificates. Each series of certificates may be included in a group of series. Series in a group may share excess principal collections, finance charge collections or both among themselves. The attached prospectus supplement will state if your series is in a group and, if it is, what other series in your group were outstanding on your series' CLOSING DATE. In addition, the attached prospectus supplement will state if classes of your series are entitled to SHARED TRANSFEROR PRINCIPAL COLLECTIONS and EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS. Each series of certificates represents interests in the trust only, and does not represent interests in or recourse obligations of RNB, TCC or TRC or any of their affiliates. A certificate is not a deposit and neither the certificates nor the underlying trust accounts or receivables are insured or guaranteed by the FDIC or any other governmental agency. INTEREST Interest will accrue from the CLOSING DATE on the related certificate principal balance, or other amount specified in the related prospectus supplement, at the CERTIFICATE RATE. The CERTIFICATE RATE may be a fixed, floating or variable rate as specified in the related prospectus supplement. Interest will be distributed to certificateholders on the DISTRIBUTION DATES specified in the related prospectus supplement. Interest payments on any DISTRIBUTION DATE will most likely be funded from collections of FINANCE CHARGE RECEIVABLES allocated to the certificateholders' interest during the previous MONTHLY PERIOD. Interest payments on any DISTRIBUTION DATE may also be funded from: o investment earnings on funds held in accounts of the trust, o collections of FINANCE CHARGE RECEIVABLES allocated initially to certificateholders of other series or TRC as holder of the TRANSFEROR CERTIFICATE, o any applicable enhancement, if necessary, or o other amounts as specified in the related prospectus supplement. If the DISTRIBUTION DATES for payment of interest for a series or class occur less frequently than monthly, any collections or other amounts may be deposited in one or more trust accounts for distribution to the certificateholders of that series or class. Each class may have a separate INTEREST FUNDING ACCOUNT if a series has more than one class of certificates. The prospectus supplement relating to each series of certificates and each class will describe: o the amounts and sources of interest payments to be made, o the CERTIFICATE RATE, and o for a series or class bearing interest at a floating or a variable CERTIFICATE RATE: - the dates and the manner for determining the CERTIFICATE RATES, and - the formula, index or other method by which the CERTIFICATE RATES are determined. PRINCIPAL No principal payments will be made to the certificateholders of a series during the REVOLVING PERIOD, except to the extent specified in the related prospectus supplement. Principal will be paid to the certificateholders in the amounts and on the DISTRIBUTION DATES specified in the related prospectus supplement or will be accumulated in a PRINCIPAL FUNDING ACCOUNT for later distribution to certificateholders on the EXPECTED FINAL PAYMENT DATE during: o the CONTROLLED AMORTIZATION PERIOD, o the PRINCIPAL AMORTIZATION PERIOD, o the ACCUMULATION PERIOD, o the EARLY AMORTIZATION PERIOD, or o the RAPID ACCUMULATION PERIOD. Principal payments for any series or class will be funded from collections of PRINCIPAL RECEIVABLES received during the related MONTHLY PERIOD or periods allocated to that series or shared from other series or from TRC as holder of the TRANSFEROR CERTIFICATE and from other sources as specified in the related prospectus supplement. These payments will be allocated to the certificateholders' interest of the related series or class. If a series has more than one class of certificates, the certificateholders of one or more classes may receive payments of principal at different times. The related prospectus supplement will describe the manner, timing and priority of payments of principal to certificateholders of each class. Funds on deposit in any PRINCIPAL FUNDING ACCOUNT for any series may have a guaranteed rate or investment agreement or other arrangement. This is intended to assure a specified rate of return on the investment of the funds. A principal guaranty or other similar arrangement may be used to enhance the likelihood of the payment in full of the principal amount of a series of certificates or class at the end of the ACCUMULATION PERIOD. DISCOUNT OPTION Under the POOLING AGREEMENT, TRC may assign a specified fixed or floating percentage of the amount of PRINCIPAL RECEIVABLES from the accounts to be treated as FINANCE CHARGE RECEIVABLES. The circumstances under which TRC may exercise its option to discount PRINCIPAL RECEIVABLES may include a time when the TRUST PORTFOLIO YIELD is declining and PRINCIPAL RECEIVABLES are available in sufficient quantity to allow for discounting. TRC may increase, reduce or eliminate the DISCOUNT PERCENTAGE for DISCOUNT OPTION RECEIVABLES from the accounts on and after the date of the change, without notice to or consent of the certificateholders. TRC must give 30 days' notice in writing to the servicer, the trustee and each rating agency of any increase, reduction or elimination of the DISCOUNT PERCENTAGE. The increase, reduction or elimination will become effective on the date specified in the notice after TRC delivers to the trustee a certificate of an authorized officer stating that the increase, reduction or elimination will not cause an EARLY AMORTIZATION EVENT or an event which with notice or the lapse of time would cause an EARLY AMORTIZATION EVENT to occur. TRC, the servicer and the trustee must also receive written notice from each rating agency that an increase of the DISCOUNT PERCENTAGE will not have a RATINGS EFFECT if this increase would cause the DISCOUNT PERCENTAGE to exceed 3%. Collections on the date of processing during the time the DISCOUNT OPTION is in effect will be considered collections of FINANCE CHARGE RECEIVABLES in an amount equal to the product of: o a fraction whose numerator is the amount of DISCOUNT OPTION RECEIVABLES and whose denominator is the amount of all PRINCIPAL RECEIVABLES, including DISCOUNT OPTION RECEIVABLES, at the end of the previous MONTHLY PERIOD, and o collections of PRINCIPAL RECEIVABLES, before any reduction for FINANCE CHARGE RECEIVABLES which are DISCOUNT OPTION RECEIVABLES. Any designation of DISCOUNT OPTION RECEIVABLES would result in an increase in the amount of FINANCE CHARGE RECEIVABLES and a corresponding increase in the PORTFOLIO YIELD for each series and a reduction in the amount of PRINCIPAL RECEIVABLES and a lower payment rate of collections from PRINCIPAL RECEIVABLES. For this reason, the effect on certificateholders will be to: o decrease the likelihood of an EARLY AMORTIZATION EVENT based on a reduction of the average PORTFOLIO YIELD for any designated period to a rate below the average BASE RATE, o increase the likelihood that the transferor will be required to add PRINCIPAL RECEIVABLES to the trust, and o increase the likelihood of an EARLY AMORTIZATION EVENT if additional PRINCIPAL RECEIVABLES were not available to balance the reduction in the total amount of PRINCIPAL RECEIVABLES. THE TRANSFEROR CERTIFICATE The certificate evidencing the TRANSFEROR'S INTEREST in the trust is referred to as the TRANSFEROR CERTIFICATE. The POOLING AGREEMENT provides that the transferor may exchange a portion of the TRANSFEROR CERTIFICATE for one or more SUPPLEMENTAL CERTIFICATES representing an interest in the TRANSFEROR'S INTEREST for transfer or assignment to a person named by the transferor after the execution and delivery of a supplement to the POOLING AGREEMENT, only if: o the transfer will not result in a RATINGS EFFECT, o the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, will not be less than the REQUIRED RETAINED TRANSFEROR AMOUNT as of the date of the exchange, and o the transferor delivers to the trustee and each rating agency a tax opinion. Any subsequent transfer or assignment of a SUPPLEMENTAL CERTIFICATE will require a tax opinion and cannot result in a RATINGS EFFECT. NEW ISSUANCES The POOLING AGREEMENT allows the transferor to direct the trustee to issue a new series. Each new issuance will have the effect of decreasing the TRANSFEROR AMOUNT by the INVESTED AMOUNT. The transferor, the servicer, the trustee and the trust are not required to and do not intend to obtain the consent of, or allow prior review by, any certificateholder of any outstanding series to issue any additional series. The transferor may offer any series to the public under a prospectus or other disclosure document in transactions either registered under the Securities Act of 1933, as amended, or exempt from registration. Each new series may be offered: o directly, through one or more underwriters or placement agents, o in fixed-price offerings, or o in negotiated transactions or otherwise. Any new series may be issued in fully registered or book-entry form in minimum denominations determined by the transferor. Under the POOLING AGREEMENT, the transferor may designate principal terms so that each series has an ACCUMULATION PERIOD, a CONTROLLED AMORTIZATION PERIOD, or a PRINCIPAL AMORTIZATION PERIOD. In addition, one or more series may be in their ACCUMULATION PERIOD, CONTROLLED AMORTIZATION PERIOD or PRINCIPAL AMORTIZATION PERIOD while other series are not. The related prospectus supplement specifies if collections of PRINCIPAL RECEIVABLES otherwise available to a series that is not amortizing or accumulating principal may be treated as SHARED PRINCIPAL COLLECTIONS and reallocated to a series that is amortizing or accumulating principal. In addition, collections of PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES otherwise payable to the transferor may be designated to be paid to the certificateholders of the applicable series. Each series may have the benefits of enhancement issued by enhancement providers different from the enhancement providers used in any other series. Under the POOLING AGREEMENT, the trustee will hold the enhancement only on behalf of the certificateholders of the series to which the enhancement is given. For each enhancement, the transferor may deliver a different form of enhancement agreement. The transferor also has the option under the POOLING AGREEMENT to vary among series the terms on which a series may be repurchased by the transferor or remarketed to other investors. There is no limit to the number of new issuances the transferor may issue under the POOLING AGREEMENT. The trust will end only as described in the POOLING AGREEMENT. There can be no assurance that the terms of any series might not have an impact on the timing and amount of payments received by a certificateholder of another series. A new issuance may only be issued after the satisfaction of the conditions given in the POOLING AGREEMENT and under the related SERIES SUPPLEMENT. The obligation of the trustee to authenticate the certificates of each new series and to execute and deliver the related SERIES SUPPLEMENT must satisfy the following conditions: o the transferor gives the trustee, the servicer and each rating agency written notice of the new issuance and its date of issuance, at least five business days before the date of the new issuance, o the transferor delivers to the trustee the related SERIES SUPPLEMENT, in a form satisfactory to the trustee, executed by each party to the POOLING AGREEMENT except the trustee, o the transferor delivers to the trustee the related enhancement agreement, if any, executed by each party to that agreement, o the transferor, the servicer, and the trustee receive confirmation from each rating agency that the new issuance will not result in a RATINGS EFFECT, o the transferor delivers to the trustee and enhancement providers, if any, a certificate of an authorized officer, dated the date of the new issuance, stating that the transferor reasonably believes that the issuance will not, based on the facts known to the officer at the time of the certification, cause an EARLY AMORTIZATION EVENT to occur for any series, o the transferor delivers to the trustee and each rating agency an opinion of counsel acceptable to the trustee that for federal income tax purposes: - following the new issuance the trust will not be considered to be an association, or publicly traded partnership, taxable as a corporation, - the new issuance will not adversely affect the tax classification as debt of certificates of any outstanding series or class that were properly classified as debt at the time of their issuance, and - the new issuance will not cause or become an event in which gain or loss would be recognized by holders of certificates classified as debt at the time of their issuance, o the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, will not be less than the REQUIRED RETAINED TRANSFEROR AMOUNT on the date of the new issuance, and o any other conditions specified in any SERIES SUPPLEMENT. After satisfying these conditions, the trustee will execute the SERIES SUPPLEMENT and issue to the transferor the certificates of the new series for execution and redelivery to the trustee for authentication. The POOLING AGREEMENT provides that, under any one or more supplements to the POOLING AGREEMENT, the transferor may require the trustee to issue on behalf of the trust one or more PARTICIPATIONS, to be delivered to or at the order of the transferor, but only if: o the issuance will not result in a RATINGS EFFECT, o the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, will not be less than the REQUIRED RETAINED TRANSFEROR AMOUNT, and o the transferor delivers to the trustee and each rating agency a tax opinion, dated the date of the issuance. Any PARTICIPATION may be transferred or exchanged upon the satisfaction of the first and third bullet points above. Each PARTICIPATION will entitle its holder to a specified PARTICIPATION PERCENTAGE of all collections of PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES and any other trust assets to the extent specified in the PARTICIPATION SUPPLEMENT. The trust has issued a PARTICIPATION to RNB. COLLECTION ACCOUNT The servicer has established and will maintain in the name of the trust and for the benefit of the certificateholders of each series, an ELIGIBLE DEPOSIT ACCOUNT called the COLLECTION ACCOUNT. An ELIGIBLE DEPOSIT ACCOUNT is either: o a segregated account with an ELIGIBLE INSTITUTION, or o a segregated trust account with the corporate trust department of a depository institution or any domestic branch of a foreign bank having securities rated as investment grade from each rating agency. An ELIGIBLE INSTITUTION means: o a United States depository institution which at all times: - has a rating by Moody's of either a long-term unsecured debt rating of "A2" or better or a certificate of deposit rating of "P-1", - has a rating by Standard & Poor's of either a long-term unsecured debt rating of "AAA" or a certificate of deposit rating of "A-1+", and - is a member of the FDIC, or o any other institution that is acceptable to each rating agency. The COLLECTION ACCOUNT will initially be maintained with the trustee. If at any time the COLLECTION ACCOUNT cannot be maintained as an ELIGIBLE DEPOSIT ACCOUNT, the COLLECTION ACCOUNT will be moved so that it will again be qualified as an ELIGIBLE DEPOSIT ACCOUNT. Funds in the COLLECTION ACCOUNT will be invested in the following ELIGIBLE INVESTMENTS: o obligations fully guaranteed by the United States, o demand deposits, time deposits or certificates of deposit of depository institutions or trust companies having at the time of investment the highest short term debt rating from Moody's and Standard & Poor's, o commercial paper, or other short-term obligations, having, at the time of the trust's investment, a rating in the highest rating category from Moody's and Standard & Poor's, o demand deposits, time deposits and certificates of deposit which are fully insured by the FDIC, o notes or bankers' acceptances issued by any depository institution or trust company having the highest rating from Moody's and Standard & Poor's, o time deposits with an entity having the highest rating from Moody's and Standard & Poor's, and o any other investments approved in writing by each rating agency which would not cause the trust to become an "investment company" within the meaning of the Investment Company Act of 1940, as amended. Any earnings, net of losses and investment expenses, on funds in the COLLECTION ACCOUNT will be treated as collections of FINANCE CHARGE RECEIVABLES on the last day of the MONTHLY PERIOD. The servicer has the revocable power to withdraw funds from the COLLECTION ACCOUNT and to instruct the trustee to make withdrawals and payments from the COLLECTION ACCOUNT for the purpose of carrying out its duties under the POOLING AGREEMENT and the SERIES SUPPLEMENTS. Under the POOLING AGREEMENT, a paying agent will be appointed having the revocable power to withdraw funds from the COLLECTION ACCOUNT to make distributions to the certificateholders. The paying agent will initially be the trustee. DEPOSITS IN COLLECTION ACCOUNT The servicer will generally deposit all collections received from the receivables in each MONTHLY PERIOD into the COLLECTION ACCOUNT not later than two business days after the date of processing unless the conditions described below are satisfied. The servicer will make the deposits and payments to the accounts and parties described in the related prospectus supplement on the date of the deposit. RNB, as servicer, may use for its own benefit all collections received from the receivables in each MONTHLY PERIOD until the business day preceding the related DISTRIBUTION DATE if RNB: o gives the trustee a letter of credit covering collection risk of the servicer acceptable to each rating agency, or o Target Corporation has and maintains a commercial paper rating of at least "A-1" by Standard & Poor's and at least "P-1" by Moody's. RNB currently has not given a letter of credit and Target Corporation does not currently maintain the required rating for use of the collections. The transferor may not have a perfected security interest in the collections held by RNB if RNB goes into insolvency or receivership or with the lapse of time periods. The servicer will only be required to deposit collections into the COLLECTION ACCOUNT up to the total amount of collections required to be deposited into an account established for any series, or, without duplication, distributed on the related DISTRIBUTION DATE or payment date to certificateholders of any series or to the issuer of any enhancement under the terms of any SERIES SUPPLEMENT. If at any time before the DISTRIBUTION DATE or payment date the amount of collections deposited in the COLLECTION ACCOUNT exceeds the amount required to be so deposited the servicer will be permitted to withdraw the excess from the COLLECTION ACCOUNT. SHARING OF EXCESS FINANCE CHARGE COLLECTIONS AND EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS The related prospectus supplement specifies if the certificateholders of a series or any class may be entitled to receive all or a portion of EXCESS FINANCE CHARGE COLLECTIONS of another series included in the same group of series to cover any shortfalls on amounts payable from collections of FINANCE CHARGE RECEIVABLES allocable to that series or class. EXCESS FINANCE CHARGE COLLECTIONS for any MONTHLY PERIOD will equal the excess of collections of FINANCE CHARGE RECEIVABLES and other amounts allocated to the certificateholders' interest of a series or class over the sum of: o interest accrued for the current month and overdue Monthly Interest on the certificates, o accrued and unpaid monthly servicing fees, o the INVESTOR DEFAULTED AMOUNT, o unreimbursed INVESTOR CHARGE-OFFS, and o other amounts specified in the related prospectus supplement. EXCESS FINANCE CHARGE COLLECTIONS will be applied to cover any shortfalls to amounts payable from collections of FINANCE CHARGE RECEIVABLES allocable to any other series in the same group. EXCESS FINANCE CHARGE COLLECTIONS will be distributed evenly to each series based on the amount of the shortfall, if any, to each other series in that group. While any series offered may be included in a group, there can be no assurance that any other series will be included in that group or that there will be any EXCESS FINANCE CHARGE COLLECTIONS available to that group for any MONTHLY PERIOD. The servicer allocates to the transferor collections of FINANCE CHARGE RECEIVABLES allocable to the TRANSFEROR'S INTEREST exceeding the amounts necessary to make required payments to any SUPPLEMENTAL CERTIFICATES. All other amounts otherwise payable to the transferor from collections of FINANCE CHARGE RECEIVABLES will be applied to cover any shortfalls, after the servicer applies EXCESS FINANCE CHARGE COLLECTIONS, in amounts payable from collections of FINANCE CHARGE RECEIVABLES allocable to each series. The EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS will be applied to cover any shortfalls regardless of whether the collections were initially allocated to TRC, as the transferor, or to any series. These collections will be distributed evenly based upon the amount of the remaining shortfall to each other series designated in the applicable SERIES SUPPLEMENT as being entitled to receive EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS. Any EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS remaining after covering shortfalls to all designated series will be treated as SHARED TRANSFEROR PRINCIPAL COLLECTIONS. EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS permit coverage of shortfalls to amounts payable from collections of FINANCE CHARGE RECEIVABLES and EXCESS FINANCE CHARGE COLLECTIONS allocable to a series by using collections of FINANCE CHARGE RECEIVABLES which would otherwise be paid to the transferor. SHARED PRINCIPAL COLLECTIONS AND SHARED TRANSFEROR PRINCIPAL COLLECTIONS The related prospectus supplement will specify if collections of PRINCIPAL RECEIVABLES for any MONTHLY PERIOD allocated to the certificateholders' interest of that series, after required distributions for that series, will be available to other series. The servicer will determine SHARED PRINCIPAL COLLECTIONS as follows: o the amount of collections of PRINCIPAL RECEIVABLES for any MONTHLY PERIOD, plus o other amounts described in the SERIES SUPPLEMENT of that series, allocated to that series remaining after covering the required deposits and distributions and any similar amount remaining for any other series, plus o the amount of any payment received by the trustee from the holder of any PARTICIPATION or any increase in the principal amount of the PARTICIPATION. The servicer will allocate the SHARED PRINCIPAL COLLECTIONS to cover any principal distributions to certificateholders and deposits to PRINCIPAL FUNDING ACCOUNTS for any series that are either scheduled or permitted and that have not been covered out of the investor principal collections and other amounts for that series. If these PRINCIPAL SHORTFALLS exceed SHARED PRINCIPAL COLLECTIONS for any MONTHLY PERIOD, SHARED PRINCIPAL COLLECTIONS will be allocated evenly among the applicable series based on the respective PRINCIPAL SHORTFALLS of each series. To the extent that SHARED PRINCIPAL COLLECTIONS exceed PRINCIPAL SHORTFALLS, the balance will be allocated to the holder of the TRANSFEROR CERTIFICATE, but only if: o the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, is greater than the REQUIRED RETAINED TRANSFEROR AMOUNT, or o in all other circumstances the SHARED PRINCIPAL COLLECTIONS will be deposited in the SPECIAL FUNDING ACCOUNT. Any reallocation of collections of PRINCIPAL RECEIVABLES will not result in a reduction in the INVESTED AMOUNT of the series to which collections were initially allocated. There can be no assurance that there will be any SHARED PRINCIPAL COLLECTIONS in any MONTHLY PERIOD. The servicer will determine the amount of any SHARED TRANSFEROR PRINCIPAL COLLECTIONS. SHARED TRANSFEROR PRINCIPAL COLLECTIONS is the amount of collections of PRINCIPAL RECEIVABLES for any MONTHLY PERIOD allocated to the TRANSFEROR'S INTEREST but not due to the holder of any SUPPLEMENTAL CERTIFICATE and other amounts payable to the transferor from collections of PRINCIPAL RECEIVABLES, plus the amount of EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS remaining after being applied to amounts payable from collections of FINANCE CHARGE RECEIVABLES. This determination will be made regardless of whether the collections were initially allocated to the transferor or any series. The servicer will allocate the SHARED TRANSFEROR PRINCIPAL COLLECTIONS to cover any PRINCIPAL SHORTFALLS that have not been covered out of the SHARED PRINCIPAL COLLECTIONS. If PRINCIPAL SHORTFALLS remaining after applying SHARED PRINCIPAL COLLECTIONS exceed SHARED TRANSFEROR PRINCIPAL COLLECTIONS for any MONTHLY PERIOD, SHARED TRANSFEROR PRINCIPAL COLLECTIONS will be allocated evenly among each series based on the respective remaining PRINCIPAL SHORTFALLS of each series. To the extent that SHARED TRANSFEROR PRINCIPAL COLLECTIONS exceed PRINCIPAL SHORTFALLS remaining after applying the SHARED PRINCIPAL COLLECTIONS, the balance will be paid to the holder of the TRANSFEROR CERTIFICATE. SHARED TRANSFEROR PRINCIPAL COLLECTIONS permit coverage of PRINCIPAL SHORTFALLS remaining after applying SHARED PRINCIPAL COLLECTIONS by using collections that would have been paid to the transferor and in some circumstances may allow the length of the ACCUMULATION PERIOD to be shorter. There can be no assurance that there will be any SHARED TRANSFEROR PRINCIPAL COLLECTIONS in any MONTHLY PERIOD. SPECIAL FUNDING ACCOUNT The servicer will establish and maintain in the name of the trust, for the benefit of the certificateholders of all series, a SPECIAL FUNDING ACCOUNT which will be an ELIGIBLE DEPOSIT ACCOUNT. Whenever the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, would otherwise be less than the REQUIRED RETAINED TRANSFEROR AMOUNT, funds otherwise payable to the transferor will be deposited in the SPECIAL FUNDING ACCOUNT on each business day until the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, is at least equal to the REQUIRED RETAINED TRANSFEROR AMOUNT. Funds on deposit in the SPECIAL FUNDING ACCOUNT will be withdrawn and paid to the transferor to the extent that following the distribution the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, will continue to exceed the REQUIRED RETAINED TRANSFEROR AMOUNT. The SERIES SUPPLEMENT may provide for the payments to be made to certificateholders instead of the transferor. Deposits in and withdrawals from the SPECIAL FUNDING ACCOUNT may be made on a daily basis. Funds on deposit in the SPECIAL FUNDING ACCOUNT will be invested by the trustee at the direction of the servicer in ELIGIBLE INVESTMENTS selected by the servicer. All net investment income earned on amounts in the SPECIAL FUNDING ACCOUNT during each MONTHLY PERIOD will be withdrawn from the SPECIAL FUNDING ACCOUNT and treated as collections of FINANCE CHARGE RECEIVABLES for that MONTHLY PERIOD. PAIRED SERIES Each series may be paired with another series only if specified in the attached prospectus supplement. A paired series is a series which has been paired with a previously issued series and has an INVESTED AMOUNT that increases as the INVESTED AMOUNT of the previously issued series decreases, or any series designated as a paired series in the related SERIES SUPPLEMENT. The prospectus supplement will specify the relationship between the paired series. FUNDING PERIOD The related prospectus supplement may specify a FUNDING PERIOD that begins on the CLOSING DATE and ends on a specified date before the start of an AMORTIZATION PERIOD or an ACCUMULATION PERIOD. During the FUNDING PERIOD, the total amount of PRINCIPAL RECEIVABLES in the trust may be less than the total principal amount of the certificates of that series. The amount of this deficiency will be held in a trust account established with the trustee for the benefit of the certificateholders of that series awaiting the transfer of additional PRINCIPAL RECEIVABLES to the trust or awaiting the reduction of the INVESTED AMOUNTS of other series. The related prospectus supplement for a series will define: o the initial INVESTED AMOUNT on the CLOSING DATE, o the total principal amount, and o the date when the INVESTED AMOUNT is expected to equal the total principal amount. The INVESTED AMOUNT will increase as receivables are delivered to the trust or as the INVESTED AMOUNTS of other series are reduced. The INVESTED AMOUNT may also decrease due to INVESTOR CHARGE-OFFS as described in the related prospectus supplement. During the FUNDING PERIOD, funds on deposit in the PRE-FUNDING ACCOUNT for a series of certificates will be withdrawn and paid to the transferor to the extent there are any increases in the INVESTED AMOUNT. If the INVESTED AMOUNT does not for any reason equal the full INVESTED AMOUNT by the end of the FUNDING PERIOD, any amount remaining in the PRE-FUNDING ACCOUNT and any additional amounts specified in the related prospectus supplement will be payable to the certificateholders of that series described in the related prospectus supplement. The related prospectus supplement specifies if monies in the PRE-FUNDING ACCOUNT: o are invested by the trustee in ELIGIBLE INVESTMENTS, o have a guaranteed rate, or o have an investment agreement or other similar arrangement. In connection with each DISTRIBUTION DATE during the FUNDING PERIOD, investment earnings on funds in the PRE-FUNDING ACCOUNT will be withdrawn from the PRE-FUNDING ACCOUNT and deposited, together with any other payment under a guaranteed rate or investment agreement or other similar arrangement, into the COLLECTION ACCOUNT for distribution as interest on the certificates of that series as specified in the related prospectus supplement. DEFAULTED RECEIVABLES The DEFAULTED AMOUNT for any MONTHLY PERIOD will be an amount, not less than zero, equal to the amount of DEFAULTED RECEIVABLES for each day in that MONTHLY PERIOD minus the sum of: o the amount of any DEFAULTED RECEIVABLES for which the TRANSFEROR AMOUNT is reduced because of the assignment of a principal balance of zero for purposes of determining the total amount of PRINCIPAL RECEIVABLES or for which the servicer becomes obligated to accept assignment during that MONTHLY PERIOD, in either case because of a breach of a representation, warranty or covenant contained in the POOLING AGREEMENT, o the total amount of recoveries received in the MONTHLY PERIOD for both FINANCE CHARGE RECEIVABLES and PRINCIPAL RECEIVABLES which were previously charged-off as uncollectible, and o the excess, if any, for the immediately preceding MONTHLY PERIOD of the total amount subtracted under these bullet points over the amount of PRINCIPAL RECEIVABLES that became DEFAULTED RECEIVABLES. Receivables in any account will be charged-off as uncollectible under the CREDIT CARD GUIDELINES. This policy is currently to charge off the receivables in an account when that account becomes 180 days delinquent. DEFAULTED RECEIVABLES are automatically removed from the trust and may be sold after reconveyance to TRC. DILUTION The amount of the PRINCIPAL RECEIVABLES in the trust will be reduced if: o the servicer adjusts downward the amount of any PRINCIPAL RECEIVABLE (except INELIGIBLE RECEIVABLES that have been or are to be reassigned to the transferor), because of a rebate, refund, counterclaim, defense, error, fraudulent charge or counterfeit charge to a cardholder, o the PRINCIPAL RECEIVABLE was created out of merchandise that was refused or returned by a cardholder, or o the servicer adjusts downward the amount of any PRINCIPAL RECEIVABLE without receiving collections or charging off the amount as uncollectible. The transferor will be required to pay an amount equal to the deficiency into the SPECIAL FUNDING ACCOUNT if the exclusion of any receivables would cause the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, at that time to be less than the REQUIRED RETAINED TRANSFEROR AMOUNT. EARLY AMORTIZATION EVENTS An EARLY AMORTIZATION EVENT for each series would occur automatically when: o RNB, TCC, TRC, or any holder of the TRANSFEROR CERTIFICATE is bankrupt, insolvent or enters receivership, o the trust becomes an "investment company" within the meaning of the Investment Company Act, o the TRANSFEROR AMOUNT, except for any interest from any SUPPLEMENTAL CERTIFICATE, is less than the REQUIRED RETAINED TRANSFEROR AMOUNT, or o the transferor becomes unable for any reason to transfer receivables to the trust. The related prospectus supplement for any series may specify additional EARLY AMORTIZATION EVENTS that apply to that series. The EARLY AMORTIZATION PERIOD or the RAPID ACCUMULATION PERIOD, if specified for a series, will begin on the date an EARLY AMORTIZATION EVENT occurs. Certificateholders may begin receiving distributions of principal earlier than expected if the EARLY AMORTIZATION PERIOD or the RAPID ACCUMULATION PERIOD begins before the series CONTROLLED AMORTIZATION PERIOD, the PRINCIPAL AMORTIZATION PERIOD or before an EXPECTED FINAL PAYMENT DATE. This may shorten the average life of the certificates. DEFEASANCE The transferor may, at its option, be discharged from its obligations on any series or all outstanding series under the following conditions: o the transferor deposits ELIGIBLE INVESTMENTS with the trustee, under an irrevocable trust agreement, which provides for scheduled payment of principal and interest sufficient to pay and discharge all remaining scheduled interest and principal payments on all outstanding certificates of the defeased series and any amounts owing to any enhancement providers, o the transferor delivers to the trustee a tax opinion on the deposit of ELIGIBLE INVESTMENTS and the termination of obligations, o the transferor delivers to the trustee an opinion of counsel stating that the deposit and termination of obligations will not result in the trust being regulated as an "investment company" within the meaning of the Investment Company Act, o the transferor delivers to the trustee a certificate of an officer of the transferor stating that the transferor reasonably believes that the deposit and termination of its obligations will not cause an EARLY AMORTIZATION EVENT or cause any event that would cause an EARLY AMORTIZATION EVENT to occur, and o a RATINGS EFFECT will not occur. The transferor may then cause collections from the defeased series to be used to buy ELIGIBLE INVESTMENTS rather than additional receivables. REPORTS TO CERTIFICATEHOLDERS The servicer will provide to the trustee and each rating agency, by the third business day before each DISTRIBUTION DATE, a monthly report providing the following information: o the total amount of PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES as of the end of that MONTHLY PERIOD, o the INVESTED AMOUNT for each series and the INVESTED AMOUNT allocated to each class, o the FLOATING ALLOCATION PERCENTAGE and PRINCIPAL ALLOCATION PERCENTAGE, o the amount of collections of PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES processed during that MONTHLY PERIOD and the portion allocated to the certificateholders' interest, o the total outstanding balance of accounts which were 30, 60, 90 and 120 days or more delinquent at the end of the MONTHLY PERIOD, o the DEFAULTED AMOUNT and the portion allocated to the certificateholders' interest, o the amount, if any, of charge-offs on the certificateholders' interest and the portion allocable to each class, o the monthly servicing fee, o the PORTFOLIO YIELD, and o the BASE RATE. On each payment date, the monthly report will include the following additional information about the other outstanding series: o the total amount distributed, o the amount of principal distributed, o the amount of interest distributed, and o the excess of unpaid principal balance over the INVESTED AMOUNT as of the RECORD DATE. On each DISTRIBUTION DATE the trustee will provide each certificateholder of record with a copy of the monthly report. The servicer and the trustee will not be required to provide any reports directly to beneficial owners. See "--Book-Entry Registration" for a general description of DTC procedures. On or before January 31 of each calendar year, the trustee will provide to any certificateholder of record during the preceding year a statement containing the information required to be given by an issuer of debt under the Internal Revenue Code along with any other customary information which is necessary to allow the certificateholders to prepare their tax returns. See "Tax Matters" for a detailed discussion. LIST OF CERTIFICATEHOLDERS Certificateholders representing 10% or more of the total unpaid principal amount of the certificates of a series, or of all outstanding series, may request access to the current list of certificateholders of the series, or of all outstanding series, for purposes of communicating with other certificateholders about their rights under the POOLING AGREEMENT, any SERIES SUPPLEMENT or the certificates. See "--Book-Entry Registration" and "--Definitive Certificates" for a description of the circumstances in which Definitive Certificates may be issued. The POOLING AGREEMENT does not provide for any annual or other meetings of certificateholders. ENHANCEMENT The related prospectus supplement will state if the trust provides enhancement for one or more classes of a series, including your series, offered by this prospectus. If so, any form of enhancement may be structured so as to be drawn upon by more than one class to the extent described in that prospectus supplement. The type, characteristics and amount of enhancement for any series or class: o will be determined based on several factors, including the characteristics of the receivables and accounts included in the trust portfolio as of the CLOSING DATE for that series and the desired rating for each class, and o will be established on the basis of requirements of each rating agency rating the certificates of that series or class. Enhancement may be in the form of: o the subordination of one or more classes of the certificates of a series, o the establishment of any cash collateral guaranty or account, o a COLLATERAL INVESTED AMOUNT, o a letter of credit, o a surety bond, o an insurance policy, o a guaranteed rate agreement, o a maturity guaranty facility, o a tax protection agreement, o an interest rate swap or cap, o a spread account, o a reserve account, o the use of cross-support features, or o any combination of the foregoing. Enhancement will not provide protection against all risks of loss or guarantee repayment of the entire principal balance of the certificates and/or payment of interest. If losses occur which exceed the amount covered by enhancement or which are not covered by enhancement, certificateholders will bear their allocable share of deficiencies. If enhancement is provided for a series or class of certificates, the related prospectus supplement will describe: o the amount payable under the enhancement, o any additional conditions to payment under enhancement not described in this prospectus, o the conditions, if any, under which: - the amount payable under enhancement may be reduced, and - enhancement may be ended or replaced, and o any material provision of any agreement relating to enhancement. The related prospectus supplement may also provide information about any enhancement provider, including: o a brief description of its principal business activities, o its principal place of business, place of incorporation and the jurisdiction under which it is chartered or licensed to do business, o if applicable, the identity of regulatory agencies which exercise primary jurisdiction over the conduct of its business, and o its total assets, and its stockholders' or policy holders' surplus, if applicable, and other appropriate financial information as of the date specified in the related prospectus supplement. The related prospectus supplement may specify if enhancement for a series may be available to pay principal of the series' certificates after EARLY AMORTIZATION EVENTS occur for that series. If so, the enhancement provider may have an interest in cash flows relating to the receivables, to the extent described in the related prospectus supplement. SPECIFIC FORMS OF ENHANCEMENT The related prospectus supplement will also specify the manner and to what extent the following forms of enhancement or other enhancement applies to your series of certificates or any class of your series: SUBORDINATION One or more classes of certificates of any series may be subordinated as described in the related prospectus supplement to the extent necessary to fund payments on the senior certificates. The rights of the holders of any subordinated certificates to receive distributions of principal and/or interest on any DISTRIBUTION DATE for that series will be subordinated in right and priority to the rights of the holders of senior certificates, but only to the extent described in the related prospectus supplement. The related prospectus supplement may specify if subordination may apply only for some types of losses not covered by another enhancement. The related prospectus supplement will also provide information concerning: o the amount of subordination of a class or classes of subordinated certificates in a series, o the circumstances in which subordination will be applicable, o the manner, if any, in which the amount of subordination will decrease over time, and o the conditions under which amounts available from payments that would otherwise be made to holders of subordinated certificates will be distributed to holders of senior certificates. If collections of receivables otherwise distributable to holders of a subordinated class of a series will be used as support for a class of another series, the related prospectus supplement will specify the manner and conditions for applying this cross-support feature. CASH COLLATERAL GUARANTY OR ACCOUNT Support for a series or one or more classes of certificates may be provided by: o a CASH COLLATERAL GUARANTY secured by the deposit of cash or some eligible investments in a CASH COLLATERAL ACCOUNT reserved for the beneficiaries of the CASH COLLATERAL GUARANTY, or o a CASH COLLATERAL ACCOUNT alone. The amount available from the CASH COLLATERAL GUARANTY or the CASH COLLATERAL ACCOUNT will be the lesser of (1) amounts on deposit in the CASH COLLATERAL ACCOUNT and (2) an amount specified in the related prospectus supplement. The related prospectus supplement will describe the circumstances under which payments are made to beneficiaries of the CASH COLLATERAL GUARANTY from the CASH COLLATERAL ACCOUNT or from the CASH COLLATERAL ACCOUNT directly. COLLATERAL INVESTED AMOUNT An undivided interest in the trust called the COLLATERAL INVESTED AMOUNT, in an amount initially equal to the percentage of the certificates of a series specified in the prospectus supplement for that series, may initially provide support for a series or one or more classes of certificates. That series may also have the benefit of a CASH COLLATERAL GUARANTY or CASH COLLATERAL ACCOUNT with an initial amount on deposit in that account, if any, as specified in the related prospectus supplement which will be increased to the extent: o TRC chooses, under the conditions specified in the related prospectus supplement, to apply principal collections allocable to the COLLATERAL INVESTED AMOUNT to decrease the COLLATERAL INVESTED AMOUNT, o principal collections allocable to the COLLATERAL INVESTED AMOUNT are required to be deposited into the CASH COLLATERAL ACCOUNT as specified in the related prospectus supplement, and o excess finance charge collections are required to be deposited into the CASH COLLATERAL ACCOUNT as specified in the related prospectus supplement. The total amount of enhancement available from the COLLATERAL INVESTED AMOUNT and, if applicable, the CASH COLLATERAL GUARANTY or CASH COLLATERAL ACCOUNT will be the lesser of the sum of: o the COLLATERAL INVESTED AMOUNT and the amount on deposit in the CASH COLLATERAL ACCOUNT, and o an amount specified in the related prospectus supplement. The related prospectus supplement will describe the circumstances under which: o payments which otherwise would be made to holders of the COLLATERAL INVESTED AMOUNT will be distributed to holders of certificates, and o if applicable, payment will be made under the CASH COLLATERAL GUARANTY or under the CASH COLLATERAL ACCOUNT. LETTER OF CREDIT One or more letters of credit may provide support for a series or one or more classes of certificates. The letter of credit may provide limited protection against some losses in addition to or instead of other enhancement. The issuer of the letter of credit will be obligated to honor demands as to the letter of credit, to the extent of the amount available under the letter of credit, to provide funds under the circumstances and under the conditions specified in the related prospectus supplement. SURETY BOND OR INSURANCE POLICY A surety bond may be purchased for the benefit of the holders of any series or class of certificates to assure distributions of interest or principal for that series or class in the manner and amount specified in the related prospectus supplement. One or more insurance companies may provide insurance, to a series or one or more classes of certificates, to guarantee, for one or more classes of that series, distributions of interest or principal in the manner and amount specified in the related prospectus supplement. SPREAD ACCOUNT Support for a series or one or more classes of certificates may be provided by the periodic deposit of available excess cash flow from the trust assets into a spread account, intended to assist with subsequent distribution of interest and principal on that series or class in the manner specified in the related prospectus supplement. RESERVE ACCOUNT The establishment of a RESERVE ACCOUNT provides support for a series or one or more classes of certificates. The RESERVE ACCOUNT may be funded, to the extent provided in the related prospectus supplement, by: o an initial cash deposit, o the retention of excess cash, o periodic distributions of principal or interest or both otherwise payable to one or more classes of certificates, including subordinated certificates, o the provision of a letter of credit, guarantee, insurance policy or other form of credit, or o any combination of these items. The RESERVE ACCOUNT will assist with the subsequent distribution of principal or interest on that series or class in the manner provided in the related prospectus supplement. THE POOLING AND SERVICING AGREEMENT CONVEYANCE OF RECEIVABLES Under the POOLING AGREEMENT, TRC has transferred to the trust its interest in: o all receivables and proceeds existing on and after the CUT-OFF DATE in the initial accounts and all receivables and proceeds existing on and after each ADDITION DATE in any AUTOMATIC ADDITIONAL ACCOUNTS, o any merchant fees and deferred billing fees, o the RECEIVABLES PURCHASE AGREEMENT, and o the BANK RECEIVABLES PURCHASE AGREEMENT. TRC must indicate in its computer records that the receivables from any transfer of receivables to the trust after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE, have been conveyed to the trust. TRC must also file all Uniform Commercial Code financing statements. TRC will then provide the trustee with a computer file, microfiche list or printed list containing an accurate and complete list of each initial account, ADDITIONAL ACCOUNT and SUPPLEMENTAL ACCOUNT showing: o the account number, o the total outstanding amount, and o the total amount of PRINCIPAL RECEIVABLES. The physical documentation relating to the accounts or the receivables will not be stamped or marked to show the transfer of receivables to the trust. RNB will retain all other records or agreements about the accounts or the receivables. ADDITION OF TRUST ASSETS Accounts will be designated to have their receivables added to the trust automatically as they are originated and the receivables in these accounts will be immediately sold by the CREDIT CARD ORIGINATOR to TCC. These receivables will then be sold by TCC to TRC and then transferred by TRC to the trust. Each AUTOMATIC ADDITIONAL ACCOUNT will be included as an account from the date it is created, and all existing and future receivables in these accounts will be transferred to the trust after being purchased by TRC. TRC may elect at any time to end or suspend the inclusion of accounts that would otherwise be AUTOMATIC ADDITIONAL ACCOUNTS by delivering to the trustee, the rating agencies and the servicer, 10 days' written notice of this election. TRC will be permitted to continue designating AUTOMATIC ADDITIONAL ACCOUNTS if the AGGREGATE ADDITION LIMIT would not be exceeded because of the inclusion of the AUTOMATIC ADDITIONAL ACCOUNTS as accounts. If the AGGREGATE ADDITION LIMIT would be exceeded, TRC will not be permitted to continue designating AUTOMATIC ADDITIONAL ACCOUNTS unless: o the DEFAULT PERCENTAGE is less than 10.5%, and o the PAYMENT RATE PERCENTAGE is greater than or equal to 10.0%, and o the TRUST PORTFOLIO YIELD less the BASE RATE (three month average) is greater than or equal to 1.5%. In any event, the number of accounts to be included as AUTOMATIC ADDITIONAL ACCOUNTS for the related six-month period must be less than or equal to 30% of the number of accounts as of the first day of the six-month period, unless such inclusion will not cause a RATINGS EFFECT. TRC intends to continue automatically adding accounts. If TRC stops the automatic designation of new accounts, TRC will not restart designating AUTOMATIC ADDITIONAL ACCOUNTS until a date specified in a written notice given by TRC to the trustee. TRC will specify in the notice that on the RESTART DATE the conditions described above will be satisfied on the RESTART DATE. The AGGREGATE ADDITION LIMIT is intended to limit the extent to which TRC, by designating AUTOMATIC ADDITIONAL ACCOUNTS, may alter the composition of the accounts without rating agency consent. TRC must make an addition to the trust on the required designation date if, on the last business day of any MONTHLY PERIOD, either: o the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, is less than the REQUIRED RETAINED TRANSFEROR AMOUNT, or o the amount of PRINCIPAL RECEIVABLES in the trust is less than the REQUIRED PRINCIPAL BALANCE. TRC will not be required to add receivables in ADDITIONAL ACCOUNTS if the TRANSFEROR AMOUNT, excluding the interest represented by any SUPPLEMENTAL CERTIFICATE, equals or exceeds the REQUIRED RETAINED TRANSFEROR AMOUNT or the total amount of PRINCIPAL RECEIVABLES in the trust equals or exceeds the REQUIRED PRINCIPAL BALANCE before the proposed ADDITION DATE. The receivables to be added will be from receivables generated from accounts owned by RNB or another CREDIT CARD ORIGINATOR. Alternatively, PARTICIPATIONS or certificates of undivided interests in a pool of assets primarily from open end credit card receivables originated by RNB or another CREDIT CARD ORIGINATOR may be added to the trust. These PARTICIPATION INTERESTS may, for example, include rights in TRC's interests in other trusts which have as their primary assets open end credit card receivables originated by RNB or another CREDIT CARD ORIGINATOR. Any PARTICIPATION INTERESTS transferred to the trust must be registered under the Securities Act or held for at least the Securities Act Rule 144(k) holding period before transfer to the trust. PARTICIPATION INTERESTS can be added to the trust only upon satisfaction of the conditions specified in the POOLING AGREEMENT. There are currently no PARTICIPATION INTERESTS held by the trust. In connection with an addition of a SUPPLEMENTAL ACCOUNT or PARTICIPATION INTEREST, RNB or another CREDIT CARD ORIGINATOR may sell to TCC or TRC, TCC if it has purchased will then sell to TRC and TRC will then transfer to the trust the receivables from these accounts on the following conditions: o on or before the tenth business day before any addition, TRC has given the trustee, the servicer, each rating agency and the enhancement providers, if any, written notice that the receivables from SUPPLEMENTAL ACCOUNTS or PARTICIPATION INTERESTS will be included as trust assets, o for SUPPLEMENTAL ACCOUNTS, on or before the date the receivables are added to the trust, TRC has delivered to the trustee a written assignment and a computer file, microfiche list or printed list containing a true and complete list of these SUPPLEMENTAL ACCOUNTS specifying for each account its account number, the total amount outstanding in the account and the total amount of PRINCIPAL RECEIVABLES outstanding in the account, o for an addition other than a required addition, TRC has received confirmation from each rating agency that the addition will not result in a RATINGS EFFECT, o for a required addition which exceeds the AGGREGATE ADDITION LIMIT, TRC has provided Standard & Poor's at least 10 business days' written notice of each addition and Standard & Poor's has notified TRC that the addition will not result in a RATINGS EFFECT, and o on or before the date any receivables or PARTICIPATION INTERESTS are added to the trust, TRC has delivered to the trustee and enhancement providers, if any, a certificate of an authorized officer stating that: - the SUPPLEMENTAL ACCOUNTS are eligible accounts, and - TRC reasonably believes that: o the addition will not cause an EARLY AMORTIZATION EVENT for any series based on the facts known to the officer at the time of the certification, and o no selection procedure was used by TRC that would result in a selection of SUPPLEMENTAL ACCOUNTS, from the available eligible accounts owned by RNB, that would have a result that would be materially less favorable to the interests of the certificateholders of any series on the date of the addition than a random selection. TRC may direct that the PRINCIPAL RECEIVABLES in the ADDITIONAL ACCOUNTS be treated as outstanding on the last day of the MONTHLY PERIOD preceding the MONTHLY PERIOD in which the addition is made for purposes of calculating FLOATING ALLOCATION PERCENTAGES and PRINCIPAL ALLOCATION PERCENTAGES. This direction may be made on the ADDITION DATE only if all collections from the ADDITIONAL ACCOUNTS for the current MONTHLY PERIOD are deposited in the COLLECTION ACCOUNT. Following any addition, the servicer will distribute collections to the certificateholders' interest of each series and the TRANSFEROR AMOUNT for the balance of that MONTHLY PERIOD, including the collections deposited on the ADDITION DATE. Each interest receives the same distribution of FINANCE CHARGE RECEIVABLES, PRINCIPAL RECEIVABLES and DEFAULTED AMOUNTS that it would have received if the ADDITIONAL ACCOUNTS had been included in the trust for the entire MONTHLY PERIOD in which the addition occurred. RNB or its affiliates may originate or acquire portfolios of open end credit card accounts. The receivables in an acquired portfolio, or a PARTICIPATION INTEREST, may be sold to TCC, and later sold to TRC and then transferred to the trust. These sales must meet the conditions for additions of SUPPLEMENTAL ACCOUNTS or PARTICIPATION INTERESTS. ADDITIONAL ACCOUNTS or PARTICIPATION INTERESTS may include accounts originated using criteria different from those that were applied to the initial accounts. These accounts may have been originated at a later date or may have been part of a portfolio of open end credit card accounts that were not part of the RNB portfolio as of the CUT-OFF DATE. Some of these accounts may have been acquired from other institutions. ADDITIONAL ACCOUNTS and accounts included in PARTICIPATION INTERESTS may not be of the same type as those previously included in the trust. For these reasons, there can be no assurance that the ADDITIONAL ACCOUNTS or PARTICIPATION INTERESTS will be of the same credit quality or have the same payment characteristics as the initial accounts or the ADDITIONAL ACCOUNTS previously included in the trust. ADDITIONAL ACCOUNTS of a type different from the initial accounts may consist of fees, charges and amounts that are different from the FINANCE CHARGE RECEIVABLES and PRINCIPAL RECEIVABLES in the initial RNB portfolio. PARTICIPATION INTERESTS may be added to the trust. The servicer will designate the portions of funds collected or to be collected for these receivables or PARTICIPATION INTERESTS to be treated for purposes of the POOLING AGREEMENT as PRINCIPAL RECEIVABLES and FINANCE CHARGE RECEIVABLES. REMOVAL OF ACCOUNTS TRC has the right to require reassignment to itself, or another company designated by it, of all of the trust's rights in and to the receivables from REMOVED ACCOUNTS or PARTICIPATION INTERESTS under the following conditions: o on or before ten business days before the removal date, TRC gives the trustee, the servicer, each rating agency and any enhancement provider written notice of the removal including the date for removal of the REMOVED ACCOUNTS and PARTICIPATION INTERESTS, o on or before ten business days after the removal date, TRC delivers to the trustee a computer file, microfiche list or printed list containing an accurate and complete list of the REMOVED ACCOUNTS specifying the account number, the total amount outstanding in the account and the total amount of PRINCIPAL RECEIVABLES outstanding in the account, o TRC will represent and warrant that as of the removal date the list of REMOVED ACCOUNTS delivered to the trustee is accurate and complete in all material respects, o TRC receives confirmation from each rating agency that the removal will not result in a RATINGS EFFECT, o TRC delivers to the trustee and any enhancement provider entitled under the SERIES SUPPLEMENT a certificate of an authorized officer, dated the removal date, stating that TRC reasonably believes that: - the removal will not cause an EARLY AMORTIZATION EVENT to occur for any series based on the facts then known to such officer, and - no selection procedure materially adverse to the interests of the certificateholders has been used in removing REMOVED ACCOUNTS from any pool of accounts or PARTICIPATION INTERESTS of a similar type, and o TRC pays the fair market value of the receivables in the REMOVED ACCOUNTS to the trust. The removal can occur for a number of reasons including a determination by TRC that the trust contains more receivables than TRC is obligated to retain in the trust under the POOLING AGREEMENT and any SERIES SUPPLEMENTS and a determination that TRC does not desire to obtain additional financing through the trust at that time. After satisfying the above conditions, the trustee will execute and deliver to TRC or its designee a written reassignment. The trustee will then be considered to sell, transfer, assign, set over and otherwise convey to TRC or its designee, all of its rights in the receivables arising in the REMOVED ACCOUNTS or PARTICIPATION INTERESTS. Also, on the date when any receivable in an account becomes a DEFAULTED RECEIVABLE, the trustee will automatically transfer to TRC, all of its rights to the DEFAULTED RECEIVABLES, any FINANCE CHARGE RECEIVABLES which have been charged off as uncollectible in that account, and all monies due or to become due and proceeds in that account. Each account with a DEFAULTED RECEIVABLE will be a REMOVED ACCOUNT and the date for removal will be the first date that any receivable in that account became a DEFAULTED RECEIVABLE. Collections received from the cardholder or from the sale of the defaulted account will be treated as collections of PRINCIPAL RECEIVABLES. REPRESENTATIONS AND WARRANTIES On the CLOSING DATE, TRC will represent and warrant to the trust that: o on the CUT-OFF DATE for each initial account, on the date of creation for each AUTOMATIC ADDITIONAL ACCOUNT, and on the ADDITION CUT-OFF DATE for each SUPPLEMENTAL ACCOUNT, each account that TRC classifies as an "eligible account" will satisfy the requirements of an eligible account, o on the CUT-OFF DATE for each initial account, on the date of creation for each AUTOMATIC ADDITIONAL ACCOUNT, and on the ADDITION CUT-OFF DATE for each SUPPLEMENTAL ACCOUNT, each receivable that TRC classifies as an "eligible receivable" will satisfy the requirements of an ELIGIBLE RECEIVABLE, and o on the date of creation of any new receivable, that receivable will be an ELIGIBLE RECEIVABLE. A receivable will be designated an INELIGIBLE RECEIVABLE and will be assigned a principal balance of zero for the purpose of determining the total amount of PRINCIPAL RECEIVABLES on any day that any representation or warranty of TRC is not true and correct in any material respect for any receivables transferred to the trust by TRC and, as a result: o the receivables become DEFAULTED RECEIVABLES, or o the trust's rights in and to those receivables or the proceeds of those receivables are impaired or are not available to the trust free and clear of any lien. TRC may cure any breach of a representation or warranty of eligibility within 60 days after the earlier to occur of the discovery by TRC or the receipt by TRC of written notice given by the trustee of the breach. These receivables will not be considered INELIGIBLE RECEIVABLES and these PRINCIPAL RECEIVABLES will be included in determining the total PRINCIPAL RECEIVABLES in the trust if, on any day before the end of the period: o the relevant representation and warranty is true and correct in all material respects as if made on that day, and o TRC has delivered to the trustee a certificate of an authorized officer describing the nature of the breach and the manner in which the representation and warranty became true and correct. On and after the date of its designation as an INELIGIBLE RECEIVABLE, each INELIGIBLE RECEIVABLE will not be given credit in determining the total amount of PRINCIPAL RECEIVABLES used to calculate the TRANSFEROR AMOUNT, the FLOATING ALLOCATION PERCENTAGE and the PRINCIPAL ALLOCATION PERCENTAGE. On the first DISTRIBUTION DATE following the MONTHLY PERIOD in which the reassignment obligation arises, TRC will deposit into the SPECIAL FUNDING ACCOUNT an amount equal to the REQUIRED RETAINED TRANSFEROR AMOUNT less the TRANSFEROR AMOUNT (which has been reduced by the amount of the INELIGIBLE RECEIVABLE and which excludes the interest represented by any SUPPLEMENTAL CERTIFICATE). The payment of the deposit amount will be considered payment in full of all of the INELIGIBLE RECEIVABLES. The obligation of TRC to make these deposits is the sole remedy for any breach of the representations and warranties for the receivable available to certificateholders of any series, the trustee on behalf of certificateholders, or any enhancement provider. TRC will also make representations and warranties to the trust that as of the CLOSING DATE: o it is a corporation validly existing and in good standing under the laws of the State of Minnesota, o it has the authority to consummate the transactions contemplated by the POOLING AGREEMENT and the related SERIES SUPPLEMENT and each of these agreements constitutes a valid, binding and enforceable agreement of TRC, o the transfer of receivables by it to the trust under the POOLING AGREEMENT is either a valid transfer and assignment to the trust of all right, title and interest of TRC in and to the receivables and the proceeds or the grant of a security interest under the UCC in the receivables, and o the transfer of the proceeds for each receivable then existing on the date of its transfer to the trust or, for each receivable arising later, upon its creation, is either: - a valid transfer and assignment to the trust of all right, title and interest of TRC in and to the proceeds, or - the grant of a security interest under the UCC in the proceeds, which will be enforceable in each case except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting the enforcement of creditors' rights and by general principles of equity, whether considered in a suit at law or in equity. If TRC breaches these representations and warranties and that breach has a material adverse effect on the certificateholders' interest in the receivables, either: o the trustee or the holders of certificates evidencing not less than 50% of the total unpaid principal amount of the certificates of all series, by written notice to TRC and the servicer and to the trustee, may direct TRC to accept the reassignment of the receivables transferred to the trust by TRC within 60 days of the notice, or within a longer period specified in the notice, or o the receivables will not be reassigned to TRC if, on any day before the end of a 60-day or longer period: - the relevant representation and warranty is true and correct in all material respects as if made on that day, and - TRC has delivered to the trustee a certificate of an authorized officer describing the nature of the breach and the manner in which the relevant representation and warranty became true and correct. TRC must accept the reassignment of these receivables on the first DISTRIBUTION DATE following the MONTHLY PERIOD in which the reassignment obligation arises. The price for the reassignment will equal: o the total INVESTED AMOUNT for all outstanding series, o amounts invested by enhancement providers, if any, of all series on the DISTRIBUTION DATE on which the purchase is scheduled to be made, o interest payable to certificateholders on that DISTRIBUTION DATE, o any interest amounts that were due but not paid on an earlier DISTRIBUTION DATE, and o interest on the overdue interest amounts, if the applicable SERIES SUPPLEMENT so provides, at the applicable CERTIFICATE RATES through the day before that DISTRIBUTION DATE. The payment of the reassignment price will be considered a payment in full of the receivables and those funds will be deposited into the COLLECTION ACCOUNT. If the trustee or the required percentage of certificateholders of all series gives a notice, the obligation of TRC to make any deposit will be the only remedy for a breach of the representations and warranties available to certificateholders of all series, the trustee on behalf of these certificateholders, or any enhancement provider. An eligible account is an open end credit card account, which is not a commercial account, owned by the CREDIT CARD ORIGINATOR as of the CUT-OFF DATE for the initial account, on the date of creation for an AUTOMATIC ADDITIONAL ACCOUNT, or as of the ADDITION CUT-OFF DATE for a SUPPLEMENTAL ACCOUNT, and: o is in existence and serviced at the facilities of the CREDIT CARD ORIGINATOR or any of its affiliates, o is payable in United States dollars, o has not been identified as an account where the credit cards were reported to the CREDIT CARD ORIGINATOR as lost or stolen, o has not been, and does not have any receivables that have been, sold, pledged, assigned or otherwise conveyed to any person unless the pledge or assignment is released on or before the CLOSING DATE or the ADDITION DATE, o lacks any receivables that are DEFAULTED RECEIVABLES, o lacks any receivables that have been identified as having been incurred because of fraudulent use of any related credit card, and o has a cardholder who has provided as his or her billing address, an address located in the United States or its territories or possessions or a United States military address, except, as of any date of determination, up to 4% of the number of accounts in the trust portfolio may have cardholders who have provided addresses outside of that jurisdiction. As to a SUPPLEMENTAL ACCOUNT, the addition of this account, other than a required addition, would not have a RATINGS EFFECT. An ELIGIBLE RECEIVABLE is a receivable: o which was created in an eligible account, o which was created under the CREDIT CARD GUIDELINES and all requirements of law, and under a cardholder agreement which follows all requirements of law which may apply to the CREDIT CARD ORIGINATOR; provided, however, any failure to follow such laws would have a material adverse effect on certificateholders, o which has obtained or received all consents, licenses, approvals or authorizations of, or registrations with, any governmental authority required for the creation of the receivable or the execution, delivery and performance by the CREDIT CARD ORIGINATOR of the related credit card agreement and such items are in full force and effect as of the date of the creation of the receivable, o to which TRC or the trust has good title free and clear of all liens and security interests at the time of its transfer to the trust, other than any lien for municipal or other local taxes, o which has been validly transferred and assigned from TRC to the trust or was granted a security interest, o which is the legal, valid and binding payment obligation of the cardholder at and after the time of transfer to the trust, legally enforceable against the cardholder under its terms, o which is recognized as an "account," a "general intangible" or "chattel paper" as defined in Article 9 of the UCC, o which has not been waived or modified at the time of its transfer to the trust, except as permitted by the POOLING AGREEMENT, o which is not under any right of rescission, setoff, counterclaim or other defense of the cardholder at the time of its transfer to the trust, including the defense of usury, other than bankruptcy or other debtor relief and equity-related defenses and adjustments permitted by the POOLING AGREEMENT to be made by the servicer, o for which TRC has satisfied all obligations to be fulfilled at the time it is transferred to the trust, and o for which TRC has not taken any action which, or failed to take any action the omission of which, would, at the time of its transfer to the trust, impair the rights of the trust or the certificateholders. It is not required or anticipated that the trustee will make any initial or periodic general examination of any documents or records of the receivables or the accounts for the purpose of: o establishing the presence or absence of defects, o ensuring compliance with TRC's representations and warranties, or o for any other purpose. In addition, it is not anticipated or required that the trustee make any initial or periodic general examination of the servicer for the purpose of establishing the compliance by the servicer with its representations or warranties or the performance by the servicer of its obligations under the POOLING AGREEMENT or for any other purpose. The servicer, however, will deliver to the trustee on or before March 31 of each calendar year an opinion of counsel as to the validity of the interest of the trust in and to the receivables and other components of the trust. INDEMNIFICATION The POOLING AGREEMENT provides that the servicer will indemnify the trust and the trustee from and against any loss, liability, expense, damage or injury suffered or sustained, from the servicer's actions or omissions relating to the trust. Under the POOLING AGREEMENT, TRC and any holder of the TRANSFEROR CERTIFICATE, excluding any SUPPLEMENTAL CERTIFICATE or PARTICIPATION, have agreed to be liable directly to an indemnitee for the entire amount of any losses, claims, damages or liabilities relating to or based on: o the arrangement created by the POOLING AGREEMENT, or o the actions of the servicer taken as though the POOLING AGREEMENT created a partnership under the Delaware Revised Uniform Partnership Act in which TRC and any holder were general partners, to the extent that the trust assets that would remain after the certificateholders and enhancement providers, if any, were paid in full would be insufficient to pay those amounts. This liability for losses, claims, damages or liabilities excludes those incurred by a certificateholder in the capacity of an investor in the certificates of any series because of the performance of the receivables, market fluctuations, a shortfall or failure to make payment under any enhancement or other similar market or investment risks associated with ownership of certificates. The servicer will indemnify and hold harmless TRC and any holder of a TRANSFEROR CERTIFICATE, excluding any SUPPLEMENTAL CERTIFICATE or PARTICIPATION, for any losses, claims, damages and liabilities of TRC and the holder relating to the actions or omissions of the servicer. Except as already mentioned, none of TRC, any holder of the TRANSFEROR CERTIFICATE, the servicer or any of their directors, officers, employees or agents will be under any other liability to the trust, the trustee, the holders of certificates of any series, any enhancement provider or any other person for any action taken, or for refraining from taking any action, in good faith under the POOLING AGREEMENT. However, none of TRC, any holder of the TRANSFEROR CERTIFICATE, the servicer or any of their directors, officers, employees or agents will be protected against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence of any person in the performance of their duties or by reason of reckless disregard of the person's obligations and duties under the POOLING AGREEMENT. The servicer is also not under any obligation to appear in, prosecute or defend any legal action that is not incidental to its servicing responsibilities under the POOLING AGREEMENT. The servicer may, in its own discretion, undertake any legal action which it may believe is necessary or desirable for the benefit of holders of certificates of any series relating to the POOLING AGREEMENT and the rights and duties of the parties to that agreement and the interest of those certificateholders. COLLECTION AND OTHER SERVICING PROCEDURES The servicer is responsible for servicing, collecting, enforcing and administering the receivables under the CREDIT CARD GUIDELINES. Servicing activities to be performed by the servicer include: o collecting and recording payments, o communicating with cardholders, o collection activities for delinquent accounts, o evaluating the increase of credit limits and the issuance of credit cards, o providing billing and tax records, if any, to cardholders, and o maintaining internal records to each account. Managerial and custodial services performed by the servicer on behalf of the trust include: o providing assistance in any inspections of the documents and records relating to the accounts and receivables by the trustee under the POOLING AGREEMENT, o maintaining the agreements, documents and files relating to the accounts and receivables under the credit guidelines as custodian for the trust, and o providing data processing and reporting services for certificateholders of any series and on behalf of the trustee. Under the POOLING AGREEMENT, RNB, as servicer, has the right to delegate any of its responsibilities and obligations as servicer to any of its affiliates and to any third-party service providers that agree to conduct RNB's servicing duties under the POOLING AGREEMENT and the CREDIT CARD GUIDELINES. SERVICING COMPENSATION AND PAYMENT OF EXPENSES As compensation for its servicing activities and as reimbursement for its expenses for any MONTHLY PERIOD, the servicer will receive a servicing fee payable monthly on each DISTRIBUTION DATE in an amount equal to one-twelfth of the product of: o the weighted average of the servicing fee rate as specified in the applicable SERIES SUPPLEMENT, and o the amount of PRINCIPAL RECEIVABLES in the trust on the last day of the previous MONTHLY PERIOD. The share of the servicing fee for any particular series and the amount invested by any enhancement provider, if any, will be determined by the provisions of the applicable SERIES SUPPLEMENT. The share of the servicing fee for any MONTHLY PERIOD not allocated to a particular series will be paid from amounts allocated to the holder of the TRANSFEROR CERTIFICATE and any holder of a PARTICIPATION on that DISTRIBUTION DATE. None of the trust, the trustee, the certificateholders of any series or any enhancement provider will be directly liable to pay the share of the servicing fee for any MONTHLY PERIOD to be paid by any holder of the TRANSFEROR CERTIFICATE or any holder of a PARTICIPATION. Each month, the servicer will pay from its servicing compensation any expenses incurred in connection with servicing the receivables including: o expenses related to the enforcement of the receivables, o payment of the fees and disbursements of the trustee and independent accountants, and o other fees that are not expressly stated in the POOLING AGREEMENT to be payable by the trust, the certificateholders of a series or TRC (except federal, state, local and foreign income, franchise or other taxes or any interest or penalties imposed upon the trust). If RNB is acting as servicer and fails to pay the fees and disbursements of the trustee, the trustee will be entitled to receive the portion of the servicing fee that is equal to the unpaid amounts. Certificateholders will not be liable to the trustee for the servicer's failure to pay those amounts, and any amounts so paid to the trustee will be treated as paid to the servicer for all other purposes of the POOLING AGREEMENT. SERVICER COVENANTS In the POOLING AGREEMENT, the servicer covenants that: o it will duly fulfill all obligations on its part to be fulfilled under or relating to the receivables and the related accounts, and will maintain in effect all qualifications required by law to service the receivables and the related accounts, the failure to comply with which would have a material adverse effect on the interests of the certificateholders, o under the POOLING AGREEMENT, it will not permit any rescission or cancellation of a receivable except as ordered by a court of competent jurisdiction or other governmental authority or in the ordinary course of business and under the CREDIT CARD GUIDELINES, o it will not do, or omit to do, anything that would substantially impair the rights of the certificateholders in any receivable or account, o it will not reschedule, revise or defer payments due on the receivables except in the ordinary course of its business and under the CREDIT CARD GUIDELINES, and o except in connection with its enforcement or collection of an account, it will take no action to cause any receivables to be evidenced by any instrument, except an instrument that, together with one or more other writings, constitutes chattel paper, and if any receivable is so evidenced, it will be reassigned or assigned to the servicer. If any of the representations, warranties or covenants of the servicer for any receivable or the related account are breached the servicer can cure the breach within 60 days of the earlier to occur of the discovery of that breach by the servicer or receipt by the servicer of written notice of that breach given by the trustee. The trustee, however, may agree to a cure period of up to 150 days. If the breach is not cured, all receivables in the account or accounts to which the breach relates will be reassigned or assigned to the servicer if because of the breach the trust's rights in and to any of the receivables are impaired or the proceeds are not available to the trust free and clear of any lien. Receivables will not be reassigned or assigned to the servicer if the breach is cured such that the relevant representation and warranty is true and correct, or the relevant covenant has been complied with, in all material respects. The servicer must deliver to the trustee a certificate of an authorized officer describing the nature of the breach and the manner in which the breach was cured. Any assignment and transfer will be made when the servicer deposits an amount equal to the amount of the receivable in the COLLECTION ACCOUNT on the business day before the DISTRIBUTION DATE after the MONTHLY PERIOD during which the obligation arises. The amount of the deposit will be treated as SHARED PRINCIPAL COLLECTIONS. This reassignment or transfer and assignment to the servicer is the only remedy available to the certificateholders of any series if a covenant or warranty of the servicer is not satisfied. The trust's interest in any reassigned receivables will be automatically assigned to the servicer. See "Description of the Certificates--Shared Principal Collections and Transferor Principal Collections" for more information about these collections. CERTAIN MATTERS REGARDING THE SERVICER The servicer may not resign from its obligations and duties under the POOLING AGREEMENT, except: o on the determination that its duties are no longer permissible under applicable law, or o as may be required for any merger or consolidation of the servicer or the conveyance or transfer of all or substantially all of the servicer's assets. No resignation will become effective until the trustee or a successor to the servicer has assumed the servicer's responsibilities and obligations under the POOLING AGREEMENT. RNB may also transfer its servicing obligations to an affiliate and be relieved of its obligations and duties under the POOLING AGREEMENT. Any person with whom the servicer may be merged or consolidated or any person resulting from any merger or consolidation to which the servicer is a party, or any person succeeding to the business of the servicer, will be the successor to the servicer under the POOLING AGREEMENT. SERVICER DEFAULT A SERVICER DEFAULT refers to: o any failure by the servicer to make any payment, transfer or deposit or to give instructions or notice to the trustee as required by the POOLING AGREEMENT or any SERIES SUPPLEMENT on or before the date occurring five business days after the date the payment, transfer or deposit or instruction or notice is required to be made or given, o failure by the servicer to observe or perform any other covenants or agreements of the servicer as described in the POOLING AGREEMENT or any SERIES SUPPLEMENT which has a material adverse effect on the interests of the certificateholders of any series or class, regardless of whether funds are available from any enhancement, and which continues unremedied for 60 days after written notice was given to the servicer requiring that the situation be remedied, o delegation by the servicer of its duties under the POOLING AGREEMENT in a manner not permitted by the POOLING AGREEMENT, which delegation continues unremedied for 15 days after the date written notice was given to the servicer requiring that the situation be remedied, o any representation, warranty or certification made by the servicer in the POOLING AGREEMENT or any SERIES SUPPLEMENT or in any certificate delivered under the POOLING AGREEMENT or any SERIES SUPPLEMENT which proves to have been incorrect when made, and has a material adverse effect on the rights of the certificateholders of any series or class, regardless of whether funds are available from any enhancement, and which continues unremedied for 60 days after written notice was given to the servicer requiring that the situation be remedied, or o the occurrence of some events of bankruptcy, insolvency or receivership of the servicer. If the delay or failure was caused by an act of God or other similar occurrence and could not be prevented by the use of reasonable diligence, the servicer is allowed an additional 60 days to remedy the situation, however, in the case of a failure to make payment, transfer or deposit, or notice, the servicer is allowed an additional five days to remedy the situation before a servicer default occurs. The servicer agrees to provide the trustee, each rating agency, enhancement providers, if any, the holder of the TRANSFEROR CERTIFICATE and the certificateholders of each series with a description of any failure or delay by it to perform its obligation, together with its notice to the trustee. The servicer shall not be relieved from using its best efforts to perform its obligations in a timely manner after a servicer default occurs. If a SERVICER DEFAULT occurs, the trustee may end all of the rights and obligations of the servicer under the POOLING AGREEMENT by sending a termination notice, in writing, to the servicer. Certificateholders holding certificates comprising more than 50% of the total unpaid principal amount of all outstanding series may also end all the rights and obligations of the servicer under the POOLING AGREEMENT by sending termination notices, in writing, to the servicer, the trustee and to any enhancement providers. If the trustee within 60 days of receipt of a termination notice is unable to obtain any bids from eligible successor servicers and the servicer delivers an officer's certificate stating that the servicer cannot in good faith cure the SERVICER DEFAULT that gave rise to the termination notice, then the trustee will offer TRC the right at its option to purchase the certificateholders' interest for all series. The purchase price for the purchase will be paid on the DISTRIBUTION DATE occurring in the month after receipt of the termination notice and will equal, after allowing for any deposits and distributions to be made on that DISTRIBUTION DATE, the PORTFOLIO REASSIGNMENT PRICE. The trustee will appoint a successor servicer after giving a termination notice. All rights, authority, power and obligations of the servicer under the POOLING AGREEMENT will pass to and be vested in the trustee if: o no successor servicer is appointed by the trustee, or o no successor servicer has accepted the appointment by the time the servicer stops acting as servicer. Before any successor servicer is appointed, the trustee will seek to obtain bids from potential servicers meeting eligibility requirements described in the POOLING AGREEMENT to serve as a successor servicer for servicing compensation not more than the servicing fee. The rights and interest of TRC as holder of the TRANSFEROR CERTIFICATE will not be affected by any termination notice or appointment of a successor servicer. EVIDENCE AS TO COMPLIANCE The POOLING AGREEMENT requires the servicer to furnish an annual report prepared by a firm of nationally recognized independent public accountants stating: o that the firm has applied some procedures agreed upon with the servicer and examined specified documents and records relating to the servicing of the accounts during the servicer's preceding fiscal year, and o that, on the basis of the agreed upon procedures, nothing came to the attention of the firm that caused them to believe that the servicing was not conducted in compliance with the POOLING AGREEMENT and the applicable provisions of each SERIES SUPPLEMENT except for exceptions or errors as the firm believes to be immaterial and any other exceptions as described in the report. The POOLING AGREEMENT requires TRC to deliver to the trustee, each rating agency and enhancement providers, if any, an annual statement stating that the servicer has performed its obligations in all material respects under the POOLING AGREEMENT throughout the preceding fiscal year. If there has been a default in the performance of any obligation during the preceding year, the annual statement will specify the nature and status of the default. Both the report and the statement are expected to be provided within ninety days after the fiscal year ending on _________________________ of each calendar year. Copies of all statements, certificates and reports furnished to the trustee may be obtained by a request in writing delivered to the trustee. AMENDMENTS The POOLING AGREEMENT and each SERIES SUPPLEMENT may be amended without the consent of the certificateholders of any series to: o add covenants, restrictions or conditions of the transferor as considered by TRC's board of directors and the trustee to be for the benefit or protection of the certificateholders, o make the occurrence, or the occurrence and continuance, of a default in any additional covenants, restrictions or conditions a default or EARLY AMORTIZATION EVENT and to provide for grace periods, immediate enforcement or limits on available remedies to the added default, o fix any ambiguity or correct or supplement any provision that may be defective or inconsistent with any other provision, o surrender any right or power of the transferor, o issue a SUPPLEMENTAL CERTIFICATE or PARTICIPATION, o add a PARTICIPATION INTEREST to the trust, o designate an additional transferor, o provide additional enhancement for the benefit of certificateholders of any series, o enable the trust or a portion of the trust to elect to qualify as a financial asset securitization investment trust or comparable tax entity for the securitization of financial assets, or o add, change or eliminate any provisions or modify in any manner the rights of certificateholders of any series then issued and outstanding, only if: - the transferor delivers to the trustee a certificate of an authorized officer stating that the transferor reasonably believes based on facts then known that the amendment will not adversely affect in any material respect the interests of any certificateholder, - except for adding covenants, restrictions or conditions and fixing any ambiguity or correcting or supplementing a provision or surrendering any right or power of the transferor, the amendment will not result in a RATINGS EFFECT, and - a tax opinion is provided. The POOLING AGREEMENT and each SERIES SUPPLEMENT may also be amended at any time by the transferor, the servicer and the trustee with the consent of the holders of certificates that represent at least 66 2/3% of the total unpaid principal amount of the certificates of all adversely affected series. Any amendment may add any provisions, change or eliminate any provisions, or modify in any manner the rights of the certificateholders in the affected series. However, without the consent of each affected certificateholder, no amendment may: o reduce the amount of or delay the timing of any distributions to be made to certificateholders or deposits of amounts to be so distributed or the amount available under any enhancement except to amend the terms of an EARLY AMORTIZATION EVENT, o change the definition or the manner of calculating the interest on any certificate, or o reduce the percentage required to consent to any amendment. The trustee will provide written notice of the substance of any amendment requiring the consent of certificateholders. The notice will be sent to each certificateholder as soon as possible after any amendment becomes effective. TRUSTEE Norwest Bank Minnesota, National Association is the trustee under the POOLING AGREEMENT. The Corporate Trust Department of the trustee is located at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-0069. The trustee and its affiliates may: o enter into normal banking and trust relationships with the transferor, the servicer and their affiliates, o hold certificates of any series in its name but will not be allowed to participate in any decisions or instructions to be given to the trust by certificateholders as a group, o appoint a co-trustee or separate trustees for all or any part of the trust, or o resign at any time. If the trustee appoints a co-trustee or separate trustees, all rights, powers, duties and obligations of the trustee will be conferred or imposed on the trustee and each separate trustee or co-trustee jointly. In any jurisdiction in which the trustee is incompetent or unqualified to perform some acts, those rights, powers, duties and obligations will be conferred or imposed on each separate trustee or co-trustee individually. If so, each separate trustee or co-trustee will exercise and perform those rights, powers, duties and obligations only at the direction of the trustee. If the trustee resigns, TRC will be required to appoint a successor trustee. The trustee may also be removed by the servicer if the trustee becomes ineligible to continue as a trustee under the POOLING AGREEMENT or if the trustee becomes insolvent. The servicer will then be required to appoint a successor trustee. Any resignation or removal of the trustee and appointment of a successor trustee will not become effective until the successor trustee accepts the appointment. TERMINATION OF THE TRUST Unless TRC instructs the trustee otherwise, the trust will end on the TRUST TERMINATION DATE. Once the trust has ended, all right, title and interest in and to the receivables and other funds of the trust will be conveyed and transferred to the holder of the TRANSFEROR CERTIFICATE, any SUPPLEMENTAL CERTIFICATE and any PARTICIPATION except for amounts in accounts maintained by the trust for the final payment of principal and interest to certificateholders. THE BANK RECEIVABLES PURCHASE AGREEMENT AND THE RECEIVABLES PURCHASE AGREEMENT The transfers of the receivables from RNB to TCC and from TCC to TRC before being transferred to the trust are governed by the BANK RECEIVABLES PURCHASE AGREEMENT and the RECEIVABLES PURCHASE AGREEMENT. The BANK RECEIVABLES PURCHASE AGREEMENT governs the transfer from RNB to TCC. The RECEIVABLES PURCHASE AGREEMENT governs the transfer of the receivables from TCC to TRC. TRC could also enter into other purchase agreements directly with CREDIT CARD ORIGINATORS. SALE OF THE RECEIVABLES BANK RECEIVABLES PURCHASE AGREEMENT. Under the BANK RECEIVABLES PURCHASE AGREEMENT, RNB sold to TCC all of its right, title and interest in and to: o the receivables existing at the close of business on the CUT-OFF DATE and later created at any time from the initial accounts until the end of the trust, o the receivables existing on each ADDITION DATE and later created at any time from any AUTOMATIC ADDITIONAL ACCOUNTS until the end of the trust, o any merchant fees and deferred billing fees, o all recoveries from the initial accounts and from the AUTOMATIC ADDITIONAL ACCOUNTS, o all recoveries from specific DEFAULTED RECEIVABLES, and o all monies due or to become due, all amounts received, and all proceeds under the BANK RECEIVABLES PURCHASE AGREEMENT. In connection with any sale of the receivables to TCC after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE, RNB will indicate in its computer files or other relevant microfiche or printed records that the receivables were sold to TCC by RNB and that these receivables have been sold by TCC to TRC and then transferred by TRC to the trust. Additionally, RNB will provide to TCC a computer file, a microfiche list or a printed list containing an accurate and complete list showing each account identified by account number and by total outstanding balance on each account as of the AUTOMATIC ADDITION TERMINATION DATE, the AUTOMATIC ADDITION SUSPENSION DATE or the ADDITION CUT-OFF DATE. RNB will also indicate in its computer files or other records that receivables in REMOVED ACCOUNTS have been repurchased by RNB. The records and agreements of the accounts and receivables are not segregated by RNB from other documents and agreements relating to other credit card accounts and receivables and are not stamped or marked to reflect the sale or transfer of the receivables to TCC. The computer records, other relevant microfiche or printed records of RNB will be marked to evidence the sale or transfer after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE. TCC, as purchaser, has filed one or more UCC financing statements meeting the requirements of state law in the jurisdictions which are necessary to perfect the transfer of the receivables. See "Legal Aspects of the Receivables" for more discussion. Under the BANK RECEIVABLES PURCHASE AGREEMENT, RNB will be required to, and TCC is required to cause RNB to, designate SUPPLEMENTAL ACCOUNTS under the POOLING AGREEMENT to be included as trust accounts. See "The Pooling and Servicing Agreement--Addition of Trust Assets" for information on the conditions to any addition of accounts. RECEIVABLES PURCHASE AGREEMENT. Under the RECEIVABLES PURCHASE AGREEMENT, TCC sold to TRC all of its right, title and interest in and to: o the receivables existing at the close of business on the CUT-OFF DATE and later created at any time from the initial accounts until the end of the trust, o the receivables existing on each ADDITION DATE and later created at any time from any AUTOMATIC ADDITIONAL ACCOUNTS until the end of the trust, o any merchant fees and deferred billing fees, o all recoveries from the initial accounts and from the AUTOMATIC ADDITIONAL ACCOUNTS, o all recoveries from specific DEFAULTED RECEIVABLES, o all monies due or to become due, all amounts received, and all proceeds under the RECEIVABLES PURCHASE AGREEMENT, and o the BANK RECEIVABLES PURCHASE AGREEMENT. In connection with any sale of the receivables to TRC after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE, TCC will indicate in its computer files or other relevant microfiche or printed records that the receivables were sold to TRC by TCC and that these receivables were then transferred by TRC to the trust. Additionally, TCC will provide to TRC a computer file, a microfiche list or a printed list containing an accurate and complete list showing each account identified by account number and by total outstanding balance on each account as of the AUTOMATIC ADDITION TERMINATION DATE, the AUTOMATIC ADDITION SUSPENSION DATE or the ADDITION CUT-OFF DATE. TCC will also indicate in its computer files or other records that receivables in REMOVED ACCOUNTS have been repurchased by TCC. The records and agreements of the accounts and receivables are not segregated by TCC from other documents and agreements relating to other credit card accounts and receivables and are not stamped or marked to reflect the sale or transfer of the receivables to TCC. The computer records, other relevant microfiche or printed records of TCC will be marked to evidence the sale or transfer after the AUTOMATIC ADDITION TERMINATION DATE or the AUTOMATIC ADDITION SUSPENSION DATE and before the RESTART DATE. TCC, as seller, has filed one or more UCC financing statements meeting the requirements of state law in the jurisdictions which are necessary to perfect the transfer of the receivables. See "Legal Aspects of the Receivables" for more discussion. Under the RECEIVABLES PURCHASE AGREEMENT, TCC will be required to, and TRC is required to cause TCC to, designate SUPPLEMENTAL ACCOUNTS under the POOLING AGREEMENT to be included as trust accounts. See "The Pooling and Servicing Agreement--Addition of Trust Assets" for information on the conditions to any addition of accounts. REPRESENTATIONS AND WARRANTIES BANK RECEIVABLES PURCHASE AGREEMENT. In the BANK RECEIVABLES PURCHASE AGREEMENT, RNB represents and warrants to TCC as of the CLOSING DATE and on each ADDITION DATE that: o RNB is a national banking association validly existing and in good standing under the laws of the United States, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under the BANK RECEIVABLES PURCHASE AGREEMENT, o the BANK RECEIVABLES PURCHASE AGREEMENT constitutes a valid and binding obligation of RNB, enforceable against RNB under its terms, according to customary bankruptcy-and equity-related exceptions, o RNB is the legal and beneficial owner of all right, title and interest in and to each receivable, subject, on the CLOSING DATE, to any participation interest in the receivables held by TCC, o RNB has the full right, power and authority to transfer the receivables under the BANK RECEIVABLES PURCHASE AGREEMENT, o the BANK RECEIVABLES PURCHASE AGREEMENT, or the SUPPLEMENTAL CONVEYANCE for SUPPLEMENTAL ACCOUNTS, to be delivered by RNB, forms a valid transfer and assignment to TCC of all right, title and interest of RNB in and to: - the receivables, - all monies due or to become due, and - all related proceeds, and o on the first CUT-OFF DATE for each initial account, on the date of creation for each AUTOMATIC ADDITIONAL ACCOUNT, and on the ADDITION CUT-OFF DATE for each SUPPLEMENTAL ACCOUNT: - each account classified as an "eligible account" by RNB in any document or report delivered under the BANK RECEIVABLES PURCHASE AGREEMENT will satisfy the requirements for an eligible account, and - each receivable classified as an "eligible receivable" by RNB in any document or report delivered under the BANK RECEIVABLES PURCHASE AGREEMENT will satisfy the requirements for an ELIGIBLE RECEIVABLE. If any representation or warranty is not true and correct in any material way as of the date specified in the BANK RECEIVABLES PURCHASE AGREEMENT and, as a result, the value of the receivable used to determine the total PRINCIPAL RECEIVABLES in the trust is reduced to zero, then, the total principal balance of that receivable under the BANK RECEIVABLES PURCHASE AGREEMENT will be changed to show that the receivable was an INELIGIBLE RECEIVABLE when sold. If so, RNB will repay to TCC the amount of the purchase price originally paid to RNB less the amount of any collections already received from this receivable. If any representation or warranty described above is not true and correct in any material way on the date specified in the BANK RECEIVABLES PURCHASE AGREEMENT and, as a result, RNB is required to accept a reassignment of all of the receivables transferred to the trust by paying the PORTFOLIO REASSIGNMENT PRICE, RNB will be required to accept a reassignment of TCC's interest in those receivables. RNB will also be required to deposit to the COLLECTION ACCOUNT an amount equal to the PORTFOLIO REASSIGNMENT PRICE on the next DISTRIBUTION DATE. RECEIVABLES PURCHASE AGREEMENT. In the RECEIVABLES PURCHASE AGREEMENT, TCC represents and warrants to TRC as of the CLOSING DATE and on each ADDITION DATE that, among other things: o TCC is a corporation validly existing and in good standing under the laws of the State of Minnesota, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under the RECEIVABLES PURCHASE AGREEMENT, o the RECEIVABLES PURCHASE AGREEMENT constitutes a valid and binding obligation of TCC, enforceable against TCC under its terms, according to customary bankruptcy-and equity-related exceptions, o TCC is the legal and beneficial owner of all right, title and interest in and to each receivable, o TCC has the full right, power and authority to transfer the receivables under the RECEIVABLES PURCHASE AGREEMENT, o the RECEIVABLES PURCHASE AGREEMENT or the SUPPLEMENTAL CONVEYANCE for SUPPLEMENTAL ACCOUNTS, to be delivered by TCC, forms a valid transfer and assignment to TRC of all right, title and interest of TCC in and to: - the receivables, - all monies due or to become due, and - all related proceeds, and o on the first CUT-OFF DATE for each initial account, on the date of creation for each AUTOMATIC ADDITIONAL ACCOUNT, and on the ADDITION CUT-OFF DATE for each SUPPLEMENTAL ACCOUNT: - each account classified as an "eligible account" by TCC in any document or report delivered under the RECEIVABLES PURCHASE AGREEMENT will satisfy the requirements for an eligible account, and - each receivable classified as an "eligible receivable" by TCC in any document or report delivered under the RECEIVABLES PURCHASE AGREEMENT will satisfy the requirements for an ELIGIBLE RECEIVABLE. If any representation or warranty is not true and correct in any material way as of the date specified in the RECEIVABLES PURCHASE AGREEMENT and, as a result, the value of the receivable used to determine the total PRINCIPAL RECEIVABLES in the trust is reduced to zero, then, the total principal balance of that receivable under the RECEIVABLES PURCHASE AGREEMENT will be changed to show that the receivable was an INELIGIBLE RECEIVABLE when sold. If so, TCC will repay to TRC the amount of the purchase price originally paid to TCC less the amount of any collections already received from this receivable. If any representation or warranty described above is not true and correct in any material way on the date specified in the RECEIVABLES PURCHASE AGREEMENT and, as a result, TRC is required to accept a reassignment of all of the receivables transferred to the trust by paying the PORTFOLIO REASSIGNMENT PRICE, TCC will be required to accept a reassignment of TRC's interest in those receivables. TCC will also be required to deposit into the COLLECTION ACCOUNT an amount equal to the PORTFOLIO REASSIGNMENT PRICE on the next DISTRIBUTION DATE. COVENANTS BANK RECEIVABLES PURCHASE AGREEMENT. It is the intention of RNB and TCC that the transfer of the receivables by RNB to TCC under the BANK RECEIVABLES PURCHASE AGREEMENT be viewed as an absolute sale of the receivables by RNB to TCC. This transfer is not intended to be a pledge of the receivables by RNB to TCC to secure a debt or other obligation of RNB. The BANK RECEIVABLES PURCHASE AGREEMENT will also be considered a security agreement within the meaning of Article 9 of the UCC and the conveyance described in the POOLING AGREEMENT will be considered a grant by RNB to TCC of a "security interest" within the meaning of Article 9 of the UCC in all of RNB's right, title and interest in and to the receivables. RNB may reduce the annual percentage rates of the periodic finance charges assessed on the receivables, reduce other fees charged on any of the accounts or change the other terms of the accounts as required by law or as RNB may determine to be appropriate. However, RNB may not otherwise take these actions if, either: o as a result of a reduction or change it is reasonably expected that the reduction or change will cause an EARLY AMORTIZATION EVENT to occur for that series, or o a reduction or change: - when RNB owns a comparable segment of receivables, is not applied to the comparable segment of consumer open end credit accounts owned by RNB with the same characteristics as the receivables that are being reduced or changed, and - when RNB does not own a comparable segment of receivables will be made with the intent to benefit TRC over the certificateholders or to materially adversely affect the certificateholders, unless restricted by an endorsement, sponsorship, or other agreement between TRC and an unrelated third party or by the terms of the accounts. RECEIVABLES PURCHASE AGREEMENT. It is the intention of TCC and TRC that the transfer of the receivables by TCC to TRC under the RECEIVABLES PURCHASE AGREEMENT be viewed as an absolute sale of the receivables by TCC to TRC. This transfer is not intended to be a pledge of the receivables by TCC to TRC to secure a debt or other obligation of TCC. The RECEIVABLES PURCHASE AGREEMENT will also be considered a security agreement within the meaning of Article 9 of the UCC and the conveyance described in the POOLING AGREEMENT will be considered a grant by TCC to TRC of a "security interest" within the meaning of Article 9 of the UCC in all of TCC's right, title and interest in and to the receivables. TRANSFER OF ACCOUNTS AND ASSUMPTION OF RNB'S, TCC'S AND TRC'S OBLIGATIONS RNB, TCC and TRC may transfer all or a portion of RNB's consumer open end credit card accounts and the related receivables upon the satisfaction of various conditions. The transfer must include: o all of the accounts, o RNB's, TCC's and TRC's remaining interest in the receivables arising under the accounts, and o all servicing functions and other obligations under the RECEIVABLES PURCHASE AGREEMENT, the BANK RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT. This transfer may be to another entity which may or may not be an entity that is affiliated with RNB, TCC or TRC. The RECEIVABLES PURCHASE AGREEMENT, the BANK RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT allow RNB, TCC and TRC to assign, convey and transfer the ASSIGNED ASSETS and the ASSUMED OBLIGATIONS to the assuming entity, without the consent or approval of certificateholders if the following conditions are met: o the assuming entity, the trustee and any of RNB, TCC or TRC have entered into an assumption agreement providing for the assuming entity to assume the ASSUMED OBLIGATIONS, including the obligations under the RECEIVABLES PURCHASE AGREEMENT, the BANK RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT, to transfer the receivables generated by the accounts to any of TCC, TRC or the trust, as the case may be, o all filings required to perfect the interest of TCC, TRC or the trustee in the receivables generated by the accounts were made and copies have been delivered to the trustee, o TCC, TRC or the trustee, as the case may be, has received written notice from each rating agency that the transfer and assumption will not have a RATINGS EFFECT, and copies of the notice were sent to the servicer and the trustee, o TCC, the transferor, or the trustee, as the case may be, has received an opinion of counsel as to matters specified by TCC, TRC or the trustee, and o the trustee has received a tax opinion. The RECEIVABLES PURCHASE AGREEMENT, the BANK RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT provide that the parties to each document may enter into amendments to that document to permit a transfer and assumption without the consent of the certificateholders. After any permitted transfer and assumption, RNB and TCC will have no further liability or obligation under the RECEIVABLES PURCHASE AGREEMENT, the BANK RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT, other than any liabilities that existed before the transfer. RNB and TCC will remain liable for all representations, warranties and covenants made by them before the transfer. AMENDMENT The BANK RECEIVABLES PURCHASE AGREEMENT may be amended by TCC and RNB without the consent of the certificateholders. The RECEIVABLES PURCHASE AGREEMENT may be amended by TRC and TCC without the consent of the certificateholders. No amendment to either the RECEIVABLES PURCHASE AGREEMENT or the BANK RECEIVABLES PURCHASE AGREEMENT will be allowed to cause a RATINGS EFFECT. TERMINATION The BANK RECEIVABLES PURCHASE AGREEMENT will end upon the mutual agreement of the parties to that agreement. The RECEIVABLES PURCHASE AGREEMENT will end immediately after the trust has ended. Additionally, if a bankruptcy trustee or receiver is appointed for TCC or another liquidation event occurs, TCC will immediately stop selling receivables to TRC and promptly give notice of the event to TRC and to the trustee. SECURITY RATINGS Any rating of the certificates by a rating agency will indicate: o its view on the likelihood that certificateholders will receive required interest and principal payments, and o its evaluation of the receivables and the availability of any enhancement for the certificates. Among the things a rating will not indicate are: o the likelihood that an EARLY AMORTIZATION EVENT will occur, o the likelihood that a United States withholding tax will be imposed on non-U.S. certificateholders, o the marketability of the certificates o the market price of the certificates, or o whether the certificates are an appropriate investment for you. A rating will not be a recommendation to buy, sell or hold the certificates. A rating may be lowered or withdrawn at any time by a rating agency. TRC will request a rating of the certificates offered by this prospectus and the prospectus supplement from at least one rating agency. It will be a condition to the issuance of the certificates of each series or class offered by this prospectus and the related prospectus supplement that they be rated in one of the four highest rating categories by at least one nationally recognized rating organization selected by TRC to rate any series. The rating or ratings applicable to the certificates of each series or class offered by this prospectus will be provided in the related prospectus supplement. Rating agencies other than those requested could assign a rating to the certificates and that rating could be lower than any rating assigned by a rating agency chosen by TRC. LEGAL ASPECTS OF THE RECEIVABLES TRANSFER OF RECEIVABLES The transfer of the receivables by TRC to the trust constitutes either a valid transfer and assignment of all of TRC's interest in and to the receivables or a grant of a security interest in the receivables. See "The Pooling and Servicing Agreement--Representations and Warranties." The receivables are accounts, general intangibles or chattel paper for purposes of the UCC. Both the transfer and assignment of accounts and the transfer of accounts as security for an obligation are treated under Article 9 of the UCC as creating a security interest. The filing of a financing statement is required to perfect the trust's interest. If a transfer of general intangibles is considered the creation of a security interest, rather than a sale, Article 9 of the UCC applies and the filing of one or more financing statements is also required to perfect the trust's security interest. Financing statements covering the receivables of the trust will be filed under the UCC. If a transfer of general intangibles is treated as a sale, the UCC is not applicable and no further action is required to protect the trust's interest. Although the priority of general intangibles that come into existence after the initial closing date in this case is not as clear, RNB, TCC and TRC believe that it would not be consistent for a court to give the trust less favorable treatment if the transfer of the receivables is considered to be a sale than if it were considered to be creating a security interest. There are some limited circumstances under the UCC in which an earlier or later transferee of receivables could have an interest in the receivables with priority over the trust's interest. Under the POOLING AGREEMENT, TRC will represent and warrant that it has transferred the receivables to the trust free and clear of all liens and security interests other than tax liens and the interest of TRC as holder of the TRANSFEROR CERTIFICATE. In addition, TRC will covenant that it will not sell, pledge, assign or transfer, or grant, create, incur, assume or suffer to exist any lien on, any receivable except to the trust or in connection with any transfer of the accounts selected for the trust. A tax or other governmental lien on TRC's property arising before a receivable comes into existence also may have priority over the interest of the trust in the receivable. There is a good possibility that the trust may not have a perfected security interest in any of the receivables created after the filing of a petition for relief by or against TCC or TRC under the U.S. bankruptcy code or after the appointment of a receiver or conservator for RNB. It is anticipated that the trust will either own or have a perfected security interest in receivables existing on the date of filing a petition by or against TCC or TRC under the U.S. bankruptcy code or after the date of appointment of a receiver or conservator for RNB and will be able to make payments of principal and interest on the investor certificates, although there can be no assurance that any of these payments would be timely. Because the trust's interest in the receivables is dependent upon TRC's interest in the receivables, which is dependent upon TCC's interest in the receivables, any negative change in the priority or perfection of TRC's or TCC's security interest would correspondingly affect the trust's interest in the affected receivables. In addition, if a receiver or conservator were appointed for RNB, some administrative expenses of the receiver or conservator also may have priority over the interest of the trust in those receivables. While RNB is the servicer, some cash collections on the receivables may be held by RNB and commingled with its funds for brief periods, and if an insolvency event occurs, the trust may not have a perfected interest in the commingled collections. MATTERS RELATING TO BANKRUPTCY OR RECEIVERSHIP RNB has represented and warranted to TCC, and TCC has represented and warranted to TRC that the sale of the receivables is a valid sale. In addition, RNB, TCC and TRC have treated and will treat the transfer of the receivables as a sale. TCC has taken or will take all actions that are required by the UCC to perfect TCC's and TRC's ownership interest in the receivables. If TCC were to become a debtor in a bankruptcy case and a creditor or trustee-in-bankruptcy of the debtor or the debtor itself were to take the position that the sale of receivables from TCC to TRC should be recharacterized as a pledge of the receivables to secure a borrowing from that debtor, then delays in payments of collections of receivables to TRC, to the trust and to certificateholders could occur and reductions in the amount of those payments could result. The FDIC may be appointed a conservator or receiver of RNB. In that capacity, the FDIC has the power to repudiate or disaffirm the obligations of the transferor under the POOLING AGREEMENT or to request a stay of any judicial action or proceeding involving RNB. A valid perfected security interest of TCC should be enforceable, to the extent of TCC's "actual direct compensatory damages," regardless of the insolvency of RNB or the appointment of a receiver or conservator for RNB if: o RNB granted a security interest in the receivables to TCC, TCC granted a security interest in the receivables to TRC and TRC granted a security interest in the receivables to the trust, o the interest was validly perfected before RNB's insolvency, o the interest was not taken or granted in contemplation of RNB's insolvency or with the intent to hinder, delay or defraud RNB or its creditors, o each of the BANK RECEIVABLES PURCHASE AGREEMENT, the RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT is continuously a record of RNB, and o each of the BANK RECEIVABLES PURCHASE AGREEMENT, the RECEIVABLES PURCHASE AGREEMENT and the POOLING AGREEMENT represents a bona fide and arm's length transaction undertaken for adequate consideration in the ordinary course of business. If so, payments to the trust should not be open to an automatic stay of payment or to recovery by the FDIC as unperfected or unenforceable. The FDIC has the right to require the trustee to establish its right to payments by submitting to and completing the administrative claims procedure established under the Financial Institutions Reform, Recovery and Enforcement Act of 1989. The conservator or receiver has the right to request a stay of proceedings as to RNB. This could result in delays in payments on the certificates and possible losses to you. The amount that the FDIC is required to pay is limited to your "actual direct compensatory damages" determined as of the date of the FDIC's appointment as receiver. There is not a statutory definition of "actual direct compensatory damages." The staff of the FDIC takes the position that upon repudiation or disaffirmation these damages would not include interest accrued to the date of actual repudiation or disaffirmation. Under the FDIC interpretation, you would receive interest only through the date of the appointment of the receiver. Since the FDIC may delay actual repudiation or disaffirmation for up to 180 days following its appointment as receiver, you may not receive the full amount of interest owing to you under the certificates. There is one reported federal district court decision that construes the term "actual direct compensatory damages." This 1993 court case construed the term, in the context of the repudiation of zero coupon bonds, to mean the fair market value of those bonds as of the date of repudiation. You would not be compensated for the period between the appointment of the receiver and the date of repudiation under either interpretation. In a 1993 decision, Octagon Gas Systems, Inc. v. Rimmer, 997 F.2d 948 (10th Cir. 1993), cert. denied, 114 S. Ct. 554 (1993), the United States Court of Appeals for the 10th Circuit suggested that even where a transfer of accounts from a seller to a buyer constitutes a "true sale," the accounts would nevertheless constitute property of the seller's bankruptcy estate in a bankruptcy of the seller. If TCC or TRC were to become part of a bankruptcy proceeding or RNB were to become subject to receivership and a court were to follow the Octagon court's reasoning, certificateholders might experience delays in payment and possibly losses in their investment in the certificates. Counsel has advised TRC that the facts of the Octagon case are distinguishable from those in the sale transactions between RNB and TCC, TCC and TRC and between TRC and the trust and that the reasoning of the Octagon case appears to be inconsistent with established precedent and the UCC. Also, because RNB, TCC, TRC, the trust and the transaction governed by the POOLING AGREEMENT do not have any particular link to the 10th Circuit, it is unlikely that RNB, TCC, or TRC would be subject to an insolvency proceeding in the 10th Circuit. For this reason, the Octagon case should not be binding precedent on a court or receiver in an insolvency proceeding involving the receivables. In addition, if TCC were to become a debtor in a bankruptcy case and a creditor or trustee-in-bankruptcy of the debtor or the debtor itself were to request a court to order TCC substantively consolidated with TRC, delays in payments on the investor certificates could result. Should the bankruptcy court rule in favor of any creditor, trustee-in-bankruptcy or debtor, reductions in payments could result. TRC has taken or will take all actions that are required under the UCC to perfect the trust's interest in the receivables. TRC has also warranted to the trust that the trust will have a first priority interest in the receivables and, with some exceptions, in the proceeds as well. However, a tax or government lien on property of RNB, TCC or TRC which predates the time a receivable is conveyed to the trust may have priority over the interest of the trust in that receivable. TRC's articles of incorporation state that it shall not file a voluntary petition for relief under the U.S. bankruptcy code without the unanimous affirmative vote of all of its directors, including the independent directors. According to the POOLING AGREEMENT, the trustee will covenant that it will not at any time institute against TRC any bankruptcy, reorganization or other proceedings under any federal or state bankruptcy or similar law. In addition, other steps have been or will be taken to avoid TRC's becoming a debtor in a bankruptcy case. Aside from these steps, if TRC were to become a debtor in a bankruptcy case, and a bankruptcy trustee for TRC or a creditor of TRC were to take the position that the transfer of the receivables from TRC to the trust should be recharacterized as a pledge of the receivables, then delays in payments on the certificates and, should the court rule in favor of the trustee or any creditor, reductions in the amount of the payments could result. TRC has been structured in a manner intended to reduce the likelihood of the voluntary or involuntary application for relief under the U.S. bankruptcy code or similar applicable state laws. TRC is also structured to avoid the substantive consolidation of TRC with TCC. TRC is a separate, special purpose subsidiary, whose articles of incorporation contain limitations on the nature of TRC's business and restrictions on the ability of TRC to commence voluntary or involuntary cases or proceedings under these laws without the unanimous vote of all its directors. Additionally, TRC does not intend to file, and TCC has agreed that it will not file, a voluntary petition for relief under the U.S. bankruptcy code or any similar state laws as to TRC. If TRC were to become a debtor in a bankruptcy case causing an EARLY AMORTIZATION EVENT to occur, then, under the POOLING AGREEMENT, additional PRINCIPAL RECEIVABLES would not be transferred to the trust. On the occurrence of some events of bankruptcy, insolvency or receivership, if no EARLY AMORTIZATION EVENT except the commencement of the bankruptcy or similar event exists, the trustee-in-bankruptcy may have the power to continue to require TRC to transfer new receivables to the trust and to prevent the commencement of the EARLY AMORTIZATION PERIOD or, if applicable for any series as specified in the related prospectus supplement, the RAPID ACCUMULATION PERIOD. Specified events of insolvency, conservatorship or receivership of the servicer will result in a SERVICER DEFAULT, which will result in an EARLY AMORTIZATION EVENT. A conservator or receiver of the servicer may have the power to prevent the trustee and the certificateholders from appointing a successor servicer if no SERVICER DEFAULT exists except the commencement of a bankruptcy or similar event. Payments made on repurchases of receivables by RNB or TRC may be recoverable by RNB or TRC, or by a creditor, conservator, receiver or a trustee-in-bankruptcy of RNB or TRC, as a preferential transfer from RNB or TRC if these payments are made within one year before the filing of a bankruptcy case as to RNB or TRC. CONSUMER PROTECTION LAWS The relationship of the cardholder and credit card issuer is extensively regulated by federal and state consumer protection and related laws. For credit cards issued by RNB, the most significant laws include: o the federal Truth-in-Lending Act, o the Fair Credit Billing Act, o the Fair Debt Collection Practices Act, o the Equal Credit Opportunity Act, o the Fair Credit Reporting Act, o the Electronic Funds Transfer Act, o the National Banking Act, and o applicable state laws. Claims may be brought under these statutes by private consumers as well as federal and state regulators. These statutes impose disclosure requirements when a credit card account is advertised, when it is opened, at the end of monthly billing cycles and at year end and, in addition, prohibit discriminatory practices in extending credit and impose limitations on the type of account-related charges that may be assessed. Federal law requires credit card issuers to disclose to consumers: o the interest rates, o cardholder fees, o grace periods, and o balance calculation methods. In addition, cardholders are entitled under current laws to have payments and credits applied to the credit card account promptly, to receive prescribed notices and to require billing errors to be resolved promptly. Some laws, including the laws described above, may limit RNB's ability to collect amounts owing on the receivables regardless of any act or omission on the part of RNB. For example, under the federal Fair Credit Billing Act, a credit card issuer is open to all claims, other than tort claims, and defenses arising out of transactions in which a credit card is used as a method of payment or extension of credit if: o the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card, and o except in cases where there is a relationship between the person honoring the card and the credit card issuer, the amount of the initial transaction exceeds $50 and the place where the initial transaction occurred was in the same state as the cardholder's mailing address or within 100 miles of that address. These statutes further provide that in some cases cardholders cannot be held liable for, or the cardholder's liability is limited to, charges to the credit card account that result from unauthorized use of the credit card. Additional consumer protection laws may be enacted that would impose requirements on the making, enforcement and collection of consumer credit loans. In particular, on May 5, 1999, an amendment to the federal Truth-in-Lending Act was passed by the House of Representatives as part of the bankruptcy reform bill and referred to the Senate. This amendment, among other things, requires disclosure: o on the time it would take the consumer to repay a balance if the consumer makes only the minimum payments, o on when any introductory rate will expire, as well as the rate that will then apply and o in internet based solicitations identical to that contained in direct mail solicitations. In addition, on May 4, 1999, President Clinton proposed similar legislation to require additional disclosure in credit card bills and solicitations. Although the proposed legislation have not been enacted, there can be no assurance that a similar bill will not become law in the future. The potential effect of any legislation which limits the amount of finance charges and fees that may be charged on credit cards could be to reduce the PORTFOLIO YIELD on the accounts. If the PORTFOLIO YIELD is reduced, an EARLY AMORTIZATION EVENT may occur, and the EARLY AMORTIZATION PERIOD would commence. Any new laws or rulings that may be adopted, and existing consumer protection laws, may adversely affect the ability to collect on the receivables. In addition, failure of the servicer to comply with those requirements could adversely affect the servicer's ability to enforce the receivables. Some jurisdictions may attempt to require out-of-state credit card issuers to comply with their consumer protection laws in connection with their operations in those jurisdictions. These laws may include a limitation on the charges imposed by credit card issuers. If it were determined that out-of-state credit card issuers must comply with a jurisdiction's laws limiting the charges imposed by credit card issuers, those actions could have an adverse impact on RNB's credit card operations. Application of federal and state bankruptcy and debtor relief laws, including the Soldiers' and Sailors' Civil Relief Act of 1940, would affect the interests of the holders of the certificates if the protection provided to debtors under those laws result in any receivables of the trust being written off as uncollectible. The trust may be liable for violations of consumer protection laws that apply to the receivables transferred to it, either as assignee from TRC for obligations arising before the transfer or as a party directly responsible for obligations arising after the transfer. In addition, a cardholder may be entitled to assert these violations by way of set-off against his or her obligation to pay the amount of receivables owing. TRC will warrant to the trust in the POOLING AGREEMENT that all receivables transferred to the trust have been and will be created in compliance with the requirements of these laws. See "The Pooling and Servicing Agreement--Representations and Warranties" for additional discussion. CLAIMS AND DEFENSES OF CARDHOLDERS AGAINST THE TRUST The UCC provides that unless a cardholder has made an enforceable agreement not to assert defenses or claims arising out of a transaction, the rights of the trust are limited by: o all the terms of the cardholder agreement between RNB and the cardholder, o any defense or claim of the cardholder, o rights of set-off, and o any other defense or claim of the cardholder against RNB that accrues before the cardholder receives notification of the assignment. The UCC also provides that any cardholder is authorized to continue to pay RNB until: o the cardholder receives notification, reasonably identifying the rights assigned, that the amount due or to become due has been assigned and that payment is to be made to the trustee or successor servicer, and o if requested by the cardholders, the trustee or successor servicer has furnished reasonable proof of assignment. No agreement as to defenses has been entered into and no notice of the assignment of the receivables to the trust will be sent to the cardholders obligated on the accounts in connection with the transfer of the receivables to the trust. TAX MATTERS The following general discussion summarizes the material U.S. federal income tax consequences relating to the purchase, ownership and disposition of a certificate. This discussion applies only to certificates offered under this Prospectus. This summary deals primarily with U.S. CERTIFICATE OWNERS who acquire their certificates at their original issue price in the original issuance of those certificates and who hold their certificates as capital assets. This discussion is based on present provisions of the Internal Revenue Code of 1986, as amended, the proposed, temporary and final Treasury regulations under the tax code, and administrative rulings or pronouncements and judicial decisions: o all as in effect on the date of this prospectus, and o all of which are subject to change, possibly with retroactive effect. This discussion does not address all of the tax consequences that may be relevant to a certificateholder because of that certificateholder's particular circumstances. It does not address the U.S. federal income tax consequences that may be relevant to some types of certificateholders that are subject to special treatment under the tax code, including: o dealers in securities or currencies, o financial institutions, o tax-exempt entities, o life insurance companies, o persons holding certificates as a part of a hedging, integrated, conversion or constructive sale transaction or a straddle, or o persons whose functional currency is not the U.S. dollar. Also, the following discussion does not consider the alternative minimum tax consequences, if any, of the investment in the certificates, or the state, local or foreign tax consequences of the investment. Each prospective certificateholder is urged to consult its own tax advisor in determining the federal, state, local and foreign income and any other tax consequences of the purchase, ownership and disposition of a certificate. The trust will not ask the IRS for a ruling regarding any of the U.S. federal income tax consequences discussed in this prospectus. As a result, the trust can give no assurance that the IRS will not take positions contrary to those described below. Opinions of counsel are not binding on the IRS or the courts. In addition, the opinions of Skadden, Arps, Slate, Meagher & Flom LLP described below are based on the representations and assumptions described in those opinions, including, but not limited to, the assumption that all of the relevant parties will comply with the terms of the POOLING AGREEMENT, the SERIES SUPPLEMENT, the RECEIVABLES PURCHASE AGREEMENT, and the BANK RECEIVABLES PURCHASE AGREEMENT. The conclusions of tax counsel described in the opinions and the discussion of the U.S. federal income tax consequences in this prospectus may not be accurate: o if those representations are inaccurate, and/or o if the relevant parties fail to comply with the terms of these agreements. TAX CHARACTERIZATION OF THE TRUST The transferor anticipates that Skadden, Arps, Slate, Meagher & Flom LLP will furnish an opinion to the transferor, in relation to the issuance of certificates of any series offered by this Prospectus, that the trust will not be classified as an association or as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. The opinion will be based on the assumptions and qualifications described in that opinion and on certain representations or covenants. As discussed in the previous paragraph, however, this opinion is not binding on the IRS and no assurance can be given that this characterization will prevail. See the last two paragraphs of this subsection for discussion of possible alternative characterizations of the trust. The assumptions and qualifications described in the opinion will include: o an assumption that any secondary transactions entered into for any certificates or other interests in the trust, like the deposit of certificates into a second trust and the issuance of securities out of that trust, will not adversely affect the U.S. federal income tax status of the trust, and o the qualification that the opinion is limited to the issuance of the certificates of that series by the trust. If other interests in the trust, excluding the certificates, for which no opinion will be rendered that those interests would constitute debt for U.S. federal income tax purposes, are characterized as equity interests in a partnership, then the trust could be treated as a publicly traded partnership. If all or part of the trust were treated as a partnership in which some or all holders of one or more series were partners, that partnership could be classified as a publicly traded partnership taxable as a corporation. Unless specified exceptions apply, a partnership will be classified as a publicly traded partnership taxable as a corporation if equity interests in that partnership: o are traded on an "established securities market", or o are "readily tradeable" on a "secondary market" or its "substantial equivalent". One exception would be if the trust is not engaged in a "financial business" and 90% or more of its income consists of interest and other types of passive income. Because Treasury regulations do not clarify the meaning of "financial business" for this purpose, it is unclear whether this exception applies. The POOLING AGREEMENT AND EACH Series Supplement contains provisions designed to reduce the risk that the trust could be classified as a publicly traded partnership taxable as a corporation due to trading of interests in the trust other than the certificates, for which an opinion is furnished that the certificates constitute debt for U.S. federal income tax purposes. There can be no assurance, however, that the trust could not become a publicly traded partnership taxable as a corporation, because some of the actions necessary to comply with the exception are not fully within the control of the transferor. If the trust were treated in whole or in part as a publicly traded partnership taxable as a corporation, the taxable income of the trust would be subject to U.S. federal income tax at the applicable marginal corporate income tax rates applicable to that income if all or part of the trust were treated as a publicly traded partnership taxable as a corporation. This entity-level tax could result in reduced distributions to certificateholders. In addition, the distributions from the trust would not be deductible in computing the taxable income of the deemed corporation, except to the extent that: o any certificates were treated as debt of the corporation, and o distributions to the related certificateholders were treated as payments of interest on the certificates. Further, distributions to certificateholders not treated as holding debt would be treated as dividends for U.S. federal income tax purposes to the extent of the current and accumulated earnings and profits of the deemed corporation. TAX CONSIDERATIONS RELATING TO CERTIFICATEHOLDERS Tax Characterization of the Certificates as Debt The transferor will express in the POOLING AGREEMENT its intent that the certificates will be treated as debt for all U.S. tax purposes. The transferor, by entering into the POOLING AGREEMENT, and each certificateholder, by the acceptance of a beneficial interest in a certificate, will agree to treat the certificates as debt for U.S. tax purposes. However, the POOLING AGREEMENT generally refers to the transfer of receivables as a "transfer, assignment and conveyance," and the transferor will treat the POOLING AGREEMENT, for some non-tax accounting purposes, as causing a transfer of an ownership interest in the receivables and not as creating a debt obligation. For U.S. federal income tax purposes, the economic substance of a transaction often determines its tax consequences. The form of a transaction, while a relevant factor, is generally not conclusive evidence of the economic substance of the transaction. In appropriate circumstances, the courts have allowed the IRS, as well as taxpayers, in more limited circumstances, to treat a transaction in accordance with its economic substance, as determined under U.S. federal income tax law, even though the participants in the transaction have characterized it differently for non-tax purposes. In a 1967 case, however, the courts substantially limited the circumstances in which a taxpayer for tax purposes could ignore the form of a transaction. Nevertheless, Skadden, Arps, Slate, Meagher & Flom LLP has advised that, in a properly presented case, this would not prevent a determination of the tax characterization of the certificates based on the economic substance of the transaction. President Clinton's Fiscal 2000 Budget Proposal includes a legislative proposal that would codify the 1967 rule if tax indifferent parties are involved. The proposal would only apply to transactions entered into on or after the date of first committee action. It is unclear if the proposal, as currently drafted, would apply to securities like the certificates. It is impossible to predict whether the proposed legislation will be enacted and, if so, in what form. Prospective investors should consult their own tax advisors regarding the proposed legislation. The IRS and the courts have determined whether the economic substance of a purported sale of an interest in property is, instead, a loan secured by the transferred property based on numerous factors designed to determine whether the seller has relinquished and the purchaser has obtained substantial incidents of ownership in the transferred property. The primary factors examined are whether the purchaser has the opportunity for gain if the property increases in value and has the risk of loss if the property decreases in value. Skadden, Arps, Slate, Meagher & Flom LLP is of the opinion that, although no transaction closely comparable to that contemplated in this prospectus has been the subject of any Treasury regulation, revenue ruling or judicial decision, the certificates will be properly characterized as indebtedness for U.S. federal income tax purposes. The discussion below assumes that the certificates will be considered debt for U.S. federal income tax purposes. Taxation of Interest Income on the Certificates General. The transferor intends to take the position that a U.S. CERTIFICATE OWNER generally will include the stated interest on a certificate in gross income when that interest income is received or accrued according to that U.S. CERTIFICATE OWNER'S regular method of tax accounting. This conclusion is based on the transferor's position that the stated interest on a certificate is unconditionally payable. Under the applicable Treasury regulations, the stated interest on the certificates will be considered unconditionally payable only if the terms and conditions of the certificates make the likelihood of late payment or non-payment of the stated interest a remote contingency. The transferor believes that the late payment or non-payment of stated interest on the certificates is a remote contingency: o since the trust and the trustee will have no discretion to withhold, delay or otherwise defer scheduled monthly payments of stated interest on the certificates, if the trust has sufficient cash on hand to allow the trustee to make those interest payments, and o based on the ratings of the certificates. If, however, the stated interest on the certificates is not considered unconditionally payable: o the stated interest on the certificates will be considered original issue discount, and o a U.S. CERTIFICATE OWNER will be required to include that stated interest in income, as original issue discount, on a daily economic accrual basis despite that person's regular method of tax accounting and without regard to whether cash related to that income is paid at the same time. In addition, if the stated interest on the certificates is not paid in full on a DISTRIBUTION DATE, the certificates may at that time, and at all later times, be considered to be issued with original issue discount and all U.S. CERTIFICATE OWNERS would be required to include that stated interest in income as original issue discount on an economic accrual basis. Original Issue Discount Obligations. Assuming that the stated interest on the certificates is considered to be "unconditionally payable," a series of certificates will not be considered to have been issued with original issue discount unless: o a substantial amount of that series of certificates is sold, under the original issuance of those certificates, to investors at a price that is less than the stated principal amount of those certificates, and o the amount of the discount exceeds a statutory de minimis amount of original issue discount. If these bullet points apply, the amount of the discount will be considered original issue discount. Under applicable regulations, a holder of a certificate issued with de minimis original issue discount must include the original issue discount in income proportionately as principal payments are made on a class of certificates. A U.S. CERTIFICATE OWNER must include the amount of the original issue discount in income on a daily economic accrual basis without regard to that person's method of accounting and without regard to receipt of cash related to that income. A U.S. CERTIFICATE OWNER will not be required to include in income separately any payments received on the certificates for the original issue discount. The relevant prospectus supplement will disclose if any series of certificates is issued with original issue discount. A certificateholder who purchases a certificate at a discount from its adjusted issue price may be subject to the "market discount" rules of the tax code. The relevant parts of these rules provide: o for gain attributable to accrued market discount to be treated as ordinary income when partial principal payments are received, or when the certificate is sold or disposed of, and o for interest deductions related to debt incurred to acquire or carry the market discount certificate to be deferred. A certificateholder that purchases a certificate for an amount greater than the sum of all amounts payable on that certificate after the purchase date other than payments of "qualified stated interest", the "stated redemption amount," will be considered to have purchased the certificate at a premium. That certificateholder may generally choose to amortize the premium as an offset to interest income using a constant yield method over the remaining term of the certificate. Sale, Exchange or Retirement of Certificates Upon a sale or other taxable exchange, retirement or disposition of a certificate, a U.S. CERTIFICATE OWNER will recognize gain or loss equal to the difference between: o the amount realized on that sale, exchange, retirement or other disposition, less an amount equal to any accrued but unpaid interest that the U.S. CERTIFICATE OWNER has not included in gross income previously, which will be taxable as gross income, and o the U.S. CERTIFICATE OWNER'S adjusted tax basis in that certificate: - as increased by any original issue discount or market discount previously included in income by the holder, and - as decreased by any deductions previously allowed for amortizable bond premium and by any payments reflecting principal or original issue discount received for that certificate. This gain or loss generally will be capital gain or loss and generally will be considered long-term capital gain or loss if the U.S. CERTIFICATE OWNER held the certificate for more than one year at the time of the sale, exchange, retirement or other disposition and subject to the market discount provisions of the tax code. The long-term capital gains of individuals, estates, and trusts generally are eligible for reduced rates of taxation. Capital losses generally may be used only to offset capital gains. NON-U.S. CERTIFICATE OWNERS Assuming that all of the certificates issued to NON-U.S. CERTIFICATE OWNERS are considered debt of the transferor for U.S. federal income tax purposes, under present U.S. federal income and estate tax law, and subject to the discussion on backup withholding below under "--Information Reporting and Backup Withholding": o no withholding of U.S. federal income tax will be required for the payment by the transferor or any withholding agent of principal or interest on a certificate owned by a NON-U.S. CERTIFICATE OWNER if: - the beneficial owner does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the transferor entitled to vote within the meaning of section 871(h)(3) of the tax code and the Treasury regulations under the tax code, - the beneficial owner is not a controlled foreign corporation that is related to the transferor through stock ownership, - the beneficial owner is not a bank whose receipt of interest n a certificate is described in section 881(c)(3)(A) of the tax code, and - the beneficial owner satisfies the statement requirement provided in section 871(h) and section 881(c) of the tax code and the Treasury regulations under the tax code, and o a certificate beneficially owned by an individual who at the time of his or her death is a NON-U.S. CERTIFICATE OWNER will not be subject to U.S. federal estate tax as a result of that individual's death if: - the individual does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of the transferor entitled to vote within the meaning of section 871(h)(3) of the tax code, and - the interest payments relating to the certificate would not have been, if received at the time of the individual's death, effectively connected with the conduct of a U.S. trade or business by the individual. To satisfy the statement requirement referred to above, the certificateholder or a financial institution holding the certificate on behalf of the owner, must provide, in accordance with specified procedures, the transferor or any withholding agent with a statement to the effect that the certificateholder is not a U.S. CERTIFICATE OWNER. Currently, these requirements will be met if: o the certificateholder provides its name and address, and certifies, under penalties of perjury, that it is not a U.S. CERTIFICATE OWNER, which certification may be made on an IRS Form W-8 or successor form, or o a financial institution holding the certificate on behalf of a certificate owner certifies, under penalties of perjury, that the statement has been received by it and furnishes any withholding agent with a copy. Under recently finalized Treasury regulations, the statement requirement also may be satisfied with other documentary evidence for interest paid after December 31, 2000 to an offshore account or through some foreign intermediaries. If a NON-U.S. CERTIFICATE OWNER cannot satisfy the requirements described above, payments of interest made to that beneficial owner will be subject to a 30% withholding tax unless that beneficial owner provides the transferor or any withholding agent with a properly executed: o IRS Form 1001, or successor form, claiming an exemption from, or a reduction in the rate of, that withholding tax under the benefit of an applicable U.S. income tax treaty, or o IRS Form 4224, or successor form, stating that the interest paid on the certificate is not subject to that withholding tax because it is effectively connected with the certificateholder's conduct of a trade or business in the United States. Under recently finalized Treasury regulations, NON-U.S. CERTIFICATE OWNERS generally will be required to provide an IRS Form W-8 in lieu of an IRS Form 1001 and IRS Form 4224, although alternative documentation may be applicable in some situations. The NON-U.S. CERTIFICATE OWNER, although exempt from the U.S. withholding tax discussed above, will be subject to U.S. federal income tax on the interest on a net income basis in the same manner as if it were a U.S. CERTIFICATE OWNER if: o it is engaged in a trade or business in the United States, and o the interest on its certificates is effectively connected with the conduct of that trade or business. In addition, if that NON-U.S. CERTIFICATE OWNER is a foreign corporation, it may be subject to a U.S. branch profits tax equal to 30%, or lower applicable treaty rate, of its effectively connected earnings and profits for the taxable year, subject to adjustments. For this purpose, the interest income will be included in that foreign corporation's earnings and profits. Any gain realized by a NON-U.S. CERTIFICATE OWNER upon the sale, exchange, retirement or other disposition of a certificate generally will not be subject to U.S. federal income or withholding tax unless: o the gain is effectively connected with a U.S. trade or business of the NON-U.S. CERTIFICATE OWNER in the United States, o for a NON-U.S. CERTIFICATE OWNER who is an individual, that individual is present in the United States for 183 days or more in the taxable year of the sale, exchange, retirement or other disposition, and other conditions are met, or o to the extent the gain is considered accrued but unpaid interest, the requirements described above are not satisfied. If the certificates were treated as an interest in a partnership, except a publicly traded partnership taxable as a corporation, that recharacterization could cause a NON-U.S. CERTIFICATE OWNER to be treated as engaged in a trade or business in the United States, in which case, the NON-U.S. CERTIFICATE OWNER: o would be required to file a U.S. federal income tax return, and o generally, would be subject to U.S. federal income tax, including, for a NON-U.S. CERTIFICATE OWNER that is a corporation, the U.S. branch profits tax, on its allocable share of the net income from the partnership. Further, some withholding obligations may apply for partnership income that is allocable to a NON-U.S. CERTIFICATE OWNER that is considered to be a partner in the partnership. That withholding would be imposed at a rate equal to the highest marginal U.S. federal income tax rate applicable to the NON-U.S. CERTIFICATE OWNER. Alternatively, if some or all of the certificates were treated as equity interests in a publicly traded partnership taxable as a corporation, the gross amount of any related dividend distributions to a NON-U.S. CERTIFICATE OWNER generally would be subject to U.S. withholding tax at the rate of 30%, unless that rate were reduced under an applicable U.S. income tax treaty. See the last two paragraphs of "--Tax Characterization of the Trust" above for discussion of possible alternative characterizations of the trust. Special rules may apply for NON-U.S. CERTIFICATE OWNERS who: o have an office or other fixed place of business in the U.S., o are former U.S. citizens, o are engaged in a banking, financing, insurance or similar business in the U.S., or o are "controlled foreign corporations," "foreign personal holding companies," "passive foreign investment companies" or corporations that accumulate earnings in order to avoid U.S. federal income tax. These persons should consult their own U.S. tax advisors before investing in the certificates. INFORMATION REPORTING AND BACKUP WITHHOLDING In general, information reporting requirements will apply to some payments of principal and interest paid on certificates and to the proceeds of the sale of a certificate made by U.S. CERTIFICATE OWNERS except some exempt recipients, like corporations. A 31% backup withholding tax will apply to those payments if the U.S. CERTIFICATE OWNER fails to provide a taxpayer identification number or certification of exempt status or fails to report in full dividend and interest income. No information reporting or backup withholding will be required for payments made by the transferor or any withholding agent to a NON-U.S. CERTIFICATE OWNER if the statement described above under "--Non-U.S. Certificate Owners" has been received and the payor does not have knowledge that the NON-U.S. CERTIFICATE OWNER is actually a U.S. CERTIFICATE OWNER. In addition, backup withholding and information reporting will not apply if payments of principal and interest on a certificate are paid or collected by a foreign office of a custodian, nominee or other foreign agent on behalf of a certificateholder or if a foreign office of a broker, as defined in applicable Treasury regulations, pays the proceeds of the sale of a certificate to the owner of that security. If, however, the custodian, nominee, agent or broker is, for U.S. federal income tax purposes: o a United States person, o a controlled foreign corporation, o a foreign person that derives 50% or more of its gross income for specified periods from the conduct of a trade or business in the United States, or o for taxable years beginning after December 31, 2000, a foreign partnership in which one or more United States persons, in total, own more than 50% of the income or capital interests in the partnership or which is engaged in a trade or business in the United States, those payments will not be subject to backup withholding but will be subject to information reporting, unless: o that custodian, nominee, agent or broker has documentary evidence in its records that the relevant certificateholder is not a United States person and other conditions are met, or o the certificateholder establishes an exemption. Payments of principal and interest on a certificate paid to the certificateholder by a United States office of a custodian, nominee or agent, or the payment by the United States office of a broker of the proceeds of the sale of a certificate, will be subject to both backup withholding and information reporting unless: o the relevant certificateholder provides the statement referred to above under "--Non-U.S. Certificate Owners, and o the payor has no knowledge that the certificateholder is actually a U.S. CERTIFICATE OWNER or the certificateholder establishes an exemption. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a certificateholder's U.S. federal income tax liability if the required information is furnished to the IRS. STATE AND LOCAL TAXATION The discussion above does not address the tax consequences of the purchase, ownership or disposition of a certificate under any state or local tax law. Each investor should consult its own tax advisor regarding state and local tax consequences of purchasing, owning and disposing of a certificate. EMPLOYEE BENEFIT PLAN CONSIDERATIONS A plan fiduciary considering an investment in the offered certificates should consider that an investment might constitute or give rise to a prohibited transaction under Employee Retirement Income Security Act of 1974, as amended, and the tax code or any substantially similar federal, state or local law. ERISA and the tax code impose restrictions on: o employee benefit plans as defined in Section 3(3) of ERISA, o plans described in Section 4975(e)(1) of the tax code, including retirement accounts and Keogh plans, o entities whose underlying asset include plan assets by reason of a plan's investment in these entities, and o persons who have specified relationships to a plan described as "parties in interest" under ERISA and "disqualified persons" under the tax code. REGULATION UNDER ERISA AND THE TAX CODE ERISA imposes duties on persons who are fiduciaries of a plan. Under ERISA, any person who exercises any authority or control over the management or disposition of a plan's assets is considered to be a fiduciary of that plan. Both ERISA and the tax code prohibit some transactions involving "plan assets" between a plan and parties in interest or disqualified persons. Violations of these rules may result in the imposition of an excise tax or penalty. The term "plan assets" is not defined by ERISA or the tax code. However, a plan's assets may be considered to include an interest in the underlying assets of the trust if the plan acquires an "equity interest" in the trust. An equity interest includes the certificates. If so, the operation of the trust may result in a prohibited transaction under ERISA and the tax code. FINAL REGULATION ISSUED BY THE DOL The U.S. Department of Labor issued a final regulation which provides exceptions to a plan which acquires an equity interest in the trust. If a plan acquires a "publicly-offered security," the issuer of the security is not treated as holding plan assets. A publicly-offered security is a security that: o is freely transferable, o is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another, and o is either: - part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act, or - sold to the plan as part of an offering of securities to the public under an effective registration statement under the Securities Act and the class of securities of which that security is part is registered under the Securities Exchange Act within the requisite time. Although it is anticipated that the conditions of this exception may be met for some classes of certificates, no assurances can be given and no monitoring will be done. In addition, the final regulation provides that if at all times more than 75% of the value of all classes of equity interests in certificates of a series are held by investors other than plan investors, an investing plan's assets will not include any of the underlying assets of the trust. If the criteria for publicly-offered securities are not met for any class of offered certificates, the trust assets may be treated as including assets of plans that are certificateholders. If so, transactions involving the trust and parties in interest or disqualified persons relating to plans that are certificateholders might be prohibited under ERISA and the tax code. For example, if a participant in any plan is a cardholder of one of the accounts, under DOL interpretations the holding of interests in certificates by that plan could constitute a prohibited transaction. In addition, if TRC or any underwriter of that series is a party in interest or a disqualified person for an investing plan, the purchase of an interest in certificates by that plan could constitute a prohibited transaction. An investment by a plan in certificates could result in liability under ERISA and the tax code unless a statutory or administrative exemption exists and the plan satisfies all conditions for exemptive relief. EXEMPTIONS TO PROHIBITED TRANSACTIONS There are five class exemptions issued by the DOL that could apply in the event of a prohibited transaction. These DOL Prohibited Transaction Class Exemptions apply to: o plan asset transactions determined by independent qualified professional asset managers (PTE 84-14), o some transactions involving bank collective investment funds (PTE 91-38), o some transactions involving insurance company pooled separate accounts (PTE 90-1), o some transactions involving insurance company general accounts (PTE 95-60), and o plan asset transactions determined by in-house asset managers (PTE 96-23). We can provide no assurance that these exemptions or any other exemption will apply, even if all of the conditions specified are satisfied. SPECIAL CONSIDERATIONS FOR INSURANCE COMPANIES Based on the reasoning of the United States Supreme Court in John Hancock Life Ins. Co. v. Harris Trust and Savings Bank, 114 S. Ct. 517 (1993), an insurance company's general account may be deemed to include assets of the Plans investing in the general account (e.g., through the purchase of an annuity contract), and the insurance company might be treated as a Party-in-Interest with respect to a Plan by virtue of such investment. Any purchaser that is an insurance company using the assets of an insurance company general account should note that the Small Business Job Protection Act of 1996 added new Section 401(c) of ERISA relating to the status of the assets of insurance company general accounts under ERISA and Section 4975 of the Code. Pursuant to Section 401(c), the Department of Labor issued final regulations effective January 5, 2000 with respect to insurance policies issued on or before December 31, 1998 that are supported by an insurer's general account. As a result of these regulations, assets of an insurance company general account will not be treated as "plan assets" for purposes of the fiduciary responsibility provisions of ERISA and Section 4975 of the Code to the extent such assets relate to contracts issued to employee benefit plans on or before December 31, 1998 and the insurer satisfies various conditions. Section 401(c) also provides that, except in the case of avoidance of the final regulations issued by the Department of Labor and actions brought by the Secretary of Labor relating to certain breaches of fiduciary duties that also constitute breaches of state or federal criminal law, until the date that is 18 months after the final regulations issued by the Department of Labor become final, no liability under the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code may result on the basis of a claim that the assets of the general account of an insurance company constitute the "plan assets" of any such plan. The plan asset status of insurance company separate accounts is unaffected by new Section 401(c) of ERISA, and separate account assets continue to be treated as the plan assets of any such plan invested in a separate account. Potential investors considering the purchase of certificates of any series on behalf of an insurance company general account should consult their legal advisors regarding the effect of these regulations on the investment. GENERAL INVESTMENT CONSIDERATIONS Prospective fiduciaries of a plan considering the purchase of interests in certificates of any series should consult with their legal advisors concerning the impact of ERISA and the tax code and the potential consequences of making an investment in the certificates based on their specific circumstances. Each plan fiduciary should take into account, among other considerations: o whether the fiduciary has the authority to make the investment, o the composition of the plan's portfolio as to diversification by type of asset, o the plan's funding objectives, o the tax effects of the investment, o whether the assets of the trust which are represented by these interests would be considered plan assets, and o whether, under the general fiduciary standards of investment prudence and diversification an investment in certificates of any series is appropriate for the plan taking into account the overall investment policy of the plan and the composition of the plan's investment portfolio. Some employee benefit plans, for example, governmental plans and some church plans, are not subject to the provisions of Title I of ERISA and Section 4975 of the tax code. For this reason, assets of these plans may be invested in the certificates of each series without regard to the ERISA considerations described here, subject to the provisions of any other applicable federal and state law. It should be noted that any plan that is qualified and exempt from taxation under the tax code is subject to the prohibited transaction rules described in the tax code. PLAN OF DISTRIBUTION FOR THE OFFERED CERTIFICATES The place and time of delivery for any series of certificates will be described in the accompanying prospectus supplement. TRC may sell certificates: o through underwriters or dealers, o directly to one or more purchasers, or o through agents. The prospectus supplement for any offered series will describe the terms of the offering of the offered certificates, including: o the name or names of any underwriters for the certificates, o the purchase price of the certificates, o the proceeds to TRC from the sale, o any underwriting discounts, o any other compensation of the underwriters, o the initial offering price, and o any discounts or concessions allowed or reallowed or paid to dealers. Under each underwriting agreement, TRC will agree to sell to each of the underwriters in the related prospectus supplement the principal amount of the offered certificates. In turn, each of those underwriters will agree to purchase from TRC the principal amount of certificates described in the underwriting agreement and in the related prospectus supplement. The underwriting agreement may allow for a proportional adjustment in the event of an increase or decrease in the full amount of the offered certificates. If there is a default by any underwriter, the underwriting agreement will provide that, in some circumstances, purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be ended. Each underwriting agreement will provide that TRC will indemnify the related underwriters against some liabilities, including liabilities under the federal securities laws. LEGAL MATTERS Legal matters relating to the certificates will be passed upon for RNB, TCC, TRC and the trust by James T. Hale, Senior Vice President, Secretary and General Counsel of Target Corporation. Legal matters relating to the certificates will be passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. Mr. Hale owns or has the right to acquire a number of shares of common stock of Target Corporation which total less than 1% of the outstanding common stock of Target Corporation. Federal income tax matters will be passed upon for TRC by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. REPORTS TO CERTIFICATEHOLDERS Unless and until DEFINITIVE CERTIFICATES are issued, monthly and annual reports, which contain unaudited information concerning the trust and which are prepared by the servicer, will be sent on behalf of the trust to Cede & Co., as nominee of DTC and registered holder of the related certificates. These reports will not constitute financial statements prepared under generally accepted accounting principles. TRC does not intend to send any of its financial reports to registered holders of certificates or to owners of beneficial interests in the certificates. TRC will file with the SEC the periodic reports relating to the trust that are required under federal securities laws. TRC may suspend the filing of periodic reports to the extent the filings are no longer required of TRC. See "Description of the Certificates--Book-Entry Registration" and "--Reports to Certificateholders" and "The Pooling and Servicing Agreement--Evidence as to Compliance." WHERE YOU CAN FIND MORE INFORMATION We filed a registration statement relating to the securities with the SEC. This prospectus is part of the registration statement, but the registration statement includes additional information. The SEC allows us to incorporate information by reference to SEC filings. This means that we can disclose information to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus. We refer you to the registration statement for additional information, including any amendments and exhibits. We also incorporate by reference any future annual, monthly and special SEC reports and proxy materials filed by or on behalf of the trust until the offering of the certificates has ended. Information that we file later with the SEC will automatically update the information in this prospectus. You should always rely on the later information over different information included in this prospectus or the related prospectus supplement. All reports, statements and other information we file are available for inspection without charge at the public reference facilities maintained by the SEC at: o 450 Fifth Street, N.W., Washington, D.C. 20549, o 7 World Trade Center, New York, New York 10048, and o Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the filings may be obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the SEC at (800) SEC-0330 for further information on the operation of the public reference rooms. In addition, the SEC maintains a Web site at "http://www.sec.gov" that contains filings and information regarding registrants that file electronically with the SEC. GLOSSARY OF TERMS FOR PROSPECTUS "ACCUMULATION PERIOD" means for any series or class, a period: o beginning on a date determined as described in the related prospectus supplement, and o ending on the earliest of: - the start of the Early Amortization Period or the Rapid Accumulation Period, - the date specified in the related prospectus supplement, and - the Trust Termination Date; and during which collections of Principal Receivables up to the amount specified in the related prospectus supplement are accumulated in a Principal Funding Account for payment to certificateholders of that series or class on the Expected Final Payment Date. "ADDITION CUT-OFF DATE" means any date TRC designates any Supplemental Account or Participation Interest for inclusion in the trust. "ADDITION DATE" means the date TRC, under the conditions specified in the Pooling Agreement, adds the following to the trust: o receivables arising in accounts owned by RNB or another Credit Card Originator, and o any Participation Interest. "ADDITIONAL ACCOUNT" means each Automatic Additional Account and Supplemental Account. "ADDITIONAL INTEREST" means interest on overdue Monthly Interest at the rate specified in the related prospectus supplement. "ADJUSTMENT PAYMENT" means any payment TRC must make into the Special Funding Account equal to the amount by which the servicer adjusts downward the Principal Receivables: o for which it received no collections and no charge-off has occurred, and o which causes the Required Retained Transferor Amount to exceed the Transferor Amount, excluding the interest represented by any Supplemental Certificate. "AGGREGATE ADDITION LIMIT" means a number of accounts which either: o for any of the three consecutive Monthly Periods beginning in January, April, July and October of each calendar year, may not exceed 15% of the number of accounts as of the first day of the calendar year during which those Monthly Periods begin, or o for any twelve-month period, equals 20% of the number of accounts as of the first day of that twelve-month period. "AMORTIZATION PERIOD" means, for any series or any class within a series, a period following the Revolving Period, which will be the Controlled Amortization Period, the Principal Amortization Period, the Rapid Accumulation Period, the Early Amortization Period, or other amortization period, in each case as defined for the series in the related prospectus supplement. "ASSIGNED ASSETS" means all or a portion of RNB's consumer open end credit card accounts and the receivables arising under those accounts that can be transferred to an assuming entity if conditions specified in the Bank Receivables Purchase Agreement, the Receivables Purchase Agreement and the Pooling Agreement are satisfied. "ASSUMED OBLIGATIONS" means all servicing functions and other obligations under the Bank Receivables Purchase Agreement, the Receivables Purchase Agreement and the Pooling Agreement or relating to the transactions contemplated by those agreements. "AUTOMATIC ADDITION SUSPENSION DATE" means the date TRC determines to suspend the inclusion of new open end credit card accounts owned by the Credit Card Originators in Automatic Additional Accounts. "AUTOMATIC ADDITION TERMINATION DATE" means the date on which new open end credit card accounts owned by the Credit Card Originators will cease to become Automatic Additional Accounts. "AUTOMATIC ADDITIONAL ACCOUNTS" means each open end credit card account established under a credit card agreement with a Credit Card Originator arising: o after the Cut-Off Date and before the earlier of the Automatic Addition Suspension Date or Automatic Addition Termination Date, and o after a Restart Date and before any subsequent Automatic Addition Suspension Date or Automatic Addition Termination Date. "BANK RECEIVABLES PURCHASE AGREEMENT" means the Amended and Restated Bank Receivables Purchase Agreement, dated as of April 28, 2000, between TCC, as purchaser of the receivables and RNB, as seller of the receivables, as may be amended from time to time. "BASE RATE" means, unless otherwise specified in a Series Supplement, for any Monthly Period, the annualized percentage equivalent of the sum of: o a fraction: - whose numerator is the sum of the Class A Monthly Interest, and the Class B Monthly Interest for the related Interest Period, and - whose denominator is the Invested Amount on the last business day of that Monthly Period, and o a fraction: - whose numerator is the monthly servicing fee for that Monthly Period, and - whose denominator is the Invested Amount on the last business day of the preceding Monthly Period. "CASH COLLATERAL ACCOUNT" means an account providing credit enhancement for a series or class of certificates directly or indirectly as security for a Cash Collateral Guaranty. "CASH COLLATERAL GUARANTY" means a guaranty secured by the deposit of cash or eligible investments in a Cash Collateral Account reserved for the beneficiaries of that Cash Collateral Guaranty. "CEDELBANK" means Cedelbank, societe anonyme, an institution administering a book-entry settlement system for trading of securities in Europe. "CEDELBANK CUSTOMERS" means organizations participating in Cedelbank's book-entry system. "CERTIFICATE RATE" means the interest rate per annum applicable for any series or class of certificates. "CLOSING DATE" means the date of issuance of a series. "COLLATERAL INVESTED AMOUNT" means a subordinated interest in a series of certificates in an amount initially equal to the percentage of the certificates of that series specified in the related prospectus supplement. "COLLECTION ACCOUNT" means an Eligible Deposit Account for the benefit of the certificateholders into which the servicer deposits collections on the receivables. "CONTROLLED ACCUMULATION PERIOD" means for any series or class, a period: o beginning on a date specified in the related prospectus supplement after the Revolving Period, and o ending on the earliest of: - the start of the Early Amortization Period or the Rapid Accumulation Period, - the date specified in the related prospectus supplement, and - the Trust Termination Date; and during which collections of Principal Receivables up to the amount specified in the related prospectus supplement are deposited monthly into the Principal Funding Account for payment to certificateholders on the Expected Final Payment Date. "CONTROLLED AMORTIZATION PERIOD" means for any series or class, a period: o beginning on a date specified in the related prospectus supplement, and o ending on the earliest of: - the start of the Early Amortization Period, and - the date specified in the related prospectus supplement; and during which collections of Principal Receivables allocable to the Invested Amount and other amounts up to an amount specified in the related prospectus supplement are paid to certificateholders of that series or class on each Distribution Date. "CREDIT CARD GUIDELINES" means the written policies and procedures of the Credit Card Originator relating to the operation of its consumer revolving lending business, including: o determining the creditworthiness of credit card customers, o the extension of credit to credit card customers, and o relating to the maintenance of credit card accounts and collection of receivables, as these policies and procedures may be modified in accordance with requirements of law. "CREDIT CARD ORIGINATOR" means RNB and any transferee, successor or assign of RNB or any other originator of consumer open end credit card accounts designated to have their receivables included in the trust. "CUT-OFF DATE" means June 30, 1995. "DEFAULT PERCENTAGE" means for any Monthly Period, the average default rate used to determine if TRC may continue to designate Automatic Additional Accounts to the trust during that Monthly Period. This percentage is equal to the average for the three Monthly Periods preceding that Monthly Period of the annualized percentage of a fraction: o whose numerator equals the Defaulted Amount for each respective Monthly Period, and o whose denominator equals the total Principal Receivables as of the first day of the related Monthly Period. "DEFAULTED AMOUNT" means the amount of receivables described under "Description of the Certificates--Defaulted Receivables." "DEFAULTED RECEIVABLES" means for any date of determination, Principal Receivables that are charged-off as uncollectible on that day. "DEFINITIVE CERTIFICATES" means certificates in fully registered, certificated form that are only issued to certificateholders under the circumstances described under "Description of the Certificates--Definitive Certificates." "DISCOUNT OPTION" means TRC's option to designate a percentage--the Discount Percentage--of receivables in the trust that would otherwise be Principal Receivables, to be treated as Finance Charge Receivables. "DISCOUNT OPTION RECEIVABLES" means those receivables that otherwise would have been treated as Principal Receivables that are to be treated as Finance Charge Receivables at TRC's option. "DISCOUNT PERCENTAGE" means a fixed or variable percentage specified in the related prospectus supplement. "DISTRIBUTION DATE" means each date specified in the related prospectus supplement on which distributions of interest or principal are to be made to certificateholders. "DTC PARTICIPANTS" means participants of DTC including securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. "EARLY AMORTIZATION EVENT" means for any series of certificates issued by the trust, any of the events identified in the related prospectus supplement and any of the events described under "Description of the Certificates--Early Amortization Events" causing the Rapid Accumulation Period or the Early Amortization Period to begin. "EARLY AMORTIZATION PERIOD" means for any series, a period: o beginning on the day an Early Amortization Event occurs or any other date specified in the related prospectus supplement, and o ending on the earliest of: - the date the Invested Amount of the certificates of that series has been paid in full, and, - the Series Termination Date; and during which collections of Principal Receivables allocable to that series will be paid on each Distribution Date to the certificateholders of that series. "ELIGIBLE DEPOSIT ACCOUNT" means any bank account satisfying the requirements listed in "Description of the Certificates--Collection Account." "ELIGIBLE INSTITUTION" means those financial institutions described under "Description of the Certificates--Collection Account." "ELIGIBLE INVESTMENTS" means those investments described under "Description of the Certificates--Collection Account." "ELIGIBLE RECEIVABLE" means each receivable satisfying the requirements listed in "The Pooling and Servicing Agreement--Representations and Warranties." "ENHANCEMENT INVESTED AMOUNT" means a subordinated interest in cash flows in respect of the receivables to the extent described in the related prospectus supplement. "EUROCLEAR" means the system operated by Morgan Guaranty Trust Company of New York's Brussels, Belgium office under contract with Euroclear Clearance System, S.C., a Belgian cooperative corporation. "EUROCLEAR PARTICIPANTS" means participants of the Euroclear system. "EXCESS FINANCE CHARGE COLLECTIONS" means those finance charge collections described under "Description of the Certificates--Sharing of Excess Finance Charge Collections and Excess Transferor Finance Charge Collections." "EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS" means those finance charge collections described under "Description of the Certificates--Sharing of Excess Finance Charge Collections and Excess Transferor Finance Charge Collections." "EXPECTED FINAL PAYMENT DATE" means for a series or class with an Accumulation Period, the expected date of final payment of principal and any accrued and unpaid interest for that series or class specified in the supplement. "FINANCE CHARGE RECEIVABLES" means: o periodic finance charges, and o other charges and fees, including deferred billing fees and merchant fees, o other amounts billed for receivables that are not Eligible Receivables, and o the amount of any Discount Option Receivables. "FLOATING ALLOCATION PERCENTAGE" means for each Monthly Period, the percentage used to allocate to your series Defaulted Amounts and collections of Finance Charge Receivables as described in the related prospectus supplement. "FUNDING PERIOD" means for any pre-funded series, the period: o beginning on the Closing Date and ending on a date specified in the related prospectus supplement before an Amortization Period or an Accumulation Period begins, and o during which: - the outstanding principal amount of the pre-funded series may be greater than the investment of that series in the receivables in the trust, and - this difference is held in a Pre-Funding Account for the benefit of the certificateholders. "INELIGIBLE RECEIVABLES" means receivables not satisfying the requirements of Eligible Receivables. "INTEREST FUNDING ACCOUNT" means an Eligible Deposit Account for the benefit of the certificateholders of a series in which amounts to be paid to those certificateholders as interest will be deposited on a monthly basis, if interest payments are made to certificateholders less frequently than monthly. "INVESTED AMOUNT" means for certificateholders in a series, the total principal amount of their interest in trust assets as specified in the related prospectus supplement. "INVESTOR CHARGE-OFF" means for any Monthly Period and for any series, the amount by which the Invested Amount will be reduced to cover Defaulted Amounts allocated to the series and other amounts as may be specified in the prospectus supplement for any series that are not covered from collections of Finance Charge Receivables or other sources as specified in the prospectus supplement for any series. "INVESTOR DEFAULTED AMOUNT" means for any Monthly Period, the product of: o the Investor Percentage specified in the related prospectus supplement for that Monthly Period, and o the Defaulted Amount for that Monthly Period. "INVESTOR PERCENTAGE" means the Floating Allocation Percentage and/or the Principal Allocation Percentage, as applicable. "MONTHLY INTEREST" means interest accrued for a monthly interest accrual period as specified in the related prospectus supplement for any series or class. "MONTHLY PERIOD" means a fiscal month of TRC. "NON-U.S. CERTIFICATE OWNER" means a beneficial owner of a certificate that is not a U.S. Certificate Owner. "PARTICIPATION" means an interest in the assets of the trust in the form of a participation. "PARTICIPATION INTEREST" means any participation or certificate representing an undivided interest in a pool of assets primarily consisting of open end credit card receivables originated by RNB or another Credit Card Originator and collections on those receivables and other assets. "PARTICIPATION PERCENTAGE" means the percentage of all collections of Principal Receivables and Finance Charge Receivables and any other assets of the trust that the holder of any Participation is entitled to under a Participation Supplement. "PARTICIPATION SUPPLEMENT" means a supplement to the Pooling Agreement under which the trustee issues Participations at TRC's direction. "PAYMENT RATE PERCENTAGE" means for any Monthly Period, the average payment rate used to determine if TRC may continue to designate Automatic Additional Accounts to the trust during that Monthly Period. This percentage is equal to the average for the three Monthly Periods preceding that Monthly Period of the percentage equivalent of a fraction: o whose numerator equals the amount of collections received during that Monthly Period, and o whose denominator equals the total Principal Receivables as of the first day of the related Monthly Period. "POOLING AGREEMENT" means the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, among TRC, as transferor of the receivables to the trust, RNB, as servicer of the receivables, and Norwest Bank Minnesota, National Association, as trustee, as may be amended from time to time. "PORTFOLIO REASSIGNMENT PRICE" means the amount TRC deposits into the Collection Account to satisfy its reassignment obligations equal to: o the total Invested Amount for all outstanding series, o outstanding amounts invested by enhancement providers, if any, of all series, o interest payable to certificateholders on that Distribution Date, o any interest amounts that were due but not paid on an earlier Distribution Date, and o interest on the overdue interest amounts, if the applicable Series Supplement so provides, at the applicable Certificate Rates through the day before that Distribution Date. "PORTFOLIO YIELD" means with respect to any series for any Monthly Period, the annualized percentage specified in the related prospectus supplement. "PRE-FUNDING ACCOUNT" means a bank account: o established with the trustee for the benefit of certificateholders of a pre-funded series, and o in which is deposited the pre-funded amount. "PRINCIPAL ALLOCATION PERCENTAGE" means for each Monthly Period, and for each series, the percentage used to allocate collections of Principal Receivables to that series as described in the related prospectus supplement. "PRINCIPAL AMORTIZATION PERIOD" means for any series or class, a period: o beginning on the date specified in the related prospectus supplement, and o ending on the earliest of: - the start of the Early Amortization Period, - payment in full of the Invested Amount for that series or class, and - the Series Termination Date; and during which collections of Principal Receivables allocable to the Invested Amount and other amounts specified in the related prospectus supplement will be used on each Distribution Date to make principal distributions to the certificateholders of that series or any class then scheduled to receive principal distributions. "PRINCIPAL FUNDING ACCOUNT" means an Eligible Deposit Account held for the benefit of the certificateholders of a series with an Accumulation Period in which collections of Principal Receivables are accumulated during the Accumulation Period. At the end of the Accumulation Period, the amount in this account will be paid to certificateholders of that series or any class. "PRINCIPAL RECEIVABLES" means receivables that consist of amounts charged by cardholders for merchandise and services, less the amount of any Discount Option Receivables. "PRINCIPAL SHORTFALLS" means for any series, the deficiency that occurs when investor principal collections and other amounts are insufficient to cover required principal payments or deposits. "RAPID ACCUMULATION PERIOD" means for any series or class, a period: o beginning when an Early Amortization Event occurs or at another time specified in the related prospectus supplement, and o ending on the earliest of: - the start of the Early Amortization Period, - payment in full of the Invested Amount of the certificates of that series or class, and - the Series Termination Date; and during which collections of Principal Receivables allocable to a series or class will be deposited on each Transfer Date into the Principal Funding Account and used to pay principal to the certificateholders of that series on the Expected Final Payment Date. "RATINGS EFFECT" means a reduction or withdrawal by any rating agency of its then-existing rating of the investor certificates of any outstanding series or class for which it is a rating agency. "RECEIVABLES PURCHASE AGREEMENT" means the Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000, between TRC, as purchaser of the receivables, and TCC, as seller of the receivables, as may be amended from time to time. "RECORD DATE" means with respect to any payment to certificateholders, the date specified in the related prospectus supplement as of which a certificateholder must be the registered holder of a certificate to receive a payment on the following Distribution Date. "REMOVED ACCOUNTS" means accounts designated by TRC to have their receivables conveyed from the trust to TRC and which will no longer constitute trust accounts if TRC satisfies the conditions specified in the Pooling Agreement. "REQUIRED PRINCIPAL BALANCE" means on any date of determination, an amount equal to: o the sum of the numerators used to calculate: - the Investor Percentages with respect to Principal Receivables for all series then outstanding, and - the Participation Percentages for all Participations then outstanding, minus o the amount on deposit in the Special Funding Account as of that date. "REQUIRED RETAINED TRANSFEROR AMOUNT" means the product of: o the sum of: - the total amount of Principal Receivables, and - the amount on deposit in the Special Funding Account and the amount of other specified trust assets, including any other accounts specified in the related prospectus supplement, and o the highest of the required retained transferor's percentages specified in the related prospectus supplement for each series outstanding. "RESERVE ACCOUNT" means a bank account established to provide support for a series or one or more classes of certificates. This account may be funded by an initial cash deposit or any other method specified in the related prospectus supplement. "RESTART DATE" means the date TRC specifies in a written notice to the trustee that it will start redesignating Automatic Additional Accounts to the trust only if: o the conditions described under "The Pooling and Servicing Agreement--Addition of Trust Assets" are satisfied, and o all accounts of the Credit Card Originators have been designated either as Automatic Additional Accounts before the Automatic Addition Suspension Date or as Supplemental Accounts. "REVOLVING PERIOD" means for any series, a period: o beginning on the Closing Date, and o ending when an Amortization Period or Accumulation Period begins; and during which collections of Principal Receivables allocable to that series are not paid to certificateholders or accumulated but are paid to the holder of the Transferor Certificate or distributed in any other manner described in the related prospectus supplement. "SERIES ALLOCATION PERCENTAGE" means on any date of determination, the percentage equivalent of a fraction: o whose numerator is the Invested Amount of a series, and o whose denominator is the sum of the Invested Amounts of all then outstanding series. "SERIES SUPPLEMENT" means the supplement to the Pooling Agreement relating to a particular series. "SERIES TERMINATION DATE" means for any series, the final Distribution Date on which principal and accrued and unpaid interest is scheduled to be paid as described in the related prospectus supplement. "SERVICER DEFAULT" means any failure of the servicer under the Pooling Agreement and any Series Supplement: o to perform its duties or fulfill its obligations (each, a "breach") which has a material adverse impact on certificateholders, and o to cure the breach within a specified period of time, including any grace period, after discovery or notice of the breach, and certain events of bankruptcy and insolvency. See "The Pooling and Servicing Agreement--Servicer Default" for a description of the specific events that could result in a Servicer Default. "SHARED PRINCIPAL COLLECTIONS" means those principal collections described under "Description of the Certificates--Shared Principal Collections and Transferor Principal Collections." "SHARED TRANSFEROR PRINCIPAL COLLECTIONS" means those principal collections described under "Description of the Certificates--Shared Principal Collections and Transferor Principal Collections." "SPECIAL FUNDING ACCOUNT" means the Eligible Deposit Account for the benefit of the certificateholders in which principal collections are held as collateral if the Transferor Amount, excluding the interest representing any Supplemental Certificate, is less than the Required Retained Transferor Amount. "SUPPLEMENTAL ACCOUNTS" means after the initial Cut-Off Date, those accounts (other than Automatic Additional Accounts) TRC designates to be added to the trust only if they are eligible accounts. However, TRC must add Supplemental Accounts to the trust if: o the Transferor Amount, excluding the interest represented by any Supplemental Certificate, is less than the Required Retained Transferor Amount, or o the total amount of Principal Receivables in the trust is less than the Required Principal Balance. "SUPPLEMENTAL CERTIFICATE" means a certificate that represents an interest in the Transferor's Interest waived or transferred to a person designated by TRC only if specified conditions in the Pooling Agreement are satisfied. "SUPPLEMENTAL CONVEYANCES" means for Supplemental Accounts, the supplement to the Bank Receivables Purchase Agreement or the Receivables Purchase Agreement that RNB or TCC delivers for those accounts. Each Supplemental Conveyance constitutes an absolute sale of the receivables in Supplemental Accounts and all monies due or to become due from those receivables and any related proceeds. "TRANSFER DATE" means the business day immediately before a Distribution Date. "TRANSFEROR AMOUNT" means the total principal amount of the Transferor's Interest in the trust based on: o the total amount of Principal Receivables in the trust, and o amounts on deposit in the Special Funding Account and other trust assets, including any other accounts specified in the related prospectus supplement, and not allocated to certificateholders, the holders of any Participations or any enhancement provider. "TRANSFEROR CERTIFICATE" means collectively the certificate that represents the Transferor's Interest in the trust and any Supplemental Certificate. "TRANSFEROR'S INTEREST" means the total principal amount of the interest of TRC, its transferees and any holder of a Supplemental Certificate in the trust. "TRUST PORTFOLIO YIELD" means with respect to any series for any Monthly Period, the annualized percentage equivalent of a fraction: o whose numerator equals the total collections of Finance Charge Receivables for that Monthly Period, and o whose denominator is the total amount of Principal Receivables in the trust as of the first day of that Monthly Period. "TRUST TERMINATION DATE" means the earliest to occur of: o the day after the day the Invested Amount and the Enhancement Invested Amount, if any, of each series is zero, only if the transferor delivers a written notice to the trustee electing to end the trust, o September 30, 2095, o an event relating to the bankruptcy of the transferor, or o the Transferor Amount being less than the Required Retained Transferor Amount. "U.S. CERTIFICATE OWNER" means a beneficial owner of a certificate that is: o a citizen or resident of the United States, o a corporation or partnership created or organized in the United States or under the laws of the United States or any political subdivision of the United States, o an estate whose income is subject to United States federal income taxation regardless of its source, or o a trust that is subject to the supervision of a court within the United States and the control of a United States person as described in section 7701(a)(30) of the tax code or that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person. PART II ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following is an itemized list of the estimated expenses to be incurred in connection with the offering of the securities being offered hereunder other than underwriting discounts and commissions. Registration Fee....................................................$ 396,000 Printing and Engraving........................................................ Trustee's Fees................................................................ Legal Fees and Expenses....................................................... Blue Sky Fees and Expenses.................................................... Accountants' Fees and Expenses................................................ Rating Agency Fees............................................................ Miscellaneous Fees............................................................ Total........................................................ $ = ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Article VII of the By-laws of Target Receivables Corporation, a Minnesota corporation, provides for indemnification of all persons who are serving or have served at the request of Target Receivables Corporation to the extent permitted under Minnesota law. Such indemnification is not exclusive of any other right to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or otherwise. Pursuant to agreements which the Transferor may enter into with underwriters or agents (forms of which are included as exhibits to this Registration Statement), officers and directors of the Transferor, and affiliates thereof, may be entitled to indemnification by such underwriters or agents against certain liabilities, including liabilities under the Securities Act of 1933, arising from information which has been furnished to the Transferor by such underwriters or agents that appears in the Registration Statement or any Prospectus. ITEM 16. EXHIBITS (a) Exhibits 1 Form of Underwriting Agreement 4(a) Amended and Restated Pooling and Servicing Agreement 4(b) Form of Series Supplement 4(c) Amended and Restated Bank Receivables Purchase Agreement 4(d) Amended and Restated Receivables Purchase Agreement 5 Opinion of James T. Hale, with respect to legality 8 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to tax matters 23(a) Consent of James T. Hale (included in his opinion to be filed as Exhibit 5) 23(b) Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in its opinion filed as Exhibit 8) 24 Power of Attorney* - --------------- * Previously filed. (b) Financial Statements All financial statements, schedules and historical financial information have been omitted as they are not applicable. ITEM 17. UNDERTAKINGS The undersigned registrant hereby undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that (a)(i) and (a)(ii) will not apply if the information required to be included in a post-effective amendment by those sub-paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (d) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) To provide to the underwriters at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. (f) That insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of each issue. (g) That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this Registration Statement as of the time it was declared effective. (h) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on May 31, 2000. TARGET CREDIT CARD MASTER TRUST By: TARGET RECEIVABLES CORPORATION as originator of the Trust By /s/ Douglas A. Scovanner -------------------------- Douglas A. Scovanner, President TARGET RECEIVABLES CORPORATION as Co-Registrant By /s/ Douglas A. Scovanner -------------------------- Douglas A. Scovanner, President Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities indicated on May 31, 2000. TARGET RECEIVABLES CORPORATION SIGNATURE TITLE - --------- ----- Principal Executive Officer: /s/ Douglas A. Scovanner President Douglas A. Scovanner Principal Financial Officer: * Vice President and Treasurer Stephen C. Kowalke Principal Accounting Officer: * Vice President and Controller JoAnn Bogdan Directors: * Director Stephen C. Kowalke * Director Martin R. Rosenbaum * Director Douglas A. Scovanner * Director Sandra Sponem * Director Jerry Storch * By: /s/ Douglas A. Scovanner Director Douglas A. Scovanner, Attorney-in-fact EXHIBIT INDEX EXHIBITS PAGE 1 Form of Underwriting Agreement 4(a) Amended and Restated Pooling and Servicing Agreement 4(b) Form of Series Supplement 4(c) Amended and Restated Bank Receivables Purchase Agreement 4(d) Amended and Restated Receivables Purchase Agreement 5 Opinion of James T. Hale, with respect to legality 8 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to tax matters. 23(a) Consent of James T. Hale (included in his opinion to be filed as Exhibit 5) 23(b) Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in its opinion filed as Exhibit 8) 24 Power of Attorney* - --------------- * Previously filed. EX-1 2 0002.txt EXHIBIT 1 - UNDERWRITING AGREEMENT TARGET CREDIT CARD MASTER TRUST SERIES 2000-__ $____________ ____% Class A Asset Backed Certificates, Series 2000-__ UNDERWRITING AGREEMENT ___________, 2000 [LEAD UNDERWRITER] As Representative of the Several Underwriters [Address of Representative] Ladies and Gentlemen: 1. Introductory. Retailers National Bank, a national banking association ("RNB"), from time to time sells, transfers and conveys receivables (the "Receivables") generated from time to time in a portfolio of open end bank credit card accounts and other rights to Target Capital Corporation, a Minnesota corporation ("TCC"). TCC from time to time sells, transfers and conveys the Receivables and other rights to Target Receivables Corporation, a Minnesota corporation (the "Transferor"). The Transferor from time to time transfers the Receivables to the Target Credit Card Master Trust (the "Trust"), and the Transferor and Target Corporation, a Minnesota corporation (the "Company"), propose to cause the Trust to issue to the Transferor $____________ principal amount of ____% Class A Asset Backed Certificates, Series 2000-__ (the "Certificates"), which the Transferor proposes to sell to the Underwriters pursuant to the terms hereof, and $____________ principal amount of non-interest bearing Class B Asset Backed Certificates, Series 2000-__ (the "Class B Certificates"), which the Transferor intends to retain. The Receivables are and will be (i) conveyed to TCC by RNB pursuant to the Amended and Restated Bank Receivables Purchase Agreement, dated as of April 28, 2000 (the "Bank Receivables Purchase Agreement") between RNB and TCC, (ii) conveyed to the Transferor by TCC pursuant to the Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000 (the "Receivables Purchase Agreement") between TCC and the Transferor and (iii) transferred from the Transferor to the Trust pursuant to (a) an Amended and Restated Pooling and Servicing Agreement among the Transferor, RNB, as Servicer, and Norwest Bank Minnesota, National Association, as Trustee, dated as of April 28, 2000 (the "Pooling and Servicing Agreement") and (b) the Series 2000-__ Supplement to the Pooling and Servicing Agreement, to be dated as of ___________, 2000 (the "Supplement"), among the Transferor, the Servicer and the Trustee. Each Certificate represents a specified percentage undivided interest in the Trust. This Underwriting Agreement shall hereinafter be referred to as this "Agreement". This Agreement, the Bank Receivables Purchase Agreement, the Receivables Purchase Agreement, the Pooling and Servicing Agreement and the Supplement shall collectively hereinafter be referred to as the "Basic Documents". Capitalized terms used but not defined herein have the meanings assigned thereto in the Pooling and Servicing Agreement and the Supplement. The Transferor and the Company hereby agree with the several Underwriters named in Schedule A hereto ("Underwriters") as follows: 2. Representations and Warranties of the Transferor and the Company. The Transferor and the Company hereby jointly and severally represent and warrant to, and agree with, the several Underwriters that: (a) A registration statement on Form S-3 (No. 333-95585) relating to the Certificates, including a form of prospectus, has been filed with the Securities and Exchange Commission (the "Commission") and either (i) has been declared effective under the Securities Act of 1933 (the "Act") and is not proposed to be amended or (ii) is proposed to be amended by amendment or post- effective amendment. If such registration statement (the "initial registration statement") has been declared effective, either (i) an additional registration statement (the "additional registration statement") relating to the Certificates may have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become effective upon filing pursuant to such Rule and the Certificates all have been duly registered under the Act pursuant to the initial registration statement and, if applicable, the additional registration statement or (ii) such an additional registration statement is proposed to be filed with the Commission pursuant to Rule 462(b) and will become effective upon filing pursuant to such Rule and upon such filing the Certificates will all have been duly registered under the Act pursuant to the initial registration statement and such additional registration statement. If the Transferor does not propose to amend the initial registration statement or, if an additional registration statement has been filed and the Transferor does not propose to amend it and if any post-effective amendment to either such registration statement has been filed with the Commission prior to the execution and delivery of this Agreement, the most recent amendment (if any) to each such registration statement has been declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of the additional registration statement, Rule 462(b). For purposes of this Agreement, "Effective Time" with respect to the initial registration statement or, if filed prior to the execution and delivery of this Agreement, the additional registration statement means (i) if the Transferor has advised the [Lead Underwriter] (the "[Lead Underwriter]") as representative of the Underwriters (the "Representative"), that it does not propose to amend such registration statement, the date and time as of which such registration statement, or the most recent post-effective amendment thereto (if any) filed prior to the execution and delivery of this Agreement, was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c), or (ii) if the Transferor has advised the Representative that it proposes to file an amendment or post-effective amendment to such registration statement, the date and time as of which such registration statement, as amended by such amendment or post-effective amendment, as the case may be, is declared effective by the Commission. If an additional registration statement has not been filed prior to the execution and delivery of this Agreement but the Transferor has advised the Representative that it proposes to file one, "Effective Time" with respect to such additional registration statement means the date and time as of which such registration statement is filed and becomes effective pursuant to Rule 462(b). "Effective Date" with respect to the initial registration statement or the additional registration statement (if any) means the date of the Effective Time thereof. The initial registration statement, as amended at its Effective Time, including all material incorporated by reference therein, including all information contained in the additional registration statement (if any) and deemed to be a part of the initial registration statement as of the Effective Time of the additional registration statement pursuant to the General Instructions of the Form on which it is filed and including all information (if any) deemed to be a part of the initial registration statement as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial Registration Statement." The additional registration statement, as amended at its Effective Time, including the contents of the initial registration statement incorporated by reference therein and including all information (if any) deemed to be a part of the additional registration statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as the "Additional Registration Statement". The Initial Registration Statement and the Additional Registration Statement are hereinafter referred to collectively as the "Registration Statements" and individually as a "Registration Statement". The form of prospectus relating to the Certificates, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as included in a Registration Statement, including all material incorporated by reference in such prospectus, is hereinafter referred to as the "Prospectus". No document has been or will be prepared or distributed in reliance on Rule 434 under the Act. (b) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement: (i) on the Effective Date of the Initial Registration Statement, the Initial Registration Statement conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission (the "Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) on the Effective Date of the Additional Registration Statement (if any), each Registration Statement conformed, or will conform, in all respects to the requirements of the Act and the Rules and Regulations and did not include, or will not include, any untrue statement of a material fact and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (iii) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement each conforms, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus conforms or will conform, in all material respects to the requirements of the Act and the Rules and Regulations, and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. If the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and no Additional Registration Statement has been or will be filed. The preceding two sentences do not apply to statements in or omissions from a Registration Statement or the Prospectus based upon written information furnished to the Transferor or the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b). (c) Each of the Transferor and the Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Minnesota, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and each of the Transferor and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification and where the failure to so qualify might permanently impair title to property material to its operation or its right to enforce a material contract against others or expose it to substantial liability in such jurisdiction. (d) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation by the Transferor or the Company of the transactions contemplated by this Agreement in connection with the issuance and sale of the Certificates, except such as have been obtained and made under the Act, and except such as may be required under state securities laws. (e) Neither the Transferor nor the Company is in violation of its Articles of Incorporation or Bylaws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement or instrument to which it is a party or by which it or its properties are bound which would have a material adverse effect on the transactions contemplated in the Basic Documents. The execution, delivery and performance of the Basic Documents and the issuance and sale of the Certificates and compliance with the terms and provisions thereof will not result in a material breach or violation of any of the terms and provisions of, or constitute a default under, any statute, any rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Transferor or the Company or any subsidiary of either of them or any of their properties, or any material agreement or instrument to which the Transferor or the Company or any such subsidiary is a party or by which the Transferor or the Company or any such subsidiary is bound or to which any of the properties of the Transferor or the Company or any such subsidiary is subject, or the Articles of Incorporation or Bylaws of the Transferor or the Company or any such subsidiary, and the Transferor has full power and authority to authorize, issue and sell the Certificates as contemplated by this Agreement and each of the Transferor and the Company has full power and authority to enter into the Basic Documents to which it is a party. (f) As of the Closing Date, the representations and warranties of the Transferor in the Basic Documents to which it is a party will be true and correct. (g) This Agreement has been duly authorized, executed and delivered by the Transferor and the Company. (h) The Transferor has authorized the conveyance of the Receivables to the Trust, and the Transferor has authorized the Trust to issue and sell the Certificates. (i) The Company has delivered to you complete and correct copies of its Form 10-Q for the ________ quarter of [year] and its Form 10-K for [year]. Except as set forth in or contemplated in the Registration Statement and the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other) of either the Transferor or the Company or the credit card business of the Company or its Affiliates since the date of the information provided pursuant to the preceding sentence. (j) Any taxes, fees and other governmental charges due and payable from or by the Transferor or the Company in connection with the execution, delivery and performance of the Basic Documents and the Certificates and any other agreements contemplated therein shall have been paid or will be paid by the Transferor or the Company, as the case may be, at or prior to the Closing Date to the extent then due. 3. Purchase, Sale and Delivery of Certificates. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Transferor agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Transferor, at a purchase price of __________% of the principal amount thereof, the respective principal amounts of Certificates set forth opposite the names of the Underwriters in Schedule A hereto. The Transferor will deliver against payment of the purchase price the Certificates in the form of one or more permanent global securities in definitive form (the "Global Certificates") deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Prospectus. Payment for the Certificates shall be made by the Underwriters in Federal (same day) funds by wire transfer to an account previously designated to the [Lead Underwriter] by the Transferor or the Company at 10:00 a.m. (New York time), on __________, 2000, or at such other time not later than seven full business days thereafter as the [Lead Underwriter] and the Transferor determine, such time being herein referred to as the "Closing Date," against delivery to the Trustee as custodian for DTC of the Global Certificates representing all of the Certificates. For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of the Certificates. The Global Certificates will be made available for checking at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, at least 24 hours prior to the Closing Date. 4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Certificates for sale to the public (which may include selected dealers) as set forth in the Prospectus. 5. Certain Agreements of the Transferor and the Company. The Transferor and the Company jointly and severally covenant and agree with the several Underwriters that: (a) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Transferor will file the Prospectus with the Commission pursuant to Rule 424(b)(1) (or if applicable, and if insisted to by the Underwriters pursuant to Rule 424(b)(4)) not later than the Commission's close of business on the second business day following the earlier of (A) the date of determination of the offering price or (B) the date the Prospectus is first used after effectiveness in connection with a public offering or sale. The Transferor will advise the Representative promptly of any such filing pursuant to Rule 424(b). If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement and an additional registration statement is necessary to register a portion of the Certificates under the Act but the Effective Time thereof has not occurred as of such execution and delivery, the Transferor will file the additional registration statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or prior to the time the Prospectus is printed and distributed to any Underwriter, or will make such filing at such later date as shall have been consented to by the [Lead Underwriter]. (b) The Transferor or the Company will advise the Representative promptly of any proposal to amend or supplement the initial or any additional registration statement as filed or the related prospectus, or the Initial Registration Statement, the Additional Registration Statement (if any) or the Prospectus, and will not effect such amendment or supplementation without the Representative's consent; and the Transferor or the Company will also advise the Representative promptly of the effectiveness of each Registration Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement) and of any amendment or supplementation of a Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceeding in respect of a Registration Statement and each of the Transferor and the Company will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (c) If, at any time when a prospectus relating to the Certificates is required to be delivered under the Act in connection with sales by any Underwriter or dealer, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Transferor will promptly notify the Representative of such event and will promptly prepare and file with the Commission (subject to the Representative's prior review pursuant to paragraph (b) of this Section 5), at its own expense, an amendment or supplement which will correct such statement or omission, or an amendment which will effect such compliance. Neither the Representative's consent to, nor the Underwriters' delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6. (d) As soon as practicable, but not later than the Availability Date (as defined below), the Transferor will cause the Trust to make generally available to the Certificateholders an earnings statement of the Trust covering a period of at least 12 months beginning after the Effective Date of the Initial Registration Statement (or, if later, the Effective Date of the Additional Registration Statement) which will satisfy the provisions of Section 11(a) of the Act. For the purpose of the preceding sentence, "Availability Date" means the 45th day after the end of the Trust's fourth fiscal quarter following the fiscal quarter that includes such Effective Date, except that, if such fourth fiscal quarter is the last quarter of the Trust's fiscal year, "Availability Date" means the 90th day after the end of such fourth fiscal quarter. (e) The Transferor or the Company will furnish to the Representative copies of each Registration Statement (two of which will be signed and will include all exhibits), each related preliminary prospectus, and, so long as delivery of a prospectus relating to the Certificates is required to be delivered under the Act in connection with sales by any Underwriter or dealer, the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representative requests. The Prospectus shall be so furnished on or prior to 10:00 A.M., New York time, on the business day following the later of the execution and delivery of this Agreement or the Effective Time of the Initial Registration Statement. All other such documents shall be so furnished as soon as available. The Transferor or the Company will pay the expenses of printing and distributing to the Underwriters all such documents. (f) The Transferor will cooperate in the qualification of the Certificates for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Representative designates and in the continuation of such qualifications in effect so long as required for the distribution of the Certificates. (g) For a period from the date of this Agreement until the retirement of the Certificates (i) RNB, as Servicer, will furnish to the Representative and, upon request, to each of the other Underwriters, copies of each certificate and the annual statements of compliance delivered to the Trustee pursuant to Article III of the Pooling and Servicing Agreement and Section 5.2 of the Supplement and the annual independent certified public accountant's servicing reports furnished to the Trustee pursuant to Article III of the Pooling and Servicing Agreement, by either first-class mail or electronic transfer as soon as practicable after such statements and reports are furnished to the Trustee, and (ii) any other periodic certificates or reports as may be delivered to the Trustee or the Certificateholders under the Pooling and Servicing Agreement or the Supplement. (h) So long as any of the Certificates is outstanding, the Transferor will furnish to the Representative by either first-class mail or electronic transfer as soon as practicable, copies of all documents (A) distributed, or caused to be distributed, by the Transferor to Certificateholders, (B) filed, or caused to be filed, by the Transferor with the Commission pursuant to the Exchange Act, any order of the Commission thereunder or pursuant to a "no-action" letter from the staff of the Commission and (C) from time to time, such other information in the possession of the Transferor concerning the Trust as the Representative may reasonably request. The Transferor will register the Certificates under the Exchange Act within 120 days after the end of the fiscal year of the Trust during which the offering of the Certificates to the public occurred. (i) The Transferor will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters (if and to the extent incurred by them) for any filing fees and other expenses (including fees and disbursements of their counsel) incurred by them in connection with qualification of the Certificates for sale and determination of their eligibility for investment under the laws of such jurisdictions as the Representative designates and the printing of memoranda relating thereto, for any fees charged by investment rating agencies for the rating of the Certificates, for any travel expenses of the Transferor's officers and employees and any other expenses of the Transferor in connection with attending or hosting meetings with prospective purchasers of the Certificates and for expenses incurred in distributing preliminary prospectuses and the Prospectus (including any amendments and supplements thereto). (j) To the extent, if any, that the ratings provided with respect to the Certificates by the Rating Agencies is conditional upon the furnishing of documents or the taking of any other action by the Transferor or the Company agreed upon on or prior to the Closing Date, the Transferor or the Company shall furnish such documents and take any such other action. (k) The Transferor or the Company shall not, until after the Closing Date, offer, sell or contract to sell, directly or indirectly, or file with the Commission a registration statement under the Act relating to, securities substantially similar to the Certificates. 6. Conditions of the Obligations of the Underwriters. The obligation of the several Underwriters to purchase and pay for the Certificates on the Closing Date will be subject to the accuracy of the representations and warranties on the part of the Transferor and the Company herein, to the accuracy of the statements of officers of the Transferor and the Company made pursuant to the provisions hereof, to the performance by each of the Transferor and the Company of its obligations hereunder and to the following additional conditions precedent: (a) The Representative shall have received a letter, dated the date of delivery thereof (which, if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, shall be on or prior to the date of this Agreement or, if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, shall be prior to the filing of the amendment or post-effective amendment to the registration statement to be filed shortly prior to such Effective Time), of Ernst & Young LLP, in form and substance satisfactory to the Underwriters and counsel for the Underwriters, confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating in effect that (i) they have performed certain specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of RNB) set forth in the Registration Statements and the Prospectus (and any supplements thereto), agrees with the accounting records of RNB, excluding any questions of legal interpretation, and (ii) they have performed certain specified procedures with respect to the accounts. For purposes of this subsection, (i) if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, "Registration Statements" shall mean the initial registration statement as proposed to be amended by the amendment or post-effective amendment to be filed shortly prior to its Effective Time, (ii) if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement but the Effective Time of the Additional Registration Statement is subsequent to such execution and delivery, "Registration Statements" shall mean the Initial Registration Statement and the additional registration statement as proposed to be filed or as proposed to be amended by the post-effective amendment to be filed shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the prospectus included in the Registration Statements. All financial statements included in material incorporated by reference into the Prospectus shall be deemed included in the Registration Statements for purposes of this subsection. (b) If the Effective Time of the Initial Registration Statement is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or such later date as shall have been consented to by the Representative. If the Effective Time of the Additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is printed and distributed to any Underwriter, or shall have occurred at such later date as shall have been consented to by the [Lead Underwriter]. If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Transferor, the Company or the Representative, shall be contemplated by the Commission. (c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of any of the Transferor, TCC, the Company or RNB or its credit card business which, in the judgment of a majority in interest of the Underwriters including the Representative, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Certificates; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) if in the judgment of a majority in interest of the Underwriters including the Representative, the effect of any such downgrading or public announcement makes it impractical or inadvisable to proceed with the completion of the public offering or the sale of and payment for the Certificates; (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Transferor or the Company on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by U.S. Federal or New York authorities; or (v) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Underwriters including the Representative, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Certificates. (d) You shall have received from James T. Hale, General Counsel for the Transferor, the Company, TCC and RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) Each of the Transferor, the Company and TCC has been duly incorporated and is validly existing and in good standing under the laws of the State of Minnesota with full corporate power, authority and legal right to own its properties and conduct its business as such properties are currently owned and such business is currently conducted, to execute, deliver and perform its obligations under each of the Basic Documents to which it is a party and, solely with respect to the Transferor, to execute and deliver to the Trustee the Certificates pursuant to the Pooling and Servicing Agreement; (ii) RNB is a national banking corporation duly organized, validly existing and in good standing under the laws of the United States, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under the Basic Documents to which it is a party and, in all material respects, to own its properties and conduct its business as such properties are presently owned and as such business is presently conducted; (iii) Each of the Transferor, the Company, TCC and RNB is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Credit Card Agreement relating to an Account owned by the Credit Card Originator or any Receivable transferred to the Trust by the Transferor unenforceable by the Credit Card Originator, the Transferor, the Servicer or the Trustee and would have a material adverse effect on the interests of the Certificateholders under the Pooling and Servicing Agreement or under any Supplement; (iv) The Certificates have been duly authorized, executed and delivered by the Transferor and, when duly authenticated by the Trustee in accordance with the terms of the Pooling and Servicing Agreement and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued and outstanding and entitled to the benefits provided by the Pooling and Servicing Agreement; (v) Each of the Basic Documents to which the applicable entity is a party has been duly authorized, executed and delivered by the Transferor, the Company, TCC and/or the Servicer, as the case may be, and constitutes the legal, valid and binding agreement of the Transferor, the Company, TCC and/or the Servicer, as the case may be, enforceable against the Transferor, the Company, TCC and/or the Servicer, as the case may be, in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors generally and the rights of creditors as the same may be applied in the event of bankruptcy, insolvency, receivership, reorganization,moratorium or other similar event in respect of the Transferor, the Company, TCC and/or the Servicer, (B) general principles of equity (regardless of whether considered and applied in a proceeding in equity or in law) and (C) with respect to the Pooling and Servicing Agreement and the Supplement, the qualification that certain of the remedial provisions of the Pooling and Servicing Agreement and the Supplement may be unenforceable in whole or in part, but the inclusion of such provisions does not affect the validity of the Pooling and Servicing Agreement or the Supplement taken as a whole, and the Pooling and Servicing Agreement and the Supplement, together with applicable law, contain adequate provisions for the practical realization of the benefits of the security created thereby; and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation; (vi) No consent, approval, authorization or order of any governmental agency or body is required for (A) the execution, delivery and performance by the Transferor, the Company, TCC or the Servicer of its obligations under any of the Basic Documents or the Certificates to which it is a party, or (B) the issuance or sale of the Certificates, except such as have been obtained under the Act and as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Certificates by the Underwriters; (vii) None of the execution and delivery of the Basic Documents or the Certificates by the Transferor, the Company, TCC and/or the Servicer, as the case may be, or the performance by the Transferor, the Company, TCC and/or the Servicer, as the case may be, of the transactions therein contemplated or the fulfillment of the terms thereof does or will result in any violation of any statute or regulation or any order or decree of any court or governmental authority binding upon the Transferor, the Company, TCC or the Servicer or the property of the Transferor, the Company, TCC or the Servicer, or conflict with, or result in a breach or violation of any term or provision of, or result in a default under any of the terms and provisions of, the charter or by-laws of the Transferor, the Company, TCC or the Servicer, or any material indenture, loan agreement or other material agreement to which the Transferor, the Company, or the Servicer is a party or by which any of them is bound; (viii) There are no proceedings or investigations pending or, to the best knowledge of such counsel, threatened against the Transferor, the Company, TCC or RNB, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of any of the Basic Documents or the Certificates, (ii) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by any of the Basic Documents or the Certificates, (iii) seeking any determination or ruling that, in the reasonable judgment of such counsel, would materially and adversely affect the performance by the Transferor of its obligations under any of the Basic Documents, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of any of the Basic Documents or the Certificates or (v) seeking to affect adversely the income tax attributes of the Trust under the Federal or applicable state income or franchise tax systems; (e) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that the Certificates will be treated as indebtedness for Federal income tax purposes and that the Trust will not be classified as an association taxable as a corporation. (f) You shall have received from Davenport, Evans, Hurwitz & Smith, special South Dakota tax counsel to RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that, to the extent that the Certificates will be characterized as debt for Federal income tax purposes, the Certificates will be characterized as debt for South Dakota income tax purposes, and to the effect that, to the extent that the Trust will not be subject to tax at the entity level for Federal income tax purposes, the Trust will not be subject to tax at the entity level for South Dakota income tax purposes. (g) You shall have received from Faegre & Benson, special Minnesota tax counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that when the Certificates are beneficially owned by a person that is not a member of the Transferor's consolidated group, the certificates will be characterized as debt for Minnesota income tax purposes and to the effect that the Trust will not be subject to tax at the entity level. (h) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) Each of the Pooling and Servicing Agreement and the Supplement constitutes the valid and binding obligation of the Transferor, RNB and the Trustee, enforceable against the Transferor, RNB and the Trustee in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, reorganization, moratorium or other similar event in respect of the Transferor, RNB or the Trustee, (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (c) the qualification that certain of the remedial provisions of the Pooling and Servicing Agreement may be unenforceable in whole or in part, but the inclusion of such provisions does not affect the validity of the Pooling and Servicing Agreement taken as a whole, and the Pooling and Servicing Agreement, together with applicable law, contain adequate provisions for the practical realization of the benefits of the security created thereby and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation; (ii) The Bank Receivables Purchase Agreement constitutes the valid and binding obligation of RNB and TCC, enforceable against RNB and TCC in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, conservatorship, reorganization, moratorium or other similar event in respect of RNB or TCC and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation; (iii) The Receivables Purchase Agreement constitutes the valid and binding obligation of TCC and the Transferor, enforceable against TCC and the Transferor in accordance with its terms, except (x) to the extent that the enforceability thereof may be limited by (a) bankruptcy, insolvency, receivership, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and the rights of creditors as the same may be applied in the event of the bankruptcy, insolvency, receivership, reorganization, moratorium or other similar event in respect of TCC and the Transferor and (b) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity) and (y) such counsel expresses no opinion as to the enforceability of any rights to contribution or indemnification which are violative of public policy underlying any law, rule or regulation; (iv) The Certificates, when executed and authenticated in accordance with the terms of the Pooling and Servicing Agreement and the Supplement and delivered to and paid for by the Underwriters pursuant to this Agreement, will be duly and validly issued and outstanding and will be entitled to the benefits of the Pooling and Servicing Agreement and the Supplement; (v) This Agreement has been duly authorized, executed and delivered by the Transferor and the Company; (vi) Neither the execution, delivery or performance by each of the Transferor, the Company, TCC or RNB of the Basic Documents to which it is a party, nor the compliance by each of the Transferor, the Company, TCC or RNB, as the case may be, with the terms and provisions thereof or hereof, will contravene any provision of any applicable law; (vii) Based on such counsel's review of applicable laws, no governmental approval, which has not been obtained or taken and is not in full force and effect, is required to authorize or is required in connection with the execution, delivery or performance by each of the Transferor, the Company, TCC or RNB, of the Basic Documents to which it is a party; (viii) The Certificates and the Basic Documents conform in all material respects to the descriptions thereof contained in the Prospectus; (ix) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended, and the Trust is not required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"); (x) The statements in the Prospectus under the heading "Legal Aspects of the Receivables," to the extent that they constitute matters of law or legal conclusions with respect thereto, have been reviewed by such counsel and are correct in all material respects; (xi) The Initial Registration Statement has become effective under the Act, the Additional Registration Statement (if any) was filed and became effective under the Act, and the Prospectus Supplement has been filed with the Commission pursuant to Rule 424(b) thereunder, no stop order suspending the effectiveness of a Registration Statement has been issued and no proceeding for that purpose has been instituted or threatened; and (xii) Each of the Registration Statements, as of their effective dates, and the Prospectus, as of its date, appeared on its face to be appropriately responsive in all material respects to the requirements of the Act and the General Rules and Regulations under the Act, except that in each case such counsel expresses no opinion as to the financial data included therein or excluded therefrom or the exhibits to a Registration Statement, and such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in a Registration Statement and the Prospectus. Such opinion shall also state that such counsel has participated in conferences with officers and representatives of the Transferor, the Company, TCC and RNB, counsel for the Transferor, the Company, TCC and RNB, representatives of the independent accountants of the Transferor, the Company, TCC and RNB, and the Underwriters at which the contents of the Prospectus and related matters were discussed and, although such counsel need not pass upon, and need not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Prospectus and shall have made no independent check or verification thereof, except for those made under the caption "Legal Aspects of the Receivables" to the extent set forth in paragraph (x) above, on the basis of the foregoing, no facts shall have come to such counsel's attention that shall have led such counsel to believe that the Prospectus, as of its date or the date of its opinion, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need not express an opinion or belief with respect to the financial statements, schedules and other financial information included in such Prospectus or excluded therefrom. (i) You shall have received from Davenport, Evans, Hurwitz & Smith special South Dakota counsel to RNB, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) The security interest created by the Bank Receivables Purchase Agreement in the Receivables has been perfected under Article 9 of the Uniform Commercial Code of South Dakota by the proper filing of UCC-1 financing statements with the appropriate filing offices in South Dakota, and such security interest is of first priority under Article 9 of the South Dakota Uniform Commercial Code; and (ii) The UCC-1 financing statements have been previously filed, have not been amended or terminated and no other filings or other actions, with respect to TCC's interest in the Receivables, are necessary to perfect the interest of TCC in the Receivables, and the proceeds thereof, conveyed to TCC, except that appropriate continuation statements must be filed in accordance with the applicable state's requirements. (j) You shall have received from Faegre & Benson, special Minnesota counsel to the Transferor and TCC, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) Each of the security interest created by the Receivables Purchase Agreement and the security interest created by the Pooling and Servicing Agreement in the Receivables has been perfected under Article 9 of the Uniform Commercial Code of Minnesota by the proper filing of UCC-1 financing statements with the appropriate filing offices in Minnesota, and each such security interest is of first priority under Article 9 of the Minnesota Uniform Commercial Code; and (ii) The UCC-1 financing statements have been previously filed have not been amended or terminated and (a) no other filings or other actions, with respect to the Transferor's interest in the Receivables, are necessary to perfect the interest of the Transferor in the Receivables, and the proceeds thereof, conveyed to the Transferor thereunder and (b) no other filings or other actions, with respect to the Trustee's interest in the Receivables, are necessary to perfect the interest of the Trustee in the Receivables, and proceeds thereof, against third parties, except, in each case, that appropriate continuation statements must be filed in accordance with the applicable state's requirements. (k) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to RNB, TCC and the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that the Bank Receivables Purchase Agreement creates in favor of TCC a security interest under Article 9 of the Delaware Uniform Commercial Code (the "Delaware UCC") in the rights of RNB in the Receivables, the Receivables Purchase Agreement creates in favor of the Transferor a security interest under Article 9 of the Delaware UCC in the rights of TCC in the Receivables and the Pooling and Servicing Agreement creates in favor of the Trustee a security interest under Article 9 of the Delaware UCC in the rights of the Transferor in the Receivables. (l) You shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Transferor, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) In a properly presented and argued case in a proceeding under Title 11 of the United States Code, 11 U.S.C. ss. ss. 101, et seq. (the "Bankruptcy Code"), if the matter were properly briefed and presented to a court, the court would hold that (1) the transfer of the Receivables by TCC to the Transferor in the manner set forth in the Receivables Purchase Agreement would constitute the sale of the Receivables from TCC to the Transferor, and (2) in the event that TCC were to become a debtor under the Bankruptcy Code, the transfer of Receivables under the Receivables Purchase Agreement would not, after full consideration of all relevant factors, be properly characterized as a pledge of the Receivables to secure a borrowing by TCC from the Transferor, and accordingly, the Receivables and the proceeds thereof would not be part of the estate of TCC under Section 541 of the Bankruptcy Code in such event, and consequently Section 362 of the Bankruptcy Code would not be applicable to the Receivables and the proceeds thereof; and (ii) If TCC should become a debtor in a case under the Bankruptcy Code, and the Transferor would not otherwise properly be a debtor in a case under the Bankruptcy Code, and if the matter were properly briefed and presented to a court exercising bankruptcy jurisdiction, it would not be a proper exercise by the court of its equitable discretion to disregard the separate corporate existence of the Transferor so as to order substantive consolidation under the Bankruptcy Code of the assets and liabilities of the Transferor with the bankruptcy estate of TCC. (m) You shall have received from [Tomothy Carlin], Assistant Vice President and Senior Counsel for Norwest Corporation, parent of the Trustee, such opinion or opinions dated the Closing Date and satisfactory in form and substance to you and your counsel, substantially to the effect that: (i) The Trustee is a national banking association duly organized, validly existing and in good standing under the Federal laws of the United States of America; (ii) The Trustee has all requisite power and authority as a national banking association to execute and deliver, and to perform its obligations under the Pooling and Servicing Agreement and the Supplement and to consummate the transactions contemplated by the Pooling and Servicing Agreement and the Supplement; (iii) The Trustee's performance of its obligations under the Pooling and Servicing Agreement and the execution, delivery and performance of the Trustee's obligations pursuant to the Supplement by the Trustee does not conflict with or result in a violation of the Articles of Association or By-Laws of the Trustee; (iv) The Pooling and Servicing Agreement and the Supplement have been duly authorized, executed and delivered by the Trustee; and (v) The Certificates have been duly authenticated by the Trustee pursuant to the Pooling and Servicing Agreement. (n) You shall have received a certificate, dated the Closing Date and satisfactory in form and substance to you and your counsel, of the Chairman, President or any Vice President and a principal financial or accounting officer of each of the Transferor, TCC, RNB and the Company, as applicable, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Transferor and the Company, as the case may be, in this Agreement are true and correct, that each of the Transferor and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, that the representations and warranties of each of the Transferor, TCC, RNB and the Company, as applicable, in the Basic Documents are true and correct as of the dates specified therein, that no stop order suspending the effectiveness of a Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission, that, subsequent to the date of the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Transferor, TCC, RNB or the Company, as the case may be, or its respective credit card business except as set forth in or contemplated by the Prospectus or as described in such certificate and that nothing has come to the attention of the Transferor, TCC, RNB or the Company that would lead the Transferor, TCC, RNB or the Company to believe that a Registration Statement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (o) You shall have received evidence satisfactory to you and your counsel that the Certificates shall be rated "AAA" by Standard & Poor's Ratings Services and "Aaa" by Moody's Investors Service, Inc. (p) You shall have received a letter, dated such Closing Date and satisfactory in form and substance to you and your counsel, which meets the requirements of subsection (a) of this Section, except that the specified date referred to in such subsection will be a date not more than five days prior to such Closing Date for the purposes of this subsection (p). (q) You shall also receive from each counsel rendering an opinion not otherwise addressed to you a letter dated the Closing Date and satisfactory in form and substance to you and your counsel, stating that you may rely on the opinions of such counsel as delivered to Moody's Investors Service, Inc. and Standard & Poor's Ratings Services in connection with the rating of the Certificates. (r) On the Closing Date, $______________ aggregate principal amount of the Class B Certificates shall have been issued to the Transferor. (s) All proceedings in connection with the transactions contemplated by this Agreement and the other Basic Documents and all documents incident hereto and thereto shall be reasonably satisfactory in form and substance to you and your counsel, and you and your counsel shall have received such information, certificates and documents as you and your Counsel may reasonably request. The Transferor will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. [The Lead Underwriter] may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder. 7. Indemnification and Contribution. (a) The Transferor and the Company, will jointly and severally indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that neither the Transferor nor the Company will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Transferor or the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below; and provided further, however, that neither the Transferor nor the Company will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary prospectus that was eliminated or remedied in the Prospectus, if a copy of the Prospectus was not sent or given with or prior to the written confirmation of the sale of any Certificate to the person asserting the loss, claim, damage or liability, if required by the Act. (b) Each Underwriter will severally and not jointly indemnify and hold harmless the Transferor and the Company against any losses, claims, damages or liabilities to which the Transferor or the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or the alleged omission to state therein in a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Transferor or the Company by such Underwriter through the Representative specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Transferor or the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Prospectus Supplement furnished on behalf of each Underwriter: the fifth and sixth paragraphs under the caption "Underwriting" concerning overallotments and stabilizing and the concession and reallowance figures appearing in the second paragraph under the caption "Underwriting". (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Transferor and the Company on the one hand and the Underwriters on the other from the offering of the Certificates or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Transferor and/or the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Transferor and the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Transferor and the Company bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Transferor or the Company on the one hand or by the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Certificates underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) The obligations of the Transferor and the Company under this Section shall be in addition to any liability which the Transferor and the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Transferor and the Company, to each officer of the Transferor and the Company who has signed a Registration Statement and to each person, if any, who controls the Transferor or the Company within the meaning of the Act. 8. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Certificates hereunder on the Closing Date and the aggregate principal amount of Certificates that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Certificates that the Underwriters are obligated to purchase on such Closing Date, the Representative may make arrangements satisfactory to the Transferor for the purchase of such Certificates by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the nondefaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Certificates that such defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate principal amount of the Certificates with respect to which such default or defaults occur exceeds 10% of the total principal amount of the Certificates that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Representative and the Transferor for the purchase of such Certificates by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Transferor or the Company, except as provided in Section 9. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default. 9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Transferor and the Company and of their respective officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Transferor, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Certificates. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Certificates by the Underwriters is not consummated, the Transferor and the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Transferor and the Company and the Underwriters pursuant to Section 7 shall remain in effect, and if any Certificates have been purchased hereunder the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect. If the purchase of the Certificates by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c), the Transferor and the Company, jointly and severally, will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Certificates. 10. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representative at [Lead Underwriter], [Address], Attention Syndicate Manager (facsimile no. [Fax]); if sent to the Transferor, will be mailed, delivered or telegraphed and confirmed to it at Target Receivables Corporation, 80 South Eighth Street, 14th floor, Suite 1401, Minneapolis, Minnesota 55402, Attention of Treasurer, (facsimile no. (612) 370-5508); and if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at Target Corporation, 777 Nicollet Mall, Minneapolis, Minnesota 55402, Attention of Treasurer (facsimile no. (612) 370-5508); provided; however, that any notice to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Underwriter. 11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder. 12. Representations of Underwriters. The Representative will act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representative will be binding upon all the Underwriters. Each of the Underwriters represents and warrants to, and agrees with, the Transferor that (w) it has only issued or passed on and shall only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Certificates to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or who is a person to whom the document may otherwise lawfully be issued or passed on, (x) it has complied and shall comply with all applicable provisions of the Financial Services Act 1986 and other applicable laws and regulations with respect to anything done by it in relation to the Certificates in, from or otherwise involving the United Kingdom and (y) if that Underwriter is an authorized person under the Financial Services Act 1986, it has only promoted and shall only promote (as that term is defined in Regulation 1.02 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to any person in the United Kingdom the scheme described in the Prospectus if that person is of a kind described either in Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes) Regulations 1991. 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all such counterparts shall together constitute one and the same Agreement. 14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. The Transferor and the Company hereby submit to the nonexclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If the foregoing is in accordance with the Representative's understanding of our agreement, kindly sign and return to the Transferor and the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Transferor, the Company and the several Underwriters in accordance with its terms. Very truly yours, TARGET RECEIVABLES CORPORATION By Name: Title: TARGET CORPORATION By Name: Title: Acting on behalf of itself and as the Representative of the several Underwriters. [Lead Underwriter] By Name: Title: SCHEDULE A Underwriters Principal ----------- Amount of Certificates [Lead Underwriter]............................................ $ ............................................ ............................................ Total ....................................... $ - EX-4 3 0003.txt EXHIBIT 4(A) ============================================================================== TARGET RECEIVABLES CORPORATION, Transferor RETAILERS NATIONAL BANK, Servicer and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Trustee TARGET CREDIT CARD MASTER TRUST AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT Dated as of April 28, 2000 ============================================================================== TABLE OF CONTENTS Page ARTICLE I Definitions...........................................................2 Section 1.1. Definitions.............................................2 Section 1.2. Other Definitional Provisions..........................27 ARTICLE II Conveyance of Receivables............................................29 Section 2.1. Conveyance of Receivables..............................29 Section 2.2. Acceptance by Trustee..................................31 Section 2.3. Representations and Warranties of the Transferor Relating to the Transferor.............................32 Section 2.4. Representations and Warranties of the Transferor Relating to this Agreement and any Supplement and the Receivables............................................34 Section 2.5. Reassignment of Ineligible Receivables.................37 Section 2.6. Reassignment of Receivables in Trust Portfolio ..............................................................39 Section 2.7. Covenants of the Transferor............................40 Section 2.8. Covenants of the Transferor with Respect to the Bank Purchase Agreement................................46 Section 2.9. Addition of Accounts...................................47 Section 2.10. Removal of Accounts....................................55 Section 2.11. Discount Option........................................58 Section 2.12. Additional Transferors.................................58 Section 2.13. Account Allocations....................................59 ARTICLE III Administration and Servicing of Receivables...........................61 Section 3.1. Acceptance of Appointment and Other Matters Relating to the Servicer................................61 Section 3.2. Servicing Compensation..................................62 Section 3.3. Representations, Warranties and Covenants of the Servicer................................................63 Section 3.4. Report to the Trustee...................................68 Section 3.5. Annual Certificate of Servicer..........................70 Section 3.6. Annual Servicing Report of Independent Public Accountants; Copies of Reports Available................70 Section 3.7. Tax Treatment...........................................72 Section 3.8. Notices to Retailers National Bank......................72 Section 3.9. Adjustments.............................................72 ARTICLE IV Rights of Certificateholders and Allocation and Application of Collections.............................74 Section 4.1. Rights of Certificateholders............................74 Section 4.2. Establishment of Collection Account and Special Funding Account.........................................74 Section 4.3. Collections and Allocations.............................78 Section 4.4. Shared Principal Collections............................80 Section 4.5. Excess Finance Charge Collections.......................80 Section 4.6. Allocations During Funding Period.......................81 ARTICLE V Distributions and Reports to Certificateholders.......................82 ARTICLE VI The Certificates......................................................83 Section 6.1. The Certificates........................................83 Section 6.2. Authentication of Certificates..........................84 Section 6.3. New Issuances...........................................84 Section 6.4. Registration of Transfer and Exchange of Certificates............................................87 Section 6.5. Mutilated, Destroyed, Lost or Stolen Certificates.......91 Section 6.6. Persons Deemed Owners...................................92 Section 6.7. Appointment of Paying Agent.............................93 Section 6.8. Access to List of Registered Certificateholders' Names and Addresses.....................................93 Section 6.9. Authenticating Agent....................................94 Section 6.10. Book-Entry Certificates.................................95 Section 6.11. Notices to Clearing Agency..............................96 Section 6.12. Definitive Certificates.................................97 Section 6.13. Global Certificate......................................97 Section 6.14. Uncertificated Classes..................................98 ARTICLE VII Other Matters Relating to the Transferor..............................99 Section 7.1. Liability of the Transferor.............................99 Section 7.2. Merger or Consolidation of, or Assumption of the Obligations of, the Transferor..........................99 Section 7.3. Limitations on Liability of the Transferor.............101 Section 7.4. Liabilities............................................101 ARTICLE VIII Other Matters Relating to the Servicer...............................103 Section 8.1. Liability of the Servicer..............................103 Section 8.2. Merger or Consolidation of, or Assumption of the Section 8.3. Limitation on Liability of the Servicer and Others.................................................104 Section 8.4. Servicer Indemnification of the Trust and the Trustee................................................105 Section 8.5. The Servicer Not To Resign.............................105 Section 8.6. Access to Certain Documentation and Information Regarding the Receivables..............................106 Section 8.7. Delegation of Duties...................................107 Section 8.8. Examination of Records.................................107 ARTICLE IX Early Amortization Events............................................108 Section 9.1. Early Amortization Events..............................108 Section 9.2. Additional Rights upon the Occurrence of Certain Events.................................................109 ARTICLE X..................................................................110 Section 10.1. Servicer Defaults.....................................110 Section 10.2. Trustee to Act; Appointment of Successor..............114 Section 10.3. Notification to Certificateholders....................116 ARTICLE XI The Trustee..........................................................117 Section 11.1. Duties of Trustee.....................................117 Section 11.2. Certain Matters Affecting the Trustee.................119 Section 11.3. Trustee Not Liable for Recitals in Certificates ..............................................................120 Section 11.4. Trustee May Own Certificates..........................121 Section 11.5. The Servicer To Pay Trustee's Fees and Expenses.......121 Section 11.6. Eligibility Requirements for Trustee..................122 Section 11.7. Resignation or Removal of Trustee.....................122 Section 11.8. Successor Trustee.....................................123 Section 11.9. Merger or Consolidation of Trustee....................123 Section 11.10. Appointment of Co-Trustee or Separate Trustee........124 Section 11.11. Tax Return...........................................125 Section 11.12. Trustee May Enforce Claims Without Possession of Certificates.......................................126 Section 11.13. Suits for Enforcement................................126 Section 11.14. Rights of Certificateholders to Direct Trustee.......126 Section 11.15. Representations and Warranties of Trustee............127 Section 11.16. Maintenance of Office or Agency......................128 Section 11.17. Confidentiality......................................128 ARTICLE XII Termination..........................................................129 Section 12.1. Termination of Trust..................................129 Section 12.2. Final Distribution....................................129 Section 12.3. Transferor's Termination Rights.......................131 Section 12.4. Defeasance............................................131 ARTICLE XIII Miscellaneous Provisions.............................................133 Section 13.1. Amendment; Waiver of Past Defaults....................133 Section 13.2. Protection of Right, Title and Interest to Trust Assets................................................135 Section 13.3. Limitation on Rights of Certificateholders............137 Section 13.4. Governing Law; Jurisdiction...........................138 Section 13.5. Notices, Payments.....................................138 Section 13.6. Rule 144A Information.................................140 Section 13.7. Severability of Provisions............................140 Section 13.8. Assignment............................................140 Section 13.9. Certificates Nonassessable and Fully Paid.............140 Section 13.10. Further Assurances....................................140 Section 13.11. Nonpetition Covenant..................................141 Section 13.12. No Waiver; Cumulative Remedies........................141 Section 13.13. Counterparts..........................................141 Section 13.14. Third-Party Beneficiaries.............................141 Section 13.15. Actions by Certificateholders.........................141 Section 13.16. Merger and Integration................................142 Section 13.17. Headings..............................................142 Section 13.18. No Proceedings........................................142 EXHIBITS Exhibit A Form of Transferor Certificate Exhibit B Form of Assignment of Receivables in Supplemental Accounts Exhibit C Form of Reassignment of Receivables in Removed Accounts Exhibit D Form of Annual Servicer's Certificate Exhibit E-1 Private Placement Legend Exhibit E-2 Form of Undertaking Letter Exhibit E-3 ERISA Legend Exhibit F Example of a Credit Card Agreement Exhibit G Reserved Exhibit H-1 Form of Opinion of Counsel with respect to Amendments Exhibit H-2 Form of Opinion of Counsel with respect to Addition of Supplemental Accounts AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of April 28, 2000 among TARGET RECEIVABLES CORPORATION, a Minnesota corporation, as Transferor, RETAILERS NATIONAL BANK, a national banking association, as Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as Trustee. WHEREAS, the Transferor, the Servicer and the Trustee have heretofore executed and delivered a Pooling and Servicing Agreement, dated as of September 13, 1995 (as amended, supplemented or otherwise modified, the "Original Pooling and Servicing Agreement"), by and between Target Receivables Corporation (formerly known as Dayton Hudson Receivables Corporation), as the Transferor, Retailers National Bank, as the Servicer, and the Trustee for the issuance by the Dayton Hudson Credit Card Master Trust of the Investor Certificates and the Exchangeable Transferor Certificate; WHEREAS, the Transferor, formerly known as Dayton Hudson Receivables Corporation, has been renamed Target Receivables Corporation and desires to amend and restate the Original Pooling and Servicing Agreement to read in its entirety as set forth below and to, among other things, rename the Trust the Target Credit Card Master Trust; WHEREAS, Section 13.1(a) of the Original Pooling and Servicing Agreement provides that the Servicer, the Transferor and the Trustee, without the consent of any of the Certificateholders, may amend the Original Pooling and Servicing Agreement from time to time so long as (x) the Transferor shall have delivered to the Trustee an Officer's Certificate to the effect that the Transferor reasonably believes that such action shall not adversely affect in any material respect the interests of any Investor Certificateholder, (y) the Rating Agency Condition shall have been satisfied with respect to such amendment and (z) a Tax Opinion is delivered in connection with such amendment; WHEREAS, all conditions precedent to the execution of this Agreement have been complied with; NOW, THEREFORE, pursuant to Section 13.1(a) of the Original Pooling and Servicing Agreement, the Servicer, the Transferor and the Trustee hereby agree that effective on and as of the date hereof, the Original Pooling and Servicing Agreement is hereby amended and restated in its entirety as follows: In consideration of the mutual agreements herein contained, each party agrees as follows for the benefit of the other parties, the Certificateholders and any Enhancement Provider to the extent provided herein and in any Supplement: ARTICLE I Definitions Section 1.1. Definitions. Whenever used in this Agreement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. "Account" shall mean each Initial Account, each Automatic Additional Account and each Supplemental Account, but shall exclude any Account all the Receivables in which are either reassigned or assigned to the Transferor or its designee or the Servicer in accordance with the terms of this Agreement and any inactive Accounts which in accordance with the Credit Card Guidelines have been removed from the active computer records of the Credit Card Originator. The definition of Account shall include each account into which an Account is transferred (a "Transferred Account"); provided that (i) such transfer is made in accordance with the Credit Card Guidelines and (ii) such Transferred Account can be traced or identified, by reference to or by way of the computer files, microfiche lists or printed lists delivered to the Trustee pursuant to Section 2.1 or 2.9(f), as an account into which an Account has been transferred. The term "Account" shall be deemed to refer to an Automatic Additional Account or a Supplemental Account only from and after the Addition Date with respect thereto, and the term "Account" shall be deemed to refer to any Removed Account only prior to the Removal Date with respect thereto. "Accumulation Period" shall mean, with respect to any Series, the period, if any, specified as such in the related Supplement. "Act" shall mean the Securities Act of 1933, as amended. "Addition" shall mean the designation of additional Eligible Accounts to be included as Accounts pursuant to subsection 2.9(a), (b) or (d) or of Participation Interests to be included as Trust Assets pursuant to subsection 2.9(a) or (b), as applicable. "Addition Cut-Off Date" shall mean the date as of which any Supplemental Accounts or Participation Interests are designated for inclusion in the Trust, as specified in the related Assignment. "Addition Date" shall mean (i) with respect to Supplemental Accounts, the date on which the Receivables in such Supplemental Accounts are conveyed to the Trust pursuant to subsection 2.9(a) or (b), as applicable, (ii) with respect to Automatic Additional Accounts, the date on which such accounts are created, and (iii) with respect to Participation Interests, the date from and after which such Participation Interests are to be included as Trust Assets pursuant to subsection 2.9(a) or (b). "Additional Account" shall mean an Automatic Additional Account or a Supplemental Account. "Affiliate" shall mean, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" shall mean the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Aggregate Addition Limit" shall mean, with respect to any Series, the number of accounts which may be included as Automatic Additional Accounts without confirmation from each Rating Agency that such action will satisfy the Rating Agency Condition and which may be designated as Supplemental Accounts pursuant to subsection 2.9(a), without the prior Rating Agency notice described under subsection 2.9(c)(iv), which would either (x) with respect to any of the three consecutive Monthly Periods commencing in January, April, July and October of each calendar year commencing October, 1995, may not exceed 15% of the number of Accounts as of the first day of the calendar year during which such Monthly Periods commence (or the Trust Cut-Off Date, in the case of 1995) or (y) with respect to any twelve-month period, equal 20% of the number of Accounts as of the first day of such twelve-month period. "Agreement" shall mean this Amended and Restated Pooling and Servicing Agreement and all amendments hereof and supplements hereto, including, with respect to any Series or Class, the related Supplement. "Amortization Period" shall mean, with respect to any Series or any Class within a Series, a period following the Revolving Period, which shall be the controlled amortization period, the principal amortization period, the rapid accumulation period, the early amortization period, or other amortization period or accumulation period, in each case as defined with respect to such Series in the related Supplement. "Applicants" shall have the meaning specified in Section 6.8. "Assignment" shall have the meaning specified in subsection 2.9(f). "Authorized Newspaper" shall mean any newspaper or newspapers of general circulation in the Borough of Manhattan, The City of New York printed in the English language (and, with respect to any Series or Class, if and so long as the Investor Certificates of such Series or Class are listed on the Luxembourg Stock Exchange and such exchange shall so require, in Luxembourg, printed in any language satisfying the requirements of such exchange) and customarily published on each business day at such place, whether or not published on Saturdays, Sundays or holidays. "Automatic Addition Suspension Date" shall mean the Business Day specified in subsection 2.9(d)(i) or the Determination Date specified in subsection 2.9(d)(ii), as applicable. "Automatic Addition Termination Date" shall mean the Business Day specified by the Transferor pursuant to subsection 2.9(d)(i) hereof as of which new open end credit card accounts owned by the Credit Card Originator shall cease to become Automatic Additional Accounts. "Automatic Additional Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement coming into existence (i) after the Trust Cut-Off Date and prior to the earlier of the Automatic Addition Termination Date or an Automatic Addition Suspension Date and (ii) following an Automatic Addition Suspension Date and after a Restart Date and prior to a subsequent Automatic Addition Suspension Date or any Automatic Addition Termination Date; provided however with respect to any accounts initially originated by parties other than Retailers National Bank and its successors or assigns and/or any transferees of Accounts from Retailers National Bank, such accounts shall be deemed to be Automatic Additional Accounts only upon satisfaction of the Rating Agency Condition. "Bank Purchase Agreement" shall mean (i) the amended and restated receivables purchase agreement, dated as of April 28, 2000, between Retailers National Bank, as seller, and Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), as purchaser, and (ii) in the event of a transfer of Accounts by Retailers National Bank to any other entity in accordance with this Agreement, the receivables purchase agreement between Retailers National Bank and such other entity, substantially in the form of the receivables purchase agreement referred to in clause (i) above. "Base Rate" shall have the meaning, with respect to any Series, specified in the related Supplement. "Bearer Certificate" shall have the meaning specified in Section 6.1. "Benefit Plan" shall have the meaning specified in subsection 6.4(c). "Book-Entry Certificates" shall mean beneficial interests in the Investor Certificates, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 6.10. "Business Day" shall mean any day other than (a) a Saturday or Sunday, (b) any other day on which national banking associations or state banking institutions in New York, New York, Minneapolis, Minnesota or Sioux Falls, South Dakota are authorized or obligated by law, executive order or governmental decree to be closed or (c) for purposes of any particular Series, any other day specified in the related Supplement. "Certificate" shall mean any one of the Investor Certificates or the Transferor Certificate. "Certificateholder" or "Holder" shall mean an Investor Certificateholder or a Person in whose name the Transferor Certificate is registered. "Certificateholders' Interest" shall have the meaning specified in Section 4.1. "Certificate Owner" shall mean, with respect to a Book-Entry Certificate, the Person who is the owner of such Book-Entry Certificate, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly or as an indirect participant, in accordance with the rules of such Clearing Agency). "Certificate Rate" shall mean, with respect to any Series or Class, the certificate rate specified therefor in the related Supplement. "Certificate Register" shall mean the register maintained pursuant to Section 6.4, providing for the registration of the Registered Certificates and the Transferor Certificate and transfers and exchanges thereof. "Class" shall mean, with respect to any Series, any one of the classes of Investor Certificates of that Series. "Clearing Agency" shall mean an organization registered as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. "Clearing Agency Participant" shall mean a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" shall mean, with respect to any Series, the closing date specified in the related Supplement. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Collection Account" shall have the meaning specified in Section 4.2. "Collections" shall mean all payments (including Recoveries of Principal Receivables or Finance Charge Receivables) received by the Servicer with respect to the Receivables, in the form of cash, checks (to the extent collected), wire transfers or other form of payment in accordance with the Credit Card Agreements in effect from time to time on any Receivables and all payments received by the Servicer with respect to Merchant Fees and Deferred Billing Fees. If so specified in any Supplement, Collections shall also include any payments received by the Servicer with respect to Participation Interests. "Commission" shall mean the Securities and Exchange Commission. "Confidential Information" shall have the meaning specified in Section 11.17. "Corporate Trust Office" shall have the meaning specified in Section 11.16. "Coupon" shall have the meaning specified in Section 6.1. "Credit Card Agreement" shall mean, with respect to an Account, the agreements between the Credit Card Originator which owns such Account and the related Obligor, governing the terms and conditions of such Account, as such agreements may be amended, modified or otherwise changed from time to time and as distributed (including any amendments and revisions thereto) to such Obligors. An example of a Credit Card Agreement is attached as Exhibit F. "Credit Card Guidelines" shall mean written policies and procedures of the Credit Card Originator relating to the operation of its consumer revolving lending business, including, without limitation, the written policies and procedures for determining the creditworthiness of credit card customers, the extension of credit to credit card customers and relating to the maintenance of credit card accounts and collection of receivables with respect thereto, as such policies and procedures may be amended, modified, or otherwise changed from time to time in conformance with all Requirements of Law, the failure to comply with which would have a material adverse effect on interests hereunder of Investor Certificateholders. "Credit Card Originator" shall mean Retailers National Bank, and its successors or assigns and/or any transferee of the Accounts from Retailers National Bank or any other originator of Accounts. "Daily Report" shall have the meaning specified in subsection 3.4(a). "Date of Processing" shall mean, with respect to any transaction, the Business Day on which such transaction is first recorded pursuant to the Servicer's customary and usual servicing practices on the Servicer's computer file of consumer open-end credit card accounts (without regard to the effective date of such recordation). "Debtor Relief Laws" shall mean the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, readjustment of debt, marshalling of assets or similar debtor relief laws of the United States, any state or any foreign country from time to time in effect, affecting the rights of creditors generally. "Defaulted Amount" shall mean, with respect to any Monthly Period, an amount (which shall not be less than zero) equal to (a) the amount of Defaulted Receivables for each day in such Monthly Period, minus (b) the sum of (i) the amount of any Defaulted Receivables for which the Transferor Amount is reduced as a result of the assignment of a principal balance of zero thereto for purposes of determining the aggregate amount of Principal Receivables or the Servicer became obligated to accept reassignment or assignment in accordance with the terms of this Agreement during such Monthly Period, (ii) the aggregate amount of Recoveries received in such Monthly Period with respect to Finance Charge Receivables and Principal Receivables previously charged off as uncollectible and (iii) the excess, if any, for the immediately preceding Monthly Period, of the sum computed pursuant to this clause (b) over the amount of Principal Receivables that became Defaulted Receivables during such Monthly Period; provided, however, that, if an Insolvency Event occurs with respect to the Transferor, the amount of such Defaulted Receivables which are subject to reassignment to the Transferor in accordance with the terms of this Agreement shall not be added to the sum so subtracted and, if any of the events described in subsection 10.1(d) occur with respect to the Servicer, the amount of such Defaulted Receivables which are subject to reassignment or assignment to the Servicer in accordance with the terms of this Agreement shall not be added to the sum so subtracted. "Defaulted Receivable" shall mean, with respect to any date of determination, all Principal Receivables in any Account which are charged off as uncollectible on such day in accordance with the Credit Card Guidelines and the Servicer's customary and usual servicing procedures for servicing open end credit card account receivables comparable to the Receivables. A Principal Receivable in any Account shall become a Defaulted Receivable on the day on which such Principal Receivable is recorded as charged off on the Servicer's computer master file of consumer credit card accounts in accordance with the Credit Card Guidelines. "Defeasance" shall have the meaning specified in Section 12.4. "Defeased Series" shall have the meaning specified in Section 12.4. "Deferred Billing Fees" shall mean the fees paid with respect to the Accounts by the Dayton's, Hudson's, Marshall Field's, Mervyn's and Target Stores to Retailers National Bank as compensation for Accounts which make charges on a deferred billing basis. "Definitive Certificates" shall have the meaning specified in Section 6.10. "Definitive Euro-Certificates" shall have the meaning specified in Section 6.13. "Demand Note" shall have the meaning specified in subsection 2.7(i). "Depositary" shall mean the Person specified in the applicable Supplement, in its capacity as depositary for the respective accounts of any Clearing Agency or, with respect to Global Certificates, any foreign clearing agencies set forth in the related Supplement. "Depository Agreement" shall mean, with respect to any Series or Class, the agreement among the Transferor, the Trustee and the applicable Clearing Agency. "Determination Date" shall mean the third Business Day preceding each Distribution Date. "Discount Option Receivables" shall mean, on any Date of Processing on and after the date on which the Transferor's exercise of its discount option pursuant to Section 2.11 takes effect, the sum of (a) the aggregate Discount Option Receivables at the end of the prior day (which amount, prior to the date on which the Transferor's exercise of its discount option takes effect and with respect to Receivables generated prior to such date, shall be zero) plus (b) any New Discount Option Receivables created on such day minus (c) any Discount Option Receivables Collections received on such Date of Processing. "Discount Option Receivables Collections" shall mean on any Date of Processing on and after the date on which the Transferor's exercise of its discount option pursuant to Section 2.11 takes effect, the product of (a) a fraction the numerator of which is the amount of the Discount Option Receivables and the denominator of which is the sum of the Principal Receivables plus the amount of Discount Option Receivables, in each case (for both numerator and denominator) at the end of the prior Monthly Period and (b) Collections of Principal Receivables, prior to any reduction for Finance Charge Receivables which are Discount Option Receivables, received on such Date of Processing. "Discount Percentage shall have the meaning specified in subsection 2.11(a). "Distribution Date" shall mean, with respect to any Series, the date specified in the related Supplement. "Document Delivery Date" shall mean the first Closing Date in the case of Initial Accounts, the Addition Date in the case of Supplemental Accounts and the Removal Date in the case of Removed Accounts. "Early Amortization Event" shall mean, with respect to any Series, each event specified in Section 9.1 and each additional event, if any, specified in the relevant Supplement as an Early Amortization Event with respect to such Series. "Eligible Account" shall mean an open end credit card account, which is not a commercial account, owned by the Credit Card Originator which as of the Trust Cut-Off Date with respect to an Initial Account, on the date of creation thereof, with respect to an Automatic Additional Account, or as of the related Addition Cut-Off Date with respect to a Supplemental Account, meets the requirement of either clause (i) or (ii) below: (i) (a) is in existence and serviced at certain facilities of the Credit Card Originator or an Affiliate thereof; (b) is payable in United States dollars; (c) except as provided below, has not been identified as an account the credit cards with respect to which have been reported to the Credit Card Originator as having been lost or stolen; (d) has not been, and does not have any Receivables that have been, sold, pledged, assigned or otherwise conveyed to any person (except pursuant to this Agreement or the Bank Purchase Agreement), unless any such pledge or assignment is released on or before the initial Closing Date or the Addition Date, as applicable; (e) except as provided below, does not have any Receivables that are Defaulted Receivables; (f) except as provided below, does not have any Receivables which have been identified by the Credit Card Originator or the relevant Obligor as having been incurred as a result of fraudulent use of any related credit card; and (g) has an Obligor who has provided as his or her most recent billing address, an address located in the United States or its territories or possessions or a United States military address; provided, however, that as of any date of determination, up to 4% (or such greater percentage if prior written notice thereof has been given by the Transferor to each Rating Agency and the Rating Agency Condition has been satisfied) of the number of Accounts may have Obligors who have provided addresses outside of such jurisdictions or (ii) with respect to Supplemental Accounts, the addition of such Accounts (other than an addition required pursuant to subsection 2.9(a)(i)) shall have satisfied the Rating Agency Condition. "Eligible Deposit Account" shall mean either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as any of the securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic credit rating categories which signifies investment grade. "Eligible Institution" shall mean (a) a depository institution (which may be the Trustee or an Affiliate) organized under the laws of the United States or any one of the states thereof which at all times (i) has either (x) a long-term unsecured debt rating of "A2" or better by Moody's or (y) a certificate of deposit rating of "P-1" by Moody's, (ii) has either (x) a long-term unsecured debt rating of "AAA" by Standard & Poor's or (y) a certificate of deposit rating of "A-l+" by Standard & Poor's and (iii) is a member of the FDIC or (b) any other institution that is acceptable to Moody's and Standard & Poor's. "Eligible Investments" shall mean book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence: (a) direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America; (b) demand deposits, time deposits or certificates of deposit (having original maturities of no more than 365 days) of depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of foreign banks) and subject to supervision and examination by Federal or state banking or depository institution authorities; provided that at the time of the Trust's investment or contractual commitment to invest therein, the short-term debt rating of such depository institution or trust company shall be in the highest investment category of each Rating Agency; (c) commercial paper or other short-term obligations having, at the time of the Trust's investment or contractual commitment to invest therein, a rating from each Rating Agency in its highest investment category; (d) demand deposits, time deposits and certificates of deposit which are fully insured by the FDIC, with a Person the commercial paper of which has a credit rating from each Rating Agency in its highest investment category; (e) notes or bankers' acceptances (having original maturities of no more than 365 days) issued by any depository institution or trust company referred to in clause (b) above; (f) time deposits, other than as referred to in clause (d) above, with a Person the commercial paper of which has a credit rating from each Rating Agency in its highest investment category; or (g) any other investments approved in writing by each Rating Agency which would not cause the Trust to become an "investment company" within the meaning of the Investment Company Act. "Eligible Receivable" shall mean each Receivable: (a) which has arisen under an Eligible Account; (b) which was created in compliance with the Credit Card Guidelines and all Requirements of Law applicable to the Credit Card Originator, the failure to comply with which would have a material adverse effect on Investor Certificateholders, and pursuant to a Credit Card Agreement which complies with all Requirements of Law applicable to the Credit Card Originator, the failure to comply with which would have a material adverse effect on Investor Certificateholders; (c) with respect to which all consents, licenses, approvals or authorizations of, or registrations with, any Governmental Authority required to be obtained or given by the Credit Card Originator in connection with the creation of such Receivable or the execution, delivery and performance by the Credit Card Originator under the related Credit Card Agreement, have been duly obtained or given and are in full force and effect as of the date of creation of such Receivable, if, and to the extent that the failure to so obtain or give any such consent, license, approval, authorization or registration would have a material adverse effect on the Investor Certificateholders; (d) as to which, at the time of its transfer to the Trust, the Transferor or the Trust will have good title free and clear of all Liens (other than any Lien for municipal or other local taxes if such taxes are not then due and payable or if the Transferor is then contesting the validity thereof in good faith by appropriate proceedings and has set aside on its books adequate reserves with respect thereto); (e) which has been the subject of a valid transfer and assignment from the Transferor to the Trust of all the Transferor's right, title and interest therein or the grant of a "security interest" (as defined in the UCC) therein; (f) which at and after the time of transfer to the Trust is the legal, valid and binding payment obligation of the Obligor thereof, legally enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (g) which constitutes an "account," a "general intangible" or "chattel paper" under and as defined in Article 9 of the UCC; (h) which, at the time of its transfer to the Trust, has not been waived or modified except as permitted in accordance with subsection 3.3(h); (i) which, at the time of its transfer to the Trust, is not subject to any right of rescission, setoff, counterclaim or any other defense of the Obligor (including the defense of usury), other than defenses arising out of Debtor Relief Laws or other similar laws affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity) or as to which the Servicer is required by Section 3.9 to make an adjustment; (j) as to which, at the time of its transfer to the Trust, the Transferor has satisfied all obligations to be fulfilled at the time it is transferred to the Trust; and (k) as to which, at the time of its transfer to the Trust, the Transferor has not taken any action which, or failed to take any action the omission of which, would, at the time of its transfer to the Trust, impair the rights of the Trust or the Certificateholders therein. "Eligible Servicer" shall mean the Trustee, a wholly owned subsidiary of the Trustee or an entity which, at the time of its appointment as Servicer, (a) is servicing a portfolio of consumer open end credit card accounts or other consumer open end credit accounts, (b) is legally qualified and has the capacity to service the Accounts, (c) is qualified (or licensed) to use the software that is then being used to service the Accounts or obtains the right to use, or has its own, software which is adequate to perform its duties under this Agreement, (d) has, in the reasonable judgment of the Trustee, the ability to professionally and competently service a portfolio of similar accounts and (e) has a net worth of at least $50,000,000 as of the end of its most recent fiscal quarter. "Enhancement" shall mean the rights and benefits provided to the Investor Certificateholder of any Series or Class pursuant to any letter of credit, surety bond, insurance policy, cash collateral account, cash collateral guaranty, collateral invested amount, spread account, reserve account, guaranty, guaranteed rate agreement, maturity guaranty facility, tax protection agreement, interest rate swap agreement, interest rate cap agreement or other similar arrangement. The subordination of any Class to another Class, or a cross support feature which requires collections on Receivables allocated to one Series to be paid as principal and/or interest with respect to another Series shall be deemed to be an Enhancement. "Enhancement Agreement" shall mean any agreement, instrument or document governing the terms of any Enhancement or pursuant to which any Enhancement is issued or outstanding. "Enhancement Invested Amount" with respect to any Series, shall have the meaning specified in the related Supplement. "Enhancement Provider" shall mean the Person or Persons providing any Enhancement, other than the Investor Certificateholders of any Class which is subordinated to another Class. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "Excess Finance Charge Collections" shall have the meaning specified in Section 4.5. "FASIT" means a financial asset securitization investment trust. "FDIC" shall mean the Federal Deposit Insurance Corporation or any successor. "Finance Charge Receivables" shall mean, with respect to any Monthly Period, the sum of (i) all amounts billed to the Obligors on any Account at the beginning of such Monthly Period in respect of Periodic Finance Charges, (ii) certain fees and charges, including Late Fees, overlimit fees, return check fees, Deferred Billing Fees and Merchant Fees, (iii) Discount Option Receivables and (iv) all amounts (other than amounts already included in clause (i) of this definition) billed in respect of Receivables that are not Eligible Receivables. "Finance Charge Shortfalls" shall have the meaning specified in Section 4.5. "Floating Allocation Percentage" shall mean, with respect to any Series, the floating allocation percentage specified in the related Supplement. "Funding Period" shall have the meaning specified in Section 4.6. "Global Certificate" shall have the meaning specified in Section 6.13. "Governmental Authority" shall mean the United States of America, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Group" shall mean, with respect to any Series, the group of Series, if any, in which the related Supplement specifies such Series is to be included. "Ineligible Receivables" shall have the meaning specified in subsection 2.5(a). "Initial Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement between the Credit Card Originator and any Person existing on the Trust Cut-Off Date. "Insolvency Event" shall have the meaning specified in subsection 9.1(a). "Insurance Proceeds" shall mean any amounts recovered by the Servicer pursuant to any credit insurance policies covering any Obligor with respect to Receivables under such Obligor's Account. "Interest Funding Account" shall mean, with respect to any Series, the account, if any, specified as such in the related Supplement. "Invested Amount" shall have, with respect to any Series, the meaning specified in the related Supplement. "Investment Company Act" shall mean the Investment Company Act of 1940, as amended. "Investor Certificateholder" shall mean the Person in whose name a Registered Certificate is registered in the Certificate Register or the holder of any Bearer Certificate (or the Global Certificate, as the case may be) or Coupon. "Investor Certificates" shall mean any one of the certificates (including the Bearer Certificates, the Registered Certificates or any Global Certificate) executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form attached to the related Supplement, other than the Transferor Certificate, the Supplemental Certificates, if any, and any Participation. "Investor Percentage" shall have, for any Series, with respect to Principal Receivables, Finance Charge Receivables and Receivables in Defaulted Accounts, the meaning specified in the related Supplement. "Late Fees" shall mean the fees specified in the Credit Card Agreement applicable to each Account for late fees with respect to such Account. "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, participation or equity interest, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing, excluding any lien or filing pursuant to this Agreement; provided, however, that any assignment or transfer pursuant to subsection 6.3(c) or (d) or Section 7.2 shall not be deemed to constitute a Lien. "Loss" shall have the meaning specified in subsection 7.4(b). "Merchant Fees" shall mean the fees paid with respect to the Accounts by the Dayton's, Hudson's, Marshall Field's, Mervyn's and Target Stores to Retailers National Bank, in its capacity as Credit Card Originator, in connection with Obligor charges for goods and services. "Monthly Period" shall mean, with respect to each Distribution Date, the immediately preceding fiscal month of the Transferor, unless otherwise defined in any Supplement. "Monthly Report" shall have the meaning specified in subsection 3.4(b). "Monthly Servicing Fee" shall have the meaning specified in the related Supplement. "Moody's" shall mean Moody's Investors Service, Inc., or its successor. "New Discount Option Receivables" shall mean, as of any date of determination, the product of the Discount Percentage and the amount of Principal Receivables (before subtracting out Finance Charge Receivables which are Discount Option Receivables) arising on such date of determination. "Notices" shall have the meaning specified in subsection 13.5(a). "Obligor" shall mean, with respect to any Account, the Person or Persons obligated to make payments with respect to such Account, including any guarantor thereof. "Officer's Certificate" shall mean, unless otherwise specified in this Agreement, a certificate delivered to the Trustee signed by the Chief Executive Officer, Chairman of the Board, President, any Vice President or the Treasurer of the Transferor or the Servicer, as the case may be. "Opinion of Counsel" shall mean a written opinion of counsel, who may be counsel for, or an employee of, the Person providing the opinion and which opinion shall be reasonably acceptable to the Trustee. "Participation" shall have the meaning specified in subsection 6.3(e). "Participation Interests" shall have the meaning specified in subsection 2.9(a). "Participation Percentage," with respect to any Participation, shall have the meaning specified in the related Participation Supplement. "Participation Supplement" shall mean a supplement to this Agreement under which the Trustee issues Participations at the Transferor's direction. "Paying Agent" shall mean any paying agent and co- paying agent appointed pursuant to Section 6.7. "Periodic Finance Charges" shall have the meaning specified in the Credit Card Agreement applicable to each Account for finance charges (due to periodic rate) or any similar term. "Person" shall mean any legal person, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, governmental entity or other entity of similar nature. "Portfolio Yield" shall have the meaning, with respect to any Series, specified in the related Supplement. "Pre-Funding Account" shall have the meaning specified in Section 4.6. "Principal Allocation Percentage" shall mean, with respect to any Series, the principal allocation percentage specified in the related Supplement. "Principal Receivable" shall mean all Eligible Receivables which are not Finance Charge Receivables (and which are not Deferred Billing Fees or Merchant Fees). In calculating the aggregate amount of Principal Receivables on any day, the amount of Principal Receivables shall not include Defaulted Receivables and shall be reduced by the aggregate amount of credit balances in the Accounts on such day. "Principal Sharing Series" shall mean a Series that, pursuant to the Supplement therefor, is entitled to receive Shared Principal Collections. "Principal Shortfalls" shall have the meaning specified in Section 4.4. "Principal Terms" shall mean, with respect to any Series, (i) its name or designation; (ii) its initial principal amount (or method for calculating such amount) and its invested amount in the Trust; (iii) its Certificate Rate (or method for the determination thereof); (iv) the payment date or dates and the date or dates from which interest shall accrue; (v) the method for allocating Collections to Certificateholders of such Series; (vi) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (vii) the percentage used to calculate the servicing fee with respect thereto; (viii) the provider, if any, and the terms of any form of Enhancement with respect thereto; (ix) the terms on which the Investor Certificates of such Series may be repurchased by the Transferor or any Affiliate of the Transferor or remarketed to other investors; (x) the Series Termination Date; (xi) the number of Classes of Investor Certificates of such Series and, if such Series consists of more than one Class, the rights and priorities of each such Class; (xii) the extent to which the Investor Certificates of such Series will be issuable in temporary or permanent global form (and, in such case, the depositary for such Global Certificate or Certificates, the terms and conditions, if any, upon which such Global Certificates may be exchanged, in whole or in part, for Definitive Certificates, and the manner in which any interest payable on a Global Certificate will be paid); (xiii) whether the Investor Certificates of such Series may be issued as Bearer Certificates and any limitation imposed thereon; (xiv) the priority of such Series with respect to any other Series; (xv) the Group, if any, to which such Series belongs; and (xvi) any other relevant terms of, or with respect to, such Series. "Rating Agency" shall mean, with respect to any outstanding Series or Class, each statistical rating agency selected by the Transferor to rate the Investor Certificates of such Series or Class. "Rating Agency Condition" shall mean, with respect to any action requiring rating agency approval or consent, that each Rating Agency shall have notified the Transferor, the Servicer and the Trustee in writing that such action will not result in a reduction or withdrawal of the rating of any outstanding Series or Class with respect to which it is a Rating Agency. "Reassignment" shall have the meaning specified in Section 2.10. "Receivable" shall mean any amount owing from time to time by an Obligor under an Account, including amounts owing for purchases of goods and services, and amounts payable for Finance Charge Receivables (exclusive of Deferred Billing Fees and Merchant Fees). A Receivable shall be deemed to have been created at the end of the day on the Date of Processing of such Receivable. Receivables which become Defaulted Receivables shall not be shown on the Servicer's records as amounts payable (and shall cease to be included as Receivables) on the day on which they become Defaulted Receivables. "Receivables Purchase Agreement" shall mean (i) the amended and restated receivables purchase agreement, dated as of April 28, 2000, between Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation) and the Transferor and (ii) any receivables purchase agreement between a transferor of the Accounts other than TCC and the Transferor, substantially in the form of the receivables purchase agreement referred to in clause (i) above. "Record Date" shall mean, with respect to any Series Date, the date specified in the related Supplement. "Recoveries" shall mean all amounts, including Insurance Proceeds, received by the Servicer with respect to Principal Receivables which have previously become Defaulted Receivables and, with respect to Finance Charge Receivables, which have been charged off as uncollectible in accordance with the Credit Card Guidelines and the Servicer's customary and usual servicing procedures for servicing open end credit card account receivables comparable to the Receivables, including the net proceeds of any sale of such Defaulted Receivables and Finance Charge Receivables which have been charged off as uncollectible by the Transferor or the Servicer regardless of whether such Defaulted Receivables and Finance Charge Receivables have been transferred, set over or otherwise conveyed to the Transferor pursuant to Section 2.10. "Registered Certificateholder" shall mean the Holder of a Registered Certificate. "Registered Certificates" shall have the meaning specified in Section 6.1. "Removal Date" shall have the meaning specified in subsection 2.10(a). "Removal Notice Date" shall have the meaning specified in subsection 2.10(a). "Removed Accounts" shall have the meaning specified in Section 2.10. "Required Designation Date" shall have the meaning specified in subsection 2.9(a). "Required Principal Balance" shall mean, as of any date of determination, the sum of the numerators used at such date to calculate (i) the Investor Percentage with respect to Principal Receivables for all Series outstanding on such date and (ii) the Participation Percentages for all Participations outstanding on such date, less the amount on deposit in the Special Funding Account as of the date of determination. "Required Retained Transferor's Percentage" shall mean, as of any date of determination, the highest of the Required Retained Transferor's Percentages specified in the Supplements for all outstanding Series. "Required Retained Transferor Amount" shall mean, as of any date of determination, the product of (i) the sum of (a) the aggregate Principal Receivables and (b) the amounts on deposit in the Special Funding Account and any other accounts specified in a Supplement and (ii) the Required Retained Transferor's Percentage. "Requirements of Law" with respect to any Person shall mean the certificate of incorporation, articles of incorporation or articles of association and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or Governmental Authority, in each case applicable to or binding upon such Person or to which such Person is subject, whether Federal, state or local. "Responsible Officer" shall mean any officer within the Corporate Trust Department (or any successor group of the Trustee), including any vice president, assistant vice president, assistant secretary or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Trustee's Corporate Trust Office because of such officer's knowledge of and familiarity with the particular subject. "Restart Date" shall mean the date specified in the notice delivered by the Transferor to the Trustee pursuant to subsection 2.9(d)(i) or 2.9(d)(iii). "Revolving Period" shall mean, with respect to any Series, the period specified as such in the related Supplement. "Rule 144A" shall mean Rule 144A under the Act, as such Rule may be amended from time to time. "Series" shall mean any series of Investor Certificates established pursuant to a Supplement. "Series Account" shall mean any deposit, trust, escrow or similar account maintained for the benefit of the Investor Certificateholders of any Series or Class, as specified in any Supplement. "Series Allocation Percentage" shall mean with respect to any Series, on any date of determination, the percentage equivalent of a fraction the numerator of which is the Series Invested Amount of such Series and the denominator of which is the sum of the Series Invested Amounts of all Series then outstanding. "Series Invested Amount" shall have, with respect to any Series, the meaning specified in the related Supplement. "Series Issuance Date" shall mean, with respect to any Series, the date on which the Investor Certificates of such Series are to be originally issued in accordance with Section 6.3 and the related Supplement. "Series Termination Date" shall mean, with respect to any Series, the termination date specified in the related Supplement. "Service Transfer" shall have the meaning specified in Section 10.1. "Servicer" shall mean Retailers National Bank, in its capacity as Servicer pursuant to this Agreement, and, after any Service Transfer, the Successor Servicer. "Servicer Default" shall have the meaning specified in Section 10.1. "Servicing Fee" shall mean, with respect to any Series, the servicing fee specified in Section 3.2. "Servicing Fee Rate" shall mean, with respect to any Series, the servicing fee rate specified in the related Supplement. "Servicing Officer" shall mean any officer of the Servicer involved in, or responsible for, the administration and servicing of the Receivables whose name appears on a list of servicing officers furnished to the Trustee by the Servicer on the initial Closing Date, as such list may from time to time be amended. "Shared Principal Collections" shall have the meaning specified in Section 4.4. "Special Funding Account" shall have the meaning specified in Section 4.2. "Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division of The McGraw Hill Companies or its successor. "Successor Servicer" shall have the meaning specified in subsection 10.2(a). "Supplement" shall mean, with respect to any Series, a Supplement to this Agreement, executed and delivered in connection with the original issuance of the Investor Certificates of such Series pursuant to Section 6.3, and all amendments thereof and supplements thereto. "Supplemental Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement, which account is designated pursuant to subsection 2.9(a) or 2.9(b) to be included as an Account, and is identified in a computer file, microfiche list or printed list delivered to the Trustee by the Transferor pursuant to Section 2.1. "Supplemental Certificate" shall have the meaning specified in subsection 6.3(c). "Tax Opinion" shall mean, with respect to any action, an Opinion of Counsel to the effect that, for Federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of Investor Certificates of any outstanding Series or Class with respect to which an Opinion of Counsel was delivered at the time of their issuance that such Investor Certificates would be characterized as debt, (b) such action will not cause the Trust to be classified, for federal income tax purposes, as an association (or publicly traded partnership) taxable as a corporation and (c) such action will not cause or constitute an event in which gain or loss would be recognized by any Investor Certificateholder. "TCC" shall mean Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), a Minnesota corporation. "Termination Notice" shall have the meaning specified in Section 10.1. "Transfer Agent and Registrar" shall have the meaning specified in subsection 6.4(a). "Transfer Date" shall mean the Business Day immediately preceding each Distribution Date. "Transferor" shall mean Target Receivables Corporation (formerly known as Dayton Hudson Receivables Corporation), a Minnesota corporation, or its permitted successors or assigns under this Agreement and additional transferors, if any, designated in accordance with Sections 2.12 or 6.3(d). "Transferor Amount" shall mean, on any date of determination, the aggregate amount of Principal Receivables on such day, minus the sum of the Series Invested Amounts with respect to all Series then outstanding, minus the amount of any Participation, plus the principal amount on deposit in the Special Funding Account or other account specified in a Supplement. "Transferor Certificate" shall mean the certificate executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A. "Transferor Retained Certificates" shall mean Investor Certificates of any Series which the Transferor retained pursuant to the terms of any Supplement. "Transferor's Interest" shall have the meaning specified in Section 4.1. "Transferor's Percentage" shall mean, with respect to Finance Charge Receivables and Defaulted Receivables, 100% less the sum of the Floating Allocation Percentages with respect to all outstanding Series, less the sum of the Participation Percentages with respect to all Participations and with respect to Principal Receivables, 100% less the sum of the Principal Allocation Percentages with respect to all outstanding Series, less the sum of the Participation Percentages with respect to all Participations. "Transferred Account" shall have the meaning set forth in the definition of "Account." "Transfer Restriction Event" shall have the meaning specified in Section 2.13. "Trust" shall mean the Target Credit Card Master Trust (formerly known as Dayton Hudson Credit Card Master Trust) created by this Agreement. "Trust Assets" shall have the meaning specified in Section 2.1. "Trust Cut-Off Date" shall mean June 30, 1995. "Trust Portfolio Yield" shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is an amount equal to the aggregate amount of Collections of Finance Charge Receivables for such Monthly Period, and the denominator of which is the aggregate amount of Principal Receivables in the Trust as of the first day of such Monthly Period. "Trustee" shall mean Norwest Bank Minnesota, National Association, a national banking association, in its capacity as trustee on behalf of the Trust, or its successor in interest, or any successor trustee appointed as herein provided. "UCC" shall mean the Uniform Commercial Code, as amended from time to time, as in effect in the State of Delaware and in any other state where the filing of a financing statement is required to perfect the Transferor's or the Trust's interest in the Receivables and the proceeds thereof or in any other specified jurisdiction. "United States" shall mean the United States of America (including the states and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. "Variable Funding Certificates" shall have the meaning specified in any Variable Funding Supplement. "Variable Funding Supplement" shall mean a Supplement executed in connection with the issuance of, and otherwise specifying the terms governing the issuance of, Variable Funding Certificates provided for therein. Section 1.2. Other Definitional Provisions. (a) With respect to any Series, all terms used herein and not otherwise defined herein shall have meanings ascribed to them in the related Supplement. (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. (d) The agreements, representations and warranties of Target Receivables Corporation and Retailers National Bank in this Agreement in each of their respective capacities as Transferor and as Servicer, shall be deemed to be the separate agreements, representations and warranties of Target Receivables Corporation and Retailers National Bank solely in each such respective capacity for so long as Target Receivables Corporation and Retailers National Bank act in each such capacity under this Agreement. (e) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any outstanding Series. (f) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day. (g) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" means "including without limitation." ARTICLE II Conveyance of Receivables Section 2.1. Conveyance of Receivables. By execution of this Agreement, the Transferor does hereby transfer, assign, set over and otherwise convey to the Trust, for the benefit of the Certificateholders, all its right, title and interest in, to and under (i) the Receivables existing at the close of business on the Trust Cut-Off Date and thereafter created from time to time and arising in the Initial Accounts and the Receivables existing on each applicable Addition Date and thereafter created from time to time and arising in any Automatic Additional Accounts owned by the Credit Card Originator, and in each case, thereafter created from time to time until the termination of the Trust, all Recoveries allocable to the Trust as provided herein, all monies due or to become due and all amounts received with respect to any of the foregoing and all proceeds (including "proceeds" as defined in the UCC) of any of the foregoing, (ii) any Merchant Fees and Deferred Billing Fees, (iii) the Receivables Purchase Agreement and (iv) the Bank Purchase Agreement. Such property, together with all monies on deposit in the Collection Account, the Special Funding Account, the Series Accounts and any Enhancement shall constitute the assets of the Trust (the "Trust Assets"). The foregoing does not constitute and is not intended to result in the creation or assumption by the Trust, the Trustee, any Investor Certificateholders or any Enhancement Provider of any obligation of the Credit Card Originator, the Servicer, the Transferor or any other Person in connection with the Accounts or the Receivables or under any agreement or instrument relating thereto, including any obligation to obligors, merchant banks, merchants clearance systems or insurers. The Transferor agrees to record and file, at its own expense, financing statements (and continuation statements when applicable) with respect to the Receivables now existing and hereafter created in Accounts and other Trust Assets meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect, and maintain the perfection of, the assignment of such Receivables to the Trust, and to deliver a file-stamped copy of each such financing statement or other evidence of such filing (which may, for purposes of this Section 2.1 consist of telephone confirmation of such filing promptly followed by delivery to the Trustee of a file-stamped copy) to the Trustee on or prior to the initial Closing Date, in the case of such Receivables arising in the Initial Accounts and Automatic Additional Accounts, and (if any additional filing is so necessary) the applicable Addition Date, in the case of such Receivables arising in Supplemental Accounts. The Trustee shall be under no obligation whatsoever to file such financing or continuation statements or to make any other filing under the UCC in connection with such assignment. The Transferor further agrees, at its own expense, (a) on (x) the Automatic Addition Termination Date or any Automatic Addition Suspension Date, in the case of the Initial Accounts and any Additional Accounts designated pursuant hereto prior to such date, (y) the applicable Addition Date, in the case of Supplemental Accounts, and (z) the applicable Removal Date, in the case of Removed Accounts, to indicate in the appropriate computer files that Receivables created in connection with the Accounts owned by the Credit Card Originator (other than Removed Accounts) have been conveyed to the Trust pursuant to this Agreement for the benefit of the Certificateholders (or conveyed to the Transferor or its designee in accordance with Section 2.10, in the case of Removed Accounts) by including in such computer files the code identifying each such Account (or, in the case of Removed Accounts, either including such a code identifying the Removed Accounts only if the removal occurs prior to the Automatic Addition Termination Date or any Automatic Addition Suspension Date, or subsequent to a Restart Date, or deleting such code thereafter) and (b) on the date referred to in clause (x), (y) or (z) above, as applicable, to deliver to the Trustee a computer file, microfiche list or printed list containing a true and complete list of all such Accounts, specifying for each such Account, as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date, in the case of clause (x) above, the applicable Addition Cut-Off Date, in the case of Supplemental Accounts, and the Removal Date, in the case of Removed Accounts, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables outstanding in such Account. Such file or list shall be supplemented from time to time to reflect Supplemental Accounts and Removed Accounts. Once the code referenced in this paragraph has been included with respect to any Account, the Transferor further agrees not to alter such code during the remaining term of this Agreement unless and until (a) such Account becomes a Removed Account, (b) a Restart Date has occurred on which the Transferor starts including Automatic Additional Accounts as Accounts or (c) the Transferor shall have delivered to the Trustee at least 30 days' prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the interest of the Trustee in the Receivables and other Trust Assets to continue to be perfected with the priority required by this Agreement. The Transferor hereby grants and transfers to the Trustee, for the benefit of the Certificateholders, a security interest in all of the Transferor's right, title and interest in, to and under the Receivables and all other Trust Assets, to secure a loan in an amount equal to the unpaid principal amount of the Investor Certificates issued hereunder or to be issued pursuant to this Agreement and the interest accrued at the related Certificate Rate, and agrees that this Agreement shall constitute a security agreement under applicable law. Section 2.2. Acceptance by Trustee. (a) The Trustee hereby acknowledges its acceptance on behalf of the Trust of all right, title and interest to the property, now existing and hereafter created, conveyed to the Trust pursuant to Section 2.1 and declares that it shall maintain such right, title and interest, upon the trust herein set forth, for the benefit of all Certificateholders. (b) The Trustee hereby agrees not to disclose to any Person any of the account numbers or other information contained in any computer files, microfiche lists or printed lists delivered to the Trustee from time to time, except (i) to a Successor Servicer or as required by a Requirement of Law applicable to the Trustee, (ii) in connection with the performance of the Trustee's duties hereunder or (iii) in enforcing the rights of Certificateholders. The Trustee (i) agrees to take such measures as shall be reasonably requested by the Transferor to protect and maintain the security and confidentiality of such information and (ii) in any event will maintain and preserve such files or lists and the confidentiality of the information contained in such files or lists in the same manner and with the same degree of care that it would exercise with respect to similar files, lists or information maintained by it for its own account. The Trustee will also, upon two Business Days' prior notice, allow the Transferor to inspect the Trustee's security and confidentiality arrangements from time to time during normal business hours. The Trustee shall provide the Transferor with notice no later than five Business Days prior to any disclosure pursuant to this Section or any shorter period of time as required by any Requirements of Law. (c) The Trustee shall have no power to create, assume or incur indebtedness or other liabilities in the name of the Trust other than as contemplated in this Agreement or any Supplement. (d) The Trustee hereby agrees not to use any information it obtains pursuant to this Agreement, including any of the account numbers or other information contained in the computer files, microfiche lists or printed lists delivered by the Transferor to the Trustee pursuant to this Agreement, including Sections 2.1, 2.9, 2.10 or 3.4(c), other than to perform its duties hereunder. Section 2.3. Representations and Warranties of the Transferor Relating to the Transferor. The Transferor hereby represents and warrants to the Trust (and agrees that the Trustee may rely on each such representation and warranty in accepting the Receivables in trust and in authenticating the Certificates) as of each Closing Date that: (a) Organization and Good Standing. The Transferor is a corporation validly existing in good standing under the laws of the State of Minnesota, and has full corporate power, authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, to execute, deliver and perform its obligations under this Agreement and each Supplement and to execute and deliver to the Trustee the Certificates pursuant hereto. (b) Due Qualification. The Transferor is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Credit Card Agreement relating to an Account owned by the Credit Card Originator or any Receivable transferred to the Trust by the Transferor unenforceable by the Credit Card Originator, the Transferor, the Servicer or the Trustee and would have a material adverse effect on the interests of the Certificateholders hereunder or under any Supplement. (c) Due Authorization. The execution, delivery and performance of this Agreement and each Supplement by the Transferor, the execution and delivery to the Trustee of the Certificates by the Transferor and the consummation by the Transferor of the transactions provided for in this Agreement and each Supplement have been duly authorized by the Transferor by all necessary corporate action on the part of the Transferor and this Agreement and each Supplement will remain, from the time of its execution, an official record of the Transferor. (d) No Conflict. The execution and delivery by the Transferor of this Agreement, each Supplement and the Certificates, the performance by the Transferor of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Transferor of the terms hereof and thereof will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Transferor is a party or by which it or any of its properties are bound. (e) No Violation. The execution and delivery by the Transferor of this Agreement, each Supplement and the Certificates, the performance by the Transferor of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Transferor of the terms hereof and thereof will not conflict with or violate any Requirements of Law applicable to the Transferor. (f) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of the Transferor, threatened against the Transferor, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement, any Supplement or the Certificates, (ii) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by this Agreement, any Supplement or the Certificates, (iii) seeking any determination or ruling that, in the reasonable judgment of the Transferor, would materially and adversely affect the performance by the Transferor of its obligations under this Agreement or any Supplement, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement, any Supplement or the Certificates or (v) seeking to affect adversely the income tax attributes of the Trust under the Federal or applicable state income or franchise tax systems. (g) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any governmental body or official required in connection with the execution and delivery by the Transferor of this Agreement, each Supplement and the Certificates, the performance by the Transferor of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Transferor of the terms hereof and thereof, have been obtained. (h) Insolvency. No Insolvency Event with respect to the Credit Card Originator, TCC or the Transferor has occurred and the transfer of the Receivables by the Transferor to the Trust has not been made in contemplation of the occurrence thereof. The representations and warranties of the Transferor set forth in this Section 2.3 shall survive the transfer and assignment by the Transferor of the respective Receivables to the Trust. Upon discovery by the Transferor, the Servicer or the Trustee of a breach of any of the representations and warranties by the Transferor set forth in this Section 2.3, the party discovering such breach shall give prompt written notice to the others and to each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement. The Transferor agrees to cooperate with the Servicer and the Trustee in attempting to cure any such breach. For purposes of the representations and warranties set forth in this Section 2.3, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the relevant Closing Date. Section 2.4. Representations and Warranties of the Transferor Relating to this Agreement and any Supplement and the Receivables. (a) Representations and Warranties. The Transferor hereby represents and warrants to the Trust (and agrees that the Trustee may rely on each such representation and warranty in accepting the Receivables in trust and in authenticating the Certificates) as of the date of this Agreement and the date of each Supplement, as of each Closing Date and, with respect to Additional Accounts, as of the related Addition Date that: (i) this Agreement, each Supplement and, in the case of Supplemental Accounts, the related Assignment, each constitutes a legal, valid and binding obligation of the Transferor, enforceable against the Transferor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (ii) as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date and as of each subsequent Addition Date with respect to Supplemental Accounts, and as of the applicable Removal Date with respect to the Removed Accounts, the related computer file, microfiche list or printed list delivered pursuant to this Agreement, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts owned by the Credit Card Originator as of such date, such Addition Cut-Off Date or such Removal Date, as the case may be, and the information contained therein with respect to the identity of such Accounts and the Receivables existing in such Accounts is true and correct in all material respects as of such date, such Addition Cut-Off Date or such Removal Date, as the case may be; (iii) the Transferor is the legal and beneficial owner of all right, title and interest in each Receivable and the Transferor has the full right to transfer such Receivables to the Trust, and each Receivable conveyed to the Trust by the Transferor has been conveyed to the Trust free and clear of any Lien of any Person claiming through or under the Transferor or any of its Affiliates (other than Liens permitted under subsection 2.7(b)) and in compliance, in all material respects, with all Requirements of Law applicable to the Transferor; (iv) all authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Transferor in connection with the conveyance by the Transferor of Receivables to the Trust have been duly obtained, effected or given and are in full force and effect; (v) this Agreement or, in the case of Supplemental Accounts, the related Assignment constitutes either a valid transfer and assignment to the Trust of all right, title and interest of the Transferor in the Receivables and other Trust Assets conveyed to the Trust by the Transferor and all monies due or to become due with respect thereto and the proceeds thereof or this Agreement or a grant of a "security interest" (as defined in the UCC) in such property to the Trust, which, in the case of existing Receivables and the proceeds thereof, is enforceable upon execution and delivery of this Agreement, or, with respect to then existing Receivables in Additional Accounts, as of the applicable Addition Date, and which will be enforceable with respect to such Receivables hereafter and thereafter created and the proceeds thereof upon such creation, in each case except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity). Upon the filing of the financing statements pursuant to Section 2.1 and, in the case of Receivables hereafter created and the proceeds thereof, upon the creation thereof, the Trust shall have a first priority security interest in such property and "proceeds" (as defined in the UCC) except for Liens permitted under subsection 2.7(b); (vi) except as otherwise expressly provided in this Agreement or any Supplement, neither the Transferor nor any Person claiming through or under the Transferor has any claim to or interest in the Collection Account, the Special Funding Account, any Series Account or any Enhancement; (vii) on the Trust Cut-Off Date, with respect to each Initial Account, on the date of its creation, with respect to each Automatic Additional Account and, on the applicable Addition Cut-Off Date, with respect to each related Supplemental Account each Account classified as an "Eligible Account" by the Transferor in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Account and each Receivable classified as an "Eligible Receivable" by the Transferor in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Receivable; (viii) on the Trust Cut-Off Date, each Receivable then existing is an Eligible Receivable, on the date of creation of each Automatic Additional Account, each Receivable contained in such Automatic Additional Account is an Eligible Receivable and, on the applicable Addition Cut-Off Date, each Receivable contained in any related Supplemental Account is an Eligible Receivable; and (ix) as of the date of the creation of any new Receivable, such Receivable is an Eligible Receivable. (b) Notice of Breach. The representations and warranties of the Transferor set forth in this Section 2.4 shall survive the transfer and assignment by the Transferor of Receivables to the Trust. Upon discovery by the Transferor, the Servicer or the Trustee of a breach of any of the representations and warranties by the Transferor set forth in this Section 2.4, the party discovering such breach shall give prompt written notice to the others and to each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement. The Transferor agrees to cooperate with the Servicer and the Trustee in attempting to cure any such breach. For purposes of the representations and warranties set forth in this Section 2.4, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the date of the relevant representations or warranties. Section 2.5. Reassignment of Ineligible Receivables. (a) Reassignment of Receivables. In the event that (i) any representation or warranty of the Transferor contained in subsection 2.4(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and correct in any material respect as of the date specified therein with respect to any Receivable transferred to the Trust by the Transferor or any Account owned by the Credit Card Originator and as a result of such breach any Receivables in the related Account become Defaulted Receivables or the Trust's rights in, to or under such Receivables or the proceeds of such Receivables are impaired or such proceeds are not available for any reason to the Trust free and clear of any Lien, unless cured within 60 days (or such longer period, not in excess of 150 days, as may be agreed to by the Trustee) after the earlier to occur of the discovery thereof by the Transferor or receipt by the Transferor or a designee of the Transferor of notice thereof given by the Trustee, or (ii) it is so provided in subsection 2.7(a) with respect to any Receivables transferred to the Trust by the Transferor, then such Receivable shall be designated an "Ineligible Receivable" and shall be assigned a principal balance of zero for the purpose of determining the aggregate amount of Principal Receivables on any day; provided, however, that such Receivables will not be deemed to be Ineligible Receivables but will be deemed an Eligible Receivable and such Principal Receivables shall be included in determining the aggregate Principal Receivables in the Trust if, on any day prior to the end of such 60-day or longer period, (x) either (A) in the case of an event described in clause (i) above the relevant representation and warranty shall be true and correct in all material respects as if made on such day or (B) in the case of an event described in clause (ii) above the circumstances causing such Receivable to become an Ineligible Receivable shall no longer exist and (y) the Transferor shall have delivered an Officer's Certificate describing the nature of such breach and the manner in which the relevant representation and warranty became true and correct. (b) Price of Reassignment. On and after the date of its designation as an Ineligible Receivable, each Ineligible Receivable shall not be given credit in determining the aggregate amount of Principal Receivables used to calculate the Transferor Amount, and the Floating Allocation Percentage and the Principal Allocation Percentage applicable to any Series. If, following the exclusion of such Principal Receivables from the calculation of the Transferor Amount, the Transferor Amount (excluding the interest represented by any Supplemental Certificate) would otherwise be less than the Required Retained Transferor Amount, the Transferor shall make a deposit into the Special Funding Account in immediately available funds prior to the next succeeding Business Day in an amount equal to the amount by which the Transferor Amount (excluding the interest represented by any Supplemental Certificate) would otherwise be less than the Required Retained Transferor Amount (up to the amount of such Principal Receivables). The payment of such deposit amount in immediately available funds shall otherwise be considered payment in full of all of the Ineligible Receivables. The obligation of the Transferor to make the deposits, if any, required to be made to the Special Funding Account as provided in this Section 2.5, shall constitute the sole remedy respecting the event giving rise to such obligation available to Certificateholders (or the Trustee on behalf of the Certificateholders) or any Enhancement Provider. Section 2.6. Reassignment of Receivables in Trust Portfolio. If any representation or warranty of the Transferor set forth in subsection 2.3(a), (b) or (c) or subsection 2.4(a)(i), (v) or (vi) is not true and correct in any material respect and such breach has a material adverse effect on the Certificateholders' Interest in the Receivables transferred to the Trust by the Transferor, then either the Trustee or the Holders of Investor Certificates evidencing not less than 50% of the aggregate unpaid principal amount of all outstanding Investor Certificates, by notice then given to the Transferor and the Servicer (and to the Trustee if given by the Investor Certificateholders), may direct the Transferor to accept a reassignment of the Receivables transferred to the Trust by the Transferor if such breach and any material adverse effect caused by such breach is not cured within 60 days of such notice (or within such longer period, not in excess of 150 days, as may be specified in such notice), and upon those conditions the Transferor shall be obligated to accept such reassignment on the terms set forth below; provided, however, that such Receivables will not be reassigned to the Transferor if, on any day prior to the end of such 60-day or longer period (i) the relevant representation and warranty shall be true and correct in all material respects as if made on such day and (ii) the Transferor shall have delivered an Officer's Certificate describing the nature of such breach and the manner in which the relevant representation and warranty became true and correct. The Transferor shall deposit in the Collection Account in immediately available funds not later than 12:00 noon, New York City time, on the first Distribution Date following the Monthly Period in which such reassignment obligation arises, in payment for such reassignment, an amount equal to the sum of the amounts specified therefor with respect to each outstanding Series in the related Supplement. Notwithstanding anything to the contrary in this Agreement, such amounts shall be distributed on such Distribution Date in accordance with Article IV and the terms of each Supplement. The payment of such deposit amount in immediately available funds shall otherwise be considered payment in full of all of the Receivables. Upon the deposit, if any, required to be made to the Collection Account as provided in this Section 2.6 and the reassignment of the applicable Receivables, the Trustee, on behalf of the Trust, shall automatically and without further action be deemed to transfer, assign, set over and otherwise convey to the Transferor or its designee, without recourse, representation or warranty (except for the warranty that since the date of transfer by the Transferor, the Trustee has not sold, transferred or encumbered any such Receivables or interest therein), all the right, title and interest of the Trust in and to such Receivables, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof. The Trustee shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Transferor to effect the conveyance of such Receivables pursuant to this Section 2.6. The obligation of the Transferor to accept reassignment of any Receivables, and to make the deposits, if any, required to be made to the Collection Account as provided in this Section 2.6, shall constitute the sole remedy respecting the event giving rise to such obligation available to Certificateholders (or the Trustee on behalf of the Certificateholders). Section 2.7. Covenants of the Transferor. The Transferor hereby covenants as follows: (a) Receivables to be Accounts, General Intangibles or Chattel Paper. Except in connection with the enforcement or collection of an Account, the Transferor will take no action to cause any Receivable transferred by it to the Trust to be evidenced by any instrument (as defined in the UCC) and, if any such Receivable is so evidenced (whether or not in connection with the enforcement or collection of an Account), it shall be deemed to be an Ineligible Receivable in accordance with subsection 2.5(a) and shall be reassigned to the Transferor in accordance with subsection 2.5(b). (b) Security Interests. Except for the conveyances hereunder, the Transferor will not sell, pledge, assign or transfer or otherwise convey to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Receivable, whether now existing or hereafter created, or any interest therein; the Transferor will immediately notify the Trustee of the existence of any Lien on any Receivable of which the Transferor has knowledge; and the Transferor shall defend the right, title and interest of the Trust in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Transferor; provided, however, that nothing in this subsection 2.7(b) shall prevent or be deemed to prohibit the Transferor from suffering to exist upon any of the Receivables any Liens for taxes if such taxes shall not at the time be due and payable or if the Transferor shall currently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto. Notwithstanding the foregoing, nothing in this subsection 2.7(b) shall be construed to prevent or be deemed to prohibit (i) the transfer of the Transferor Certificate and certain other rights of the Transferor in accordance with the terms of this Agreement and any related Supplement or (ii) the sale of any Defaulted Receivables and Finance Charge Receivables in Accounts that have been reconveyed to the Transferor pursuant to Section 2.10 provided that Recoveries on such Accounts shall be applied as provided herein and that with respect to any Monthly Period, the aggregate amount of sales proceeds received from such sold receivables shall not exceed the greater of (x) 0.20% of the aggregate outstanding balance of all Receivables on the first day of such Monthly Period or (y) $5,000,000. (c) Transferor's Interest. Except as otherwise permitted herein, including in Sections 2.12, 6.3 and 7.2, the Transferor agrees not to transfer, assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a security interest in the Transferor's Interest represented by the Transferor Certificate or any Supplemental Certificate and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or grant shall be void. (d) Delivery of Collections or Recoveries. If the Transferor receives Collections or Recoveries, the Transferor agrees to pay the Servicer all such Collections and Recoveries as soon as practicable after receipt thereof but in no event later than two Business Days after the Date of Processing by the Transferor. (e) Notice of Liens. The Transferor shall notify the Trustee and each Enhancement Provider, if any, entitled to such notice pursuant to the relevant Supplement promptly after becoming aware of any Lien on any Receivable other than the conveyances hereunder or Liens permitted under subsection 2.7(b). (f) Separate Corporate Existence. The Transferor shall: (i) Maintain in full effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation and obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and the Receivables Purchase Agreement and each other instrument or agreement necessary or appropriate to proper administration hereof and permit and effectuate the transactions contemplated hereby. (ii) Maintain its own deposit account or accounts, separate from those of any Affiliate of the Transferor, with commercial banking institutions. The funds of the Transferor will not be diverted to any other Person or for other than the corporate use of the Transferor, and, except as may be expressly permitted by this Agreement or the Receivables Purchase Agreement, the funds of the Transferor shall not be commingled with those of any Affiliate of the Transferor. (iii) Ensure that, to the extent that it shares the same officers or other employees as any of its stockholders or Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees. (iv) Ensure that, to the extent that it jointly contracts with any of its stockholders or Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that the Transferor contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between the Transferor and any of its Affiliates shall be only on an arm's-length basis. (v) Maintain a principal executive and administrative office through which its business is conducted separate from those of its stockholders and Affiliates. To the extent that the Transferor and any of its stockholders or Affiliates have offices in contiguous space, there shall be fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses. (vi) Conduct its affairs strictly in accordance with its Articles of Incorporation and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special stockholders' and directors' meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of such meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts. Regular stockholders' and directors' meetings shall be held at least annually. (vii) Ensure that its Board of Directors shall be elected independently from the Boards of Directors of its Affiliates and shall at all times include at least one Independent Director (for purposes hereof, "Independent Director" shall mean any member of the Board of Directors of the Transferor who is not and has not at any time been (x) a director, officer, employee or shareholder of any Affiliate of the Transferor within a period of three years prior to such Person's election to the Board of Directors or (y) a member of the immediate family of any of the foregoing). (viii) Ensure that decisions with respect to its business and daily operations shall be independently made by the Transferor (although the officer making any particular decision may also be an officer or director of an Affiliate of the Transferor) and shall not be dictated by an Affiliate of the Transferor. (ix) Act solely in its own corporate name and through its own authorized officers and agents, and no Affiliate of the Transferor shall be appointed to act as agent of the Transferor, except as expressly contemplated by this Agreement or the Receivables Purchase Agreement. (x) Ensure that no Affiliate of the Transferor shall advance funds to the Transferor, other than capital contributions from TCC made to enable the Transferor to pay the purchase price of Receivables or as is otherwise provided in the Receivables Purchase Agreement, and no Affiliate of the Transferor will otherwise supply funds to, or guaranty debts of, the Transferor; provided, however, that an Affiliate of the Transferor may provide funds to the Transferor in connection with capitalization of the Transferor provided to assure that the Transferor has "substantial assets" as described in Treasury Regulation Section 301.7701- 2(d)(2). (xi) Not enter into any guaranty, or otherwise become liable, with respect to any obligation of any Affiliate of the Transferor other than with respect to Section 7.4. (xii) Ensure that any financial reports required of the Transferor shall comply with generally accepted accounting principles and shall be issued separately from, but may be consolidated with, any reports prepared for any of its Affiliates. (g) Continuous Perfection. The Transferor shall not change its name, identity or structure in any manner that could cause any financing or continuation statement filed pursuant to this Agreement to be misleading within the meaning of Section 9-402(7) of the UCC (or any other then applicable provision of the UCC) unless the Transferor shall have delivered to the Trustee at least 30 days' prior written notice thereof and, no later than 30 days after making such change, shall have taken all action necessary or advisable to amend such financing statement or continuation statement so that it is not misleading. The Transferor shall not change its chief executive office or change the location of its principal records concerning the Receivables, the Trust Assets or the Collections unless it has delivered to the Trustee at least 30 days' prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the interest of the Trustee in the Receivables and other Trust Assets to continue to be perfected with the priority required by this Agreement. (h) Reports to the Commission. The Transferor shall, on behalf of the Trust, cause to be filed with the Commission any periodic reports required to be filed under the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. (i) Net Worth. The Transferor shall retain in force and shall enforce according to its terms that certain demand note (the "Demand Note") dated as of September 13, 1995, between Dayton Hudson Corporation (now known as Target Corporation), as the maker, and Dayton Hudson Capital Corporation (now known as Target Capital Corporation), as the payee and any other demand note provided by Target Corporation to TCC pursuant to the Demand Note. Notwithstanding the foregoing, at such time as the Demand Note shall become due according to its terms, the Transferor may enter into a new demand note or alternative arrangement (in lieu of retaining the cash paid under the Demand Note) if it obtains an opinion of counsel that use of such replacement demand note or alternative arrangement will not cause the Trust to be classified for federal income tax purposes as an association taxable as a corporation. Section 2.8. Covenants of the Transferor with Respect to the Bank Purchase Agreement. The Transferor, in its capacity as purchaser of the Receivables from TCC pursuant to the Receivables Purchase Agreement, hereby covenants that the Transferor will at all times enforce the covenants and agreements of the Credit Card Originator in the Bank Purchase Agreement assigned by TCC to the Transferor in the Receivables Purchase Agreement, including, without limitation, covenants to the effect set forth below. (a) Periodic Finance Charges and Other Fees. Except as otherwise required by any Requirement of Law, or as is deemed by the Credit Card Originator in its sole discretion to be appropriate, it shall not at any time reduce the annual percentage rates of the Periodic Finance Charges assessed on the Receivables or reduce other fees on the Accounts, if, either (a) as a result of such reduction it is reasonably expected that such reduction will cause an Early Amortization Event to occur with respect to a Series or (b) such reduction (x) if the Credit Card Originator owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by the Credit Card Originator that have characteristics the same as or substantially similar to the Receivables that are the subject of such change and (y) if the Credit Card Originator does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. (b) Credit Card Agreements and Credit Card Guidelines. The Credit Card Originator shall comply with and perform its obligations under the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines except insofar as any failure so to comply or perform would not materially and adversely affect the rights of the Trust or the Certificateholders hereunder or under the Certificates. Unless required by law or unless, in its sole discretion, the Credit Card Originator deems it appropriate, it will not change the terms and provisions of the Credit Card Agreements or the Credit Card Guidelines with respect to any of the Accounts in any respect (including the calculation of the amount, or the timing, of charge-offs and the Periodic Finance Charges and other fees to be assessed thereon), if, either (i) as a result of such change it is reasonably expected that such change will cause an Early Amortization Event to occur with respect to a Series or (ii) such change (x) if the Credit Card Originator owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by the Credit Card Originator that have characteristics the same as or substantially similar to the Receivables that are the subject of such change and (y) if the Credit Card Originator does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. The Transferor further covenants that the Transferor will not enter into any amendments to the Receivables Purchase Agreement unless the Rating Agency Condition has been satisfied. Section 2.9. Addition of Accounts. (a) Required Additions. (i) If, as of the close of business on the last Business Day of any Monthly Period, either (x) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) is less than the Required Retained Transferor Amount on such date or (y) the aggregate amount of Principal Receivables is less than the Required Principal Balance on such date, the Transferor shall on or prior to the close of business on the 10th Business Day following the last Business Day of such Monthly Period (the "Required Designation Date"), unless the Transferor Amount (excluding the interest represented by any Supplemental Certificate) equals or exceeds the Required Retained Transferor Amount or the aggregate amount of Principal Receivables equals or exceeds the Required Principal Balance, as the case may be, in either case as of the close of business on any day after the last Business Day of such Monthly Period and prior to the Required Designation Date, designate additional Eligible Accounts to be included as Accounts as of the Required Designation Date or any earlier date in a sufficient amount such that, after giving effect to such addition, the Transferor Amount (excluding the interest represented by any Supplemental Certificate) as of the close of business on the Addition Date is at least equal to the Required Retained Transferor Amount on such date and the aggregate amount of Principal Receivables equals or exceeds the Required Principal Balance on such date. The failure of any condition set forth in paragraph (c) or (d) below, as the case may be, shall not relieve the Transferor of its obligation pursuant to this paragraph; provided, however, that the failure of the Transferor to transfer Receivables to the Trust as provided in this paragraph solely as a result of the unavailability of a sufficient amount of Eligible Receivables shall not constitute a breach of this Agreement; provided, further, that any such failure which has not been timely cured will nevertheless result in the occurrence of an Early Amortization Event with respect to each Series for which, pursuant to the Supplement therefor, a failure by the Transferor to convey Receivables in Supplemental Accounts or Participation Interests to the Trust by the day on which it is required to convey such Receivables or Participation Interests constitutes an "Early Amortization Event" (as defined in such Supplement). (ii) In lieu of, or in addition to, designating Supplemental Accounts pursuant to clause (i) above, the Transferor may, subject to the conditions specified in paragraph (c) below, convey to the Trust participations representing undivided interests in a pool of assets primarily consisting of open end credit card receivables generated in credit card accounts owned by a Credit Card Originator, and any interests in the foregoing, including securities representing or backed by such receivables, and other self- liquidating financial assets including, without limitation, any "Eligible Assets" as such term is defined in Rule 3a-7 under the Investment Company Act (or any successor to such Rule) and collections thereon ("Participation Interests"); provided that an Opinion of Counsel is delivered that such Participation Interest will not be classified or cause the Trust to be classified as an equity interest in an association taxable as a corporation; provided, further, that to the extent required pursuant to the Act, any Participation Interests transferred to the Trust (a) shall have been (i) registered under the Act or (ii) held for at least the Rule 144(k) holding period, and (b) shall be acquired in secondary market transactions not from the issuer or an affiliate. The addition of Participation Interests in the Trust pursuant to this paragraph (a) or paragraph (b) below shall be effected by a Supplement, dated the applicable Addition Date, pursuant to subsection 13.1(a). (b) Permitted Additions. The Transferor may from time to time after an Automatic Addition Termination Date or an Automatic Addition Suspension Date (and in the latter case, prior to a Restart Date), at its sole discretion, subject to the conditions specified in paragraph (c) below, designate additional Eligible Accounts to be included as Accounts or Participation Interests to be included as Trust Assets, in either case as of the applicable Addition Date. (c) Conditions to Addition. On the Addition Date with respect to any Supplemental Accounts or Participation Interests added pursuant to subsection 2.9(a) or 2.9(b), the Credit Card Originator will sell to TCC, TCC will thereafter sell to the Transferor and the Transferor will thereafter transfer to the Trust the Receivables arising in Supplemental Accounts (and such Supplemental Accounts shall be deemed to be Accounts for purposes of this Agreement) and Participation Interests, subject to the satisfaction of the following conditions: (i) on or before the tenth Business Day immediately preceding the Addition Date, the Transferor shall have given the Trustee, the Servicer, each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement written notice that the Supplemental Accounts or Participation Interests will be included and specifying the applicable Addition Date, the Addition Cut-Off Date, the approximate number of accounts expected to be added and the approximate aggregate balances expected to be outstanding in the accounts to be added; (ii) in the case of Supplemental Accounts, the Transferor shall have delivered to the Trustee copies of UCC-1 financing statements covering such Supplemental Accounts, if necessary to perfect the Trust's interest in the Receivables arising therein; (iii) as of each of the Addition Cut-Off Date and the Addition Date, (x) no Insolvency Event with respect to the Credit Card Originator, TCC or the Transferor shall have occurred, (y) the Credit Card Originator, TCC and the Transferor shall not be insolvent and (z) the transfer of the Receivables arising in the Supplemental Accounts or the Participation Interests to the Trust shall not have been made in contemplation of the occurrence of an Insolvency Event or the insolvency thereof; (iv) except in the case of an Addition pursuant to subsection 2.9(a), the Rating Agency Condition shall have been satisfied and in the case of an Addition pursuant to subsection 2.9(a) which would exceed the Aggregate Addition Limit, the Transferor shall have provided to Standard & Poor's at least 10 Business Days' prior written notice of such Addition and at or prior to the end of such 10 Business Day period, the Transferor shall receive a notice in writing from Standard & Poor's that such Addition will not result in the lowering or withdrawal of its then existing rating of the Investor Certificates of any Series; (v) the Transferor shall have delivered to the Trustee and any Enhancement Provider entitled thereto pursuant to the relevant Supplement an Officer's Certificate, dated the Addition Date, stating that (x) in the case of Supplemental Accounts, as of the applicable Addition Date the Supplemental Accounts are all Eligible Accounts, (y) to the extent applicable, the conditions set forth in clauses (ii) through (iv) above have been satisfied and (z) the Transferor reasonably believes that (A) the addition by the Transferor of the Receivables arising in the Supplemental Accounts or of the Participation Interests to the Trust will not, based on the facts known to such officer at the time of such certification, then or thereafter cause an Early Amortization Event to occur with respect to any Series and (B) in the case of Supplemental Accounts, no selection procedure was utilized by the Transferor which would result in a selection of Supplemental Accounts (from among the available Eligible Accounts owned by the Credit Card Originator) that would have a result that would be materially less favorable to the interests of the Investor Certificateholders of any Series as of the Addition Date than a random selection; and (vi) the Transferor shall have delivered to the Trustee, each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement an outside Opinion of Counsel, dated the Addition Date, in accordance with subsection 13.2(d). (d) Automatic Additional Accounts. (i) All accounts which meet the definition of Automatic Additional Accounts shall be included as Accounts from and after the date upon which such Automatic Additional Accounts are created and all Receivables in such Automatic Additional Accounts, whether such Receivables are then existing or thereafter created, shall be transferred automatically to the Trust upon purchase by the Transferor. For all purposes of this Agreement, all receivables of such Automatic Additional Accounts shall be treated as Receivables upon their creation. The Transferor may elect at any time to terminate the inclusion in Accounts of new accounts which would otherwise be Automatic Additional Accounts as of any Business Day (the "Automatic Addition Termination Date"), or suspend any such inclusion as of any Business Day (an "Automatic Addition Suspension Date") until a date (the "Restart Date") to be notified in writing by the Transferor to the Trustee by delivering to the Trustee, the Servicer and each Rating Agency prior written notice of such election at least 10 days prior to such Automatic Addition Termination Date or Automatic Addition Suspension date. Promptly after an Automatic Addition Termination Date or any Automatic Addition Suspension Date, or a Restart Date, the Transferor and the Trustee agree to execute and the Transferor agrees to record and file at its own expense an amendment to the financing statements referred to in Section 2.1 to specify the accounts then subject to this Agreement (which specification may incorporate a list of accounts by reference) and, except in connection with any such filing made after a Restart Date, to release any security interest in any accounts created after the Automatic Addition Termination Date or any Automatic Addition Suspension Date. (ii) The Transferor shall not be permitted to continue to designate Automatic Additional Accounts to be included as Accounts pursuant to this subsection 2.9(d) (and the Determination Date on which such determination is made shall be also referred to as an "Automatic Addition Suspension Date") unless: (I) the arithmetic average for the three Monthly Periods preceding the then current Monthly Period, of the annualized percentage equivalent of a fraction for each respective Monthly Period, the numerator of which is equal to the Defaulted Amount for the respective Monthly Period and the denominator of which is equal to the aggregate Principal Receivables as of the first day of the respective Monthly Period, is less than 10.50%; (II) the arithmetic average for the three Monthly Periods preceding the then current Monthly Period, of the percentage equivalent of a fraction for each respective Monthly Period, the numerator of which is equal to the amount of Collections received during the respective Monthly Period and the denominator of which is equal to the aggregate Principal Receivables as of the first day of the respective Monthly Period, is greater than or equal to 10.0%; (III) the arithmetic average for the three Monthly Periods preceding the then current Monthly Period of the Trust Portfolio Yield minus the weighted arithmetic average of the Base Rates for each Series then outstanding for such three Monthly Periods is greater than or equal to 1.5%; (IV) the number of accounts to be included as Automatic Additional Accounts with respect to the related six-month period is less than or equal to 30% of the number of Accounts as of the first day of such six-month period; provided, however, that the designation of Automatic Additional Accounts shall be permitted to continue in the event that as of any date of determination on which (x) any of the conditions in clauses (I) through (III) listed above is not met, and if the Aggregate Addition Limit would be exceeded as a result of the inclusion of such Automatic Additional Accounts as Accounts or (y) the condition in clause (IV) above would not be satisfied because the threshold specified therein would be exceeded as a result of the inclusion of such Automatic Additional Accounts as Accounts, the Rating Agency Condition shall have been satisfied with respect to such inclusion; (V) on each Determination Date, the Transferor shall have delivered to the Rating Agencies and the Trustee an Officer's Certificate, certifying (i) that each Automatic Additional Account designated as an Eligible Account is an Eligible Account and (ii) that either (x) the conditions under clauses (I), (II) or (III) above shall be satisfied or the Aggregate Addition Limit would not be exceeded as a result of the inclusion of such Automatic Additional Accounts as Accounts and the limitation under clause (IV) above will not be exceeded or (y) if the conditions under clauses (I), (II) or (III) shall not be satisfied and the Aggregate Addition Limit would be exceeded as a result of the inclusion of such Automatic Additional Accounts as Accounts, or the condition under clause (IV) above would not be satisfied because the threshold specified therein would be exceeded as a result of the inclusion of Automatic Additional Accounts as Accounts, the Rating Agency Condition has been satisfied with respect to such inclusion; and (VI) as of the Addition Date, (x) no Insolvency Event with respect to the Credit Card Originator, TCC or the Transferor shall have occurred, (y) the Credit Card Originator, TCC and the Transferor shall not be insolvent and (z) the transfer of the Receivables arising in the Automatic Additional Accounts to the Trust shall not have been made in contemplation of the occurrence of an Insolvency Event or the insolvency thereof. (iii) If the conditions of clauses (I) through (III) of clause (ii) above are not satisfied and clause (IV) of clause (ii) above is satisfied, the Transferor intends to continue to automatically add accounts so long as the Aggregate Addition Limit is not exceeded. Upon either (x) any one of the conditions set forth in clauses (I) through (III) of clause (ii) above not being satisfied and the Aggregate Addition Limit being exceeded or (y) the condition set forth in clause (IV) above not being satisfied because the threshold specified therein has been exceeded as specified in an Officer's Certificate of the Transferor delivered pursuant to clause (ii)(V) above, the Transferor shall cease to designate Automatic Additional Accounts to be included as Accounts pursuant to this subsection 2.9(d) until a date (the "Restart Date") specified in a written notice given by the Transferor to the Trustee; provided, however, that the Transferor shall specify in such notice that on such Restart Date (x) the conditions under clauses (I) through (III) of clause (ii) above will be satisfied or the Aggregate Addition Limit would not be exceeded as a result of the inclusion of Automatic Additional Accounts as Accounts and the condition under clause (ii)(IV) above will be satisfied on the Restart Date and (y) all accounts of the Credit Card Originators shall have been designated Accounts either as Automatic Additional Accounts prior to the Automatic Addition Suspension Date or as Supplemental Accounts. (e) Representations and Warranties. The Transferor hereby represents and warrants to the Trust as of the related Addition Date as to the matters relating to it set forth in paragraph (d)(iii) above and that the file or list delivered pursuant to paragraph (f) below is, as of the applicable Addition Cut-Off Date, true and complete in all material respects. (f) Delivery of Documents. In the case of the designation of Supplemental Accounts, the Transferor shall deliver to the Trustee (i) the computer file, microfiche list or printed list required to be delivered pursuant to Section 2.1 with respect to such Supplemental Accounts on the applicable Document Delivery Date and (ii) a duly executed, written Assignment (including an acceptance by the Trustee for the benefit of the Certificateholders), substantially in the form of Exhibit B (the "Assignment"), on the Document Delivery Date. (g) Adjustment to Calculations. The Transferor may direct that the Principal Receivables in the Additional Accounts be treated as Principal Receivables outstanding on the last day of the Monthly Period preceding the Monthly Period in which the Addition is made for purposes of calculating Floating Allocation Percentages and Principal Allocation Percentages for the Monthly Period of such Addition. Such direction may be made on the Addition Date only if all collections with respect to the Additional Accounts for the period from the last day of the preceding Monthly Period through the Addition Date are deposited in the Collection Account on the Addition Date. Following any such Addition, the Servicer shall allocate collections for the balance of such Monthly Period, including the collections deposited on the Addition Date, to the Certificateholders' Interest of each Series and the Transferor Amount so that each interest receives the same allocations of Finance Charge Receivables, Principal Receivables and Defaulted Amounts that it would have received if such Additional Accounts had been included in the Trust for the entire Monthly Period in which the Addition occurred. Section 2.10. Removal of Accounts. On any day of any Monthly Period the Transferor shall have the right to require the reassignment to it or its designee of all the Trust's right, title and interest in, to and under the Receivables then existing and thereafter created, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to the Accounts then owned by the Credit Card Originator and designated by the Transferor (the "Removed Accounts") or Participation Interests (unless otherwise set forth in the applicable Supplement), upon satisfaction of the following conditions: (a) on or before the tenth Business Day immediately preceding the Removal Date (the "Removal Notice Date") the Transferor shall have given the Trustee, the Servicer, each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement written notice of such removal and specifying the date for removal of the Removed Accounts and Participation Interests (the "Removal Date"); (b) with respect to Removed Accounts, on or prior to the date that is 10 Business Days after the Removal Date, the Transferor shall have delivered to the Trustee a computer file, microfiche list or printed list containing a true and complete list of the Removed Accounts specifying for each such Account, as of the Removal Notice Date, its account number, the aggregate amount outstanding, and the aggregate amount of Principal Receivables outstanding in such Account; (c) with respect to Removed Accounts, the Transferor shall have represented and warranted as of the Removal Date that the list of Removed Accounts delivered pursuant to paragraph (b) above, as of the Removal Date, is true and complete in all material respects; (d) the Rating Agency Condition shall have been satisfied with respect to such removal; (e) the Transferor shall have delivered to the Trustee and any Enhancement Provider entitled thereto pursuant to the relevant Supplement an Officer's Certificate, dated as of the Removal Date, to the effect that the Transferor reasonably believes that (i) such removal will not, based on the facts known to such officer at the time of such certification, then or thereafter cause an Early Amortization Event or an event which with notice or lapse of time would constitute an Early Amortization Event to occur with respect to any Series and (ii) no selection procedure believed by the Transferor to be materially adverse to the interests of the Investor Certificateholders has been used in removing Removed Accounts from among any pool of Accounts or Participation Interests of a similar type; (f) the Transferor shall not utilize a selection procedure intended to include a disproportionately higher level of Defaulted Receivables in the Removed Accounts than exist in the Accounts and shall not remove such Accounts for the intended purpose of mitigating losses to the Trust; and (g) the Transferor shall pay to the Trust the greater of (i) the fair market value (as of the Removal Date) of the Receivables to be removed and (ii) the amount of the Principal Receivables to be removed; to the extent the fair market value of the Receivables exceeds the amount of the Principal Receivables to be removed, the amount of such excess shall be treated as Collections of Finance Charge Receivables. Upon satisfaction of the above conditions, the Trustee shall execute and deliver to the Transferor or its designee a written reassignment in substantially the form of Exhibit C (the "Reassignment") and shall, without further action, be deemed to transfer, assign, set over and otherwise convey to the Transferor or its designee, effective as of the Removal Date, without recourse, representation or warranty, all the right, title and interest of the Trust in and to the Receivables arising in the Removed Accounts or the Participation Interests, all monies due and to become due and all amounts received with respect thereto and all proceeds thereof. In addition, the Trustee shall execute such other documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Transferor to effect the conveyance of Receivables pursuant to this Section 2.10. In addition to the foregoing, on the date when any Receivable in an Account becomes a Defaulted Receivable, the Trust shall automatically and without further action or consideration be deemed to transfer, set over and otherwise convey to the Transferor, without recourse, representation or warranty, all right, title and interest of the Trust in and to the Defaulted Receivables and Finance Charge Receivables which have been charged off as uncollectible, in such Account, all monies due or to become due with respect thereto and all proceeds thereof; provided that Recoveries of such Account shall be applied as provided herein. Each such Account shall constitute a Removed Account for which the applicable Removal Date shall be the first date on which any Receivable in such Account became a Defaulted Receivable. Section 2.11. Discount Option. (a) The Transferor shall have the option to designate at any time a fixed or floating percentage (the "Discount Percentage"), of the amount of Receivables arising in the Accounts on or after the date such designation becomes effective that would otherwise constitute Principal Receivables (prior to subtracting from Principal Receivables, Finance Charge Receivables that are Discount Option Receivables) to be treated as Finance Charge Receivables. The Transferor may from time to time increase (subject to the limitations described below), reduce or eliminate the Discount Percentage for Discount Option Receivables arising in the Accounts on and after the date of such change. The Transferor must provide 30 days' prior written notice to the Servicer, the Trustee and each Rating Agency of any such increase, reduction or elimination, and such increase, reduction or elimination shall become effective on the date specified therein only if (i) the Transferor has delivered to the Trustee an Officer's Certificate to the effect that, based on the facts known to such officer at the time, the Transferor reasonably believes that such increase, reduction or elimination shall not at the time of its occurrence cause an Early Amortization Event, or an event which with notice or the lapse of time would constitute an Early Amortization Event, to occur with respect to any Series and (ii) the Discount Percentage shall not be greater than 3% at any time, unless the Transferor, the Servicer and the Trustee shall have received written confirmation from each Rating Agency that the Rating Agency Condition is satisfied. (b) On each Date of Processing after the date on which the Transferor's exercise of its discount option takes effect, the Transferor shall treat Discount Option Receivables Collections as Collections of Finance Charge Receivables. Section 2.12. Additional Transferors. The Transferor may designate additional Persons to be included as Transferors under this Agreement by an amendment to this Agreement (which amendment shall be subject to Section 13.1) and, in connection with such designation, the Transferor shall surrender the Transferor Certificate to the Trustee in exchange for a newly issued Transferor Certificate reflecting such additional Transferor's interest in the Transferor's Interest; provided, however, that prior to any such designation and issuance the conditions set forth in subsection 6.3(c) shall have been satisfied with respect thereto. Section 2.13 Account Allocations. In the event that the Transferor is unable for any reason to transfer Receivables to the Trust in accordance with the provisions of this Agreement, including by reason of the application of the provisions of Section 9.1 or any order of any Governmental Authority (a "Transfer Restriction Event"), then, in any such event, (a) the Transferor and the Servicer agree (except as prohibited by any such order) to allocate and pay to the Trust, after the date of such inability, all Collections, including Collections of Receivables transferred to the Trust prior to the occurrence of such event, and all amounts which would have constituted Collections but for the Transferor's inability to transfer Receivables (up to an aggregate amount equal to the amount of Receivables transferred to the Trust by the Transferor in the Trust on such date), (b) the Transferor and the Servicer agree that such amounts will be applied as Collections in accordance with Article IV and the terms of each Supplement and (c) for so long as the allocation and application of all Collections and all amounts that would have constituted Collections are made in accordance with clauses (a) and (b) above, Principal Receivables and all amounts which would have constituted Principal Receivables but for the Transferor's inability to transfer Receivables to the Trust which are written off as uncollectible in accordance with this Agreement shall continue to be allocated in accordance with Article IV and the terms of each Supplement. For the purpose of the immediately preceding sentence, the Transferor and the Servicer shall treat the first received Collections with respect to the Accounts as allocable to the Trust until the Trust shall have been allocated and paid Collections in an amount equal to the aggregate amount of Principal Receivables in the Trust as of the date of the occurrence of such event. If the Transferor and the Servicer are unable pursuant to any Requirements of Law to allocate Collections as described above, the Transferor and the Servicer agree that, after the occurrence of such event, payments on each Account with respect to the principal balance of such Account shall be allocated first to the oldest principal balance of such Account and shall have such payments applied as Collections in accordance with Article IV and the terms of each Supplement. The parties hereto agree that Finance Charge Receivables, whenever created, accrued in respect of Principal Receivables which have been conveyed to the Trust shall continue to be a part of the Trust notwithstanding any cessation of the transfer of additional Principal Receivables to the Trust and Collections with respect thereto shall continue to be allocated and paid in accordance with Article IV and the terms of each Supplement. ARTICLE III Administration and Servicing of Receivables Section 3.1. Acceptance of Appointment and Other Matters Relating to the Servicer. (a) Retailers National Bank agrees to act as Servicer under this Agreement and the Certificateholders by their acceptance of Certificates consent to Retailers National Bank acting as Servicer. (b) The Servicer shall service and administer the Receivables, shall collect payments due under the Receivables and shall charge off as uncollectible Receivables, all in accordance with its customary and usual servicing procedures for servicing credit card and other consumer open end credit receivables comparable to the Receivables and in accordance with the Credit Card Guidelines. The Servicer shall have full power and authority, acting alone or through any party properly designated by it hereunder, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing, subject to Section 10.1 and provided Retailers National Bank is the Servicer, the Servicer or its designee (rather than the Trustee) is hereby authorized and empowered (i) to make withdrawals and payments or to instruct the Trustee to make withdrawals and payments from the Collection Account and any Series Account, as set forth in this Agreement or any Supplement, and (ii) to take any action required or permitted under any Enhancement, as set forth in this Agreement or any Supplement. Without limiting the generality of the foregoing and subject to Section 10.1, the Servicer or its designee is hereby authorized and empowered to make any filings, reports, notices, applications and registrations with, and to seek any consents or authorizations from, the Commission and any state securities authority on behalf of the Trust as may be necessary or advisable to comply with any Federal or state securities laws or reporting requirements; provided, however, that initially, the Transferor shall make any filings with the Commission and under state securities laws on behalf of the Trust. The Trustee shall furnish the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. (c) The Servicer shall not be obligated to use separate servicing procedures, offices, employees or accounts for servicing the Receivables from the procedures, offices, employees and accounts used by the Servicer in connection with servicing other credit card receivables. (d) The Servicer shall comply with and perform its servicing obligations with respect to the Accounts and Receivables in accordance with the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines except insofar as any failure to so comply or perform would not materially and adversely affect the Trust or the Investor Certificateholders. (e) The Servicer shall be liable for the payment, without reimbursement, of all expenses incurred in connection with the Trust and the servicing activities hereunder including expenses related to enforcement of the Receivables, fees and disbursements of the Trustee, any Paying Agent and any Transfer Agent and Registrar (including the reasonable fees and expenses of its counsel) in accordance with Section 11.5, fees and disbursements of independent accountants and all other fees and expenses, including the costs of filing UCC continuation statements and the costs and expenses relating to obtaining and maintaining the listing of any Investor Certificates on any stock exchange, that are not expressly stated in this Agreement to be payable by the Trust, the Investor Certificateholders of a Series or the Transferor (other than Federal, state, local and foreign income, franchise and other taxes, if any, or any interest or penalties with respect thereto, assessed on the Trust). (f) The Servicer agrees that upon a request by the Transferor it will use its best efforts to obtain and maintain the listing of the Investor Certificates of any Series or Class on any specified securities exchange. If any such request is made, the Servicer shall give notice to the Transferor and the Trustee on the date on which such Investor Certificates are approved for such listing. Within three Business Days following receipt of notice by the Servicer of any actual, proposed or contemplated delisting of such Investor Certificates by any such securities exchange the Servicer, in its sole discretion, may terminate any listing on any such securities exchange. Section 3.2. Servicing Compensation. As full compensation for its servicing activities hereunder and as reimbursement for any expense incurred by it in connection therewith, the Servicer shall be entitled to receive a servicing fee (the "Servicing Fee") with respect to each Monthly Period, payable monthly on the related Distribution Date, in an amount equal to one-twelfth of the product of (a) the weighted average of the Servicing Fee Rates with respect to each outstanding Series (based upon the Servicing Fee Rate for each Series and the Series Invested Amount (or such other amount as specified in the related Supplement) of such Series, in each case as of the last day of the prior Monthly Period) and (b) the amount of Principal Receivables on the last day of the prior Monthly Period. The share of the Servicing Fee allocable to (i) the Certificateholders' Interest of a particular Series with respect to any Monthly Period (the "Monthly Servicing Fee") and (ii) the Enhancement Invested Amount, if any, of a particular Series with respect to any Monthly Period will each be determined in accordance with the relevant Supplement. The share of the Servicing Fee allocable to any Participation with respect to any Monthly Period will be determined in accordance with the applicable Participation Supplement. The portion of the Servicing Fee with respect to any Monthly Period not so allocated to the Certificateholders' Interest or the Enhancement Invested Amount, if any, of a particular Series or any Participation shall be paid from amounts allocable to the Holder of the Transferor Certificate on the related Distribution Date. In no event shall the Trust, the Trustee, the Investor Certificateholders of any Series, the holder of any Participation or any Enhancement Provider be directly liable for the share of the Servicing Fee with respect to any Monthly Period to be paid from amounts allocable to the Holder of the Transferor Certificate. Section 3.3. Representations, Warranties and Covenants of the Servicer. Retailers National Bank, in its capacity as initial Servicer, hereby makes, and any Successor Servicer by its appointment hereunder shall make, on each Closing Date (and on the date of any such appointment), the following representations, warranties and covenants to the Trust (and agrees that the Trustee may rely on each such representation, warranty and covenant in accepting the Receivables in trust and in authenticating the Certificates): (a) Organization and Good Standing. The Servicer is a national banking association (or with respect to such Successor Servicer, such other corporate entity as may be applicable) duly organized, validly existing and in good standing under the laws of the United States, and has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement and each Supplement and, in all material respects, to own its properties and conduct its business as such properties are presently owned and as such business is presently conducted. (b) Due Qualification. The Servicer is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a material adverse effect on the interests of the Investor Certificateholders hereunder or under any Supplement. (c) Due Authorization. The execution, delivery, and performance of this Agreement and each Supplement have been duly authorized by the Servicer by all necessary corporate action on the part of the Servicer. (d) Binding Obligation. This Agreement and each Supplement constitutes a legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect, affecting the enforcement of creditors' rights in general (or with respect to such Successor Servicer, such other corporate entity as may be applicable) and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity). (e) No Violation. The execution and delivery of this Agreement and each Supplement by the Servicer, the performance of the transactions contemplated by this Agreement and each Supplement and the fulfillment of the terms hereof and thereof applicable to the Servicer, will not conflict with, violate, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any Requirement of Law applicable to the Servicer or any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it or any of its properties are bound. (f) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of the Servicer, threatened against the Servicer before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by this Agreement or any Supplement, seeking any determination or ruling that, in the reasonable judgment of the Servicer, would materially and adversely affect the performance by the Servicer of its obligations under this Agreement or any Supplement, or seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or any Supplement. (g) Compliance with Requirements of Law. The Servicer shall duly satisfy all obligations on its part to be fulfilled under or in connection with the Receivables and the related Accounts, will maintain in effect all qualifications required under Requirements of Law in order to properly service the Receivables and the related Accounts and will comply in all material respects with all other Requirements of Law in connection with servicing the Receivables and the related Accounts, the failure to comply with which would have a material adverse effect on the interests of the Investor Certificateholders. (h) No Rescission or Cancellation. Subject to Section 3.9, the Servicer shall not permit any rescission or cancellation of a Receivable except as ordered by a court of competent jurisdiction or other Governmental Authority or in the ordinary course of its business and in accordance with the Credit Card Guidelines. (i) Protection of Certificateholders' Rights. Except as provided in subsections 2.8(a) and (b) hereof with respect to the Bank Purchase Agreement, the Servicer shall take no action which, nor omit to take any action the omission of which, would substantially impair the rights of Certificateholders in any Receivable or Account, nor shall it, except in the ordinary course of its business and in accordance with the Credit Card Guidelines, reschedule, revise or defer Collections due on the Receivables. (j) Receivables Not To Be Evidenced by Promissory Notes. Except in connection with its enforcement or collection of an Account, the Servicer will take no action to cause any Receivable to be evidenced by any instrument, other than an instrument that, taken together with one or more other writings, constitutes chattel paper (as such terms are defined in the UCC) and, if any Receivable is so evidenced (whether or not in connection with the enforcement or collection of an Account), it shall be reassigned or assigned to the Servicer as provided in this Section 3.3. (k) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any governmental body or official required in connection with the execution and delivery by the Servicer of this Agreement and each Supplement, the performance by the Servicer of the transactions contemplated by this Agreement and each Supplement and the fulfillment by the Servicer of the terms hereof and thereof, have been obtained; provided, however, that the Servicer makes no representation or warranty regarding state securities or "blue sky" laws in connection with the distribution of the Certificates. (l) Maintenance of Records and Books of Account. The Servicer shall maintain and implement administrative and operating procedures (including the ability to recreate records evidencing the Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, computer records and other information, reasonably necessary or advisable for the collection of all the Receivables. Such documents, books and computer records shall reflect all facts giving rise to the Receivables, all payments and credits with respect thereto, and, to the extent required pursuant to Section 2.1, such documents, books and computer records shall indicate the interests of the Trust in the Receivables. For purposes of the representations, warranties and covenants set forth in this Section 3.3, each reference to a Supplement shall be deemed to refer only to those Supplements in effect as of the relevant Closing Date or the date of appointment of a Successor Servicer, as applicable. If any of the representations, warranties or covenants of the Servicer contained in paragraph (g), (h), (i) or (j) with respect to any Receivable or the related Account is breached, and as a result of such breach the Trust's rights in, to or under any Receivables in the related Account or the proceeds of such Receivables are materially impaired or such proceeds are not available for any reason to the Trust free and clear of any Lien, then no later than the expiration of 60 days (or such longer period, not in excess of 150 days, as may be agreed to by the Trustee) from the earlier to occur of the discovery of such event by the Servicer, or receipt by the Servicer of notice of such event given by the Trustee, all Receivables in the Account or Accounts to which such event relates shall be reassigned or assigned to the Servicer on the terms and conditions set forth below; provided, however, that such Receivables will not be reassigned or assigned to the Servicer if, on any day prior to the end of such 60-day or longer period, (i) the relevant representation and warranty shall be true and correct, or the relevant covenant shall have been complied with, in all material respects and (ii) the Servicer shall have delivered an Officer's Certificate describing the nature of such breach and the manner in which such breach was cured. The Servicer shall effect such assignment by making a deposit into the Collection Account in immediately available funds prior to the next succeeding Business Day in an amount equal to the amount of such Receivables, which deposit shall be considered a Collection with respect to such Receivables and shall be applied in accordance with Article IV and the terms of each Supplement. Upon each such assignment to the Servicer, the Trustee, on behalf of the Trust, shall automatically and without further action be deemed to transfer, assign, set over and otherwise convey to the Servicer, without recourse, representation or warranty (except for the warranty that since the date of transfer by the Transferor, the Trustee has not sold, transferred or encumbered any such Receivables or interest therein), all right, title and interest of the Trust in and to such Receivables, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof. The Trustee shall execute such documents and instruments of transfer or assignment and take such other actions as shall be reasonably requested by the Servicer to effect the conveyance of any such Receivables pursuant to this Section 3.3. The obligation of the Servicer to accept assignment of such Receivables, and to make the deposits, if any, required to be made to the Special Funding Account or the Collection Account as provided in the preceding paragraph, shall constitute the sole remedy respecting the event giving rise to such obligation available to Certificateholders (or the Trustee on behalf of Certificateholders) or any Enhancement Provider, except as provided in Section 8.4. Section 3.4. Report to the Trustee. (a) Daily Reports. On the second Business Day immediately following each Date of Processing, the Servicer shall prepare and make available at the office of the Servicer for inspection by the Trustee a report (the "Daily Report") that shall set forth (i) the aggregate amount of Collections processed by the Servicer on such Date of Processing, (ii) estimates of the aggregate amount of Collections processed by the Servicer with respect to Principal Receivables on such Date of Processing, (iii) estimates of the aggregate amount of Collections processed by the Servicer with respect to Finance Charge Receivables, on such Date of Processing, (iv) the aggregate amount of Defaulted Receivables for such Date of Processing, and (v) the estimates of the aggregate amount of Principal Receivables in the Trust as of such Date of Processing. The estimate of the aggregate amount of Collections processed by the Servicer with respect to Principal Receivables required by clause (ii) above shall equal (x) the product of (a) the Collections, other than Merchant Fees and Deferred Billing Fees, and (b) a fraction, the numerator of which shall be the aggregate amount of Collections of Principal Receivables as of the last day of the preceding Monthly Period and the denominator of which shall be the aggregate amount of Collections, excluding Merchant Fees and Deferred Billing Fees, as of such last day. The estimate of the aggregate amount of Collections processed by the Servicer with respect to Finance Charge Receivables required by clause (iii) above shall equal the sum of (x) the product of (a) the Collections, excluding Merchant Fees and Deferred Billing Fees, and (b) a fraction, the numerator of which shall be the aggregate amount of Collections of Finance Charge Receivables other than Merchant Fees and Deferred Billing Fees (including Discount Option Receivables) as of the last day of the preceding Monthly Period and the denominator of which shall be the aggregate amount of Collections, other than Merchant Fees and Deferred Billing Fees, as of such last day and (y) the Merchant Fees and Deferred Billing Fees. (b) Monthly Reports; Adjustments. On or before each Determination Date, the Servicer shall prepare and make available at the office of the Servicer for inspection by the Trustee a report (the "Monthly Report") that shall set forth (x) during the Monthly Period the amount on deposit in the Special Funding Account as of the last day of the preceding Monthly Period and (y) a calculation of the Transferor Amount and the Required Retained Transferor Amount as of the last day of the preceding Monthly Period and a determination of whether the Transferor Amount (excluding the interest represented by any Supplemental Certificate) on such day was greater than the Required Retained Transferor Amount on such day and such other information as may be specified in any applicable Supplement. In addition, on the Determination Date following each Monthly Period during which the methods of estimating shall have been used pursuant to subsection 3.4(a) above by the Servicer, the Servicer shall make in the Monthly Report an appropriate "true-up" adjustment of the aggregate amounts allocated as Collections of Principal Receivables and Finance Charge Receivables in the Collection Account for such Monthly Period pursuant to subsection 3.4(a) above to the actual amount of Collections of Principal Receivables included in the Trust Assets, the amount of Discount Option Receivables for such Monthly Period, and the actual amount of Collections of Finance Charge Receivables included in the Trust Assets, in each case, to reflect the difference between (x) the amounts that should have been recorded as Collections in respect of Principal Receivables and Finance Charge Receivables if actual Collections of Principal Receivables and Finance Charge Receivables had been known and (y) the amount allocated thereto pursuant to the last two sentences of subsection 3.4(a). (c) Monthly Servicer's Certificate. Unless otherwise stated in the Supplement related to any Series, on each Determination Date, the Servicer shall forward to the Trustee, the Paying Agent, each Rating Agency and each Enhancement Provider, if any, a certificate of a Servicing Officer setting forth (i) the aggregate amounts for the preceding Monthly Period with respect to each of the items specified in clauses (i), (ii) and (iii) of subsection 3.4(a), together with the amount and nature of any "true-up" adjustment required by subsection 3.4(b), (ii) the Defaulted Amount for the preceding Monthly Period, (iii) Recoveries for the preceding Monthly Period, (iv) a calculation of the Portfolio Yield and Base Rate for each Series then outstanding, (v) the aggregate amount of Receivables and the balance on deposit in the Collection Account (or any subaccount thereof) or any Series Account applicable to any Series then outstanding with respect to Collections processed as of the end of the last day of the preceding Monthly Period, (vi) the aggregate amount of adjustments from the preceding Monthly Period, (vii) the aggregate amount, if any, of withdrawals, drawings or payments under any Enhancement with respect to each Series required to be made with respect to the preceding Monthly Period, (viii) the sum of all amounts payable to the Investor Certificateholders on the succeeding Distribution Date in respect of interest and principal payable with respect to the Investor Certificates and (ix) such other amounts, calculations, and/or information as may be required by any relevant Supplement. (d) Transferred Accounts. The Servicer covenants and agrees hereby to deliver to the Trustee, after the Automatic Addition Termination Date or any Automatic Addition Suspension Date (but in the latter case, prior to a Restart Date) within a reasonable time period after any Transferred Account is created, but in any event not later than 15 days after the end of the Monthly Period within which the Transferred Account is created, a notice specifying the new account number for any Transferred Account and the replaced account number. Section 3.5. Annual Certificate of Servicer. The Servicer shall deliver to the Trustee, each Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement, on or before the 90th day following the Transferor's fiscal year an Officer's Certificate (with appropriate insertions) substantially in the form of Exhibit D. Section 3.6. Annual Servicing Report of Independent Public Accountants; Copies of Reports Available. (a) On or before the 90th day following the end of the Transferor's fiscal year the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Transferor) to furnish a report (addressed to the Trustee) to the Trustee, the Servicer and each Rating Agency to the effect that they have applied certain procedures agreed upon with the Servicer to certain documents relating to the administration and servicing of Accounts under this Agreement and each Supplement, and that based on such agreed upon procedures, such firm will provide a report stating that the administration and servicing was conducted in compliance with Article III and Article IV and Section 8.8 of this Agreement and the applicable provisions of any Supplement, except for such exceptions or errors as they believe to be immaterial and such other exceptions as shall be set forth in such report. A copy of such report shall be delivered to each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement. (b) On or before the 90th day following the end of the Transferor's fiscal year, beginning with May 3, 1996, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or the Transferor) to furnish a report to the Trustee, the Servicer and each Rating Agency to the effect that they have randomly selected at least one (1) of the Servicer's Certificates delivered pursuant to subsection 3.4(c) during each of the three month periods ended March 31, June 30, September 30 and December 31 during the period covered by such report and applied certain procedures agreed upon with the Servicer to compare the mathematical calculations of certain amounts set forth in such report with the Servicer's computer reports which were the source of such amounts and that on the basis of such agreed upon procedures and comparison, such accountants are of the opinion that such amounts are in agreement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such statement. A copy of such report shall be delivered to each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement. Notwithstanding the foregoing, the report furnished by the independent public accountants shall cover each of the twelve (12) Servicer's Certificates delivered pursuant to Section 3.4(c) if any material exceptions were set forth in that report by the independent public accountants pursuant to this Section 3.6(b). (c) A copy of each certificate and report provided pursuant to Section 3.4(c), 3.5 or 3.6 may be obtained by any Investor Certificateholder or Certificate Owner by a request to the Trustee addressed to the Corporate Trust Office. Section 3.7. Tax Treatment. The Transferor has entered into this Agreement, and the Certificates will be issued with the intention that, unless otherwise specified in any Supplement, for Federal, state and local income and franchise tax purposes, the Investor Certificates (except any Certificates held by the Transferor) of each Series will qualify as debt secured by the Receivables. The Transferor, by entering into this Agreement, each Certificateholder, by the acceptance of its Certificate (and each Certificate Owner, by its acceptance of an interest in the applicable Certificate), agree to treat the Investor Certificates for Federal, state and local income and franchise tax purposes as debt. Each Holder of an Investor Certificate agrees that it will cause any Certificate Owner acquiring an interest in an Investor Certificate through it to comply with this Agreement as to treatment as debt under applicable tax law, as described in this Section 3.7. Furthermore, subject to Section 11.11 or unless the Transferor shall determine that the filing of returns is appropriate, the Trustee shall treat the Trust as a security device only and shall not file tax returns or obtain an employer identification number on behalf of the Trust. Section 3.8. Notices to Retailers National Bank. If Retailers National Bank is no longer acting as Servicer, any Successor Servicer shall deliver to Retailers National Bank each certificate and report required to be provided thereafter pursuant to Section 3.4(c), 3.5 or 3.6. Section 3.9. Adjustments. (a) If the Servicer adjusts downward the amount of any Receivable because of a rebate, refund, unauthorized charge or billing error to an accountholder, or because such Receivable was created in respect of merchandise which was refused or returned by an accountholder, or if the Servicer otherwise adjusts downward the amount of any Receivable without receiving Collections therefor or charging off such amount as uncollectible, then, in any such case, the amount of Principal Receivables will be reduced by the amount of the adjustment. Similarly, the amount of Principal Receivables will be reduced by the amount of any Principal Receivable which was discovered as having been created through a fraudulent or counterfeit charge or with respect to which the covenant of the Transferor contained in subsection 2.7(b) has been breached. Notwithstanding the foregoing, any Collection with respect to such Receivables, the balances of which have been adjusted downward, which would otherwise have been treated as Collections of Principal Receivables shall be treated as Collections of Principal Receivables. Any adjustment required as provided above shall be made on or prior to the end of the Monthly Period in which such adjustment obligation arises. If, following the exclusion of such Principal Receivables from the calculation of the Transferor Amount, the Transferor Amount (excluding the interest represented by any Supplemental Certificate) would otherwise be less than the Required Retained Transferor Amount, not later than 12:00 noon, New York City time, on the Distribution Date following the Monthly Period in which such adjustment obligation arises, the Transferor shall make a deposit into the Special Funding Account in immediately available funds in an amount equal to the amount by which the Transferor Amount (excluding the interest represented by any Supplemental Certificate) would otherwise be less than the Required Retained Transferor Amount (up to the amount of such Principal Receivables). Any amount deposited into the Special Funding Account pursuant to the preceding sentence shall be considered Collections of Principal Receivables and shall be applied in accordance with Article IV and the terms of each Supplement. (b) If (i) the Servicer makes a deposit into the Collection Account in respect of a Collection of a Receivable and such Collection was received by the Servicer in the form of a check which is not honored for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that is less than or more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any Receivable in respect of which a dishonored check is received shall be deemed not to have been paid. Notwithstanding the first two sentences of this paragraph, any adjustments made pursuant to this paragraph will be reflected in a current report but will not change any amount of Collections previously reported pursuant to subsection 3.4(c). ARTICLE IV Rights of Certificateholders and Allocation and Application of Collections Section 4.1. Rights of Certificateholders. The Investor Certificates shall represent fractional undivided interests in the Trust, which, with respect to each Series, shall consist of the right to receive, to the extent necessary to make the required payments with respect to the Investor Certificates of such Series at the times and in the amounts specified in the related Supplement, the portion of Collections allocable to Investor Certificateholders of such Series pursuant to this Agreement and such Supplement, funds on deposit in the Collection Account allocable to Certificateholders of such Series pursuant to this Agreement and such Supplement, funds on deposit in any related Series Account and funds available pursuant to any related Enhancement (collectively, with respect to all Series, the "Certificateholders' Interest"), it being understood that, unless otherwise specified in the Supplement with respect to such Series, the Investor Certificates of any Series or Class shall not represent any interest in any Series Account or Enhancement for the benefit of any other Series or Class. The Transferor Certificate shall represent the ownership interest in the remainder of the Trust Assets not allocated, pursuant to this Agreement, any Supplement or any Participation Supplement, to the Certificateholders' Interest or any Participation, respectively, including the right to receive Collections with respect to the Receivables and other amounts at the times and in the amounts specified in this Agreement or any Supplement to be paid to the Transferor on behalf of the Holder of the Transferor Certificate (the "Transferor's Interest"); provided, however, that the Transferor Certificate shall not represent any interest in the Collection Account, any Series Account or any Enhancement, except as specifically provided in this Agreement or any Supplement. Section 4.2. Establishment of Collection Account and Special Funding Account. The Servicer, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders (the "Collection Account"). The Collection Account shall initially be established with the Trustee. The Trustee shall possess all right, title and interest in and to all funds on deposit from time to time in the Collection Account and in all proceeds thereof for the benefit of the Certificateholders. The Collection Account shall be under the sole dominion and control of the Trustee for the benefit of the Certificateholders. Except as expressly provided in this Agreement, the Servicer agrees that it shall have no right of set-off or banker's lien against, and no right to otherwise deduct from, any funds held in the Collection Account for any amount owed to it by the Trustee, the Trust, any Certificateholder or any Enhancement Provider. If at any time the Collection Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Collection Account meeting the conditions specified above, transfer any cash or any investments to such new Collection Account and from the date such new Collection Account is established, it shall be the "Collection Account." Funds on deposit in the Collection Account (other than amounts deposited pursuant to Section 2.6, 10.1 or 12.2) shall at the direction of the Servicer or the Transferor be invested by the Trustee in Eligible Investments selected by the Servicer or the Transferor. All such Eligible Investments shall be held by the Trustee for the benefit of the Certificateholders. The Trustee shall maintain for the benefit of the Certificateholders possession of the negotiable instruments or certificated securities, if any, evidencing such Eligible Investments. Investments of funds representing Collections collected during any Monthly Period shall be invested in Eligible Investments that will convert or be convertible into cash so that all funds will be available at the close of business on the Transfer Date following such Monthly Period. No Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee may sell, liquidate or dispose of an Eligible Investment before its maturity, at the written direction of the Servicer, if such sale, liquidation or disposal would not result in a loss of all or part of the principal portion of such Eligible Investment or if, prior to the maturity of such Eligible Investment, a default occurs in the payment of principal, interest or any other amount with respect to such Eligible Investment. On each Distribution Date, all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Collection Account shall be treated as Collections of Finance Charge Receivables with respect to the last day of the related Monthly Period, except as otherwise specified in any Supplement. For purposes of determining the availability of funds or the balances in the Collection Account for any reason under this Agreement, all investment earnings net of investment expenses and losses on such funds shall be deemed not to be available or on deposit. The Servicer, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders (the "Special Funding Account"). The Special Funding Account shall initially be established with the Trustee. The Trustee shall possess all right, title and interest in and to all funds on deposit from time to time in the Special Funding Account and in all proceeds thereof. The Special Funding Account shall be under the sole dominion and control of the Trustee for the benefit of the Certificateholders. Except as expressly provided in this Agreement, the Servicer agrees that it shall have no right of set-off or banker's lien against, and no right to otherwise deduct from, any funds held in the Special Funding Account for any amount owed to it by the Trustee, the Trust, any Certificateholder or any Enhancement Provider. If, at any time, the Special Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Special Funding Account meeting the conditions specified above, transfer any cash or any investments to such new Special Funding Account and from the date such new Special Funding Account is established, it shall be the "Special Funding Account." Funds on deposit in the Special Funding Account shall at the direction of the Servicer or the Transferor be invested by the Trustee in Eligible Investments selected by the Servicer or the Transferor. All such Eligible Investments shall be held by the Trustee for the benefit of the Certificateholders. The Trustee shall maintain for the benefit of the Certificateholders possession of the negotiable instruments or certificated securities, if any, evidencing such Eligible Investments. Funds on deposit in the Special Funding Account on any day will be invested in Eligible Investments that will convert or be convertible into cash so that all funds will be available at the close of business on the next Business Day. No Eligible Investment shall be disposed of prior to its maturity; provided, however, that the Trustee may sell, liquidate or dispose of an Eligible Investment before its maturity, at the written direction of the Servicer, if such sale, liquidation or disposal would not result in a loss of all or part of the principal portion of such Eligible Investment or if, prior to the maturity of such Eligible Investment, a default occurs, in the payment of principal, interest or any other amount with respect to such Eligible Investment. Unless directed by the Servicer, funds deposited in the Special Funding Account on a Transfer Date with respect to the next following Distribution Date are not required to be invested overnight. On each Distribution Date, all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Special Funding Account shall be treated as Collections of Finance Charge Receivables with respect to the last day of the related Monthly Period except as otherwise specified in the related Supplement. Unless otherwise directed by the Servicer, funds on deposit in the Special Funding Account will be withdrawn and paid to the Holder of the Transferor Certificate or such other Person as may be specified in a Supplement on any Business Day to the extent that the Transferor Amount (excluding the interest represented by any Supplemental Certificate) would otherwise exceed the Required Retained Transferor Amount on such date. On any Transfer Date on which one or more Series is in an Accumulation Period or Amortization Period, the Servicer shall determine the aggregate amounts of Principal Shortfalls, if any, with respect to each such Series that is a Principal Sharing Series (after giving effect to the allocation and payment provisions in the Supplement with respect to each such Series), and the Servicer shall instruct the Trustee to withdraw such amount (up to the amount on deposit in the Special Funding Account) on the succeeding Distribution Date and allocate such amount among each such Series as specified in each related Supplement; provided, however, that funds shall only be withdrawn from the Special Funding Account for allocation to cover such Principal Shortfalls if, and to the extent, that such allocation will not result in the reduction of the Transferor Amount (excluding the interest represented by any Supplemental Certificate) to an amount below the Required Retained Transferor Amount. For purposes of determining the availability of funds or the balances in the Special Funding Account for any reason under this Agreement, all investment earnings net of investment expenses and losses on such funds shall be deemed not to be available or on deposit. Section 4.3. Collections and Allocations. (a) The Servicer will apply or will instruct the Trustee to apply all funds on deposit in the Collection Account as described in this Article IV and in each Supplement. Except as otherwise provided below and in each Supplement, the Servicer shall deposit Collections into the Collection Account no later than the second Business Day following the Date of Processing of such Collections. Subject to the express terms of any Supplement, but notwithstanding anything else in this Agreement to the contrary, if Retailers National Bank remains the Servicer and (x) for so long as Target Corporation maintains a short-term debt rating of "A-1" or better by Standard & Poor's and "P-1" or better by Moody's (or such other rating below "A-1" or "P-1", as the case may be, which is satisfactory to each Rating Agency), or (y) Retailers National Bank has provided to the Trustee a letter of credit covering collection risk of the Servicer acceptable to each Rating Agency (as evidenced by a letter from each Rating Agency to the effect that the Rating Agency Condition has been satisfied), the Servicer need not make the daily deposits of Collections into the Collection Account as provided in the preceding sentence, but may make a single deposit in the Collection Account in immediately available funds not later than 12:00 noon, New York City time, on the related Transfer Date. (b) With respect to each day during each Monthly Period, (i) Collections of Finance Charge Receivables will be allocated to the Certificateholders' Interest of each Series, and (ii) Collections of Principal Receivables will be allocated to the Certificateholders' Interest of each Series, each as set forth in the Supplement related to such Series. On each Determination Date, (i) Collections of Recoveries will be treated as Collections of Principal Receivables and allocated to the Certificateholders' Interest of each Series and (ii) Defaulted Receivables will be allocated to the Certificate-holders' Interest of each Series, each as set forth in the related Supplement. (c) Throughout the existence of the Trust, unless otherwise stated in any Supplement, the Servicer shall allocate to the Holder of the Transferor Certificate an amount equal to the product of (A) the Transferor's Percentage and (B) the aggregate amount of such Collections allocated to Principal Receivables and Finance Charge Receivables, respectively, in respect of each Monthly Period; provided, however, that, if the Transferor Amount (determined after giving effect to any payment of such amount and any Principal Receivables transferred to the Trust on such date and excluding the interest represented by any Supplemental Certificate), would otherwise be less than or equal to the Required Retained Transferor Amount, the Servicer will not distribute to the Holder of the Transferor Certificate any such amounts that otherwise would be distributed to the Holder of the Transferor Certificate, but shall deposit such funds in the Special Funding Account. Notwithstanding anything in this Agreement to the contrary, unless otherwise stated in any Supplement, the Servicer need not deposit this amount or any other amounts so allocated to the Transferor Certificate pursuant to any Supplement into the Collection Account and shall pay, or be deemed to pay, such amounts as collected to the Holder of the Transferor Certificate. The payments to be made to the Holder of the Transferor Certificate pursuant to this subsection 4.3(c) do not apply to deposits to the Collection Account or other amounts that do not represent Collections, including payment of the purchase price for Receivables pursuant to Section 2.6 or 10.1, proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 12.2 or payment of the purchase price for the Certificateholders' Interest of a specific Series pursuant to the related Supplement. (d) Throughout the existence of the Trust, unless otherwise stated in any Participation Supplement, the Servicer shall allocate to the holders of any Participations an amount equal to the product of (A) the related Participation Percentage and (B) the aggregate amount of such Collections allocated to Principal Receivables, Finance Charge Receivables and Recoveries, respectively, and the aggregate amount of Defaulted Receivables, in each case, in respect of each Monthly Period. Notwithstanding anything in this Agreement to the contrary, unless otherwise stated in any Participation Supplement, the Servicer need not deposit these amounts or any other amounts so allocated to any Participation pursuant to any Participation Supplement into the Collection Account and shall pay such amounts as collected to the holder of the related Participation. The payments to be made to the holder of any Participation pursuant to this subsection 4.3(d) do not apply to deposits to the Collection Account or other amounts that do not represent Collections, including payment of the purchase price for Receivables pursuant to Section 2.6 or 10.1, proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 12.2 or payment of the purchase price for the Certificateholders' Interest of a specific Series pursuant to the related Supplement. Section 4.4. Shared Principal Collections. On each Distribution Date, (a) the Servicer shall allocate Shared Principal Collections to each Principal Sharing Series, pro rata, in proportion to the Principal Shortfalls, if any, with respect to each such Series, and any remainder may, at the option of the Transferor, be applied as principal with respect to any Variable Funding Certificate and (b) the Servicer shall withdraw from the Collection Account or the Special Funding Account and pay to the Holder of the Transferor Certificate an amount equal to the excess, if any, of (x) the sum of the aggregate amount for all outstanding Series of Collections of Principal Receivables which the related Supplements or this Agreement specify are to be treated as "Shared Principal Collections" for such Distribution Date plus the amount of any payment received by the Trustee from the holder of any Participation with respect to the purchase of a Participation or any increases in the principal amount of such Participation (such sum to be treated for purposes of this Agreement as "Shared Principal Collections") over (y) the aggregate amount for all outstanding Principal Sharing Series which the related Supplements specify are "Principal Shortfalls," for such Distribution Date; provided, however, that, if, on any Distribution Date the Transferor Amount (determined after giving effect to any Principal Receivables transferred to the Trust on such date and excluding the interest represented by any Supplemental Certificate), would otherwise be less than or equal to the Required Retained Transferor Amount, the Servicer will not distribute to the Holder of the Transferor Certificate any Shared Principal Collections that otherwise would be distributed to the Holder of the Transferor Certificate, but shall deposit such funds in the Special Funding Account. Section 4.5. Excess Finance Charge Collections. On each Distribution Date, (a) for each Group the Servicer shall apply the aggregate amount for all outstanding Series in such Group of the amounts which the related Supplements specify are to be treated as "Excess Finance Charge Collections" for such Distribution Date to each Series in such Group, pro rata, in proportion to the Finance Charge Shortfalls, if any, with respect to each such Series, and (b) the Servicer shall withdraw (or shall instruct the Trustee to withdraw) from the Collection Account and pay to the Holder of the Transferor Certificate an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series in a Group of the amounts which the related Supplements specify are to be treated as "Excess Finance Charge Collections" for such Distribution Date over (y) the aggregate amount for all outstanding Series in such Group which the related Supplements specify are "Finance Charge Shortfalls" for such Distribution Date; provided, however, that the sharing of Excess Finance Charge Collections among Series in a Group will continue only until such time, if any, at which the Transferor shall deliver to the Trustee an Officer's Certificate to the effect that, in the reasonable belief of the Transferor, the continued sharing of Excess Finance Charge Collections among Series in any Group would have adverse regulatory implications with respect to the Transferor. Following the delivery by the Transferor of such an Officer's Certificate to the Trustee, there will not be any further sharing of Excess Finance Charge Collections among Series in any Group. Section 4.6. Allocations During Funding Period. To the extent that the Servicer establishes an Eligible Deposit Account as a pre-funding account (the "Pre-Funding Account") with respect to any Series, bearing a designation indicating that the funds deposited therein are for the benefit of such Series, during the period (the "Funding Period"), as set forth in the related Supplement, that the Pre-Funding Account maintains a balance, the date upon which an increase in the Invested Amount of such Series in accordance with the terms of such related Supplement occurs shall be treated as an Addition Date solely for the purpose of calculating the Floating Allocation Percentage and the Principal Allocation Percentage. Such Addition Date shall be deemed to occur on the date of each such increase and the Floating Allocation Percentage and Principal Allocation Percentage shall be calculated accordingly. ARTICLE V Distributions and Reports to Certificateholders Distributions shall be made to, and reports shall be provided to, Certificateholders as set forth in the applicable Supplement. ARTICLE VI The Certificates Section 6.1. The Certificates. The Investor Certificates of any Series or Class may be issued in bearer form ("Bearer Certificates") with attached interest coupons and any other applicable coupon (collectively, the "Coupons") or in fully registered form ("Registered Certificates") and shall be substantially in the form of the exhibits with respect thereto attached to the applicable Supplement. The Transferor Certificate will be issued in registered form, substantially in the form of Exhibit A, and shall upon issue, be executed and delivered by the Transferor to the Trustee for authentication and redelivery as provided in Section 6.2. Unless otherwise specified in the applicable Participation Supplement, each Participation shall be uncertificated. Each Supplemental Certificate shall be either issued in registered form or shall be uncertificated, in either case as specified in the applicable Supplement. Except as otherwise provided in Section 6.3 or in any Supplement, Bearer Certificates shall be issued in minimum denominations of $5,000 and Registered Certificates shall be issued in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof and shall be subject to the terms specified in the applicable Supplement. If specified in any Supplement, the Investor Certificates of any Series or Class shall be issued upon initial issuance as a single certificate evidencing the aggregate original principal amount of such Series or Class as described in Section 6.13. The Transferor Certificate shall initially be a single certificate and shall initially represent the entire Transferor's Interest. Each Certificate shall be executed by manual or facsimile signature on behalf of the Transferor by its President or any Vice President. Certificates bearing the manual or facsimile signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of the Transferor shall not be rendered invalid, notwithstanding that such individual ceased to be so authorized prior to the authentication and delivery of such Certificates or does not hold such office at the date of such Certificates. No Certificates shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by the manual signature of a duly authorized signatory, and such certificate of authentication upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. Bearer Certificates shall be dated the Closing Date. All Registered Certificates and the Transferor Certificate shall be dated the date of their authentication. Section 6.2. Authentication of Certificates. The Trustee shall authenticate and deliver the Investor Certificates of each Series and Class that are issued upon original issuance to or upon the order of the Transferor against payment to the Transferor of the purchase price therefor. The Trustee shall authenticate and deliver the Transferor Certificate to the Transferor simultaneously with its delivery of the Investor Certificates of the first Series to be issued hereunder. If specified in the related Supplement for any Series or Class, the Trustee shall authenticate and deliver outside the United States the Global Certificate that is issued upon original issuance thereof. Section 6.3. New Issuances. (a) The Transferor may from time to time direct the Trustee, on behalf of the Trust, to authenticate one or more new Series of Investor Certificates. The Investor Certificates of all outstanding Series shall be equally and ratably entitled as provided herein to the benefits of this Agreement without preference, priority or distinction, all in accordance with the terms and provisions of this Agreement and the applicable Supplement except, with respect to any Series or Class, as provided in the related Supplement. (b) On or before the Closing Date relating to any new Series, the parties hereto will execute and deliver a Supplement which will specify the Principal Terms of such new Series. The terms of such Supplement may modify or amend the terms of this Agreement solely as applied to such new Series. The obligation of the Trustee to authenticate the Investor Certificates of such new Series and to execute and deliver the related Supplement is subject to the satisfaction of the following conditions; provided, however, that the conditions set forth in clauses (i), (iii), (iv) and (v) below shall not be applicable to the issuance of the first Series of Investor Certificates: (i) on or before the fifth Business Day immediately preceding the Closing Date, the Transferor shall have given the Trustee, the Servicer, each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement notice of such issuance and the Closing Date; (ii) the Transferor shall have delivered to the Trustee the related Supplement, executed by each party hereto other than the Trustee; (iii) the Transferor shall have delivered to the Trustee any related Enhancement Agreement executed by each of the parties thereto, other than the Trustee; (iv) the Rating Agency Condition shall have been satisfied with respect to such issuance; (v) the Transferor shall have delivered to the Trustee and any Enhancement Provider entitled thereto pursuant to the relevant Supplement an Officer's Certificate, dated the Series Issuance Date, to the effect that the Transferor reasonably believes that such issuance will not, based on the facts known to such officer at the time of such certification, then or thereafter cause an Early Amortization Event to occur with respect to any Series; (vi) the Transferor shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the Closing Date, with respect to such issuance; and (vii) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) shall not be less than the Required Retained Transferor Amount, as of the Closing Date and after giving effect to such issuance. Upon satisfaction of the above conditions, the Trustee shall execute the Supplement and authenticate the Investor Certificates of such Series upon execution thereof by the Transferor. (c) The Transferor may surrender the Transferor Certificate to the Trustee in exchange for a newly issued Transferor Certificate and one or more additional certificates (each, a "Supplemental Certificate"), the terms of which shall be defined in a Supplement (which Supplement shall be subject to subsection 13.1(a) to the extent that it amends any of the terms of this Agreement), to be delivered to or upon the order of the Transferor (or the Holder of a Supplemental Certificate, in the case of the transfer or exchange thereof, as provided below), upon satisfaction of the following conditions: (i) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) shall not be less than the Required Retained Transferor Amount, as of the date of, and after giving effect to, such exchange; (ii) the Rating Agency Condition shall have been satisfied with respect to such exchange (or transfer or exchange as provided below); and (iii) the Transferor shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the date of such exchange (or transfer or exchange as provided below), with respect thereto. Any Supplemental Certificate may be transferred or exchanged only upon satisfaction of the conditions set forth in clauses (ii) and (iii) above. (d) The Transferor Certificate (or any interest therein) may be transferred to a Person which is a member of the "affiliated group" as defined in Code Section 1504(a) of which Retailers National Bank is a member without the consent or approval of the Holders of the Investor Certificates, provided that (i) the Rating Agency Condition shall have been satisfied with respect to such transfer, (ii) the Transferor shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the date of such transfer, with respect thereto, and (iii) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) shall not be less than the Required Retained Transferor Amount. In connection with any such transfer, the Person to whom the Transferor Certificate is transferred will, by its acquisition and holding of an interest in the Transferor Certificate, assume all of the rights and obligations of the Transferor as described in this Agreement and in any Supplement or amendment thereto (including the right under this paragraph (d) with respect to subsequent transfers of an interest in the Transferor Certificate). (e) The Transferor may direct the Trustee to issue on behalf of the Trust one or more participations (each, a "Participation"), the terms of which shall be defined in a Participation Supplement (which Participation Supplement shall be subject to subsection 13.1(a) to the extent that it amends any of the terms of this Agreement), to be delivered to or upon the order of the Transferor upon satisfaction of the following conditions: (i) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) shall not be less than the Required Retained Transferor Amount, as of the date of, and after giving effect to, such exchange; (ii) the Rating Agency Condition shall have been satisfied with respect to such issuance (or transfer as provided below); and (iii) the Transferor shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the date of such issuance (or transfer as provided below), with respect thereto. Any Participation may be transferred or exchanged only upon satisfaction of the conditions set forth in clauses (ii) and (iii) above. Notwithstanding the foregoing, on the Closing Date, the Transferor shall issue to Retailers National Bank a Participation with respect to which the conditions above need not be specifically satisfied. The Trustee, at the direction of the Transferor, may agree to extend the term of any Participation. Any payments made by the holder of any Participation and received by the Trustee with respect to the purchase of any Participation or the increase in the principal amount of the Participation shall be treated as Collections of Principal Receivables pursuant to Section 4.4. Section 6.4. Registration of Transfer and Exchange of Certificates. (a) The Trustee shall cause to be kept at the office or agency to be maintained in accordance with the provisions of Section 11.16 a register (the "Certificate Register") in which, subject to such reasonable regulations as it may prescribe, a transfer agent and registrar (which may be the Trustee) (the "Transfer Agent and Registrar") shall provide for the registration of the Registered Certificates and of transfers and exchanges of the Registered Certificates as herein provided. The Transfer Agent and Registrar shall initially be Norwest Bank Minnesota, National Association, and any co-transfer agent and co-registrar chosen by the Transferor and acceptable to the Trustee, including, if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange shall so require, a co-transfer agent and co-registrar in Luxembourg. So long as any Investor Certificates are outstanding, the Transferor shall maintain a co-transfer agent and co-registrar in New York City. Any reference in this Agreement to the Transfer Agent and Registrar shall include any co-transfer agent and co-registrar unless the context requires otherwise. The Trustee may revoke such appointment and remove any Transfer Agent and Registrar if the Trustee determines in its sole discretion that such Transfer Agent and Registrar failed to perform its obligations under this Agreement in any material respect. Any Transfer Agent and Registrar shall be permitted to resign as Transfer Agent and Registrar upon 30 days' notice to the Transferor, the Trustee and the Servicer; provided, however, that such resignation shall not be effective and such Transfer Agent and Registrar shall continue to perform its duties as Transfer Agent and Registrar until the Trustee has appointed a successor Transfer Agent and Registrar reasonably acceptable to the Transferor. Subject to paragraph (c) below, upon surrender for registration of transfer of any Registered Certificate at any office or agency of the Transfer Agent and Registrar maintained for such purpose, one or more new Registered Certificates (of the same Series and Class) in authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest shall be executed, authenticated and delivered, in the name of the designated transferee or transferees. At the option of a Registered Certificateholder, Registered Certificates (of the same Series and Class) may be exchanged for other Registered Certificates of authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest, upon surrender of the Registered Certificates to be exchanged at any such office or agency; Registered Certificates, including Registered Certificates received in exchange for Bearer Certificates, may not be exchanged for Bearer Certificates. At the option of the Holder of a Bearer Certificate, subject to applicable laws and regulations, Bearer Certificates may be exchanged for other Bearer Certificates or Registered Certificates (of the same Series and Class) of authorized denominations of like aggregate fractional undivided interests in the Certificateholders' Interest, upon surrender of the Bearer Certificates to be exchanged at an office or agency of the Transfer Agent and Registrar located outside the United States. Each Bearer Certificate surrendered pursuant to this Section 6.4 shall have attached thereto all unmatured Coupons; provided that any Bearer Certificate, so surrendered after the close of business on the Record Date preceding the relevant payment date or distribution date after the expected final payment date need not have attached the Coupon relating to such payment date or distribution date (in each case, as specified in the applicable Supplement). Whenever any Investor Certificates are so surrendered for exchange, the Transferor shall execute, the Trustee shall authenticate and the Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates, outside the United States) the Investor Certificates which the Investor Certificateholder making the exchange is entitled to receive. Every Investor Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in a form satisfactory to the Trustee or the Transfer Agent and Registrar duly executed by the Investor Certificateholder or the attorney-in-fact thereof duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Investor Certificates, but the Transfer Agent and Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such transfer or exchange. All Investor Certificates (together with any Coupons) surrendered for registration of transfer and exchange or for payment shall be canceled and disposed of in a manner satisfactory to the Trustee. The Trustee shall cancel and destroy any Global Certificate upon its exchange in full for Definitive Euro-Certificates and shall deliver a certificate of destruction to the Transferor. Such certificate shall also state that a certificate or certificates of a foreign Clearing Agency to the effect referred to in Section 6.13 was received with respect to each portion of the Global Certificate exchanged for Definitive Euro-Certificates. The Transferor shall execute and deliver to the Trustee Bearer Certificates and Registered Certificates in such amounts and at such times as are necessary to enable the Trustee to fulfill its responsibilities under this Agreement, each Supplement and the Certificates. (b) The Transfer Agent and Registrar will maintain at its expense in the City of New York and, if and so long as any Series or Class is listed on the Luxembourg Stock Exchange, Luxembourg, an office or agency where Investor Certificates may be surrendered for registration of transfer or exchange (except that Bearer Certificates may not be surrendered for exchange at any such office or agency in the United States). (c) (i) Registration of transfer of Investor Certificates containing (x) a legend substantially to the effect set forth on Exhibit E-1-A shall be effected only if such transfer is made pursuant to an effective registration statement under the Act or is exempt from the registration requirements under the Act and (y) a legend substantially to the effect set forth on Exhibit E-1-B shall be effected only if such transfer is made to a Person that is not (1) an employee benefit plan or other plan, trust or account (including an individual retirement account) that is subject to ERISA or Section 4975 of the Code or (2) any collective investment fund, insurance company separate or general account or other entity (except an entity registered under the Investment Company Act) whose underlying assets include "plan assets" under ERISA by reason of a plan's investment in such entity (a "Benefit Plan"). In the event that registration of a transfer is to be made in reliance upon an exemption from the registration requirements under the Act, the transferor or the transferee shall deliver, at its expense, to the Transferor, the Servicer and the Trustee, an investment letter from the transferee, substantially in the form of the investment representation letter attached hereto as Exhibit E-2, and no registration of transfer shall be made until such letter is so delivered. Investor Certificates issued upon registration or transfer of, or Investor Certificates issued in exchange for, Investor Certificates bearing the legend referred to above shall also bear such legend unless the Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar receive an Opinion of Counsel, satisfactory to each of them, to the effect that such legend may be removed. Whenever an Investor Certificate containing the legend referred to above is presented to the Transfer Agent and Registrar for registration of transfer, the Transfer Agent and Registrar shall promptly seek instructions from the Servicer regarding such transfer and shall be entitled to receive instructions signed by a Servicing Officer prior to registering any such transfer. The Transferor hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and to hold each of them harmless against any loss, liability or expense incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by them in relation to any such instructions furnished pursuant to this clause (i). (ii) Registration of transfer of Investor Certificates containing a legend to the effect set forth on Exhibit E-3 shall be effected only if such transfer is made to a Person which is not a Benefit Plan. By accepting and holding any such Investor Certificate, an Investor Certificateholder shall be deemed to have represented and warranted that it is not a Benefit Plan. By acquiring any interest in a Book-Entry Certificate which contains such legend, a Certificate Owner shall be deemed to have represented and warranted that it is not a Benefit Plan. (iii) If so requested by the Transferor, the Trustee will make available to any prospective purchaser of Investor Certificates who so requests, a copy of a letter provided to the Trustee by or on behalf of the Transferor relating to the transferability of any Series or Class to a Benefit Plan. Section 6.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated Certificate (together, in the case of Bearer Certificates, with all unmatured Coupons (if any) appertaining thereto) is surrendered to the Transfer Agent and Registrar, or the Transfer Agent and Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there is delivered to the Transfer Agent and Registrar and the Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee that such Certificate has been acquired by a bona fide purchaser, the Transferor shall execute, the Trustee shall authenticate and the Transfer Agent and Registrar shall deliver (in the case of Bearer Certificates, outside the United States), in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and aggregate fractional undivided interest. In connection with the issuance of any new Certificate under this Section 6.5, the Trustee or the Transfer Agent and Registrar may require the payment by the Certificateholder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and Transfer Agent and Registrar) connected therewith. Any duplicate Certificate issued pursuant to this Section 6.5 shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. Section 6.6. Persons Deemed Owners. The Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of any of these may (a) prior to due presentation of a Registered Certificate for registration of transfer, treat the Person in whose name any Registered Certificate is registered as the owner of such Registered Certificate for the purpose of receiving distributions pursuant to the terms of the applicable Supplement and for all other purposes whatsoever, and (b) treat the bearer of a Bearer Certificate or Coupon as the owner of such Bearer Certificate or Coupon for the purpose of receiving distributions pursuant to the terms of the applicable Supplement and for all other purposes whatsoever; and, in any such case, neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any agent of any of them shall be affected by any notice to the contrary. Notwithstanding the foregoing, in determining whether the Holders of the requisite Investor Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Certificates owned by the Transferor, the Servicer, any other Holder of the Transferor Certificate, the Trustee or any Affiliate thereof, shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Certificates which the Trustee actually knows to be so owned shall be so disregarded. Certificates so owned which have been pledged in good faith shall not be disregarded and may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Certificates and that the pledgee is not the Transferor, the Servicer, any other Holder of the Transferor Certificate or any Affiliate thereof. Section 6.7. Appointment of Paying Agent. The Paying Agent shall make distributions to Investor Certificateholders from the Collection Account or any applicable Series Account pursuant to the provisions of the applicable Supplement and shall report the amounts of such distributions to the Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Collection Account or any applicable Series Account for the purpose of making the distributions referred to above. The Trustee may revoke such power and remove the Paying Agent if the Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement or any Supplement in any material respect. The Paying Agent shall initially be Norwest Bank Minnesota, National Association, and any co- paying agent chosen by the Transferor and acceptable to the Trustee, including, if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange so requires, a co-paying agent in Luxembourg or another western European city. Any Paying Agent shall be permitted to resign as Paying Agent upon 30 days' notice to the Trustee. In the event that any Paying Agent shall resign, the Trustee shall appoint a successor to act as Paying Agent. The Trustee shall cause each successor or additional Paying Agent to execute and deliver to the Trustee an instrument in which such successor or additional Paying Agent shall agree with the Trustee that it will hold all sums, if any, held by it for payment to the Investor Certificateholders in trust for the benefit of the Investor Certificateholders entitled thereto until such sums shall be paid to such Investor Certificateholders. The Paying Agent shall return all unclaimed funds to the Trustee and upon removal shall also return all funds in its possession to the Trustee. The provisions of Sections 11.1, 11.2, 11.3 and 11.5 shall apply to the Trustee also in its role as Paying Agent, for so long as the Trustee shall act as Paying Agent. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Section 6.8. Access to List of Registered Certificateholders' Names and Addresses. The Trustee will furnish or cause to be furnished by the Transfer Agent and Registrar to the Servicer or the Paying Agent, within five Business Days after receipt by the Trustee of a request therefor, a list in such form as the Servicer or the Paying Agent may reasonably require, of the names and addresses of the Registered Certificateholders. If any Holder or group of Holders of Investor Certificates of any Series or all outstanding Series, as the case may be, evidencing not less than 10% of the aggregate unpaid principal amount of such Series or all outstanding Series, as applicable (the "Applicants"), apply to the Trustee, and such application states that the Applicants desire to communicate with other Investor Certificateholders with respect to their rights under this Agreement or any Supplement or under the Investor Certificates and is accompanied by a copy of the communication which such Applicants propose to transmit, then the Trustee, after having been adequately indemnified by such Applicants for its costs and expenses shall afford or shall cause the Transfer Agent and Registrar to afford such Applicants access during normal business hours to the most recent list of Registered Certificateholders of such Series or all outstanding Series, as applicable, held by the Trustee, within five Business Days after the receipt of such application. Such list shall be as of a date no more than 45 days prior to the date of receipt of such Applicants' request. Every Registered Certificateholder, by receiving and holding a Registered Certificate, agrees with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor any of their respective agents, shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Registered Certificateholders hereunder, regardless of the sources from which such information was derived. Section 6.9. Authenticating Agent. (a) The Trustee may appoint one or more authenticating agents with respect to the Certificates which shall be authorized to act on behalf of the Trustee in authenticating the Certificates in connection with the issuance, delivery, registration of transfer, exchange or repayment of the Certificates. Whenever reference is made in this Agreement to the authentication of Certificates by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication on behalf of the Trustee by an authenticating agent and certificate of authentication executed on behalf of the Trustee by an authenticating agent. Each authenticating agent must be acceptable to the Transferor and the Servicer. (b) Any institution succeeding to the corporate agency business of an authenticating agent shall continue to be an authenticating agent without the execution or filing of any power or any further act on the part of the Trustee or such authenticating agent. An authenticating agent may at any time resign by giving notice of resignation to the Trustee and to the Transferor. The Trustee may at any time terminate the agency of an authenticating agent by giving notice of termination to such authenticating agent and to the Transferor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an authenticating agent shall cease to be acceptable to the Trustee or the Transferor, the Trustee promptly may appoint a successor authenticating agent. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an authenticating agent. No successor authenticating agent shall be appointed unless acceptable to the Trustee and the Transferor. The Transferor agrees to pay to each authenticating agent from time to time reasonable compensation for its services under this Section 6.9. The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable to any authenticating agent. (c) Pursuant to an appointment made under this Section 6.9, the Certificates may have endorsed thereon, in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Certificates described in the Amended and Restated Pooling and Servicing Agreement. ------------------------------------ ------------------------------------ as Authenticating Agent for the Trustee, By:--------------------------------- Authorized Officer Section 6.10. Book-Entry Certificates. Unless otherwise specified in the related Supplement for any Series or Class, the Investor Certificates, upon original issuance, shall be issued in the form of one or more typewritten Investor Certificates representing the Book-Entry Certificates, to be delivered to the Clearing Agency, by, or on behalf of, the Transferor. The Investor Certificates shall initially be registered on the Certificate Register in the name of the Clearing Agency or its nominee, and no Certificate Owner will receive a definitive certificate representing such Certificate Owner's interest in the Investor Certificates, except as provided in Section 6.12. Unless and until definitive, fully registered Investor Certificates ("Definitive Certificates") have been issued to the applicable Certificate Owners pursuant to Section 6.12 or as otherwise specified in any such Supplement: (a) the provisions of this Section 6.10 shall be in full force and effect; (b) the Transferor, the Servicer and the Trustee may deal with the Clearing Agency and the Clearing Agency Participants for all purposes (including the making of distributions) as the authorized representatives of the respective Certificate Owners; (c) to the extent that the provisions of this Section conflict with any other provisions of this Agreement, the provisions of this Section 6.10 shall control; and (d) the rights of the respective Certificate Owners shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by law and agreements between such Certificate Owners and the Clearing Agency or the Clearing Agency Participants. Pursuant to the Depository Agreement, unless and until Definitive Certificates are issued pursuant to Section 6.12, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal and interest on the related Investor Certificates to such Clearing Agency Participants. For purposes of any provision of this Agreement requiring or permitting actions with the consent of, or at the direction of, Investor Certificateholders evidencing a specified percentage of the aggregate unpaid principal amount of Investor Certificates, such direction or consent may be given by Certificate Owners (acting through the Clearing Agency and the Clearing Agency Participants) owning Investor Certificates evidencing the requisite percentage of principal amount of Investor Certificates. Section 6.11. Notices to Clearing Agency. Whenever any notice or other communication is required to be given to Investor Certificateholders of any Series or Class with respect to which Book-Entry Certificates have been issued, unless and until Definitive Certificates shall have been issued to the related Certificate Owners, the Trustee shall give all such notices and communications to the applicable Clearing Agency. Section 6.12. Definitive Certificates. If Book- Entry Certificates have been issued with respect to any Series or Class and (a) the Transferor advises the Trustee that the Clearing Agency is no longer willing or able to discharge properly its responsibilities under the Depository Agreement with respect to such Series or Class and the Trustee or the Transferor is unable to engage a qualified successor, (b) the Transferor, at its option, advises the Trustee that it elects to terminate the book-entry system with respect to such Series or Class through the Clearing Agency or (c) after the occurrence of a Servicer Default, Certificate Owners of such Series or Class evidencing not less than 50% of the aggregate unpaid principal amount of such Series or Class advise the Trustee and the Clearing Agency through the Clearing Agency Participants that the continuation of a book-entry system with respect to the Investor Certificates of such Series or Class through the Clearing Agency is no longer in the best interests of the Certificate Owners with respect to such Certificates, then the Trustee shall notify all Certificate Owners of such Certificates, through the Clearing Agency, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Trustee of any such Certificates by the Clearing Agency, accompanied by registration instructions from the Clearing Agency for registration, the Transferor shall execute and the Trustee shall authenticate and deliver such Definitive Certificates. Neither the Transferor nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of such Definitive Certificates all references herein to obligations imposed upon or to be performed by the Clearing Agency shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such Definitive Certificates and the Trustee shall recognize the Holders of such Definitive Certificates as Investor Certificateholders hereunder. Section 6.13. Global Certificate. If specified in the related Supplement for any Series, or Class, the Investor Certificates for such Series or Class will initially be issued in the form of a single temporary global Certificate (the "Global Certificate") in bearer form, without interest coupons, in the denomination of the aggregate principal amount of such Series or Class and substantially in the form set forth in the exhibit with respect thereto attached to the related Supplement. The Global Certificate will be executed by the Transferor and authenticated by the Trustee upon the same conditions, in substantially the same manner and with the same effect as the Definitive Certificates. The Global Certificate may be exchanged for Bearer or Registered Certificates in definitive form (the "Definitive EuroCertificates") pursuant to the terms of any applicable Supplement. Section 6.14. Uncertificated Classes. Notwithstanding anything to the contrary contained in this Article VI or in Article XII, unless otherwise specified in any Supplement, any provisions contained in this Article VI and in Article XII relating to the registration, form, execution, authentication, delivery, presentation, cancellation and surrender of Certificates shall not be applicable to any uncertificated Certificates. ARTICLE VII Other Matters Relating to the Transferor Section 7.1. Liability of the Transferor. The Transferor shall be liable in all respects for the obligations, covenants, representations and warranties of the Transferor arising under or related to this Agreement or any Supplement. The Transferor shall be liable only to the extent of the obligations specifically undertaken by it in its capacity as Transferor. Section 7.2. Merger or Consolidation of, or Assumption of the Obligations of, the Transferor. (a) The Transferor shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person unless: (i)(x) the business entity formed by such consolidation or into which the Transferor is merged or the Person which acquires by conveyance or transfer the properties and assets of the Transferor substantially as an entirety shall be, if the Transferor is not the surviving entity, organized and existing under the laws of the United States of America or any state or the District of Columbia, and, if the Transferor is not the surviving entity, such business entity shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the performance of every covenant and obligation of the Transferor hereunder, including its obligations under Section 7.4; (y) the Transferor has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section 7.2, that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (ii) the Rating Agency Condition shall have been satisfied with respect to such consolidation, merger, conveyance or transfer; (iii) the Transferor shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated the date of such consolidation, merger, conveyance or transfer, with respect thereto; (iv) in connection with any merger or consolidation, the business entity into which the Transferor shall merge or consolidate shall be (x) a business entity that is not subject to Title 11 of the United States Code or (y) a special-purpose corporation, the powers and activities of which shall be limited to the performance of the Transferor's obligations under this Agreement, any Supplement and the Receivables Purchase Agreement; and (v) if the Transferor is not the surviving entity, the surviving entity shall file new UCC-1 financing statements with respect to the interest of the Trust in the Receivables. (b) The obligations of the Transferor hereunder shall not be assignable nor shall any Person succeed to the obligations of the Transferor hereunder except in each case in accordance with (i) the provisions of the foregoing paragraph, (ii) Sections 2.12 or 6.3(d), or (iii) conveyances, mergers, consolidations, assumptions, sales or transfers to other entities (1) for which the Transferor delivers an Officer's Certificate to the Trustee indicating that the Transferor reasonably believes that such action will not adversely affect in any material respect the interests of any Investor Certificateholder, (2) which meet the requirements of clause (ii) of the preceding paragraph and (3) for which such purchaser, transferee, pledgee or entity shall expressly assume, in an agreement supplemental hereto, executed and delivered to the Trustee in writing in form satisfactory to the Trustee, the performance of every covenant and obligation of the Transferor thereby conveyed. (c) This Section 7.2 shall not be construed to prohibit or in any way limit the Transferor's ability to effectuate any consolidation or merger pursuant to which the Transferor would be the surviving entity. Section 7.3. Limitations on Liability of the Transferor. Subject to Sections 7.1 and 7.4, neither the Transferor, any Holder of the Transferor Certificate nor any of the directors, officers, employees or agents of the Transferor acting in such capacities shall be under any liability to the Trust, the Trustee, the Certificateholders, any Enhancement Provider or any other Person for any action taken or for refraining from the taking of any action in good faith in their capacities as Transferor pursuant to this Agreement; provided, however, that this provision shall not protect the Transferor, any Holder of the Transferor Certificate or any such Person against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Transferor and any director, officer, employee or agent of the Transferor may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Transferor) respecting any matters arising hereunder. Section 7.4. Liabilities. (a) Notwithstanding Section 7.3 (and notwithstanding Sections 8.3 and 8.4), the Transferor by entering into this Agreement, and any Holder of any interest in the Transferor Certificate (excluding, unless otherwise provided in any Supplement, any Supplemental Certificate and not including, unless otherwise provided in any Participation Supplement, any Participation) by its acceptance thereof, agree to be liable, directly to the injured party, for the entire amount of any losses, claims, damages or liabilities (other than those that would be incurred by an Investor Certificateholder if the Investor Certificates were notes secured by the Receivables, for example, as a result of the performance of the Receivables, market fluctuations, a shortfall or failure to make payment under any Enhancement or other similar market or investment risks associated with ownership of the Investor Certificates) arising out of or based on the arrangement created by this Agreement or the actions of the Servicer taken pursuant hereto (to the extent that, if the Trust Assets at the time the claim is made were used to pay in full all outstanding Certificates of all Series, the Trust Assets that would remain after the Investor Certificateholders and Enhancement Providers, if any, were paid in full would be insufficient to pay any such losses, claims, damages or liabilities) as though this Agreement created a partnership under the Delaware Revised Uniform Partnership Act in which the Transferor and such Holder of the Transferor Certificate were general partners. To the extent provided in Section 8.4, the Servicer will (from its own assets and not from the assets of the Trust) indemnify and hold harmless the Transferor and each Holder of the Transferor Certificate against and from certain losses, claims, damages and liabilities of the Transferor or such Holder as described in this Section 7.4 arising from the actions or omissions of the Servicer. (b) The Transferor shall indemnify and hold harmless the Trustee and its officers, directors, employees and agents, from and against any loss, liability, expense, damage or injury (collectively, a "Loss") suffered or sustained by reason of the acceptance by the Trustee of the Trust pursuant to this Agreement, other than as specified in Section 8.4, including any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any action, proceeding or claim; provided, however, that the Transferor's duty to indemnify under this subsection 7.4(b) shall not extend to any Losses (i) for which the Trustee has a right to indemnification under any other provision of this Agreement, or (ii) that are caused by or result from the breach of contract by, or the fraud, negligence, or willful misconduct of, the Trustee, its employees or its agents. ARTICLE VIII Other Matters Relating to the Servicer Section 8.1. Liability of the Servicer. The Servicer shall be liable under this Agreement only to the extent of the obligations specifically undertaken by the Servicer in its capacity as Servicer. Section 8.2. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer. The Servicer shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless: (a) (i) the corporation formed by such consolidation or into which the Servicer is merged or the Person which acquires by conveyance or transfer the properties and assets of the Servicer substantially as an entirety shall be, if the Servicer is not the surviving entity, a corporation organized and existing under the laws of the United States of America or any state or the District of Columbia, and, if the Servicer is not the surviving entity, such corporation shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the performance of every covenant and obligation of the Servicer hereunder; (ii) the Servicer has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section 8.2, that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; and (iii) either (x) the corporation formed by such consolidation or into which the Servicer is merged or the Person which acquired by conveyance or transfer the properties and assets of the Servicer substantially as an entirety shall be an Eligible Servicer (taking into account, in making such determination, the experience and operations of the predecessor Servicer) or (y) upon the effectiveness of such consolidation, merger, conveyance or transfer, a Successor Servicer shall have assumed the obligations of the Servicer in accordance with this Agreement. (b) This Section 8.2 shall not be construed to prohibit or in any way limit the Servicer's ability to effectuate any consolidation or merger pursuant to which the Servicer would be the surviving entity. (c) The Servicer shall notify each Rating Agency promptly after any consolidation, merger, conveyance or transfer effected pursuant to this Section 8.2. Section 8.3. Limitation on Liability of the Servicer and Others. Except as provided in Sections 8.4 and 11.5, neither the Servicer nor any of the directors, officers, employees or agents of the Servicer in its capacity as Servicer shall be under any liability to the Trust, the Trustee, the Certificateholders, any Enhancement Providers or any other person for any action taken or for refraining from the taking of any action in good faith in its capacity as Servicer pursuant to this Agreement; provided, however, that this provision shall not protect the Servicer or any such Person against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Servicer) respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties as Servicer in accordance with this Agreement and which in its reasonable judgment may involve it in any expense or liability. The Servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of the Certificateholders with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. Section 8.4. Servicer Indemnification of the Trust and the Trustee. The Servicer shall indemnify and hold harmless the Trust and the Trustee and its officers, directors, employees and agents, from and against any loss, liability, expense, damage or injury suffered or sustained by reason of any acts or omissions of the Servicer with respect to the Trust pursuant to this Agreement, including any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any action, proceeding or claim; provided, however, that the Servicer shall not indemnify the Trustee if such acts, omissions or alleged acts or omissions constitute or are caused by fraud, negligence, or willful misconduct by the Trustee; provided, further, that the Servicer shall not indemnify the Trust, the Investor Certificateholders or the Certificate Owners for any liabilities, costs or expenses of the Trust with respect to any action taken by the Trustee at the request of the Investor Certificateholders; provided, further, that the Servicer shall not indemnify the Trust, the Investor Certificateholders or the Certificate Owners as to any losses, claims or damages incurred by any of them in their capacities as investors, including, without limitation, losses with respect to market or investment risks associated with ownership of the Investor Certificates or losses incurred as a result of Defaulted Receivables; and provided, further, that the Servicer shall not indemnify the Trust, the Investor Certificateholders or the Certificate Owners for any liabilities, costs or expenses of the Trust, the Investor Certificateholders or the Certificate Owners arising under any tax law, including, any Federal, state, local or foreign income or franchise taxes or any other tax imposed on or measured by income (or any interest or penalties with respect thereto or arising from a failure to comply therewith) required to be paid by the Trust, the Investor Certificateholders or the Certificate Owners in connection herewith to any taxing authority. Indemnification pursuant to this Section 8.4 shall not be payable from the Trust Assets. The provisions of this indemnity shall run directly to and be enforceable by an indemnitee subject to the limitations hereof. Section 8.5. The Servicer Not To Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except (x) upon the determination that (i) the performance of its duties hereunder is no longer permissible under Requirements of Law (other than the charter and by-laws of the Servicer) and (ii) there is no reasonable action which the Servicer could take to make the performance of its duties hereunder permissible under such Requirements of Law or (y) as may be required, in connection with the Servicer's consolidation with, or merger into any other corporation or the Servicer's conveyance or transfer of its properties and assets substantially as an entirety to any Person in each case, in accordance with Section 8.2. Any determination permitting the resignation of the Servicer pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No resignation shall become effective until the Trustee or a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 10.2. If within 120 days of the date of the determination that the Servicer may no longer act as Servicer, and if the Trustee is unable to appoint a Successor Servicer, the Trustee shall serve as Successor Servicer. Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established institution having a net worth of not less than $50,000,000 and whose regular business includes the servicing of credit card accounts as the Successor Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency and each Enhancement Provider, if any, entitled thereto under the terms of the applicable Supplement upon the appointment of a Successor Servicer. Section 8.6. Access to Certain Documentation and Information Regarding the Receivables. The Servicer shall provide to the Trustee access to the documentation regarding the Accounts and the Receivables in such cases where the Trustee is required in connection with the enforcement of the rights of Certificateholders or by applicable statutes or regulations to review such documentation, such access being afforded without charge but only (a) upon reasonable request, (b) during normal business hours, (c) subject to the Servicer's normal security and confidentiality procedures and (d) at reasonably accessible offices in the continental United States designated by the Servicer. Nothing in this Section 8.6 shall derogate from the obligation of the Credit Card Originator, TCC, the Transferor, the Trustee and the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Servicer to provide access as provided in this Section 8.6 as a result of such obligation shall not constitute a breach of this Section 8.6. Section 8.7. Delegation of Duties. In the ordinary course of business, the Servicer may at any time delegate any duties hereunder to any Person who agrees to conduct such duties in accordance with the Credit Card Guidelines and this Agreement. Any such delegations shall not relieve the Servicer of its liability and responsibility with respect to such duties, and shall not constitute a resignation within the meaning of Section 8.5 and the Servicer will remain jointly and severally liable with such Person for any amounts which would otherwise be payable pursuant to this Article VIII as if the Servicer had performed such duty; provided, however, that in the case of any significant delegation to a Person other than an Affiliate of Retailers National Bank, at least 30 days' prior written notice shall be given to the Trustee, each Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement, of such delegation to any entity that is not an Affiliate of the Servicer. Section 8.8. Examination of Records. To the extent required pursuant to Section 2.1, the Transferor and the Servicer shall clearly and unambiguously indicate in their computer files or other records that the Receivables arising in the Accounts have been conveyed to the Trustee, on behalf of the Trust, pursuant to this Agreement for the benefit of the Certificateholders. From and after the date the actions referred to in the preceding sentence are required to be taken, the Transferor and the Servicer shall, prior to the sale or transfer to a third party of any receivable held in its custody, examine its computer and other records to determine that such receivable is not a Receivable. ARTICLE IX Early Amortization Events Section 9.1. Early Amortization Events. If any one of the following events (each, an "Early Amortization Event") shall occur with respect to any Series: (a) Retailers National Bank, TCC, the Transferor or any Holder of the Transferor Certificate shall fail generally to, or admit in writing its inability to, pay its debts as they become due or makes an assignment for the benefit of its creditors; or a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of Retailers National Bank, TCC, the Transferor or any Holder of the Transferor Certificate in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for any substantial part of its property, or for the winding-up or liquidation, dissolution, reorganization or readjustment of its affairs or similar relief and, if instituted against the Transferor or any Holder of the Transferor Certificate, any such proceeding shall continue undismissed or unstayed and in effect, for a period of 60 consecutive days, or any of the actions sought in such proceeding shall occur; or the commencement by Retailers National Bank, TCC, the Transferor or any Holder of the Transferor Certificate, of a voluntary case under any Debtor Relief Law, or such Person's seeking, consenting or acquiescing to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or seeking, consenting or acquiescing to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for any substantial part of its property, or any general assignment for the benefit of creditors; or such Person or any subsidiary of such Person shall have taken any corporate action in furtherance of any of the foregoing actions (any such event, an "Insolvency Event"); (b) the Trust shall become an "investment company" within the meaning of the Investment Company Act; (c) the Transferor Amount (excluding the interest represented by any Supplemental Certificate) shall be less than the Required Retained Transferor Amount; or (d) the Transferor shall become unable for any reason to transfer Receivables to the Trust pursuant to this Agreement; then in the case of any such event, an Early Amortization Event shall occur with respect to such Series without any notice or other action on the part of the Trustee or the Investor Certificateholders, immediately upon the occurrence of such event. Section 9.2. Additional Rights upon the Occurrence of Certain Events. If an Insolvency Event occurs with respect to the Transferor (excluding any Supplemental Certificate), or the event set forth in subsection 9.1(c) shall occur, the Transferor shall on the day any such event occurs, immediately cease to transfer Principal Receivables, or interests in Principal Receivables represented by any Participation Interests to the Trust and shall promptly give notice to the Trustee thereof. Notwithstanding any cessation of the transfer to the Trust of additional Principal Receivables or any Participation Interests, Principal Receivables or any Participation Interests transferred to the Trust prior to the occurrence of such Insolvency Event and Collections in respect of such Principal Receivables and Participation Interests, and Finance Charge Receivables whenever created accrued in respect of such Principal Receivables, shall continue to be a part of the Trust. ARTICLE X Servicer Defaults Section 10.1. Servicer Defaults. If any one of the following events (a "Servicer Default") shall occur and be continuing: (a) any failure by the Servicer to make any payment, transfer or deposit or to give instructions or notice to the Trustee pursuant to the terms of this Agreement or any Supplement on or before the date occurring five Business Days after the date such payment, transfer or deposit or such instruction or notice is required to be made or given, as the case may be, under the terms of this Agreement or any Supplement; (b) failure on the part of the Servicer to duly observe or perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or any Supplement which has a material adverse effect on the interests hereunder of the Investor Certificateholders of any Series or Class (which determination shall be made without regard to whether funds are then available pursuant to any Enhancement) and which continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by Holders of Investor Certificates evidencing not less than 25% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such failure that does not relate to all Series, 25% of the aggregate unpaid principal amount of all Series to which such failure relates); the Servicer shall delegate its duties under this Agreement, except as permitted by Sections 8.2 and 8.7, a Responsible Officer of the Trustee has actual knowledge of such delegation and such delegation continues unremedied for 15 days after the date on which written notice thereof, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by Holders of Investor Certificates evidencing not less than 25% of the aggregate unpaid principal amount of all Investor Certificates; (c) any representation, warranty or certification made by the Servicer in this Agreement or any Supplement or in any certificate delivered pursuant to this Agreement or any Supplement shall prove to have been incorrect when made, which has a material adverse effect on the rights of the Investor Certificateholders of any Series or Class (which determination shall be made without regard to whether funds are then available pursuant to any Enhancement) and which continues to be incorrect in any material respect for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of Investor Certificates evidencing not less than 25% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such representation, warranty or certification that does not relate to all Series, 25% of the aggregate unpaid principal amount of all Series to which such representation, warranty or certification relates); or (d) the Servicer shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of the Servicer in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for any substantial part of its property, or for the winding-up or liquidation of its affairs and, if instituted against the Servicer, any such proceeding shall continue undismissed or unstayed and in effect, for a period of 60 consecutive days, or any of the actions sought in such proceeding shall occur; or the commencement by the Servicer, of a voluntary case under any Debtor Relief Law, or such Person's consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or for any substantial part of its property, or any general assignment for the benefit of creditors; or such Person or any subsidiary of such Person shall have taken any corporate action in furtherance of any of the foregoing actions; then, in the event of any Servicer Default, so long as the Servicer Default shall not have been remedied, either the Trustee or the Holders of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of all Investor Certificates, by notice given to the Servicer (and to the Trustee and any Enhancement Provider entitled thereto pursuant to the relevant Supplement if given by the Investor Certificateholders) (a "Termination Notice"), may terminate all but not less than all the rights and obligations of the Servicer, as Servicer, under this Agreement and in and to the Receivables and the proceeds thereof; provided, however, if within 60 days of receipt of a Termination Notice the Trustee is unable to obtain any bids from Eligible Servicers in accordance with subsection 10.2(c) to act as a Successor Servicer and receives an Officer's Certificate of the Servicer to the effect that the Servicer cannot in good faith cure the Servicer Default which gave rise to the Termination Notice, the Trustee shall offer the Transferor the right at its option to purchase the Certificateholders' Interest and the interest in the Trust Assets represented by any Participation on the Distribution Date occurring in the next calendar month. The purchase price for the Certificateholders' Interest shall be equal to the sum of the amounts specified therefor with respect to each outstanding Series in the related Supplement. The Transferor shall notify the Trustee prior to the Record Date for the related Distribution Date of the purchase if it is exercising such option. If it exercises such option, the Transferor shall (x) deliver to the Trustee an Opinion of Counsel (which must be an independent outside counsel) to the effect that, in reliance on certain certificates to the effect that the Receivables constitute fair value for consideration paid therefor and as to the solvency of the Transferor, the purchase would not be considered a fraudulent conveyance and (y) deposit the purchase price into the Collection Account not later than 12:00 noon, New York City time, on such Distribution Date in immediately available funds. The purchase price shall be allocated and distributed to Investor Certificateholders in accordance with Article IV and the terms of each Supplement. After receipt by the Servicer of such Termination Notice, and on the date that a Successor Servicer shall have been appointed by the Trustee pursuant to Section 10.2, all authority and power of the Servicer under this Agreement shall pass to and be vested in the Successor Servicer (a "Service Transfer"); and, without limitation, the Trustee is hereby authorized and empowered (upon the failure of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon the failure of the Servicer to execute or deliver such documents or instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with the Trustee and the Successor Servicer in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing hereunder including, without limitation, the transfer to the Successor Servicer of all authority of the Servicer to service the Receivables provided for under this Agreement, including, without limitation, all authority over all Collections which shall on the date of transfer be held by the Servicer for deposit, or which have been deposited by the Servicer, in the Collection Account, or which shall thereafter be received with respect to the Receivables, and in assisting the Successor Servicer and in enforcing all rights to Insurance Proceeds. The Servicer shall promptly transfer its electronic records relating to the Receivables to the Successor Servicer in such electronic form as the Successor Servicer may reasonably request and shall promptly transfer to the Successor Servicer all other records, correspondence and documents necessary for the continued servicing of the Receivables in the manner and at such times as the Successor Servicer shall reasonably request. To the extent that compliance with this Section 10.1 shall require the Servicer to disclose to the Successor Servicer information of any kind which the Servicer reasonably deems to be confidential, the Successor Servicer shall be required to enter into such customary licensing and confidentiality agreements as the Servicer shall deem appropriate to protect its interests. Notwithstanding the foregoing, any delay in or failure of performance under subsection 10.1(a) for a period of five Business Days or under subsection 10.1(b) or (c) for a period of 60 days (in addition to any period provided in subsection 10.1(a), (b) or (c)) shall not constitute a Servicer Default until the expiration of such additional five Business Days or 60 days, respectively, if such delay or failure could not be prevented by the exercise of reasonable diligence by the Servicer and such delay or failure was caused by an act of God or the public enemy, acts of declared or undeclared war, public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or similar causes. The preceding sentence shall not relieve the Servicer from the obligation to use its best efforts to perform its obligations in a timely manner in accordance with the terms of this Agreement and any Supplement and the Servicer shall provide the Trustee, each Rating Agency, any Enhancement Provider entitled thereto pursuant to the relevant Supplement, the Holder of the Transferor Certificate and the Investor Certificateholders with an Officer's Certificate giving immediate notice of such failure or delay by it, together with a description of its efforts to so perform its obligations. Section 10.2. Trustee to Act; Appointment of Successor. (a) On and after the receipt by the Servicer of a Termination Notice pursuant to Section 10.1, the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Termination Notice or otherwise specified by the Trustee or until a date mutually agreed upon by the Servicer and the Trustee. The Trustee shall, as promptly as possible after the giving of a Termination Notice, appoint an Eligible Servicer as a successor servicer (the "Successor Servicer"), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Trustee. In the event that a Successor Servicer has not been appointed or has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Trustee without further action shall automatically be appointed the Successor Servicer. The Trustee may delegate any of its servicing obligations to an Affiliate of the Trustee or agent in accordance with Section 3.1(b) and 8.7. Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established institution having a net worth of not less than $50,000,000 and whose regular business includes the servicing of credit card receivables as the Successor Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant to the applicable Supplement upon the appointment of a Successor Servicer. (b) Upon its appointment, the Successor Servicer shall be the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities (except for liabilities arising during the period of time when the prior Servicer was performing and acting as Servicer) relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement to the Servicer shall be deemed to refer to the Successor Servicer. (c) In connection with any Termination Notice, the Trustee will review any bids which it obtains from Eligible Servicers and shall be permitted to appoint any Eligible Servicer submitting such a bid as a Successor Servicer for servicing compensation not in excess of the aggregate Servicing Fees for all Series; provided, however, that the Holder of the Transferor Certificate shall be responsible for payment of the portion of such aggregate Servicing Fees allocable to the Holder of the Transferor Certificate and that no such monthly compensation paid out of Collections shall be in excess of such aggregate Servicing Fees. Each Holder of the Transferor Certificate agrees that, if Retailers National Bank (or any Successor Servicer) is terminated as Servicer hereunder, the portion of the Collections in respect of Finance Charge Receivables that the Holder of the Transferor Certificate is entitled to receive pursuant to this Agreement or any Supplement shall be reduced by an amount sufficient to pay the Holder of the Transferor Certificate share (determined by reference to the Supplements with respect to any outstanding Series) of the compensation of the Successor Servicer. (d) All authority and power granted to the Successor Servicer under this Agreement shall automatically cease and terminate upon termination of the Trust pursuant to Section 12.1 and shall pass to and be vested in the Transferor and, without limitation, the Transferor is hereby authorized and empowered to execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Successor Servicer agrees to cooperate with the Transferor in effecting the termination of the responsibilities and rights of the Successor Servicer to conduct servicing on the Receivables. The Successor Servicer shall transfer its electronic records relating to the Receivables to the Transferor in such electronic form as the Transferor may reasonably request and shall transfer all other records, correspondence and documents to the Transferor in the manner and at such times as the Transferor shall reasonably request. To the extent that compliance with this Section 10.2 shall require the Successor Servicer to disclose to the Transferor information of any kind which the Successor Servicer deems to be confidential, the Transferor shall be required to enter into such customary licensing and confidentiality agreements as the Successor Servicer shall deem appropriate to protect its interests. Section 10.3. Notification to Certificateholders. Within two Business Days after the Servicer becomes aware of any Servicer Default, the Servicer shall give notice thereof to the Trustee, each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement and the Trustee shall give notice to the Investor Certificateholders. Upon any termination or appointment of a Successor Servicer pursuant to this Article X, the Trustee shall give prompt notice thereof to the Investor Certificateholders. ARTICLE XI The Trustee Section 11.1. Duties of Trustee. (a) The Trustee, prior to the occurrence of a Servicer Default and after the curing of all Servicer Defaults which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. If a Servicer Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant to any provision of this Agreement, shall examine them to determine whether they conform on their face to the requirements of this Agreement. The Trustee shall give prompt written notice to the Certificateholders of any material lack of conformity of any such instrument to the applicable requirements of this Agreement discovered by the Trustee which would entitle a specified percentage of the Certificateholders to take any action pursuant to this Agreement. (c) Subject to subsection 11.1(a), no provision of this Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own misconduct; provided, however, that: (i) the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (ii) the Trustee shall not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of Investor Certificates relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Agreement; provided that such direction is delivered by the Holders of Investor Certificates evidencing the percentage of the aggregate unpaid principal amount of Investor Certificates of all Series to which such action relates required for such action by the terms of this Agreement; and (iii) the Trustee shall not be charged with knowledge of any failure by the Servicer referred to in clauses (a) and (b) of Section 10.1 unless a Responsible Officer of the Trustee obtains actual knowledge of such failure or the Trustee receives written notice of such failure from the Servicer, any Holders of Investor Certificates evidencing not less than 25% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such failure that does not relate to all Series, 25% of the aggregate unpaid principal amount of all Investor Certificates of all Series to which such failure relates, or the Enhancement Providers, if any, for all Series to which such failure relates). (d) The Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer under this Agreement except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of this Agreement. (e) The Trustee shall have no power to vary the corpus of the Trust, except as expressly provided in this Agreement. (f) In the event that the Paying Agent or the Transfer Agent and Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or the Transfer Agent and Registrar, as the case may be, under this Agreement, the Trustee shall be obligated as soon as possible upon knowledge of a Responsible Officer thereof and receipt of appropriate records, if any, to perform such obligation, duty or agreement in the manner so required. (g) If the Transferor has agreed to transfer any of its receivables (other than the Receivables) to another Person, upon the written request of the Transferor, the Trustee will enter into such intercreditor agreements with the transferee of such receivables as are customary and necessary to separately identify the rights of the Trust and such other Person in the Transferor's receivables; provided that the Trustee shall not be required to enter into any intercreditor agreement which could adversely affect the interests of the Certificateholders and, upon the request of the Trustee, the Transferor will deliver an Opinion of Counsel on any matters relating to such intercreditor agreement, reasonably requested by the Trustee. Section 11.2. Certain Matters Affecting the Trustee. (a) the Trustee may rely on and shall be protected in acting on, or in refraining from acting in accord with, any resolution, Officer's Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed or presented to it pursuant to this Agreement by the proper party or parties; (b) the Trustee may consult with counsel, and any advice of such counsel, or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any Enhancement Agreement, or to institute, conduct or defend any litigation hereunder or thereunder or in relation to this Agreement or any Enhancement Agreement, at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement or any Enhancement Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligations, upon the occurrence of any Servicer Default (which has not been cured) to exercise such of the rights and powers vested in it by this Agreement, and to use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs; (d) the Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement; (e) the Trustee shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond or other paper or document, unless requested in writing to do so by Holders of Investor Certificates evidencing more than 25% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such matters that do not relate to all Series, 25% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such matters relate); (f) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed with due care by it hereunder; and (g) except as may be required by subsection 11.1(a), the Trustee shall not be required to make any initial or periodic examination of any documents or records related to the Receivables or the Accounts for the purpose of establishing the presence or absence of defects, the compliance by the Transferor with its representations and warranties or for any other purpose. Section 11.3. Trustee Not Liable for Recitals in Certificates. The Trustee assumes no responsibility for the correctness of the recitals contained herein and in the Certificates (other than the certificate of authentication on the Certificates). Except as set forth in Section 11.15, the Trustee makes no representations as to the validity or sufficiency of this Agreement or any Supplement or of the Certificates (other than the certificate of authentication on the Certificates) or of any Receivable or related document. The Trustee shall not be accountable for the use or application by the Transferor of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any funds paid to the Transferor or the Holder of the Transferor Certificate in respect of the Receivables or deposited in or withdrawn from the Collection Account, any Series Accounts or any other accounts hereafter established to effectuate the transactions contemplated by this Agreement and in accordance with the terms of this Agreement. Section 11.4. Trustee May Own Certificates. Subject to Section 6.6, the Trustee in its individual or any other capacity may become the owner or pledgee of Investor Certificates with the same rights as it would have if it were not the Trustee. Section 11.5. The Servicer To Pay Trustee's Fees and Expenses. The Servicer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to receive, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by it in the execution of the trust hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and the Servicer will pay or reimburse the Trustee (without reimbursement from the Collection Account or otherwise) upon its request for all reasonable expenses or disbursements incurred or made by the Trustee in accordance with any of the provisions of this Agreement or any Enhancement Agreement (including the reasonable fees and expenses of its agents, any co-trustee and counsel) except any such expense, disbursement or advance as may arise from its own negligence, willful misconduct or bad faith and except as provided in the following sentence. If the Trustee is appointed Successor Servicer pursuant to Section 10.2, the provisions of this Section 11.5 shall not apply to expenses, disbursements and advances made or incurred by the Trustee in its capacity as Successor Servicer. The obligations of the Servicer under Section 8.4 and this Section 11.5 shall survive the termination of the Trust and the resignation or removal of the Trustee. Section 11.6. Eligibility Requirements for Trustee. The Trustee hereunder shall at all times be a bank, trust company or a corporation organized and doing business under the laws of the United States of America or any state thereof authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authority and maintain any credit or deposit rating required by any Rating Agency (as of the date hereof "Baa3" for Moody's). If such bank or corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section 11.6, the combined capital and surplus of such bank or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 11.6, the Trustee shall resign immediately in the manner and with the effect specified in Section 11.7. Section 11.7. Resignation or Removal of Trustee. (a) The Trustee may at any time resign and be discharged from the trust hereby created by giving written notice thereof to the Servicer. Upon receiving such notice of resignation, the Transferor shall promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee. (b) If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 11.6 and shall fail to resign after written request therefor by the Servicer or the Transferor, or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in which event the Servicer shall remove the Trustee and promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee. (c) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 11.7 shall not become effective until acceptance of appointment by the successor trustee as provided in Section 11.8 and any liability of the Trustee arising hereunder shall survive such appointment of a successor trustee. Section 11.8. Successor Trustee. (a) Any successor trustee appointed as provided in Section 11.7 shall execute, acknowledge and deliver to the Transferor, to the Servicer and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as Trustee herein. The predecessor Trustee shall deliver to the successor trustee all documents and statements held by it hereunder, and the Transferor and the predecessor Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor trustee all such rights, powers, duties and obligations. (b) No successor trustee shall accept appointment as provided in this Section 11.8 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 11.6. (c) Upon acceptance of appointment by a successor trustee as provided in this Section 11.8, such successor trustee shall provide notice of such succession hereunder to all Investor Certificateholders and the Servicer shall provide such notice to each Rating Agency and any Enhancement Provider entitled thereto pursuant to the relevant Supplement. Section 11.9. Merger or Consolidation of Trustee. Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be eligible under the provisions of Section 11.6, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 11.10. Appointment of Co-Trustee or Separate Trustee. (a) Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust may at the time be located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co- trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section 11.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable; provided, however, that the Trustee shall exercise due care in the appointment of any co-trustee. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 11.6 and no notice to Certificateholders of the appointment of any co- trustee or separate trustee shall be required under Section 11.8. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act) except to the extent that under any laws of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Servicer hereunder) the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article XI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee and a copy thereof given to the Servicer. (d) Any separate trustee or co-trustee may at any time constitute the Trustee its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect to this Agreement on its behalf and in its name. If any separate trustee or co- trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. Section 11.11. Tax Return. In the event the Trust shall be required to file tax returns, the Servicer shall prepare or shall cause to be prepared any tax returns required to be filed by the Trust and shall remit such returns to the Trustee for signature (if it is determined that the Trustee is required to sign such returns) at least five days before such returns are due to be filed; the Trustee shall promptly sign such returns and deliver such returns after signature to the Servicer and such returns shall be filed by the Servicer. The Servicer in accordance with the terms of each Supplement shall also prepare or shall cause to be prepared all tax information required by law to be distributed to Investor Certificateholders. The Trustee upon request, will furnish the Servicer with all such information known to the Trustee as may be reasonably required in connection with the preparation of all tax returns of the Trust. In no event shall the Trustee or the Servicer (except as provided in Section 7.4 or 8.4) be liable for any liabilities, costs or expenses of the Trust or the Investor Certificateholders arising under any tax law, including Federal, state, local or foreign income or excise taxes or any other tax imposed or measured by income (or any interest or penalty with respect thereto or arising from a failure to comply therewith). Section 11.12. Trustee May Enforce Claims Without Possession of Certificates. All rights of action and claims under this Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Certificateholders in respect of which such judgment has been obtained. Section 11.13. Suits for Enforcement. If a Servicer Default shall occur and be continuing, the Trustee, in its discretion may, subject to the provisions of Sections 10.1 and 11.14, proceed to protect and enforce its rights and the rights of the Certificateholders under this Agreement by a suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights of the Trustee or the Certificateholders. Section 11.14. Rights of Certificateholders to Direct Trustee. Holders of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any remedy, trust or power that does not relate to all Series, 50% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such remedy, trust or power relates) shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee relating to such proceeding; provided, however, that, subject to Section 11.1, the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Trustee in good faith shall, by a Responsible Officer or Responsible Officers of the Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Certificateholders not parties to such direction; and provided further that nothing in this Agreement shall impair the right of the Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such direction. Section 11.15. Representations and Warranties of Trustee. The Trustee represents and warrants as of each Closing Date that: (a) the Trustee is a national banking association organized, existing and in good standing under the laws of the United States; (b) the Trustee has full power, authority and right to execute, deliver and perform this Agreement and each Supplement, and has taken all necessary action to authorize the execution, delivery and performance by it of this Agreement and each Supplement; and (c) this Agreement and each Supplement has been duly executed and delivered by the Trustee and is a binding obligation of the Trustee enforceable against the Trustee in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity). Section 11.16. Maintenance of Office or Agency. The Trustee will maintain at its expense an office or agency (the "Corporate Trust Office") where notices and demands to or upon the Trustee in respect of the Certificates and this Agreement may be served (a) in the City of New York, in the case of Registered Certificates and Holders thereof, and (b) in London or Luxembourg, in the case of Bearer Certificates and Holders thereof, if and for so long as any Bearer Certificates are outstanding. The corporate trust office of the Trustee (the "Corporate Trust Office") shall initially be located at Norwest Bank Minnesota, National Association, MAC N9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479. The Trustee will give prompt notice to the Servicer and to Investor Certificateholders of any change in the location of the Certificate Register or any such office or agency. Section 11.17. Confidentiality. Information provided by the Credit Card Originator or the Transferor to the Trustee related to the transaction effected hereunder, including all information related to the Obligors with respect to the Receivables, and any computer software provided to the Trustee in connection with the transaction effected hereunder or under any Supplement, in each case whether in the form of documents, reports, lists, tapes, discs or any other form, shall be "Confidential Information." The Trustee and its agents, representatives or employees shall at all times maintain the confidentiality of all Confidential Information and shall not, without the prior written consent of the Credit Card Originator or the Transferor, as applicable, disclose to third parties (including Certificateholders) or use such information, in any manner whatsoever, in whole or in part, except as expressly permitted under this Agreement or under any Supplement or as required to fulfill an obligation of the Trustee under this Agreement or under any Supplement, in which case such Confidential Information shall be revealed only to the extent expressly permitted or only to the Trustee's agents, representatives and employees who need to know such Confidential Information to the extent required for the purpose of fulfilling an obligation of the Trustee under this Agreement or under any Supplement. Notwithstanding the above, Confidential Information may be disclosed to the extent required by law or legal process, provided that the Trustee gives prompt written notice to the Credit Card Originator or the Transferor, as applicable, of the nature and scope of such disclosure. ARTICLE XII Termination Section 12.1. Termination of Trust. The Trust and the respective obligations and responsibilities of the Transferor, the Servicer and the Trustee created hereby (other than the obligation of the Trustee to make payments to Investor Certificateholders as hereinafter set forth) shall terminate, except with respect to the duties described in Sections 7.4, 8.4, 9.2 and 12.2(b), upon the earlier of (i) September 30, 2095 and (ii) the day following the Distribution Date on which the Invested Amount and Enhancement Invested Amount for each Series is zero (provided that the Transferor has delivered a written notice to the Trustee electing to terminate the Trust). Section 12.2. Final Distribution. (a) The Servicer shall give the Trustee at least 30 days' prior notice of the Distribution Date on which the Investor Certificateholders of any Series or Class may surrender their Investor Certificates for payment of the final distribution on and cancellation of such Investor Certificates (or, in the event of a final distribution resulting from the application of Section 2.6 or 10.1, notice of such Distribution Date promptly after the Servicer has determined that a final distribution will occur, if such determination is made less than 30 days prior to such Distribution Date). Such notice shall be accompanied by an Officer's Certificate setting forth the information specified in Section 3.5 covering the period during the then current calendar year through the date of such notice. Not later than the fifth day of the month in which the final distribution in respect of such Series or Class is payable to Investor Certificateholders, the Trustee shall provide notice to Investor Certificateholders of such Series or Class specifying (i) the date upon which final payment of such Series or Class will be made upon presentation and surrender of Investor Certificates of such Series or Class at the office or offices therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such payment date is not applicable, payments being made only upon presentation and surrender of such Investor Certificates at the office or offices therein specified (which, in the case of Bearer Certificates, shall be outside the United States). The Trustee shall give such notice to the Transfer Agent and Registrar and the Paying Agent at the time such notice is given to Investor Certificateholders. (b) Notwithstanding a final distribution to the Investor Certificateholders of any Series or Class (or the termination of the Trust), except as otherwise provided in this paragraph, all funds then on deposit in the Collection Account, the Special Funding Account and any Series Account allocated to such Investor Certificateholders shall continue to be held in trust for the benefit of such Investor Certificateholders and the Paying Agent or the Trustee shall pay such funds to such Investor Certificateholders upon surrender of their Investor Certificates (and any excess shall be paid in accordance with the terms of any relevant Enhancement Agreement). In the event that all such Investor Certificateholders shall not surrender their Investor Certificates for cancellation within six months after the date specified in the notice from the Trustee described in paragraph (a), the Trustee shall give a second notice to the remaining such Investor Certificateholders to surrender their Investor Certificates for cancellation and receive the final distribution with respect thereto (which surrender and payment, in the case of Bearer Certificates, shall be outside the United States). If within one year after the second notice all such Investor Certificates shall not have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining such Investor Certificateholders concerning surrender of their Investor Certificates, and the cost thereof shall be paid out of the funds in the Collection Account or any Series Account held for the benefit of such Investor Certificateholders. The Trustee and the Paying Agent shall pay to the Transferor any monies held by them for the payment of principal or interest that remains unclaimed for two years. After payment to the Transferor, Investor Certificate- holders entitled to the money must look to the Transferor for payment as general creditors unless an applicable abandoned property law designates another Person. (c) In the event that the Invested Amount with respect to any Series is greater than zero on its Series Termination Date or such earlier date as is specified in the related Supplement (after giving effect to deposits and distributions otherwise to be made on such date), the Trustee will sell or cause to be sold on such Series Termination Date, in accordance with the procedures and subject to the conditions described in such Supplement, Principal Receivables and the related Finance Charge Receivables (or, if a Tax Opinion is obtained, interests therein) in an amount up to 110% of the Invested Amount with respect to such Series on such date (after giving effect to such deposits and distributions; provided, however, that in no event shall such amount exceed an amount of Principal Receivables (and all associated Finance Charge Receivables) equal to the sum of (i) the product of (A) the Transferor's Percentage, (B) the aggregate outstanding Principal Receivables, and (C) a fraction the numerator of which is the related Investor Percentage of Collections of Finance Charge Receivables and the denominator of which is the sum of all Investor Percentages with respect to Collections of Finance Charge Receivables of all Series outstanding and (ii) the Invested Amount of such Series). The proceeds from any such sale shall be allocated and distributed in accordance with the terms of the applicable Supplement. Section 12.3. Transferor's Termination Rights. Upon the termination of the Trust pursuant to Section 12.1 and the surrender of the Transferor Certificate and any Supplemental Certificate, the Trustee shall assign and convey to the Transferor or its designee, without recourse, representation or warranty, all right, title and interest of the Trust in and to the Receivables, whether then existing or thereafter created, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof, except for amounts held by the Trustee pursuant to subsection 12.2(b). The Trustee shall execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Transferor to vest in the Transferor or its designee all right, title and interest which the Trust had in and to the Receivables and such other related assets. Section 12.4. Defeasance. Notwithstanding anything to the contrary in this Agreement or any Supplement: (a) The Transferor may at its option be discharged from its obligations hereunder with respect to any Series or all outstanding Series (the "Defeased Series") on the date the applicable conditions set forth in subsection 12.4(c) are satisfied ("Defeasance"); provided, however, that the following rights, obligations, powers, duties and immunities shall survive with respect to the Defeased Series until otherwise terminated or discharged hereunder: (i) the rights of Holders of Investor Certificates of the Defeased Series to receive, solely from the trust fund provided for in subsection 12.4(c), payments in respect of principal of and interest on such Investor Certificates when such payments are due; (ii) the Transferor's obligations with respect to such Certificates under Sections 6.4 and 6.5; (iii) the rights, powers, trusts, duties and immunities of the Trustee, the Paying Agent and the Transfer Agent and Registrar hereunder; and (iv) this Section 12.4 (b) Subject to subsection 12.4(c), the Transferor at its option may cause Collections allocated to the Defeased Series and available to purchase additional Receivables to be applied to purchase Eligible Investments rather than additional Receivables. (c) The following shall be the conditions to Defeasance under subsection 12.4(a): (i) the Transferor irrevocably shall have deposited or caused to be deposited with the Trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust for making the payments described below, (A) dollars in an amount, or (B) Eligible Investments which through the scheduled payment of principal and interest in respect thereof will provide, not later than the due date of payment thereon, money in an amount, or (C) a combination thereof, in each case sufficient to pay and discharge, and, which shall be applied by the Trustee to pay and discharge, all remaining scheduled interest and principal payments on all outstanding Investor Certificates of the Defeased Series on the dates scheduled for such payments in this Agreement and the applicable Supplements and all amounts owing to the Enhancement Providers, if any, with respect to the Defeased Series; (ii) prior to any exercise of its right pursuant to this Section 12.4 with respect to a Defeased Series to substitute money or Eligible Investments for Receivables, the Transferor shall have delivered to the Trustee a Tax Opinion with respect to such deposit and termination of obligations and an Opinion of Counsel to the effect that such deposit and termination of obligations will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act; (iii) the Transferor shall have delivered to the Trustee and each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement an Officer's Certificate of the Transferor stating that the Transferor reasonably believes that such deposit and termination of obligations will not, based on the facts known to such officer at the time of such certification, then cause an Early Amortization Event or any event that, with the giving of notice or the lapse of time, would constitute an Early Amortization Event to occur with respect to any Series; and (iv) the Rating Agency Condition has been satisfied. ARTICLE XIII Miscellaneous Provisions Section 13.1. Amendment; Waiver of Past Defaults. (a) This Agreement or any Supplement may be amended from time to time (including, without limitation, in connection with (i) adding covenants, restrictions or conditions of the Transferor, such further covenants, restrictions or conditions as its Board of Directors and the Trustee shall consider to be for the benefit or protection of the Investor Certificateholders, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or Early Amortization Event permitting the enforcement of all or any of the several remedies provided in this Agreement as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such amendment may provide for a particular period of grace after default or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default, (ii) curing any ambiguity or correcting or supplementing any provision contained herein or in any Supplement which may be defective or inconsistent with any other provision contained herein or in any Supplement or to surrender any right or power conferred upon the Transferor, (iii) the issuance of a Supplemental Certificate or Participation, (iv) the addition of a Participation Interest to the Trust, (v) the assumption by another entity, in accordance with the provisions of this Agreement, of the Transferor's obligations hereunder, (vi) the provision of additional Enhancement for the benefit of Certificateholders of any Series by the Servicer, the Transferor and the Trustee without the consent of any of the Certificateholders, (vii) enabling the Trust or a portion thereof to elect to qualify as a FASIT (or comparable tax entity for the securitization of financial assets) in accordance with the Code or (viii) adding any provision to, changing in any manner or eliminating any of the provisions of this Agreement or any Supplement or modifying in any manner the rights of Certificateholders of any Series then issued and outstanding, provided, in each case, that (x) the Transferor shall have delivered to the Trustee an Officer's Certificate to the effect that the Transferor reasonably believes that such action shall not adversely affect in any material respect the interests of any Investor Certificateholder, (y) except with respect to clauses (i) and (ii), the Rating Agency Condition shall have been satisfied with respect to any such amendment and (z) a Tax Opinion is delivered in connection with any such amendment. The designation of additional Transferors pursuant to Section 2.12 shall be subject to this Section 13.1 only to the extent that the supplement to this Agreement providing for such designation amends any of the terms of this Agreement. (b) This Agreement or any Supplement may also be amended from time to time by the Servicer, the Transferor and the Trustee, with the consent of the Holders of Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of all adversely affected Series, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or any Supplement or of modifying in any manner the rights of the Investor Certificateholders; provided, however, that no such amendment shall (i) reduce in any manner the amount of or delay the timing of any distributions to be made to Investor Certificateholders or deposits of amounts to be so distributed or the amount available under any Enhancement without the consent of each affected Investor Certificateholder (provided that any amendment of the terms of an Early Amortization Event shall not be deemed to be within the scope of this clause (i)), (ii) change the definition of or the manner of calculating the interest of any Investor Certificateholder without the consent of each affected Investor Certificateholder or (iii) reduce the aforesaid percentage required to consent to any such amendment without the consent of each Investor Certificateholder. Any amendment to be effected pursuant to this paragraph shall be deemed to adversely affect all outstanding Series, other than any Series with respect to which such action shall not, as evidenced by an Opinion of Counsel for the Transferor, addressed and delivered to the Trustee, adversely affect in any material respect the interests of any Investor Certificateholder of such Series. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's rights, duties or immunities under this Agreement or otherwise. (c) Promptly after the execution of any such amendment or consent (other than an amendment pursuant to paragraph (a)), the Trustee shall furnish notification of the substance of such amendment to each Investor Certificateholder, and the Servicer shall furnish notification of the substance of such amendment to each Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant to the relevant Supplement. (d) It shall not be necessary for the consent of Investor Certificateholders under this Section 13.1 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Investor Certificateholders shall be subject to such reasonable requirements as the Trustee may prescribe. (e) Any Supplement executed in accordance with the provisions of Section 6.3 shall not be considered an amendment to this Agreement for the purposes of this Section 13.1. (f) The Holders of Investor Certificates evidencing more than 66-2/3% of the aggregate unpaid principal amount of the Investor Certificates of each Series, or, with respect to any Series with two or more Classes, of each Class (or, with respect to any default that does not relate to all Series, 66- 2/3% of the aggregate unpaid principal amount of the Investor Certificates of each Series to which such default relates or, with respect to any such Series with two or more Classes, of each Class) may, on behalf of all Certificateholders, waive any default by the Transferor or the Servicer in the performance of their obligations hereunder (other than any event which would result in an Early Amortization Event as described in Section 9.1 of this Agreement or the failure to add Receivables in Additional Accounts when required to do so pursuant to subsection 2.9(a)(i)) and its consequences, except the failure to make any distributions required to be made to Investor Certificateholders or to make any required deposits of any amounts to be so distributed. Upon any such waiver of a past default, such default shall cease to exist, and any default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived. Section 13.2. Protection of Right, Title and Interest to Trust Assets. (a) The Transferor shall cause this Agreement, all amendments and supplements hereto and all financing statements and continuation statements and any other necessary documents covering the Certificateholders, and the Trustee's right, title and interest to the Trust to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Certificateholders and the Trustee hereunder to all property comprising the Trust Assets. The Transferor shall deliver to the Trustee file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. (b) Within 30 days after the Transferor makes any change in its name, identity or corporate structure which would make any financing statement or continuation statement filed in accordance with paragraph (a) seriously misleading within the meaning of Section 9-402(7) (or any comparable provision) of the UCC, the Transferor shall give the Trustee notice of any such change and shall file such financing statements or amendments as may be necessary to continue the perfection of the Trust's security interest in the Receivables and the proceeds thereof. (c) The Transferor and the Servicer will give the Trustee prompt notice of any relocation of any office from which it services Receivables or keeps records concerning the Receivables or of its principal executive office and whether, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall file such financing statements or amendments as may be necessary to perfect or to continue the perfection of the Trust's security interest in the Receivables and the proceeds thereof. The Transferor and the Servicer will at all times maintain each office from which it services Receivables and its principal executive offices within the United States. (d) The Transferor will deliver to the Trustee and any Enhancement Provider entitled thereto pursuant to the relevant Supplement: (i) upon the execution and delivery of each amendment of this Agreement or any Supplement, an Opinion of Counsel to the effect specified in Exhibit H-1; (ii) on each Addition Date on which any Supplemental Accounts are to be designated as Accounts pursuant to subsection 2.9(a) or (b), an Opinion of Counsel substantially in the form of Exhibit H-2, and on each Addition Date on which any Participation Interests are to be included in the Trust pursuant to subsection 2.9(a) or (b), an Opinion of Counsel covering the same substantive legal issues addressed by Exhibit H-2 but conformed to the extent appropriate to relate to Participation Interests; and (iii) on or before March 31 of each year, beginning with March 31, 1996, an Opinion of Counsel substantially in the form of Exhibit H-2. Section 13.3. Limitation on Rights of Certificateholders. (a) The death or incapacity of any Certificateholder (other than the Transferor) shall not operate to terminate this Agreement or the Trust, nor shall such death or incapacity entitle such Certificateholders' legal representatives or heirs to claim an accounting or to take any action or commence any proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. (b) No Investor Certificateholder shall have any right to vote (except as expressly provided in this Agreement) or in any manner otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall any Investor Certificateholder be under any liability to any third person by reason of any action by the parties to this Agreement pursuant to any provision hereof. (c) No Investor Certificateholder shall have any right by virtue of any provisions of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Investor Certificateholder previously shall have made, and unless the Holders of Investor Certificates evidencing more than 50% of the aggregate unpaid principal amount of all Investor Certificates (or, with respect to any such action, suit or proceeding that does not relate to all Series, 50% of the aggregate unpaid principal amount of the Investor Certificates of all Series to which such action, suit or proceeding relates) shall have made, written request to the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by each Investor Certificateholder with every other Investor Certificateholder and the Trustee, that no one or more Investor Certificateholders shall have any right in any manner whatever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of Holders of any other of the Investor Certificates, or to obtain or seek to obtain priority over or preference to any other Investor Certificateholder, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Investor Certificateholders except as otherwise expressly provided in this Agreement. For the protection and enforcement of the provisions of this Section 13.3, each and every Investor Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. SECTION 13.4. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts) and further agrees that service of any process, summons, notice or document by prepaid certified mail with proof of mailing receipt validated by the United States Postal Service to its respective address set forth in Section 13.5 (or to the agent of such party appointed and maintained in the State of Delaware as such party's agent for acceptance of legal process) shall be effective service of process for any litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware or of the federal courts sitting in the State of Delaware and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum. Section 13.5. Notices, Payments. (a) All demands notices, instructions, directions and communications (collectively, "Notices") under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at, mailed by registered mail, return receipt requested, or sent by facsimile transmission (i) in the case of the Transferor, to Target Receivables Corporation, 80 South Eighth Street, 14th Floor, Suite 1401, Minneapolis, Minnesota 55402, Attention Treasurer (facsimile no. (612) 370- 5508), (ii) in the case of the Servicer to Retailers National Bank, 3901 West 53rd Street, Sioux Falls, South Dakota 57106, Attention: Vice President and Manager (facsimile no. (605) 362-2028), (iii) in the case of the Trustee, to Norwest Bank Minnesota, National Association, MAC N9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services/Asset-Backed Administration (facsimile no. (612) 667-3464), (iv) in the case of Moody's, to 99 Church Street, New York, New York 10007, Attention of ABS Monitoring Department 4th Floor (facsimile no. (212) 553-4600), (v) in the case of Standard & Poor's, to 55 Water Street, New York, New York 10041, Attention of Asset Backed Group (facsimile no. (212) ________), (vi) in the case of the Paying Agent or the Transfer Agent and Registrar, to Norwest Bank Minnesota, National Association, MAC N9311-161, Sixth and Marquette, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services/Asset-Backed Administration (facsimile no. (612) 667- 3464) and (vii) to any other Person as specified in any Supplement; or, as to each party, at such other address or facsimile number as shall be designated by such party in a written notice to each other party. (b) Any Notice required or permitted to be given to a Holder of Registered Certificates shall be given by first- class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register. No Notice shall be required to be mailed to a Holder of Bearer Certificates or Coupons but shall be given as provided below. Any Notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Investor Certificateholder receives such Notice. In addition, (a) if and so long as any Series or Class is listed on the Luxembourg Stock Exchange and such exchange shall so require, any Notice to Investor Certificateholders shall be published in an Authorized Newspaper of general circulation in Luxembourg within the time period prescribed in this Agreement and (b) in the case of any Series or Class with respect to which any Bearer Certificates are outstanding, any Notice required or permitted to be given to Investor Certificateholders of such Series or Class shall be published in an Authorized Newspaper within the time period prescribed in this Agreement. Section 13.6. Rule 144A Information. For so long as any of the Investor Certificates of any Series or Class are "restricted securities" within the meaning of Rule 144(a)(3) under the Act, each of the Transferor, the Trustee, the Servicer and any Enhancement Provider agree to cooperate with each other to provide to any Investor Certificateholders of such Series or Class and to any prospective purchaser of Certificates designated by such Investor Certificateholder, upon the request of such Investor Certificateholder or prospective purchaser, any information required to be provided to such holder or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4) under the Act. Section 13.7. Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such provisions shall be deemed severable from the remaining provisions of this Agreement and shall in no way affect the validity or enforceability of the remaining provisions or of the Certificates or the rights of the Certificateholders. Section 13.8. Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Article VIII, this Agreement may not be assigned by the Servicer without the prior consent of Holders of Investor Certificates evidencing not less than 66-2/3% of the aggregate unpaid principal amount of all outstanding Investor Certificates. Section 13.9. Certificates Nonassessable and Fully Paid. It is the intention of the parties to this Agreement that the Certificateholders shall not be personally liable for obligations of the Trust, that the interests in the Trust represented by the Certificates shall be nonassessable for any losses or expenses of the Trust or for any reason whatsoever and that Certificates upon authentication thereof by the Trustee pursuant to Section 6.2 are and shall be deemed fully paid. Section 13.10. Further Assurances. The Transferor and the Servicer agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the Trustee more fully to effect the purposes of this Agreement, including the execution of any financing statements or continuation statements relating to the Receivables for filing under the provisions of the UCC of any applicable jurisdiction. Section 13.11. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, the Servicer, the Trustee, the Transferor, each Enhancement Provider, if any, each Holder of a Supplemental Certificate and each Holder of a Participation shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Trust or the Transferor, acquiesce, petition or otherwise invoke or cause the Trust or the Transferor to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Trust or the Transferor under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Trust or the Transferor or any substantial part of their respective property or ordering the winding-up or liquidation of the affairs of the Trust or the Transferor. Section 13.12. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Trustee or the Certificateholders, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided under this Agreement are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Section 13.13. Counterparts. This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument. Section 13.14. Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Certificateholders, any Enhancement Provider (to the extent provided in this Agreement and the related Supplement) and their respective successors and permitted assigns. Except as otherwise expressly provided in this Agreement (including, without limitation, Section 7.4), no other Person will have any right or obligation hereunder. Section 13.15. Actions by Certificateholders. (a) Wherever in this Agreement a provision is made that an action may be taken or a Notice given by Certificateholders, such action or Notice may be taken or given by any Certificateholder, unless such provision requires a specific percentage of Certificateholders. (b) Any Notice, request, authorization, direction, consent, waiver or other act by the Holder of a Certificate shall bind such Holder and every subsequent Holder of such Certificate and of any Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or omitted to be done by the Trustee or the Servicer in reliance thereon, whether or not notation of such action is made upon such Certificate. Section 13.16. Merger and Integration. Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived or supplemented except as provided herein. Section 13.17. Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 13.18. No Proceedings. Each of the Trustee, the Transferor, the Servicer, and each Certificateholder by acceptance of its Certificate, hereby agrees that it will not institute against the Holder of the Transferor Certificate, or join any other Person in instituting against the Holder of the Transferor Certificate, on account of its ownership of the Transferor Certificate or its obligations hereunder, any bankruptcy, insolvency, liquidation, readjustment of debt, marshalling of assets or any similar proceeding so long as there shall not have elapsed one year plus one day since the last day on which any Investor Certificates shall have been outstanding. IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. TARGET RECEIVABLES CORPORATION, as Transferor, By /s/ Stephen C. Kowalke --------------------------------- Name: Stephen C. Kowalke Title: Vice President and Treasurer RETAILERS NATIONAL BANK, as Servicer, By /s/ Stephen C. Kowalke ---------------------------------- Name: Stephen C. Kowalke Title: Assistant Treasurer NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee, By /s/ S. Dignan -------------------------------- Name: S. Dignan Title: Corporate Trust Officer EXHIBIT A FORM OF TRANSFEROR CERTIFICATE THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. No. R-1 One Unit TARGET CREDIT CARD MASTER TRUST TRANSFEROR CERTIFICATE THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN ASSETS OF THE TARGET CREDIT CARD MASTER TRUST Evidencing an interest in a trust, the corpus of which consists primarily of receivables generated from time to time in the ordinary course of business in a portfolio of open end credit card accounts owned by Retailers National Bank. (Not an interest in or obligation of the Transferor or any affiliate thereof) This certifies that TARGET RECEIVABLES CORPORATION is the registered owner of a fractional interest in the assets of a trust (the "Trust") not allocated to the Certificateholders' Interest, the interest of any Holder of a Supplemental Certificate or the interest of any holder of a Participation pursuant to the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000 (as amended and supplemented, the "Agreement"), among Target Receivables Corporation, a Minnesota corporation, as transferor (the "Transferor"), Retailers National Bank, a national banking association, as Servicer, and Norwest Bank Minnesota, National Association, a national banking association, as trustee (the "Trustee"). The corpus of the Trust consists of (i) a portfolio of all receivables (the "Receivables") existing in the open end credit card accounts identified under the Agreement from time to time (the "Accounts"), (ii) all Receivables generated under the Accounts from time to time thereafter, (iii) funds collected or to be collected from accountholders in respect of the Receivables, (iv) all funds which are from time to time on deposit in the Collection Account, the Special Funding Account and in the Series Accounts, (v) the benefits of any Enhancements issued and to be issued by Enhancement Providers, if any, with respect to one or more Series of Investor Certificates and (vi) all other assets and interests constituting the Trust. Although a summary of certain provisions of the Agreement is set forth below, this Certificate does not purport to summarize the Agreement and reference is made to the Agreement for information with respect to the interests, rights, benefits, obligations, proceeds and duties evidenced hereby and the rights, duties and obligations of the Trustee. A copy of the Agreement may be requested from the Trustee by writing to the Trustee at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479, Attention: Joseph Travis. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended and supplemented from time to time, the Holder of this Certificate by virtue of the acceptance hereof assents and is bound. The Receivables consist of Principal Receivables which arise generally from the purchase of merchandise and services and Finance Charge Receivables which arise generally from Periodic Finance Charges, Late Fees and other fees and charges with respect to the Accounts. This Certificate is the Transferor Certificate, which represents the Transferor's interest in certain assets of the Trust, including the right to receive a portion of the Collections and other amounts at the times and in the amounts specified in the Agreement. The aggregate interest represented by the Transferor Certificate at any time in the Receivables in the Trust shall not exceed the Transferor's Interest at such time. In addition to the Transferor Certificate, (i) Investor Certificates will be issued to investors pursuant to the Agreement, which will represent the Certificateholders' Interest, (ii) Supplemental Certificates may be issued pursuant to the Agreement, which will represent that portion of the Transferor's Interest not allocated to the Holder of the Transferor Certificate and (iii) Participations may be issued pursuant to the Agreement, which will represent an undivided ownership interest in the Receivables. This Transferor Certificate shall not represent any interest in the Collection Account, the Special Funding Account or the Series Accounts, except as expressly provided in the Agreement, or any Enhancements. The Transferor has entered into the Agreement, and this Certificate is issued, with the intention that, for Federal, state and local income and franchise tax purposes only, the Investor Certificates (except, Transferor Retained Certificates which are held by the Transferor) will qualify as debt secured by the Receivables. The Transferor, by entering into the Agreement and the Holder of the Transferor Certificate by acceptance of this Transferor Certificate, agree to treat such Investor Certificates for Federal, state and local income and franchise tax purposes as debt under applicable tax law. Subject to certain conditions and exceptions specified in the Agreement, the obligations created by the Agreement and the Trust created thereby shall terminate upon the earliest of (i) September 30, 2095 and (ii) the day following the Distribution Date on which the Invested Amount and Enhancement Invested Amount for each Series is zero (provided the Transferor has delivered a written notice to the Trustee electing to terminate the Trust). Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid for any purpose. IN WITNESS WHEREOF, the Holder of the Transferor Certificate has caused this Certificate to be duly executed. TARGET RECEIVABLES CORPORATION, as Transferor, By ______________________________ Name: Title: Dated: ______________, ____ TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is the Transferor Certificate described in the within-mentioned Agreement. NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee, By ________________________ Authorized Signatory or By [________________________], as Authenticating Agent for the Trustee, By _________________________ Authorized Signatory EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS (As required by Section 2.9 of the Amended and Restated Pooling and Servicing Agreement) ASSIGNMENT No. ____ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated as of __________, ____1/ by and among TARGET RECEIVABLES CORPORATION, a Minnesota corporation, as Transferor (the "Transferor"), RETAILERS NATIONAL BANK, as Servicer (the "Servicer"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association (the "Trustee"), pursuant to the Amended and Restated Pooling and Servicing Agreement referred to below. WITNESSETH WHEREAS the Transferor, the Servicer and the Trustee are parties to the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000 (as may be amended and supplemented from time to time, the "Agreement"); WHEREAS, pursuant to the Agreement, the Transferor wishes to designate Supplemental Accounts owned by the Credit Card Originator to be included as Accounts and to convey the Receivables of such Supplemental Accounts, whether now existing or hereafter created, to the Trust as part of the corpus of the Trust (as each such term is defined in the Agreement); and WHEREAS the Trustee is willing to accept such designation and conveyance subject to the terms and conditions hereof; NOW, THEREFORE, the Transferor, the Servicer and the Trustee hereby agree as follows: 1. Defined Terms. All capitalized terms used herein shall have the meanings ascribed to them in the Agreement unless otherwise defined herein. "Addition Date" shall mean, with respect to the Supplemental Accounts designated hereby, ___________, ____. "Addition Cut-Off Date" shall mean, with respect to the Supplemental Accounts designated hereby, ___________, ----. - -------- 1/ To be dated as of the applicable Addition Date. - - 2. Designation of Supplemental Accounts. On or before the Document Delivery Date, the Transferor will deliver to the Trustee a computer file, microfiche list or printed list containing a true and complete schedule identifying all such Supplemental Accounts specifying for each such Account, as of the Addition Cut-Off Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables outstanding in such Account, which computer file, microfiche list or printed list shall supplement any computer file, microfiche list or printed list previously delivered to the Trustee. 3. Conveyance of Receivables. The Transferor does hereby transfer, assign, set over and otherwise convey to the Trust, for the benefit of the Certificateholders, all its right, title and interest in, to and under the Receivables of such Supplemental Accounts existing at the close of business on the Addition Date and thereafter created from time to time until the termination of the Trust, all monies due or to become due and all amounts received with respect thereto and all proceeds (including "proceeds" as defined in the UCC) thereof. The foregoing does not constitute and is not intended to result in the creation or assumption by the Trust, the Trustee, any Investor Certificateholder or any Enhancement Provider of any obligation of the Servicer, the Transferor, the Credit Card Originator or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto, including any obligation to Obligors, merchant banks, merchants clearance systems or insurers. The Transferor agrees to record and file, at its own expense, financing statements (and continuation statements when applicable) with respect to the Receivables now in Supplemental Accounts, meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect, and maintain perfection of, the assignment of such Receivables to the Trust, and to deliver a file-stamped copy of each such financing statement or other evidence of such filing to the Trustee on or prior to the Addition Date. The Trustee shall be under no obligation whatsoever to file such financing or continuation statements or to make any other filing under the UCC in connection with such assignment. In connection with such assignment, the Transferor further agrees, at its own expense, on or prior to the date of this Assignment, to cause the Credit Card Originator to indicate in the appropriate computer files that Receivables created in connection with the Supplemental Accounts and designated hereby have been conveyed to the Trust pursuant to the Agreement and this Assignment for the benefit of the Certificateholders. The Transferor does hereby grant to the Trustee a security interest in all of its right, title and interest in and to the Receivables now existing and hereafter created in the Supplemental Accounts, all monies due or to become due and all amounts received with respect thereto and all proceeds (including "proceeds" as defined in the UCC) thereof. This Assignment constitutes a security agreement under the UCC. 4. Acceptance by Trustee. The Trustee hereby acknowledges its acceptance on behalf of the Trust of all right, title and interest to the property, now existing and hereafter created, conveyed to the Trust pursuant to Section 3 of this Assignment, and declares that it shall maintain such right, title and interest, upon the trust set forth in the Agreement, for the benefit of all Certificateholders. The Trustee further acknowledges that, prior to or simultaneously with the execution and delivery of this Assignment, the Transferor delivered to the Trustee the computer file, microfiche list or printed list described in Section 2 of this Assignment. 5. Representations and Warranties of the Transferor. The Transferor hereby represents and warrants to the Trustee, on behalf of the Trust, as of the date of this Assignment and as of the Addition Date that: (a) Legal, Valid and Binding Obligation. This Assignment constitutes a legal, valid and binding obligation of the Transferor enforceable against the Transferor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (b) Eligibility of Accounts. Each Supplemental Account designated hereby is an Eligible Account; (c) Insolvency. As of each of the Addition Cut-Off Date and the Addition Date, no Insolvency Event with respect to the Credit Card Originator or the Transferor has occurred and the transfer by the Transferor of Receivables arising in the Supplemental Accounts to the Trust has not been made in contemplation of the occurrence thereof; (d) Early Amortization Event. The Transferor reasonably believes that (A) the addition of the Receivables arising in the Supplemental Accounts will not, based on the facts known to the Transferor, then or thereafter cause an Early Amortization Event to occur with respect to any Series and (B) no selection procedure was utilized by the Transferor which would result in the selection of Supplemental Accounts (from among the available Eligible Accounts owned by the Credit Card Originator) that would be materially less favorable to the interests of the Investor Certificateholders of any Series as of the Addition Date than a random selection; (e) Security Interest. This Assignment constitutes a valid transfer and assignment to the Trust of all right, title and interest of the Transferor in and to the Receivables and other Trust Assets conveyed to the Trust by the Transferor and all monies due or to become due and all amounts received with respect thereto and the proceeds as defined in the UCC, and this Assignment constitutes a grant of a "security interest" (as defined in the UCC) in such property to the Trust, which, in the case of existing Receivables and the proceeds thereof, is enforceable upon execution and delivery of this Assignment, and which will be enforceable with respect to such Receivables hereafter created and the proceeds thereof upon such creation. Upon the filing of the financing statements described in Section 3 of this Assignment and, in the case of the Receivables hereafter created and the proceeds thereof, upon the creation thereof, the Trust shall have a first priority security interest in such property except for Liens permitted under Section 2.7(b) of the Agreement; (f) No Conflict. The execution and delivery by the Transferor of this Assignment, the performance of the transactions contemplated by this Assignment and the fulfillment of the terms hereof applicable to the Transferor, will not conflict with or violate any Requirements of Law applicable to the Transferor or conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Transferor is a party or by which it or its properties are bound; (g) No Proceedings. There are no proceedings or investigations, pending or, to the best knowledge of the Transferor, threatened against the Transferor before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Assignment, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Assignment, (iii) seeking any determination or ruling that, in the reasonable judgment of the Transferor, would materially and adversely affect the performance by the Transferor of its obligations under this Assignment, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Assignment or (v) seeking to affect adversely the income tax attributes of the Trust under the Federal or applicable state income or franchise tax systems; and (h) All Consents. All authorizations, consents, orders or approvals or other actions of any Person or of any court or other governmental authority required to be obtained by the Transferor in connection with the execution and delivery of this Assignment by the Transferor and the performance of the transactions contemplated by this Assignment by the Transferor, have been obtained. 6. Ratification of Agreement. As supplemented by this Assignment, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Assignment shall be read, taken and construed as one and the same instrument. 7. Counterparts. This Assignment may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Assignment to be duly executed by their respective officers as of the day and year first above written. TARGET RECEIVABLES CORPORATION, as Transferor, By ______________________________ Name: Title: RETAILERS NATIONAL BANK, as Servicer, By ______________________________ Name: Title: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee, By ______________________________ Name: Title: EXHIBIT C FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS (As required by Section 2.10 of the Amended and Restated Pooling and Servicing Agreement) REASSIGNMENT No. _____ OF RECEIVABLES dated as of __________, ___,1/ by and among TARGET RECEIVABLES CORPORATION, a Minnesota corporation, as Transferor (the "Transferor"), RETAILERS NATIONAL BANK, a national banking association, as Servicer (the "Servicer") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee (the "Trustee"), pursuant to the Amended and Restated Pooling and Servicing Agreement referred to below. WITNESSETH: WHEREAS the Transferor, the Servicer and the Trustee are parties to the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000 (as may be amended and supplemented from time to time, the "Agreement"); WHEREAS pursuant to the Agreement, the Transferor wishes to remove from the Trust all Receivables in certain designated Accounts owned by the Credit Card Originator (the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of such Removed Accounts, whether now existing or hereafter created, from the Trust to the Transferor; and WHEREAS the Trustee is willing to accept such designation and to reconvey the Receivables in the Removed Accounts subject to the terms and conditions hereof; NOW, THEREFORE, the Transferor, the Servicer and the Trustee hereby agree as follows: 1. Defined Terms. All terms defined in the Agreement and used herein shall have such defined meanings when used herein, unless otherwise defined herein. "Removal Date" shall mean, with respect to the Removed Accounts designated hereby, ______________, ____. "Removal Notice Date" shall mean, with respect to the Removed Accounts, ______________, ____. - -------- 1/ To be dated as of the Removal Date. - - 2. Designation of Removed Accounts. On or before the date that is 10 Business Days after the Removal Date, the Transferor will deliver to the Trustee a computer file, microfiche list or printed list containing a true and complete schedule identifying all Accounts the Receivables of which are being removed from the Trust, specifying for each such Account, as of the Removal Notice Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables in such Account, which computer file, microfiche list or printed list shall supplement any computer file, microfiche list or printed list previously delivered to the Trustee pursuant to the Agreement. 3. Conveyance of Receivables. (a) The Trustee does hereby transfer, assign, set over and otherwise convey to the Transferor, without recourse, on and after the Removal Date, all right, title and interest of the Trust in, to and under the Receivables existing at the close of business on the Removal Date and thereafter created from time to time in the Removed Accounts designated hereby, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof. (b) In connection with such transfer, the Trustee agrees to execute and deliver to the Transferor on or prior to the date this Reassignment is delivered, applicable termination statements with respect to the Receivables existing at the close of business on the Removal Date and thereafter created from time to time in the Removed Accounts reassigned hereby and the proceeds thereof evidencing the release by the Trust of its interest in the Receivables in the Removed Accounts, and meeting the requirements of applicable state law, in such manner and such jurisdictions as are necessary to terminate such interest. 4. Representations and Warranties of the Transferor. The Transferor hereby represents and warrants to the Trustee, on behalf of the Trust, as of the Removal Date: (a) Legal, Valid and Binding Obligation. This Reassignment constitutes a legal, valid and binding obligation of the Transferor enforceable against the Transferor, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (b) Early Amortization Event. The Transferor reasonably believes that (A) the removal of the Receivables existing in the Removed Accounts will not, based on the facts known to the Transferor, then or thereafter cause an Early Amortization Event to occur with respect to any Series and (B) no selection procedure believed by the Transferor to be materially adverse to the interests of the Investor Certificateholders has been used in removing Removed Accounts from among any pool of Accounts or Participations of a similar type as of the Removal Date; (c) List of Removed Accounts. The list of Removed Accounts delivered pursuant to Section 2.10(c) of the Agreement, as of the Removal Date, is true and complete in all material respects; and (d) Defaulted Receivables. No selection procedure was utilized by the Transferor with the intent to include a disproportionately higher level of Defaulted Receivables in the Removed Accounts than exist in the Accounts or to remove Accounts for the intended purpose of mitigating losses to the Trust. 5. Ratification of Agreement. As supplemented by this Reassignment, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Reassignment shall be read, taken and construed as one and the same instrument. 6. Counterparts. This Reassignment may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Reassignment to be duly executed by their respective officers as of the day and year first above written. TARGET RECEIVABLES CORPORATION, as Transferor, By ______________________________ Name: Title: RETAILERS NATIONAL BANK as Servicer, By ______________________________ Name: Title: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee, By ______________________________ Name: Title: EXHIBIT D FORM OF ANNUAL SERVICER'S CERTIFICATE (To be delivered on or before the 90th day following the end of the fiscal year of the Transferor, pursuant to Section 3.5 of the Amended and Restated Pooling and Servicing Agreement referred to below) RETAILERS NATIONAL BANK TARGET CREDIT CARD MASTER TRUST The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB"), pursuant to the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000 (as may be amended and supplemented from time to time, the "Agreement"), among Target Receivables Corporation, as Transferor, RNB as Servicer, and Norwest Bank Minnesota, National Association, as Trustee, does hereby certify that: 1. RNB is, as of the date hereof, the Servicer under the Agreement. Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement. 2. The undersigned is a Servicing Officer who is duly authorized pursuant to the Agreement to execute and deliver this Certificate to the Trustee. 3. A review of the activities of the Servicer during the fiscal year ended __________, ____, and of its performance under the Agreement was conducted under my supervision. 4. Based on such review, the Servicer has, to the best of my knowledge, performed in all material respects its obligations under the Agreement throughout such year and no default in the performance of such obligations has occurred or is continuing except as set forth in paragraph 5 below. 5. The following is a description of each default in the performance of the Servicer's obligations under the provisions of the Agreement known to me to have been made by the Servicer during the fiscal year ended __________, ____, which sets forth in detail (i) the nature of each such default, (ii) the action taken by the Servicer, if any, to remedy each such default and (iii) the current status of each such default: [If applicable, insert "None."] IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this _____ day of _______, ____. RETAILERS NATIONAL BANK, as Servicer, By ______________________________ Name: Title: EXHIBIT E-1-A THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. EXHIBIT E-1-B THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).1/ - - -------- 1/ The following text should be included in any Certificate in which the above legend appears: The [Certificates] may not be acquired by or for the account of (a) any employee benefit plan or other plan, trust or account (including an individual retire ment account) that is subject to the Employee Retire ment Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any collective investment fund, insurance company separate or general account or other entity (except an entity registered under the Invest ment Company Act of 1940, as amended) whose underlying assets include "plan assets" under ERISA by reason of any such plan's investment in such entity (a "Benefit Plan"). By accepting and holding this Certificate, the Holder hereof shall be deemed to have represented and warranted that it is not, and is not acting on behalf of, a Benefit Plan. By acquiring any interest in this Certificate, each applicable Certificate Owner shall be deemed to have represented and warranted that it is not, and is not acting on behalf of, a Benefit Plan. EXHIBIT E-2 [FORM OF UNDERTAKING LETTER] [Date] Norwest Bank Minnesota, National Association Norwest Center Sixth and Marquette Minneapolis, Minnesota 55479 Attention: Joseph Travis Target Receivables Corporation 80 South Eighth Street, 14th Floor, Suite 1401 Minneapolis, Minnesota 55402 Attention: Treasurer Re: Purchase of $____________1/ principal amount of Target Credit Card Master Trust, [Class __], [__%] [Floating Rate] Asset Backed Certificates, Series [ ] Dear Sirs: In connection with our purchase of the above- referenced Asset Backed Certificates (the "Certificates") we confirm that: (i) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the "1933 Act"), and are being sold to us in a transaction that is exempt from the registration requirements of the 1933 Act; (ii) any information we desire concerning the Certificates or any other matter relevant to our decision to purchase the certificates is or has been made available to us; (iii) we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Certificates, and we (and any account for which we are purchasing under paragraph (iv) below) are able to bear the economic risk of an investment in the Certificates; we (and any account for which we are purchasing under paragraph (iv) below) are an "accredited investor" (as such term is defined in Rule 501(a)(1), (2) or (3) of Regulation D under the 1933 Act); and we are not, and none of such accounts is, a Benefit Plan; - -------- 1/ Not less than $250,000 minimum principal amount. - (iv) we are acquiring the Certificates for our own account or for accounts as to which we exercise sole investment discretion and not with a view to any distribution of the Certificates, subject, nevertheless, to the understanding that the disposition of our property shall at all times be and remain within our control; (v) we agree that the Certificates must be held indefinitely by us unless subsequently registered under the 1933 Act or an exemption from any registration requirements of that Act and any applicable state securities laws available; (vi) we agree that in the event that at some future time we wish to dispose of or exchange any of the Certificates (such disposition or exchange not being currently foreseen or contemplated), we will not transfer or exchange any of the Certificates unless: (A)(1) the sale is of at least U.S. $250,000 principal amount of Certificates to an Eligible Purchaser (as defined below), (2) a letter to substantially the same effect as paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter is executed promptly by the purchaser and (3) all offers or solicitations in connection with the sale, whether directly or through any agent acting on our behalf, are limited only to Eligible Purchasers and are not made by means of any form of general solicitation or general advertising whatsoever; or (B) the Certificates are transferred pursuant to Rule 144 under the 1933 Act by us after we have held them for more than three years; or (C) the Certificates are sold in any other transaction that does not require registration under the 1933 Act and, if the Transferor, the Servicer, the Trustee or the Transfer Agent and Registrar so requests, we theretofore have furnished to such party an opinion of counsel satisfactory to such party, in form and substance satisfactory to such party, to such effect; or (D) the Certificates are transferred pursuant to an exception from the registration requirements of the 1933 Act under Rule 144A under the 1933 Act; and (vii) we understand that the Certificates will bear a legend to substantially the following effect: "THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN." ["THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW)."]*/ The first paragraph of this legend may be removed if the Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar have received an opinion of counsel satisfactory to them, in form and substance satisfactory to them, to the effect that such paragraph may be removed. "Eligible Purchaser" means either an Eligible Dealer or a corporation, partnership or other entity which we have reasonable grounds to believe and do believe can make representations with respect to itself to substantially the same effect as the representations set forth herein. "Eligible Dealer" means any corporation or other entity the principal business of which is acting as a broker and/or dealer in securities. ["Benefit Plan" means (a) any employee benefit plan or other plan, trust or account (including an individual retirement account) that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any collective investment fund, insurance company separate or general account or other entity (except an entity registered under the Investment Company Act of 1940, as amended) whose underlying assets include "plan assets" under ERISA by reason of a plan's investment in such entity.]**/ Capitalized terms used but not defined herein shall have the meanings given to such terms in the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, by and among Target Receivables Corporation, Retailers National Bank and Norwest Bank Minnesota, National Association - -------- * This bracketed text should be included only if the Certificate(s) to be purchased include the legend specified on Exhibit E-1-B. ** This bracketed text should be included only if the Certificate(s) to be purchased include the legend specified on Exhibit E-1-B. Very truly yours, ------------------------ (Name of Purchaser) By:_____________________ (Authorized Officer) EXHIBIT E-3 THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).1/ - - -------- 1/ The following text should be included in any Certificate in which the above legend appears: The [Certificates] may not be acquired by or for the account of (a) any employee benefit plan or other plan, trust or account (including an individual retire ment account) that is subject to the Employee Retire ment Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any collective investment fund, insurance company separate or general account or other entity (except an entity registered under the Invest ment Company Act of 1940, as amended) whose underlying assets include "plan assets" under ERISA by reason of any such plan's investment in such entity (a "Benefit Plan"). By accepting and holding this Certificate, the Holder hereof shall be deemed to have represented and warranted that it is not, and is not acting on behalf of, a Benefit Plan. By acquiring any interest in this Certificate, each applicable Certificate Owner shall be deemed to have represented and warranted that it is not, and is not acting on behalf of, a Benefit Plan. EXHIBIT F Example of a Credit Card Agreement EXHIBIT G RESERVED. EXHIBIT H-1 FORM OF OPINION OF COUNSEL WITH RESPECT TO AMENDMENTS Provisions to be included in Opinion of Counsel to be delivered pursuant to Section 13.2(d)(i) The opinions set forth below may be subject to all the qualifications, assumptions, limitations and exceptions taken or made in the Opinions of Counsel delivered on any applicable Closing Date. (i) The amendment to the [Amended and Restated Pooling and Servicing Agreement], [Supplement], attached hereto as Schedule 1 (the "Amendment" ), has been duly authorized, executed and delivered by the Transferor and the Servicer and constitutes the legal, valid and binding agreement of the Transferor and the Servicer, respectively, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws from time to time in effect affecting creditors' rights generally or the rights of creditors of national banking associations. The enforceability of the respective obligations of the Transferor and the Servicer is also subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) (ii) The Amendment has been entered into in accordance with the terms and provisions of Section 13.1 of the Amended and Restated Pooling and Servicing Agreement. EXHIBIT H-2 FORM OF OPINION OF COUNSEL WITH RESPECT TO ADDITION OF SUPPLEMENTAL ACCOUNTS Provisions to be included in Opinion of Counsel to be delivered pursuant to Section 13.2(d)(ii) or (iii) The opinions set forth below may be subject to appropriate qualifications, assumptions, limitations and exceptions. Paragraphs 1-3 are not required if the opinion is being delivered solely under Section 13.2(d)(iii). 1. The Receivables arising in such Supplemental Accounts constitute either "general intangibles," "accounts" or "chattel paper," in each case as defined under Section 9- 106 of the UCC. 2. The Amended and Restated Pooling and Servicing Agreement creates in favor of the Trust a security interest in the Transferor's rights in the Receivables in such Supplemental Accounts and the proceeds thereof. 3. The security interest described in paragraph 2 is perfected and of first priority under the UCC. 4. No further filings or actions are required under the UCC prior to March 31, ____, in order to maintain the perfection and priority of the security interest created by the Amended and Restated Pooling and Servicing Agreement in favor of the Trust in the Transferor's rights in the Receivables and the proceeds thereof. EX-4 4 0004.txt EXHIBIT 4(B) - ----------------------------------------------------------------------------- TARGET RECEIVABLES CORPORATION, Transferor RETAILERS NATIONAL BANK, Servicer and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION Trustee on behalf of the Series 2000-__ Certificateholders ---------------------------------------- SERIES 2000-__ SUPPLEMENT Dated as of _______________ to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT Dated as of April 28, 2000 ---------------------------------------- TARGET CREDIT CARD MASTER TRUST $___________ ____% Class A Asset Backed Certificates, Series 2000-__ $_____________ Class B Asset Backed Certificates, Series 2000-__ - ---------------------------------------------------------------------------- TABLE OF CONTENTS Page ARTICLE I CREATION OF THE SERIES 2000-__ CERTIFICATES Section 1.1. Designation............................................ 1 Section 1.2. Delivery and Payment for the Series 2000- __ Certificates........................................ 1 Section 1.3. Form of Delivery of Series 2000-__ Certificates........................................... 2 ARTICLE II DEFINITIONS Section 2.1. Definitions............................................ 3 ARTICLE III SERVICER Section 3.1. Servicing Compensation................................. 16 ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS Section 4.1. Rights of Certificateholders........................... 17 Section 4.2. Collections and Allocation; Payments on Transferor Certificate................................. 17 Section 4.3. Determination of Monthly Interest for the Series 2000-__ Certificates............................ 21 Section 4.4. Determination of Principal Amounts..................... 22 Section 4.5. Shared Principal Collections........................... 23 Section 4.6. Application of Funds on Deposit in the Collection Account for the Certificates................ 23 Section 4.7. Coverage of Required Amount for the Series 2000-__ Certificates............................ 28 Section 4.8. Investor Charge-Offs................................... 29 Section 4.9. Reallocated Class B Principal Collections for the Series 2000-__ Certificates.................... 29 Section 4.10. Issuance of Additional Investor Certificates........................................... 30 Section 4.11. Establishment of the Principal Funding Account for the Certificates........................... 31 Section 4.12. Accumulation Period.................................... 32 Section 4.13. Reserve Account........................................ 33 SECTION 4.14. Defeasance............................................. 35 ARTICLE V DISTRIBUTIONS AND REPORTS TO SERIES 2000-__ INVESTOR CERTIFICATEHOLDERS Section 5.1. Distributions.......................................... 36 Section 5.2. Reports and Statements to Series 2000-__ Certificateholders...................................... 37 ARTICLE VI EARLY AMORTIZATION EVENTS Section 6.1. Series 2000-__ Early Amortization Events............... 38 ARTICLE VII OPTIONAL REPURCHASE; SERIES TERMINATION; SALE OF CLASS B CERTIFICATES Section 7.1. Optional Repurchase.................................... 40 Section 7.2. Series 2000-__ Termination............................. 40 Section 7.3. Reduction of Class B Invested Amount During the Revolving Period; Designation of Class B Certificate Terms; Sale of Class B Certificates................................... 40 Section 7.4. Purchase of the Class A Certificates by the Transferor......................................... 41 ARTICLE VIII FINAL DISTRIBUTION Section 8.1. Sale of Receivables or Certificateholders' Interest pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1 or 7.2 of this Supplement.................. 43 ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Delivery and Payment for the Series 2000- __ Certificates........................................ 45 Section 9.2. Form of Delivery of Series 2000-__ Certificates........................................... 45 Section 9.3. Legend on Class B Certificates......................... 45 Section 9.4. Ratification of Agreement.............................. 46 Section 9.5. Counterparts........................................... 46 Section 9.6. Paired Series.......................................... 46 Section 9.7. Jurisdiction; Service.................................. 47 Section 9.8. Governing Law.......................................... 47 Section 9.9. Instructions in Writing................................ 47 EXHIBITS EXHIBIT A-1 FORM OF CLASS A INVESTOR CERTIFICATE EXHIBIT A-2 FORM OF CLASS B INVESTOR CERTIFICATE EXHIBIT B FORM OF MONTHLY SERIES 2000-__ CERTIFICATEHOLDERS' STATEMENT EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE SERIES 2000-__ SUPPLEMENT, dated as of __________, 2000 (this "Supplement") by and among TARGET RECEIVABLES CORPORATION, a corporation organized and existing under the laws of the State of Minnesota, as Transferor (the "Transferor"), RETAILERS NATIONAL BANK, a national banking association organized and existing under the laws of the United States, as Servicer (the "Servicer"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States, as trustee (together with its successors in trust thereunder as provided in the Agreement referred to below, the "Trustee") under the Amended and Restated Pooling and Servicing Agreement dated as of April 28, 2000, as amended (the "Agreement") among the Transferor, the Servicer and the Trustee. Section 6.3 of the Agreement provides, among other things, that the Transferor and the Trustee may at any time and from time to time enter into a supplement to the Agreement for the purpose of authorizing the issuance by the Transferor, for execution and redelivery to the Trustee for authentication, of one or more Series of Certificates. Pursuant to this Supplement, the Transferor and the Trustee shall create a new Series of Investor Certificates and shall specify the Principal Terms thereof. The Investor Certificates shall not be subordinated to any other Series. ARTICLE I CREATION OF THE SERIES 2000-__ CERTIFICATES Section 1.1. Designation. There is hereby created a Series of Investor Certificates to be issued pursuant to the Agreement and this Supplement to be known generally as the "Series 2000-__ Certificates." The Series 2000-__ Certificates shall be issued in two Classes, which shall be designated generally as the $____________ ____% Class A Asset Backed Certificates, Series 2000-__ (the "Class A Certificates") and the $______________ Class B Asset Backed Certificates, Series 2000-__ (the "Class B Certificates"), subject to any increase in such principal amounts as a result of the issuance of Additional Certificates pursuant to Section 4.10 of this Supplement. The Series 2000-__ Certificates shall be a Principal Sharing Series and shall be included in Group I. The Series 2000-__ Certificates shall be entitled to share Excess Transferor Finance Charge Collections and Shared Transferor Principal Collections. Section 1.2. Delivery and Payment for the Series 2000- __ Certificates. The Transferor shall execute and deliver the Series 2000-__ Certificates to the Trustee for authentication in accordance with Section 6.1 of the Agreement. The Trustee shall deliver the Series 2000-__ Certificates to or upon the order of the Transferor when authenticated in accordance with Section 6.2 of the Agreement. Section 1.3. Form of Delivery of Series 2000-__ Certificates. (a) The Class A Certificates shall be delivered as Book-Entry Certificates as provided in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be substantially in the form of Exhibit A-1 hereto. The Class B Certificates shall be delivered as Definitive Certificates as provided in Sections 6.1, 6.2 and 6.10 of the Agreement and shall be substantially in the form of Exhibit A-2 hereto. (b) The Depositary for the Class A Certificates shall be the Depositary Trust Company, and the Class A Certificates initially shall be registered in the name of Cede & Co., its nominee. ARTICLE II DEFINITIONS Section 2.1. Definitions. In the event that any term or provision contained herein shall conflict with or be inconsistent with any provision contained in the Agreement, the terms and provisions of this Supplement shall govern with respect to the Series 2000-__ Certificates. All Article, Section or subsection references herein shall mean Article, Section or subsections of this Supplement except as otherwise provided herein. All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement. Each capitalized term defined herein shall relate only to the Series 2000-__ Certificates and to no other Series of Certificates issued by the Trust. "Accumulation Date" shall mean the first day of the ___________ Monthly Period. "Accumulation Period" shall mean, with respect to the Class A Certificates, the period commencing on the Accumulation Date, or such later date as may be specified by the Servicer in accordance with Section 4.12, and continuing to and including the earliest of (x) the Early Amortization Commencement Date, (y) the end of the _________ Monthly Period and (z) the date of termination of the Trust pursuant to Section 12.1 of the Agreement. "Accumulation Period Length" shall have the meaning specified in Section 4.12. "Additional Certificate Date" shall have the meaning specified in subsection 4.10(a). "Additional Certificates" shall have the meaning specified in subsection 4.10(a). "Additional Interest" shall mean, at any time of determination, the sum of Class A Additional Interest and Class B Additional Interest, if any. "Adjusted Invested Amount" shall mean for any Business Day an amount equal to the sum of the Class A Adjusted Invested Amount plus the Class B Invested Amount. "Amortization Period Commencement Date" shall mean the earlier of the Accumulation Date, or such later date as may be specified by the Servicer in accordance with Section 4.12, and the Early Amortization Commencement Date. "Available Reserve Account Amount" shall mean, with respect to any Transfer Date, the lesser of (a) the amount on deposit in the Reserve Account as of such date (before giving effect to any deposit or withdrawals made or to be made pursuant to subsections 4.6(a)(ix) and 4.13(d) to the Reserve Account on such date) and (b) the Required Reserve Account Amount. "Available Series 2000-__ Finance Charge Collections" shall have the meaning specified in subsection 4.6(a). "Available Shared Principal Collections" shall mean, for any Monthly Period, Shared Principal Collections available to be allocated to the Certificates from each other Series that has a controlled or scheduled amortization or accumulation period beginning after the _________ Distribution Date. "Base Rate" shall mean, with respect to any Monthly Period, the sum of (i) the annualized percentage equivalent of a fraction the numerator of which is the sum of the Class A Interest and the Class B Interest for the related Interest Accrual Period and the denominator of which is the Invested Amount as of the close of business on the last day of the Monthly Period and (ii) the annualized percentage equivalent of a fraction the numerator of which is the Monthly Servicing Fee for such Monthly Period and the denominator of which is the Invested Amount as of the close of business on the last day of the preceding Monthly Period. "Carryover Class A Interest" shall mean, with respect to any Distribution Date, (a) any Class A Interest due but not paid on any previous Distribution Date plus (b) any Class A Additional Interest. "Carryover Class B Interest" shall mean, with respect to any Distribution Date, (a) any Class B Interest due but not paid on any previous Distribution Date plus (b) any Class B Additional Interest. "Carryover Interest" shall mean, with respect to any Distribution Date, the sum of Carryover Class A Interest and Carryover Class B Interest. "Class A Additional Interest" shall have the meaning specified in subsection 4.3. "Class A Adjusted Invested Amount" shall mean for any Business Day an amount equal to the Class A Invested Amount minus the aggregate principal amount on deposit in the Principal Funding Account on such Business Day. "Class A Certificateholder" shall mean the Person in whose name a Class A Certificate is registered in the Certificate Register. "Class A Certificateholders' Interest" shall mean, with respect to any date, the portion of the Series 2000-__ Certificateholders' Interest evidenced by the Class A Certificates. "Class A Certificate Rate" shall mean, with respect to any Interest Accrual Period, a per annum rate equal to ____%. "Class A Certificates" shall mean any of the certificates executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A- 1 hereto. "Class A Expected Final Payment Date" shall mean the ___________ Distribution Date. "Class A Floating Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Class A Adjusted Invested Amount as of (x) during the Revolving Period or the Accumulation Period with respect to Collections of Finance Charge Receivables and at all times with respect to Defaulted Amounts, the close of business on the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (y) during an Early Amortization Period with respect to Collections of Finance Charge Receivables, the close of business on the last day of the Monthly Period immediately preceding the occurrence of an Early Amortization Event and the denominator of which is the greater of (a) the total amount of Principal Receivables in the Trust plus the amounts on deposit in the Special Funding Account as of the close of business on such date and (b) when used with respect to Collections of Finance Charge Receivables, the sum of the numerators with respect to all Classes of all Series and Participations then outstanding used to calculate the applicable allocation percentage. "Class A Initial Invested Amount" shall mean the aggregate initial principal amount of the Class A Certificates, which is $_____________. "Class A Interest" shall mean the interest distributable in respect of the Class A Certificates as calculated in accordance with Section 4.3. "Class A Interest Shortfall" shall have the meaning specified in Section 4.3. "Class A Invested Amount" shall mean, when used with respect to any date of determination, an amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate amount of principal payments made to Class A Certificateholders prior to such date, minus (c) the aggregate amount of Class A Investor Charge-Offs for all prior Distribution Dates, plus (d) the sum of the aggregate amount allocated with respect to Class A Investor Charge-Offs and available on all prior Distribution Dates pursuant to subsection 4.6(a)(vi) and, with respect to such subsection, pursuant to Sections 4.7 and 4.9, for the purpose of reinstating amounts reduced pursuant to the foregoing clause (c), plus (e) the amount of any increase in the Class A Invested Amount resulting from the issuance of Additional Certificates under Section 4.10 and minus (f) the amount of any reduction in the Class A Invested Amount as a result of the purchase by the Transferor and subsequent cancellation of Class A Certificates pursuant to Section 7.4. "Class A Investor Charge-Offs" shall have the meaning specified in subsection 4.8(b). "Class A Investor Defaulted Amount" shall mean, with respect to each Distribution Date, an amount equal to the product of (a) the Class A Floating Allocation Percentage applicable on such date and (b) the Defaulted Amount for the related Monthly Period. "Class A Percentage" shall mean a fraction the numerator of which is the Class A Adjusted Invested Amount and the denominator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount. "Class A Principal" shall mean the principal distributable in respect of the Class A Certificates as calculated in accordance with subsection 4.4(a). "Class A Required Amount" shall mean, with respect to each Distribution Date, the amount determined by the Servicer equal to the excess, if any, of (x) the sum of (i) Class A Interest for the related Monthly Period, (ii) any Carryover Class A Interest previously due but not paid to the Class A Certificateholders on a prior Distribution Date, (iii) the Class A Servicing Fee for the related Monthly Period, (iv) the Class A Investor Defaulted Amount and (v) the Class A Percentage of the Series Allocation Percentage of the adjustment payments required to be made by the Transferor pursuant to Section 3.9 of the Agreement but not made on or prior to the related Distribution Date, over (y) the sum of the Available Series 2000-__ Finance Charge Collections applied with respect to such amounts pursuant to subsection 4.6(a) plus any Excess Finance Charge Collections from other Series and Excess Transferor Finance Charge Collections allocable to Series 2000-__ and applied with respect to such amounts pursuant to Section 4.7. "Class A Servicing Fee" shall have the meaning specified in Section 3.1. "Class B Additional Interest" shall mean the amount, if any, distributable in respect of the Class B Certificates as calculated pursuant to a supplemental agreement entered into in accordance with Section 7.3. "Class B Certificateholder" shall mean the Person in whose name a Class B Certificate is registered in the Certificate Register. "Class B Certificateholders' Interest" shall mean, with respect to any date, the portion of the Series 2000-__ Certificateholders' Interest evidenced by the Class B Certificates. "Class B Certificate Rate" shall mean, with respect to any Interest Accrual Period, a per annum rate equal to 0%; provided, however such interest rate may be increased pursuant to the terms of a supplemental agreement entered into in accordance with Section 7.3. "Class B Certificates" shall mean any of the certificates executed by the Transferor and authenticated by or on behalf of the Trustee, substantially in the form of Exhibit A- 2 hereto. "Class B Floating Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Class B Invested Amount as of (x) during the Revolving Period or the Accumulation Period with respect to Collections of Finance Charge Receivables and at all times with respect to Defaulted Amounts, the close of business on the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (y) during an Early Amortization Period with respect to Collections of Finance Charge Receivables, the close of business on the last day of the Monthly Period immediately preceding the occurrence of an Early Amortization Event and the denominator of which is the greater of (a) the total amount of Principal Receivables plus the amount on deposit in the Special Funding Account as of the close of business on such date and (b) when used with respect to Collections of Finance Charge Receivables, the sum of the numerators with respect to all Classes of all Series and Participations then outstanding used to calculate the applicable allocation percentage. "Class B Initial Invested Amount" shall mean the aggregate initial principal amount of the Class B Certificates, which is $___________. "Class B Interest" shall mean the interest, if any, distributable in respect of the Class B Certificates as may be calculated pursuant to a supplemental agreement entered into in accordance with Section 7.3. "Class B Invested Amount" shall mean, when used with respect to any date of determination, an amount equal to (a) the Class B Initial Invested Amount, minus (b) the aggregate amount of principal payments made to Class B Certificateholders prior to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount of Reallocated Class B Principal Collections for which the Class B Invested Amount has been reduced for all prior Distribution Dates, plus (e) the sum of the aggregate amount allocated and available on all prior Distribution Dates pursuant to subsection 4.6(a)(vii) and, with respect to such subsection, pursuant to Section 4.7, for the purpose of reinstating amounts reduced pursuant to the foregoing clauses (c) and (d) plus (f) the amount of any increase in the Class B Invested Amount resulting from the issuance of Additional Certificates under Section 4.10. "Class B Investor Charge-Offs" shall have the meaning specified in subsection 4.8(a). "Class B Investor Defaulted Amount" shall mean, with respect to each Distribution Date, an amount equal to the product of (a) the Class B Floating Allocation Percentage applicable on such date and (b) the Defaulted Amount for the related Monthly Period. "Class B Percentage" shall mean a fraction the numerator of which is the Class B Invested Amount and the denominator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount. "Class B Principal" shall mean the principal distributable in respect of the Class B Certificates as calculated in accordance with subsection 4.4(b). "Class B Principal Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is (a) during the Revolving Period, the Class B Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date), (b) during the Accumulation Period, the Class B Invested Amount as of the last day of the Revolving Period, and (c) during the Early Amortization Period, the Class B Invested Amount as of the last day of the Revolving Period, or, if less, the last numerator used to calculate the Class B Principal Allocation Percentage in the Accumulation Period, if any, and the denominator of which is the greater of (a)(x) if only one Series is outstanding (i) during the Revolving Period, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period and (ii) during the Accumulation Period and the Early Amortization Period the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the Revolving Period and (y), if more than one Series is outstanding, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (b) the sum of the numerators used to calculate the principal allocation percentages for all Series and Participations outstanding as of the date as to which such determination is being made; provided, that such calculations are subject to adjustment to give effect to additions of Additional Accounts. "Class B Servicing Fee" shall have the meaning specified in Section 3.1. "Closing Date" shall mean __________________. "Controlled Accumulation Amount" shall mean $____________ provided that such amount may be increased pursuant to Section 4.10 as a result of the issuance of Additional Certificates; provided, further, that, if the Accumulation Period is modified pursuant to Section 4.12, (i) the Controlled Accumulation Amount for each Distribution Date with respect to the Accumulation Period shall mean the amount determined in accordance with Section 4.12 on the date on which the Accumulation Period has most recently been modified and (ii) the sum of the Controlled Accumulation Amounts for all Distribution Dates with respect to the modified Accumulation Period shall not be less than the Class A Invested Amount. "Controlled Deposit Amount" shall mean, with respect to any Distribution Date with respect to the Accumulation Period, an amount equal to the Controlled Accumulation Amount plus the Deficit Controlled Accumulation Amount for the preceding Distribution Date, if any. "Covered Amount" shall mean, with respect to any Interest Accrual Period prior to the payment in full of the Class A Invested Amount, one-twelfth of the product of (a) the Class A Certificate Rate in effect with respect to the related Interest Accrual Period and (b) the Principal Funding Account Balance as of the first day of such Interest Accrual Period. "Deficit Controlled Accumulation Amount" shall mean, on each Distribution Date with respect to the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such Distribution Date over the amount distributed from the Collection Account as Class A Principal for such Distribution Date. "Distribution Date" shall mean ________________ and the 25th day of each month thereafter, or if such day is not a Business Day, the next succeeding Business Day. "Early Amortization Commencement Date" shall mean the date on which an Early Amortization Event is deemed to occur pursuant to Section 9.1 of the Agreement or a Series 2000-__ Early Amortization Event is deemed to occur pursuant to Section 6.1. "Early Amortization Period" shall mean the period beginning on the earlier of (a) the day on which a Series 2000-__ Early Amortization Event or an Early Amortization Event occurs or is deemed to have occurred and (b) the Class A Expected Final Payment Date if the Class A Invested Amount has not been paid in full on such date, and ending on the earlier of (i) the date on which the Class A Invested Amount and the Class B Invested Amount have been paid in full and (ii) the Series 2000-__ Termination Date. "Enhancement" shall mean, with respect to the Class A Certificates, the subordination of the Class B Invested Amount. "Excess Finance Charge Collections" shall mean, with respect to any Distribution Date, as the context requires, either (x) the amount described in subsection 4.6(a)(x) allocated to the Series 2000-__ Certificates but available to cover shortfalls in amounts paid from Collections of Finance Charge Receivables for other Series, if any or (y) the aggregate amount of Collections of Finance Charge Receivables allocable to other Series in excess of the amounts necessary to make required payments with respect to such Series, if any, and available to cover shortfalls with respect to the Series 2000-__ Certificates. "Excess Transferor Finance Charge Collections" shall have the meaning specified in subsection 4.2(d). "Floating Allocation Percentage" shall mean, with respect to any date of determination, the sum of the Class A Floating Allocation Percentage and Class B Floating Allocation Percentage on such date. "Initial Invested Amount" shall mean the sum of the Class A Initial Invested Amount and the Class B Initial Invested Amount. "Interest Accrual Period" shall mean, with respect to a Distribution Date, the period from and including the preceding Distribution Date to and excluding such Distribution Date; provided, however, that the initial Interest Accrual Period shall be the period from the Closing Date to and excluding the first Distribution Date. "Invested Amount" shall mean, as of any date of determination, an amount equal to the sum of (a) the Class A Invested Amount as of such date and (b) the Class B Invested Amount as of such date. "Investor Certificateholder" shall mean the Holder of record of an Investor Certificate. "Investor Certificates" shall mean the Class A Certificates and the Class B Certificates; provided, however, that the Class B Certificates shall not be considered to be Investor Certificates for purposes of any Tax Opinion or other opinion relating to tax matters hereunder or under the Agreement for so long as they are held by the Transferor. "Investor Charge-Offs" shall mean the sum of Class A Investor Charge-Offs and Class B Investor Charge-Offs. "Investor Defaulted Amount" shall mean, with respect to any Monthly Period, an amount equal to the product of the Defaulted Amount and the Floating Allocation Percentage as of the related Distribution Date. "Investor Percentage" shall mean, with respect to Principal Receivables, the Principal Allocation Percentage and, with respect to Finance Charge Receivables and Receivables in Defaulted Accounts, the Floating Allocation Percentage. "Monthly Period" shall mean with respect to each Distribution Date, the immediately preceding fiscal month of the Transferor, provided, that the first Monthly Period shall begin on the Closing Date and end on the last day of the fiscal month of the Transferor during which the Closing Date occurs. "Monthly Servicing Fee" shall have the meaning specified in Section 3.1. "Percentage Allocation" shall have the meaning specified in subsection 4.2(b)(ii)(y). "Portfolio Yield" shall mean for the Series 2000-__ Certificates, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is an amount equal to the sum of the aggregate amount of Available Series 2000-__ Finance Charge Collections for such Monthly Period, minus the aggregate Investor Defaulted Amount for such Monthly Period and the Series 2000-__ Allocation Percentage of any adjustment payments required to be made by the Transferor pursuant to Section 3.9 of the Agreement but not made on or prior to the related Distribution Date, and the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period. "Principal Allocation Percentage" shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is (a) during the Revolving Period, the Invested Amount as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date), (b) during the Accumulation Period, the Invested Amount as of the last day of the Revolving Period; provided, that during the Accumulation Period on the date of issuance of a new Series, at the option of the Transferor, such amount may be reduced to an amount not less than the greater of (x) the Adjusted Invested Amount on such date and (y) the amount which would result in a Principal Allocation Percentage which when multiplied by the amount of Collections of Principal Receivables for the preceding Monthly Period would equal (I) the Controlled Deposit Amount for such Monthly Period plus 10% of the Controlled Accumulation Amount or, if such date is on or after the Class A Expected Final Payment Date and the Class A Invested Amount has been paid in full, the Class B Invested Amount minus (II) the amount of any Available Shared Principal Collections with respect to such Monthly Period, and (c) during the Early Amortization Period, the Invested Amount as of the last day of the Revolving Period or, if less, the last numerator used to calculate the Principal Allocation Percentage in the Accumulation Period, if any, and the denominator of which is the greater of (a)(x) if only one Series is outstanding (i) during the Revolving Period, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period and (ii) during the Accumulation Period and the Early Amortization Period the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the Revolving Period and (y), if more than one Series is outstanding, the sum of the total amount of Principal Receivables in the Trust and the principal amount on deposit in the Special Funding Account as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Closing Date) and (b) the sum of the numerators used to calculate the principal allocation percentages for all Series and Participations outstanding as of the date as to which such determination is being made; provided, further, that such calculations are subject to adjustment to give effect to additions of Additional Accounts. "Principal Funding Account" shall have the meaning specified in subsection 4.11(a). "Principal Funding Account Balance" shall mean, with respect to any date of determination during the Accumulation Period, the principal amount, if any, on deposit in the Principal Funding Account on such date of determination. "Principal Funding Investment Proceeds" shall mean, with respect to each Interest Accrual Period during the Accumulation Period, the investment earnings on funds on deposit in the Principal Funding Account (net of investment expenses and losses) for such Interest Accrual Period. "Principal Funding Investment Shortfall" shall mean, with respect to each Interest Accrual Period during the Accumulation Period, the amount, if any, by which the Principal Funding Investment Proceeds are less than the Covered Amount. "Principal Shortfalls" shall mean on any Distribution Date (x) for Series 2000-__, (i) during the Accumulation Period, the excess of the Controlled Deposit Amount over the aggregate amount applied with respect thereto for such Distribution Date, and (ii) at all other times, the Invested Amount of the class then receiving principal payments after the application of Collections of Principal Receivables on such Distribution Date provided however, that after the Class A Invested Amount has been paid in full, such amount shall be equal to the Class B Invested Amount or (y) for any other Series the amounts specified as such in the Supplement for such other Series. "Rating Agency" shall mean each of Standard & Poor's and Moody's. "Reallocated Class B Principal Collections" shall have the meaning specified in Section 4.9. "Reassignment Amount" shall mean, with respect to any Distribution Date, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date, the sum of (i) the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount on such Distribution Date, plus (ii) the sum of the Class A Interest and Class B Interest, if any, for such Distribution Date and the sum of Class A Interest and Class B Interest, if any, previously due but not distributed to the Series 2000-__ Certificateholders on a prior Distribution Date, plus (iii) the amount of Additional Interest, if any, for such Distribution Date and any Additional Interest previously due but not distributed to the Series 2000-__ Certificateholders on a prior Distribution Date. "Record Date" shall mean, with respect to any Distribution Date, the last Business Day of the calendar month preceding the month in which such Distribution Date occurs. "Required Amount" shall have the meaning specified in Section 4.7. "Required Reserve Account Amount" shall mean, with respect to any Distribution Date on or after the Reserve Account Funding Date, an amount, if any, specified by the Transferor. "Required Retained Transferor's Percentage" shall mean 2%; provided, however, that such percentage may be adjusted from time to time upon written notice from the Transferor to the Trustee if each Rating Agency initially contracted to rate the Class A Certificates shall have been notified of such amendment and shall have provided notice to the Trustee or the Servicer that such action would not result in a reduction or withdrawal of its rating of the Class A Certificates and such action shall not, as evidenced by a Tax Opinion, cause the Trust to be characterized for Federal income tax purposes as an association or publicly traded partnership taxable as a corporation or otherwise have any material adverse effect on the Federal income taxation of any outstanding Series of Certificates or any Certificate Owner. "Reserve Account" shall have the meaning specified in subsection 4.13(a). "Reserve Account Funding Date" shall mean the date specified by the Transferor for the commencement of the funding of the Reserve Account. "Reserve Account Surplus" shall mean, as of any Transfer Date following the Reserve Account Funding Date, the amount, if any, by which the amount on deposit in the Reserve Account exceeds the Required Reserve Account Amount. "Reserve Draw Amount" shall have the meaning specified in subsection 4.13(c). "Revolving Period" shall mean the period from and including the Closing Date to, but not including, the Amortization Period Commencement Date. "Scheduled Series 2000-__ Termination Date" shall mean the ___________ Distribution Date. "Series Accounts" shall mean the Principal Funding Account and the Reserve Account. "Series Invested Amount" shall mean, for Series 2000-1, as of any date of determination, an amount equal to the sum of (a) the Class A Adjusted Invested Amount as of such date and (b) the Class B Invested Amount as of such date. "Series 2000-__" shall mean the Series of the Target Credit Card Master Trust represented by the Series 2000-__ Certificates. "Series 2000-__ Allocation Percentage" shall mean, on any date of determination, the percentage equivalent of a fraction the numerator of which is the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount and the denominator of which is the sum of the invested amounts (or adjusted invested amounts, as applicable) of all then outstanding Series. "Series 2000-__ Certificateholder" shall mean the holder of record of any Series 2000-__ Investor Certificate. "Series 2000-__ Certificateholders' Interest" shall have the meaning specified in Section 4.1. "Series 2000-__ Certificates" shall have the meaning specified in Section 1.1. "Series 2000-__ Early Amortization Event" shall have the meaning specified in Section 6.1. "Series 2000-__ Termination Date" shall mean the earlier to occur of (i) the day after the Distribution Date on which the Series 2000-__ Certificates are paid in full, or (ii) the Scheduled Series 2000-__ Termination Date. "Servicing Base Amount" shall have the meaning specified in Section 3.1. "Servicing Fee Rate" shall mean 2.00% per annum. "Shared Principal Collections" shall mean, as the context requires, either (a) the amount allocated to the Series 2000-__ Certificates which, in accordance with subsections 4.6(a)(iii), (iv), (v), (vi) and (vii), 4.6(b) and 4.6(c)(iii), may be applied in accordance with Section 4.4 of the Agreement or (b) the amounts allocated to the investor certificates of other Series which the applicable Supplements for such Series specify are to be treated as "Shared Principal Collections" plus amounts specified in any Participation Supplement with respect to any participation to be treated as Shared Principal Collections which may be applied to cover Principal Shortfalls with respect to the Series 2000-__ Certificates. "Special Payment Date" shall mean each Distribution Date following the Monthly Period in which an Early Amortization Event occurs with respect to an Early Amortization Period and each Distribution Date following the Class A Expected Final Payment Date. "Shared Transferor Principal Collections" shall have the meaning specified in subsection 4.2(d). "Termination Payment Date" shall mean the earlier of the first Distribution Date following (i) to the extent applicable, the liquidation or sale of the Receivables as a result of an Insolvency Event and (ii) the occurrence of the Scheduled Series 2000-__ Termination Date. "Transferor Retained Certificates" shall mean investor certificates of any Series, including the Class B Certificates, which the Transferor retains, but only to the extent that and for so long as the Transferor is the Holder of such Certificates. "Transferor Retained Class" shall mean the Class B Certificates. ARTICLE III SERVICER Section 3.1. Servicing Compensation. The share of the Servicing Fee allocable to the Series 2000-__ Certificateholders with respect to any Distribution Date (the "Monthly Servicing Fee") shall be equal to one-twelfth of the product of (a) the Servicing Fee Rate and (b) (i) the sum of the Class A Adjusted Invested Amount and the Class B Invested Amount as of the last day of the Monthly Period second preceding such Distribution Date, minus (ii) the product of the amount, if any, on deposit in the Special Funding Account as of the last day of the Monthly Period second preceding such Distribution Date and the Floating Allocation Percentage with respect to such Monthly Period (the amount calculated pursuant to this clause (b) is referred to as the "Servicing Base Amount"); provided, however, that with respect to the first Distribution Date, the Monthly Servicing Fee shall be $________. The share of the Monthly Servicing Fee allocable to the Class A Certificateholders with respect to any Distribution Date (the "Class A Servicing Fee") shall be equal to the product of (a) the Class A Percentage and (b) the Monthly Servicing Fee; provided, however, that with respect to the first Distribution Date the Class A Servicing Fee shall be $________. The share of the Monthly Servicing Fee allocable to the Class B Certificateholders with respect to any Distribution Date (the "Class B Servicing Fee") shall be equal to the product of (a) the Class B Percentage and (b) the Monthly Servicing Fee; provided, however, that with respect to the first Distribution Date, the Class B Servicing Fee shall be $________. The remainder of the Servicing Fee shall be paid from amounts allocable to the Holder of the Transferor Certificate, holders of Participations or the Certificateholders of other Series (as provided in the related Supplements) and in no event shall the Trust, the Trustee or the Series 2000-__ Certificateholders be liable for the share of the Servicing Fee to be paid from amounts allocable to the Holder of the Transferor Certificate, holders of a Participation or the Certificateholders of any other Series. The Monthly Servicing Fee shall be payable to the Servicer solely to the extent amounts are available for distribution in respect thereof pursuant to Section 4.6(a)(ii). ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS Section 4.1. Rights of Certificateholders. The Series 2000-__ Certificates shall represent undivided interests in the Trust, consisting of the right to receive, to the extent necessary to make the required payments with respect to such Series 2000-__ Certificates at the times and in the amounts specified in this Agreement, (a) the Floating Allocation Percentage and the Principal Allocation Percentage (as applicable from time to time) of Collections, (b) funds distributable to the Series 2000-__ Certificates pursuant to Section 4.2 of the Agreement on deposit in the Special Funding Account, (c) funds on deposit in the Principal Funding Account and (d) funds on deposit in the Reserve Account (for such Series, the "Series 2000-__ Certificateholders' Interest"). The Class B Certificates shall be subordinated to the Class A Certificates to the extent provided in this Article IV. The Class B Certificates will not have the right to receive payments of principal until the Class A Invested Amount has been paid in full, except as provided in Section 7.3. Section 4.2. Collections and Allocation; Payments on Transferor Certificate. (a) Collections. The Servicer will apply or will instruct the Trustee to apply all funds on deposit in the Collection Account, the Special Funding Account, the Principal Funding Account and the Reserve Account allocable to the Series 2000-__ Certificates as described in this Article IV and Article IV of the Agreement. In addition, on the Closing Date, the Transferor shall make a deposit to the Collection Account in the amount of $_________, to be allocated to the Series 2000-__ Certificates. (b) Allocations. The Servicer will apply, or will instruct the Trustee to apply, all collections and other funds that are allocated to the Investor Certificates as follows: (i) Daily Allocations During the Revolving Period. During the Revolving Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below: (x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (i) the Floating Allocation Percentage and (ii) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing, provided, however, that, with respect to each Monthly Period, such amount shall only be allocated until such time as the amount deposited in the Collection Account equals the amount of Class A Interest, Class B Interest, if any, Carryover Interest, if any, and, at any time that Retailers National Bank is not the Servicer, the Servicing Fee, due on the next Distribution Date. (y) Allocate to the Investor Certificateholders an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing and pay such amount to the Holder of the Transferor Certificate; provided, however, that the amount to be paid to the Holder of the Transferor Certificate pursuant to this Section 4.2(b)(i)(y) on any Date of Processing shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall be paid to such Holder only if on such Date of Processing the Transferor Amount (excluding the interest represented by the Supplemental Certificate) is greater than the Required Retained Transferor Amount and otherwise shall be deposited in the Special Funding Account; provided, further, that such amounts will be paid to the Holder of the Transferor Certificate subject to the obligation of the Transferor to make an amount equal to the Reallocated Class B Principal Collections for each Monthly Period available on the related Distribution Date for application in accordance with Section 4.9. (ii) Daily Allocations During the Accumulation Period. During the Accumulation Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below: (x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing, provided, however, that, with respect to each Monthly Period, such amount shall only be allocated until such time as the amount deposited in the Collection Account equals the amount of Class A Interest, Class B Interest, if any, and Carryover Interest, if any, and, at any time that Retailers National Bank is not the Servicer, the Servicing Fee, due on the next Distribution Date. (y) During each Monthly Period prior to the Monthly Period related to the Distribution Date on which the Class A Invested Amount is paid in full, allocate to the Class A Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (x) the Principal Allocation Percentage on such Date of Processing and (y) the aggregate amount of Collections of Principal Receivables on such Date of Processing (for any such date, a "Percentage Allocation"); provided, however, that if the sum of such Percentage Allocations with respect to the same Monthly Period exceeds the Controlled Deposit Amount for the related Distribution Date, then such excess shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall not be treated as a Percentage Allocation and shall be paid to the Holder of the Transferor Certificate only if the Transferor Amount (excluding the interest represented by the Supplemental Certificate) on such Date of Processing is greater than the Required Retained Transferor Amount (after giving effect to all Principal Receivables transferred to the Trust on such day) and otherwise shall be deposited in the Special Funding Account; provided, further, that such amounts will be paid to the Holder of the Transferor Certificate subject to the obligation of the Transferor to make an amount equal to the Reallocated Class B Principal Collections for each Monthly Period available on the related Distribution Date for application in accordance with Section 4.9. (iii) Daily Allocations During the Early Amortization Period. During the Early Amortization Period, the Servicer shall, prior to the close of business on any Date of Processing, allocate the following amounts as set forth below: (x) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Floating Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Finance Charge Receivables on such Date of Processing. (y) Allocate to the Investor Certificateholders and deposit in the Collection Account in accordance with Section 4.3(a) of the Agreement an amount equal to the product of (A) the Principal Allocation Percentage on such Date of Processing and (B) the aggregate amount of Collections of Principal Receivables on such Date of Processing; provided, however, that after the date on which an amount of such Collections equal to the Invested Amount has been deposited into the Collection Account and allocated to the Investor Certificateholders, any excess of the amount determined in accordance with this subparagraph (y) shall be first, if any other Principal Sharing Series is outstanding and in its Amortization Period, deposited in the Collection Account for application, to the extent necessary, as Shared Principal Collections on the related Distribution Date and second shall be paid to the Holder of the Transferor Certificate only if on such Date of Processing the Transferor Amount (excluding the interest represented by the Supplemental Certificate) is greater than the Required Retained Transferor Amount and otherwise shall be deposited in the Special Funding Account. (iv) Monthly Allocations During the Revolving Period and Accumulation Period. During the Revolving Period and Accumulation Period, the Servicer shall, prior to the close of business on any Transfer Date allocate to the Investor Certificateholders and deposit in the Collection Account an amount equal to the sum of (I) (A) the lesser of (1) the sum of (a) the product of (x) the Floating Allocation Percentage with respect to the preceding Monthly Period and (y) the aggregate amount of Collections of Finance Charge Receivables for the related Monthly Period, (b) the amount of Excess Finance Charge Collections allocated to Series 2000-__ for the related Monthly Period and (c) the amount of Excess Transferor Finance Charge Collections allocated to Series 2000-__ for the related Monthly Period and (2) the aggregate of the amounts to be paid on such Distribution Date pursuant to clause (y) of each of clauses (i) through (viii) of Section 4.6(a) and the amount described in Section 4.6(a)(ix), less (B) the daily amounts deposited in the Collection Account during such Monthly Period pursuant to subsections 4.2(b)(i)(x) and 4.2(b)(ii)(x) with respect to the Revolving Period and the Accumulation Period, respectively, (II) the excess of the amount of Reallocated Class B Principal Collections over the amount retained in the Collection Account pursuant to subsections 4.2(b)(i)(y) and 4.2(b)(ii)(y) with respect to the Revolving Period and Accumulation Period, (III) an amount equal to the pro rata portion of Finance Charge Shortfalls, if any, for Group I allocated to Series 2000-__ pursuant to Section 4.5 of the Agreement, not to exceed Excess Finance Charge Collections pursuant to Section 4.6(a)(x) available on the related Distribution Date, (IV) an amount equal to the amount of Shared Principal Collections to be applied for the benefit of other Principal Sharing Series pursuant to Section 4.4 of the Agreement from amounts that were originally allocated to Series 2000-__, not to exceed (a) during the Revolving Period, the Principal Allocation Percentage of Principal Collections for the related Monthly Period or (b) during the Accumulation Period, the Principal Allocation Percentage of Principal Collections for the related Monthly Period less the amount thereof applied to pay Class A Principal on the related Distribution Date and (V) the amount of Shared Transferor Principal Collections to be applied to make payments of Class A Principal and Class B Principal on the related Distribution Date. (c) The allocations to be made pursuant to this subsection 4.2 also apply to deposits into the Collection Account that are treated as Collections, including adjustment payments made in accordance with Section 3.9 of the Agreement, payment of the reassignment price pursuant to Section 2.5(b) of the Agreement and proceeds from the sale, disposition or liquidation of the Receivables pursuant to Section 10.2, 12.1 or 12.2 of the Agreement and Section 7.1. Such deposits to be treated as Collections will be allocated as Finance Charge Receivables or Principal Receivables as provided in the Agreement. (d) Notwithstanding anything herein or in the Agreement, the Supplement for any other Series or any Enhancement Agreement for any Series to the contrary, all amounts designated to be paid to the Transferor or any holder of a Transferor Certificate in such documents, other than amounts allocated to be paid to the holder of any Supplemental Certificate, instead, to the extent that such amounts are derived from Collections of Finance Charge Receivables and other amounts applied like collections of Finance Charge Receivables, including any amounts constituting Excess Finance Charge Collections remaining after application thereof to all Series but prior to payment thereof to the Transferor, shall be deemed to be "Excess Transferor Finance Charge Collections" and to the extent that such amounts are derived from Collections of Principal Receivables, and to the extent of any Excess Transferor Finance Charge Collections remaining after application thereof to each Series designated to be entitled thereto, shall be deemed to be "Shared Transferor Principal Collections." Section 4.3. Determination of Monthly Interest for the Series 2000-__ Certificates. The amount of monthly interest (the "Class A Interest") allocable to the Class A Certificates with respect to any Interest Accrual Period shall be an amount equal to one-twelfth of the product of (i) the Class A Certificate Rate and (ii) the outstanding principal balance of the Class A Certificates as of the close of business on the last day of the preceding monthly period, provided, however, that with respect to the first Distribution Date after the Closing Date the Class A Interest shall be an amount equal to $_____________. On the Determination Date preceding each Distribution Date, the Servicer shall determine an amount (the "Class A Interest Shortfall") equal to the excess, if any, of (x) the Class A Interest for the Interest Accrual Period applicable to such Distribution Date over (y) the amount available to be paid to the Class A Certificateholders in respect of interest on such Distribution Date. If there is a Class A Interest Shortfall with respect to any Distribution Date, an additional amount ("Class A Additional Interest") shall be payable as provided herein with respect to the Class A Certificates on each Distribution Date following such Distribution Date, to and including the Distribution Date on which such Class A Interest Shortfall is paid to Class A Certificateholders, equal to one-twelfth of the product of (i) the Class A Certificate Rate plus 2% per annum and (ii) such Class A Interest Shortfall remaining unpaid. Notwithstanding anything to the contrary herein, Class A Additional Interest shall be payable or distributed to Class A Certificateholders only to the extent permitted by applicable law. Section 4.4. Determination of Principal Amounts. (a) The amount of principal (the "Class A Principal") distributable from the Collection Account with respect to the Class A Certificates on each Distribution Date with respect to the Amortization Period shall be equal to an amount calculated as follows: the sum of (i) an amount equal to the product of the Principal Allocation Percentage and the aggregate amount of Collections of Principal Receivables with respect to the preceding Monthly Period, (ii) any amount on deposit in the Special Funding Account that is distributable to the Class A Certificates pursuant to subsection 4.6(d) with respect to the preceding Monthly Period, (iii) the amount, if any, allocated to the Class A Certificates pursuant to subsections 4.6(a)(iii), (iv), (v), (vi) and (vii), (iv) the amount of Shared Principal Collections allocated to the Class A Certificates with respect to the preceding Monthly Period pursuant to Section 4.4 of the Agreement and (v) the amount of Shared Transferor Principal Collections allocated to the Class A Certificates with respect to the preceding Monthly Period pursuant to subsection 4.5(b); provided, however, that (i) with respect to any Distribution Date during the Accumulation Period, Class A Principal may not exceed the Controlled Deposit Amount for such Distribution Date; (ii) with respect to any Distribution Date, Class A Principal may not exceed the Class A Adjusted Invested Amount; and (iii) with respect to the Scheduled Series 2000-__ Termination Date, the Class A Principal shall be an amount equal to the Class A Adjusted Invested Amount. (b) The amount of principal (the "Class B Principal") distributable from the Collection Account with respect to the Class B Certificates on each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full, shall be an amount equal to the lesser of: (x) the sum of (i) an amount equal to the product of the Principal Allocation Percentage and the aggregate amount of Collections of Principal Receivables (subtracting from such product the amount of Reallocated Class B Principal Collections) with respect to the preceding Monthly Period, (ii) any amount on deposit in the Special Funding Account that is distributable to the Class B Certificates pursuant to subsection 4.6(d) with respect to the preceding Monthly Period, and (iii) the amount, if any, allocated to the Class B Certificates pursuant to subsections 4.6(a)(iv), (v) and (vii) with respect to such Distribution Date, (iv) the amount, if any, of principal allocable to the Class A Certificates pursuant to subsection 4.4(a) (without regard to the proviso thereof), respectively, but remaining after distributions have been made to Class A Certificateholders pursuant to subsections 4.6(c)(i), (v) the amount of Shared Principal Collections allocated to the Class B Certificates with respect to the preceding Monthly Period pursuant to Section 4.4 of the Agreement and (vi) the amount of Shared Transferor Principal Collections allocated to the Class B Certificates with respect to the preceding Monthly Period pursuant to subsection 4.5(b) and (y) the Class B Invested Amount, provided, however, that with respect to the Scheduled Series 2000-__ Termination Date, the Class B Principal shall be an amount equal to the Class B Invested Amount, Section 4.5. Shared Principal Collections. (a) Shared Principal Collections allocated to the Series 2000-__ Certificates and to be applied pursuant to subsection 4.4(a)(iv) and subsection 4.4(b)(v) for any Distribution Date with respect to the Amortization Period shall mean an amount equal to the product of (x) Shared Principal Collections for all Series for such date and (y) a fraction, the numerator of which is the Principal Shortfall for the Series 2000-__ Certificates for such date and the denominator of which is the aggregate amount of Principal Shortfalls for all Series for such date. For any Distribution Date with respect to the Revolving Period, Shared Principal Collections allocated to the Series 2000-__ Certificates shall be zero. (b) Shared Transferor Principal Collections allocated to the Series 2000-__ Certificates and to be applied pursuant to subsection 4.4(a)(v) and subsection 4.4(b)(vi) for any Distribution Date with respect to the Amortization Period shall mean an amount equal to the product of (x) the aggregate amount of Shared Transferor Principal Collections for such date and (y) a fraction, the numerator of which is the Principal Shortfall for the Series 2000-__ Certificates for such date and the denominator of which is the aggregate amount of Principal Shortfalls for all Series for such date. For any Distribution Date with respect to the Revolving Period, Shared Transferor Principal Collections allocated to the Series 2000-__ Certificates shall be zero. Section 4.6. Application of Funds on Deposit in the Collection Account for the Certificates. (a) On each Distribution Date, the Servicer shall instruct the Trustee to withdraw, and the Trustee, acting in accordance with such instructions set forth in the Monthly Servicer Report, shall withdraw from the Collection Account, or retain therein, as applicable, to the extent of the sum of (x) the Floating Allocation Percentage of Collections of Finance Charge Receivables collected during the preceding Monthly Period plus (y) any investment earnings on amounts on deposit in the Principal Funding Account deposited in the Collection Account pursuant to Section 4.11(b) and investment earnings on amounts on deposit in the Reserve Account deposited in the Collection Account pursuant to Section 4.13(b) plus (z) the Reserve Draw Amount deposited into the Collection Account pursuant to subsection 4.13(d) (such sum, the "Available Series 2000-__ Finance Charge Collections"; provided that, with respect to the first Distribution Date, the amount deposited by the Transferor into the Collection Account pursuant to Section 4.2(a) shall also constitute Available Series 2000-__ Finance Charge Collections), the following amounts, and apply such amounts as follows and in the following priority: (i) Class A Interest. An amount equal to the lesser of (x) the Available Series 2000-__ Finance Charge Collections for such date and (y) the sum of Class A Interest and Carryover Class A Interest shall be paid to the Class A Certificateholders in accordance with Section 5.1. Notwithstanding anything to the contrary herein, the portion of Carryover Class A Interest that constitutes Class A Additional Interest shall be payable or distributable to Class A Certificateholders only to the extent permitted by applicable law. (ii) Servicing Fee. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawal pursuant to subsection 4.6(a)(i) and (y) the Monthly Servicing Fee for such Monthly Period plus any unpaid Monthly Servicing Fees from prior Monthly Periods. (iii) Class A Investor Defaulted Amount. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) and (ii) and (y) the aggregate Class A Investor Defaulted Amount for such Distribution Date, shall be (A) during the Revolving Period, treated as Shared Principal Collections and (B)(I) during the Accumulation Period, on and prior to the date on which an amount equal to the Class A Invested Amount is available in the Principal Funding Account for distribution to the Class A Certificateholders, deposited in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c). (iv) Class B Investor Defaulted Amount. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (iii) and (y) the aggregate Class B Investor Defaulted Amount for such Distribution Date, shall be (A) during the Revolving Period treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount. (v) Adjustment Payment Shortfalls. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (iv) and (y) an amount equal to the Floating Allocation Percentage of any adjustment payment which the Transferor is required but fails to make pursuant to subsection 3.9(a) of the Agreement shall be, (A) during the Revolving Period, treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount. (vi) Reimbursement of Class A Investor Charge-Offs. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (v) and (y) the unreimbursed Class A Investor Charge-Offs, if any, will be applied to reimburse Class A Investor Charge-Offs, and shall be (A) during the Revolving Period, treated as Shared Principal Collections and (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is available in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c). (vii) Reimbursement of Class B Investor Charge-Offs and Reallocated Class B Principal Collections. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals pursuant to subsections 4.6(a)(i) through (vi) and (y) the unreimbursed reductions in the Class B Invested Amount as a result of Class B Investor Charge-Offs and Reallocated Class B Principal Collections, if any, shall be (A) during the Revolving Period treated as Shared Principal Collections, (B)(I) during the Accumulation Period, on and prior to the day on which an amount equal to the Class A Invested Amount is deposited in the Principal Funding Account, retained in the Principal Funding Account, and (II) during the Early Amortization Period, on and prior to the date on which the Class A Invested Amount is paid in full, deposited in the Collection Account, in each case for payment to the Class A Certificateholders to the extent required in accordance with subsections 4.4(a)(iii) and 4.6(c) and (C) on and after the date on which an amount equal to the Class A Invested Amount has been retained in the Principal Funding Account or the Class A Invested Amount has been paid in full, distributed to the Class B Certificateholders to the extent of the Class B Invested Amount. (viii) Class B Interest. An amount equal to the lesser of (x) any Available Series 2000-__ Finance Charge Collections remaining after giving effect to the withdrawals to subsections 4.6(a)(i) through (vii) and (y) the sum of Class B Interest and Carryover Class B Interest, if any, shall be paid to the Class B Certificateholders. Notwithstanding anything to the contrary herein, the portion of Carryover Class B Interest that constitutes Class B Additional Interest shall be payable or distributable to Class B Certificateholders only to the extent permitted by applicable law. (ix) Reserve Account. On each Distribution Date from and after the Reserve Account Funding Date, but prior to the date of termination of the Reserve Account as described in subsection 4.13(f), an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account. (x) Excess Finance Charge Collections. Any Available Series 2000-__ Finance Charge Collections after giving effect to the withdrawals pursuant to subsection 4.6(a)(i) through (ix) shall be treated as Excess Finance Charge Collections, and the Servicer shall direct the Trustee in writing on each Distribution Date to withdraw such amounts from the Collection Account and to first make such amounts available to pay to Certificateholders of other Series to the extent of shortfalls, if any, in amounts payable to such certificateholders from Collections of Finance Charge Receivables allocated to such other Series, and then, to pay any unpaid expenses or liabilities of the Trust, and then treated as Excess Transferor Finance Charge Collections. (b) For each Distribution Date with respect to the Revolving Period, the product of (i) the Principal Allocation Percentage and (ii) Collections of Principal Receivables with respect to such Distribution Date will be treated as Shared Principal Collections and applied, for such Distribution Date, as provided in Section 4.4 of the Agreement; provided, however, that if the Class B Invested Amount is reduced in accordance with Section 7.3(a), the amount specified in clauses (i) and (ii) may be distributed to the Class B Certificateholders in an amount not to exceed such reduction. (c) For each Distribution Date on and after the Amortization Period Commencement Date, the Trustee, acting pursuant to the Servicer's instructions, will distribute the amount of funds on deposit in the Collection Account available for payment of principal to Series 2000-__ Certificateholders in accordance with Section 4.4 in the following priority: (i) an amount equal to Class A Principal, subject to the proviso in Section 4.4(a) (x) with respect to the Accumulation Period, to the Principal Funding Account for payment to the Class A Certificateholders on the earlier of the Class A Expected Final Payment Date and the first Special Payment Date or (y) with respect to the Early Amortization Period, to the Class A Certificateholders; (ii) after the Class A Invested Amount has been paid in full, to the Class B Certificateholders, an amount equal to Class B Principal, subject to the proviso in Section 4.4(b); and (iii) an amount equal to the sum of (I) the excess, if any, of (A) the sum of the amounts described in subsections 4.4(a)(i) and (iii) over (B) the Class A Principal and (II) the excess, if any, of (A) the sum of the amounts described in subsections 4.4(b)(i) and (iii) over (B) the Class B Principal will be treated as Shared Principal Collections and applied as provided in subsection 4.4 of the Agreement. (d) On each Distribution Date during the Amortization Period, funds on deposit in the Special Funding Account and distributable to Series 2000-__ as provided in Section 4.2 of the Agreement will be deposited in the Collection Account. Such amounts will be allocated in the following order of priority: (i) on each Distribution Date until the Class A Invested Amount is paid in full to the Class A Certificateholders in an amount equal to the lesser of the Principal Shortfall and the amount allocated with respect thereto pursuant to Section 4.2 of the Agreement; provided, however, such amount shall not exceed the Class A Principal after subtracting therefrom any amounts to be deposited in the Collection Account with respect thereto pursuant to subsections 4.4(a)(i), (iii),(iv) and (v); and provided, further that during the Accumulation Period such amount shall be deposited in the Principal Funding Account; and (ii) on each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full to the Class B Certificateholders in an amount not to exceed the Class B Invested Amount after subtracting therefrom any amounts to be deposited in the Collection Account with respect thereto pursuant to subsections 4.4(b)(i), (iii), (iv), (v) and (vi) to be paid to the Class B Certificateholders. Section 4.7. Coverage of Required Amount for the Series 2000-__ Certificates. To the extent that on any Distribution Date payments are being made pursuant to any of subsections 4.6(a)(i) through (ix), respectively, and the full amount to be paid pursuant to any such subsection receiving payments on such Distribution Date is not paid in full on such Distribution Date, the Servicer shall apply all or a portion of the Excess Finance Charge Collections from other Series with respect to such Distribution Date allocable to the Series 2000-__ Certificates in an amount equal to the excess of the full amount to be allocated or paid pursuant to the applicable subsection over the amount applied with respect thereto from Available Series 2000-__ Finance Charge Collections on such Distribution Date (the "Required Amount"). Excess Finance Charge Collections allocated to the Series 2000-__ Certificates for any Distribution Date shall mean an amount equal to the product of (x) Excess Finance Charge Collections available from all other Series in Group I for such Distribution Date and (y) a fraction, the numerator of which is the Required Amount for such Distribution Date and the denominator of which is the aggregate amount of shortfalls in required amounts or other amounts to be paid from Collections of Finance Charge Receivables for all Series in Group I for such Distribution Date. In addition, the Servicer shall apply all or a portion of the Excess Transferor Finance Charge Collections with respect to such Distribution Date allocable to the Series 2000-__ Certificates in an amount equal to the unpaid Required Amount after the application of Excess Finance Charge Collections. Excess Transferor Finance Charge Collections allocated to the Series 2000-__ Certificates for any Distribution Date shall mean an amount equal to the product of (x) Excess Transferor Finance Charge Collections available for such Distribution Date and (y) a fraction, the numerator of which is the unpaid Required Amount after the application of Excess Finance Charge Collections for such Distribution Date and the denominator of which is the aggregate amount of shortfalls for such Distribution Date in required amounts or other amounts to be paid from Collections of Finance Charge Receivables for all Series which are designated pursuant to the applicable Series Supplement to be entitled to share Excess Transferor Finance Charge Collections. Section 4.8. Investor Charge-Offs. (a) If, on any Determination Date, the aggregate Investor Defaulted Amount and the Series Allocation Percentage of any unpaid adjustment payments required by Section 3.9 of the Agreement in the preceding Monthly Period exceed the Available Series 2000-__ Finance Charge Collections applied to the payment thereof pursuant to subsections 4.6(a)(iii), (iv) and (v) plus the amount of Excess Finance Charge Collections and Excess Transferor Finance Charge Collections allocated thereto pursuant to Section 4.7, plus the amount of Reallocated Class B Principal Collections applied with respect thereto pursuant to Section 4.9, the Class B Invested Amount will be reduced by the amount by which the remaining aggregate Investor Defaulted Amount and Series Allocation Percentage of such unpaid adjustment payments exceed the amount applied with respect thereto during such preceding Monthly Period (a "Class B Investor Charge-Off"). (b) In the event that any such reduction of the Class B Invested Amount would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero, and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero, but not more than the aggregate Investor Defaulted Amount and Series Allocation Percentage of the unpaid adjustment payments required by Section 3.9 of the Agreement for such Monthly Period (a "Class A Investor Charge-Off"). Section 4.9. Reallocated Class B Principal Collections for the Series 2000-__ Certificates. On each Distribution Date, the Servicer will apply or cause the Trustee to apply from amounts on deposit in the Collection Account an amount equal to the lesser of (i) the Class B Invested Amount, (ii) the product of (x) the Class B Principal Allocation Percentage and (y) the amount of Collections of Principal Receivables with respect to the related Monthly Period and (iii) the Class A Required Amount for such Distribution Date (such amount called "Reallocated Class B Principal Collections") to the components of the Class A Required Amount in the same priority as amounts are applied to such components from Available Series 2000-__ Finance Charge Collections pursuant to subsection 4.6(a). Section 4.10. Issuance of Additional Investor Certificates. (a) During the Revolving Period, the Transferor may, in its discretion and subject to the terms of subsection (b) below, request the Trustee to issue additional Class A Certificates and Class B Certificates (each such additional certificates, the "Additional Certificates") in an amount and on the date (the "Additional Certificate Date") determined by the Transferor. Upon issuance, the Additional Certificates will be identical in all respects (except that the principal amount of such Additional Certificates may be different) to the Certificates currently outstanding and will be equally and ratably entitled to the benefits of this Supplement and the Agreement. As a result of such issuance, the Class A Invested Amount and the Class B Invested Amount shall be increased pro rata and all the calculations required pursuant to this Supplement shall, from and after the Additional Certificate Date, be computed using such increased Class A Invested Amount and Class B Invested Amount. The Controlled Accumulation Amount shall be increased proportionally to reflect the additional principal amount of Class A Certificates and Class B Certificates represented by the Additional Certificates. (b) Additional Certificates shall only be issued upon satisfaction of all of the following conditions: (i) on or before the fifth Business Day immediately preceding the date on which the Additional Certificates are to be issued, the Transferor shall give notice to the Trustee, the Servicer and the Rating Agency of such issuance and the date upon which it is to occur; (ii) after giving effect to the addition of the Additional Certificates to the Series, the total amount of Principal Receivables in the Trust shall be greater than or equal to the Required Principal Balance; (iii) on or before the Additional Certificate Date, the Rating Agency Condition shall have been satisfied; (iv) the Transferor shall have delivered to the Trustee an Officer's Certificate dated as of the Additional Certificate Date, stating that the Transferor reasonably believes that the issuance of such Additional Certificates will not have a material adverse effect on the Class A Certificates or Class B Certificates; (v) as of the date of issuance of the Additional Certificates, the amount of unreimbursed Investor Charge- Offs shall be zero; and (vi) the Transferor shall have delivered to the Trustee a Tax Opinion with respect to such issuance. Section 4.11. Establishment of the Principal Funding Account for the Certificates. (a) The Trustee, for the benefit of the holders of the Series 2000-__ Certificates, shall establish and maintain in the name of the Trustee, on behalf of the Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the holders of the Series 2000-__ Certificates (the "Principal Funding Account"). The Principal Funding Account shall initially be established with the Trustee. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Principal Funding Account and in all proceeds thereof for the benefit of the holders of the Series 2000-__ Certificates. For purposes of the definition of "Required Retained Transferor Amount" the Principal Funding Account shall be an account specified in clause (i)(b) of the definition thereof. Except as provided in subsection 4.11(b), the Principal Funding Account shall be under the sole dominion and control of the Trustee for the benefit of the holders of the Series 2000-__ Certificates. If, at any time, the Principal Funding Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall within 10 Business Days establish a new Principal Funding Account meeting the conditions specified above, transfer any cash and/or any investments to such new Principal Funding Account and from the date such new Principal Funding Account is established, it shall be, for the Certificates, the "Principal Funding Account." (b) On each Distribution Date with respect to the Accumulation Period and any Special Payment Date, the Servicer shall withdraw from the Principal Funding Account and deposit in the Collection Account all interest and other investment income (net of losses and investment expenses) on funds then on deposit in the Principal Funding Account. Investment income (including reinvested interest) on funds deposited in the Principal Funding Account and invested pursuant to subsection 4.11(c) shall not be considered to be principal amounts on deposit in the Principal Funding Account for purposes hereof, and shall be treated as Available Series 2000-__ Finance Charge Collections with respect to the last day of the related Monthly Period. Funds on deposit in the Principal Funding Account prior to the Class A Expected Final Payment Date shall be invested at the direction of the Transferor by the Trustee in Eligible Investments. Any such investment shall (i) convert or be convertible into cash so that such funds shall be made available for withdrawal on or prior to the next Distribution Date and (ii) shall be held until maturity; provided, however, that the Trustee, at the direction of the Transferor, may sell an investment that is no longer an Eligible Investment prior to its maturity. Any request to the Trustee from the Transferor to invest funds on deposit in the Principal Funding Account shall be in writing and shall certify that the requested investment is an Eligible Investment which converts or is convertible into cash at or prior to the time required hereby. (c) Pursuant to the authority granted to the Servicer in subsection 3.1(b) of the Agreement, the Servicer shall have the power, revocable by the Trustee, to make withdrawals and payments or to instruct the Trustee to make withdrawals and payments from the Principal Funding Account for the purposes of carrying out of the Servicer's or Trustee's duties hereunder. Pursuant to the authority granted to the Paying Agent in Sections 5.1 and 6.7 of the Agreement, the Paying Agent shall have the power, revocable by the Trustee, to withdraw funds from the Principal Funding Account for the purpose of making distributions to the Certificateholders. Section 4.12. Accumulation Period. The Accumulation Period is scheduled to commence on the Accumulation Date; provided, however, that if the Accumulation Period Length (determined as described below) on any Determination Date on or after the ____________ Determination Date is less than 12 months,upon written notice to the Trustee, the Transferor and each Rating Agency, the Servicer, at its option, may elect to modify the date on which the Accumulation Period actually commences to the first day of the month that is a number of months prior to the month in which the Class A Expected Final Payment Date occurs at least equal to the Accumulation Period Length (so that, as a result of such election, the number of Monthly Periods in the Accumulation Period will at least equal the Accumulation Period Length); provided, however, that (i) the length of the Accumulation Period will not be less than one month; (ii) such determination of the Accumulation Period Length shall be made on each Determination Date on and after the __________ Determination Date but prior to the commencement of the Accumulation Period, and any election to shorten the Accumulation Period shall be subject to the subsequent lengthening of the Accumulation Period to the Accumulation Period Length determined on any subsequent Determination Date, but the Accumulation Period shall in no event commence prior to the Accumulation Date, and (iii) notwithstanding any other provision of the Series 2000-__ Supplement to the contrary, no election to postpone the commencement of the Accumulation Period shall be made after an Early Amortization Event (as defined in the related Supplement) shall have occurred and be continuing with respect to any other Series. The "Accumulation Period Length" will mean a number of months such that the amount available for distribution of principal on the Class A Certificates on the Class A Expected Final Payment Date is expected to equal or exceed the Class A Invested Amount, assuming for this purpose that (1) the payment rate with respect to Collections of Principal Receivables remains constant at the lowest level of such payment rate during the twelve preceding Monthly Periods (or such lower payment rate as the Servicer may select), (2) the total amount of Principal Receivables in the Trust (and the principal amount on deposit in the Special Funding Account, if any) remains constant at the level on such date of determination, (3) no Early Amortization Event with respect to any Series will subsequently occur and (4) no additional Series (other than any Series being issued on such date of determination) will be subsequently issued. Any notice by the Servicer electing to modify the commencement of the Accumulation Period pursuant to this Section 4.12 shall specify (i) the Accumulation Period Length, (ii) the commencement date of the Accumulation Period and (iii) the Controlled Accumulation Amount with respect to each Monthly Period during the Accumulation Period. Section 4.13. Reserve Account. (a) The Servicer shall establish and maintain with an Eligible Institution, which may be the Trustee, in the name of the Trustee, on behalf of the Trust, for the benefit of the Investor Certificateholders, a segregated trust account with the corporate trust department of such Eligible Institution (the "Reserve Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Investor Certificateholders. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Reserve Account and in all proceeds thereof. The Reserve Account shall be under the sole dominion and control of the Trustee for the benefit of the Investor Certificateholders. If at any time the institution holding the Reserve Account ceases to be an Eligible Institution the Transferor shall notify the Trustee, and the Trustee upon being notified (or the Servicer on its behalf) shall, within 10 Business Days, establish a new Reserve Account meeting the conditions specified above with an Eligible Institution, and shall transfer any cash or any investments to such new Reserve Account. The Trustee, at the written direction of the Servicer, shall (i) make withdrawals from the Reserve Account from time to time in an amount up to the Available Reserve Account Amount at such time, for the purposes set forth in this Supplement, and (ii) on each Distribution Date (from and after the Reserve Account Funding Date) prior to termination of the Reserve Account make a deposit into the Reserve Account in the amount specified in, and otherwise in accordance with, subsection 4.6(a)(ix). (b) Funds on deposit in the Reserve Account shall be invested by the Transferor (or, at the direction of the Transferor, by the Servicer or the Trustee on behalf of the Transferor) in Eligible Investments. Funds on deposit in the Reserve Account on any Transfer Date, after giving effect to any withdrawals from the Reserve Account on such Transfer Date shall be invested in such investments that will convert or be convertible into cash so that such funds will be available for withdrawal on or prior to the following Transfer Date. The Trustee shall maintain for the benefit of the Investor Certificateholders possession of the negotiable instruments or certificated securities, if any, evidencing such Eligible Investments. No Eligible Investment shall be disposed of prior to its maturity. On each Transfer Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Transfer Date on funds on deposit in the Reserve Account shall be retained in the Reserve Account to the extent that the Available Reserve Account Amount is less than the Required Reserve Account Amount and the balance, if any, shall be deposited into the Collection Account for application as Available Series 2000-__ Finance Charge Collections on the following Distribution Date. For purposes of determining the availability of funds or the balance in the Reserve Account for any reason under this Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit. (c) On each Transfer Date with respect to the Accumulation Period prior to the payment in full of the Class A Invested Amount and the first Transfer Date with respect to the Early Amortization Period, the Servicer shall calculate the "Reserve Draw Amount" which shall be equal to the Principal Funding Investment Shortfall with respect to each Transfer Date with respect to the Accumulation Period or the first Transfer Date with respect to the Early Amortization Period. (d) In the event that for any Transfer Date the Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available Reserve Account Amount, shall be withdrawn from the Reserve Account on such Transfer Date by the Trustee (acting in accordance with the written instructions of the Servicer), deposited into the Collection Account and included in Available Series 2000-__ Finance Charge Collections for such Transfer Date. (e) In the event that the Reserve Account Surplus on any Distribution Date, after giving effect to all deposits to and withdrawals from the Reserve Account on and prior to such Distribution Date, is greater than zero, the Trustee, acting in accordance with the written instructions of the Servicer, shall withdraw from the Reserve Account, and apply as Excess Finance Charge Collections, an amount equal to such Reserve Account Surplus. (f) Upon the earliest to occur of (i) the termination of the Trust pursuant to Article XII of the Agreement, (ii) the day on which the Class A Invested Amount is paid in full to the Class A Certificateholders, (iii) if the Accumulation Period has not commenced, the occurrence of a Series 2000-__ Early Amortization Event or a Early Amortization Event and (iv) if the Accumulation Period has commenced, the earlier of the first Transfer Date with respect to the Early Amortization Period and the Class A Expected Final Payment Date, the Trustee, acting in accordance with the written instructions of the Servicer, shall withdraw from the Reserve Account and apply as Available Series 2000-__ Finance Charge Collections, all amounts, if any, on deposit in the Reserve Account and the Reserve Account shall be deemed to have terminated for purposes of this Supplement. SECTION 4.14. Defeasance. On any date prior to the Early Amortization Period on which the following conditions have been satisfied: (i) the Transferor has deposited (x) in the Principal Funding Account, an amount equal to the outstanding principal balance of the Class A Certificates, which amount will be invested in Eligible Investments and (y) in the Reserve Account an amount equal to or greater than the Covered Amount, as estimated by the Transferor, for the period from the date of the deposit to the Principal Funding Account through the Class A Expected Final Payment Date; (ii) the Transferor has delivered to the Trustee an opinion of counsel to the effect that such deposit and termination of obligations as described below will not result in the Trust being required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and an opinion of counsel to the effect that following such deposit none of the Trust, the Reserve Account or the Principal Funding Account will be deemed to be an association (or publicly traded partnership) taxable as a corporation; (iii) the Transferor has delivered to the Trustee a certificate of an officer of the Transferor stating that the Transferor reasonably believes that such deposit and termination of its obligations will not constitute an Early Amortization Event or any event that, with the giving of notice or the lapse of time, would constitute an Early Amortization Event or a Series 2000-__ Early Amortization Event to occur; and (iv) the Rating Agency Condition shall have been satisfied; then, the Series 2000-__ Certificates will no longer be entitled to the security interest of the Trust in the Receivables and, except those set forth in clause (i) above, other Trust assets ("Defeasance"), and the Investor Percentages applicable to the allocation to the Series 2000-__ Certificateholders of Collections of Principal Receivables, Finance Charge Receivables and Defaulted Receivables will be reduced to zero. Upon the satisfaction of the foregoing conditions, the Class B Invested Amount will be reduced to zero. ARTICLE V DISTRIBUTIONS AND REPORTS TO SERIES 2000-__ INVESTOR CERTIFICATEHOLDERS Section 5.1. Distributions. (a) On each Distribution Date, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are available on such Distribution Date to pay interest on the Class A Certificates pursuant to this Supplement. (b) On the Class A Expected Final Payment Date and on each Distribution Date thereafter, and on each Distribution Date with respect to the Early Amortization Period, the Paying Agent shall distribute to each Class A Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class A Certificateholder's pro rata share of the amounts that are available on such date to pay principal of the Class A Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class A Invested Amount on such date. On each Distribution Date on and after the Distribution Date on which the Class A Invested Amount is paid in full, the Paying Agent shall distribute to each Class B Certificateholder of record on the related Record Date (other than as provided in Section 12.2 of the Agreement) such Class B Certificateholder's pro rata share of the amounts that are available on such date to pay principal of the Class B Certificates pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Invested Amount on such date. (c) The distributions to be made pursuant to this Section 5.1 are subject to the provisions of Sections 2.6, 10.1 and 12.2 of the Agreement and Section 8.1. (d) Except as provided in Section 12.2 of the Agreement with respect to a final distribution, distributions to Series 2000-__ Certificateholders hereunder shall be made by check mailed to each Series 2000-__ Certificateholder at such Series 2000-__ Certificateholder's address appearing in the Certificate Register without presentation or surrender of any Series 2000-__ Certificate or the making of any notation thereon; provided, however, that with respect to Series 2000-__ Certificates registered in the name of a Clearing Agency, such distributions shall be made to such Clearing Agency in immediately available funds; provided, further, that the final payment in retirement of the Class A Certificates will be made only upon presentation and surrender of the Class A Certificates at the offices specified in the notice of such final distribution delivered by the Trustee pursuant to Section 12.2 of the Agreement. Section 5.2. Reports and Statements to Series 2000-__ Certificateholders. (a) On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to each Class A Certificateholder a statement substantially in the form of Exhibit B prepared by the Servicer. (b) Not later than each Determination Date, the Servicer shall deliver to the Trustee, the Paying Agent and each Rating Agency (i) statements substantially in the form of Exhibit B prepared by the Servicer and (ii) a certificate of a Servicing Officer substantially in the form of Exhibit C. (c) On or before January 31 of each calendar year, beginning with calendar year ____, the Paying Agent, on behalf of the Trustee, shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2000-__ Certificateholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2000-__ Certificateholders, as set forth in paragraph (a) or (b) above, as applicable, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2000-__ Certificateholder, together with other information as is required to be provided by an issuer of indebtedness under the Internal Revenue Code. Such obligation of the Servicer shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Paying Agent pursuant to any requirements of the Internal Revenue Code as from time to time in effect. ARTICLE VI EARLY AMORTIZATION EVENTS Section 6.1. Series 2000-__ Early Amortization Events. If any one of the following events shall occur with respect to the Series 2000-__ Certificates: (a) failure on the part of the Transferor (i) to make any payment or deposit required to be made by the Transferor by the terms of (A) the Agreement or (B) this Supplement, on or before the date occurring five Business Days after the date such payment or deposit is required to be made herein, (ii) to perform in all material respects the Transferor's covenant not to sell, pledge, assign, or transfer to any person, or grant any unpermitted lien on, any Receivable; or (iii) duly to observe or perform in any material respect any covenants or agreements of the Transferor set forth in the Agreement or this Supplement, which failure has a material adverse effect on the Series 2000-__ Certificateholders and which continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Trustee, or to the Transferor and the Trustee by any Holder of Series 2000-__ Certificates; (b) any representation or warranty made by the Transferor in the Agreement or this Supplement (i) shall prove to have been incorrect in any material respect when made, which continues to be incorrect in any material respect for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Trustee, or to the Transferor and the Trustee by any Holder of Series 2000-__ Certificates, and (ii) as a result of which the interests of the Series 2000-__ Certificateholders are materially and adversely affected; provided, however, that a Series 2000-__ Early Amortization Event pursuant to this subsection 6.1(b) shall not be deemed to have occurred hereunder if the Transferor has accepted designation of the related Receivable as an Ineligible Receivable during such period in accordance with the provisions of the Agreement; (c) the average of the Portfolio Yields for any three consecutive Monthly Periods is reduced to a rate which is less than the average of the Base Rates for such three consecutive Monthly Periods; (d) (i) a failure by DHCC or the Transferor to make an Addition within five Business Days after the Required Designation Date or (ii) the Class B Invested Amount shall be less than 5% of the Initial Invested Amount; (e) any Servicer Default shall occur which would have a material adverse effect on the Series 2000-__ Certificateholders; or (f) the amount on deposit in the Special Funding Account as a percentage of the sum of the aggregate amount of Principal Receivables plus the amount on deposit in the Special Funding Account shall equal or exceed 30% on the last day of three consecutive Monthly Periods; then, the Trustee shall within five days publish a notice of such Early Amortization Event and in the case of any event described in subparagraph (a), (b) or (e), after the applicable grace period, if any, set forth in such subparagraphs, the Holders of Series 2000-__ Certificates evidencing undivided interests aggregating more than 50% of the Invested Amount of this Series 2000-__ by notice then given in writing to the Trustee, the Transferor and the Servicer may declare that a early amortization event (a "Series 2000-__ Early Amortization Event") has occurred as of the date of such notice, and in the case of any event described in subparagraphs (c), (d) or (f), a Series 2000-__ Early Amortization Event shall occur without any notice or other action on the part of the Trustee or the Series 2000-__ Certificateholders immediately upon the occurrence of such event. ARTICLE VII OPTIONAL REPURCHASE; SERIES TERMINATION; SALE OF CLASS B CERTIFICATES Section 7.1. Optional Repurchase. The Series 2000-__ Certificates shall be subject to termination by the Transferor at its option on any Distribution Date on or after the Distribution Date on which the Class A Invested Amount is reduced to an amount less than or equal to 10% of the Class A Initial Invested Amount. The deposit required in connection with any such termination and final distribution shall be equal to the Class A Invested Amount plus accrued and unpaid interest on the Series 2000-__ Certificates through the day prior to the Distribution Date on which the final distribution occurs. Section 7.2. Series 2000-__ Termination. (a) If, on the __________ Distribution Date, the Invested Amount (after giving effect to all changes therein on such date) would be greater than zero, the Servicer, on behalf of the Trustee, shall, within the forty-day period which begins on such Distribution Date, solicit bids for the sale of Principal Receivables and the related Finance Charge Receivables (or interests therein) in the amount specified in subsection 12.2(c) of the Agreement. Such bids shall require that such sale shall (subject to Section 7.2(b)) occur on the Scheduled Series 2000-__ Termination Date. The Transferor shall be entitled to participate in, and to receive from the Trustee a copy of each other bid submitted in connection with, such bidding process. (b) The Servicer, on behalf of the Trustee, shall sell such Receivables (or interests therein) on the Scheduled Series 2000-__ Termination Date to the bidder who made the highest cash purchase offer. The proceeds of any such sale shall be treated as Collections on the Receivables to be allocated to the Series 2000-__ Certificateholders pursuant to the Agreement and this Supplement; provided, however, that the Servicer shall determine conclusively the amount of such proceeds which are allocable to Finance Charge Receivables and the amount of such proceeds which are allocable to Principal Receivables. During the period from the __________ Distribution Date to the Scheduled Series 2000-__ Termination Date, the Servicer shall continue to collect payments on the Receivables and allocate and deposit such Collections in accordance with the provisions of the Agreement and this Supplement. Section 7.3. Reduction of Class B Invested Amount During the Revolving Period; Designation of Class B Certificate Terms; Sale of Class B Certificates. (a) The Class B Invested Amount may be reduced during the Revolving Period by distributing Collections of Principal Receivables to the Class B Certificateholders in accordance with Section 4.6(b), provided that (i) the Rating Agency Condition shall have been satisfied with respect to such reduction and (ii) the Transferor shall have delivered to the Trustee an Officer's Certificate stating that the Transferor reasonably believes that such reduction will not, based on the facts known to such officer at the time of such certification, cause an Early Amortization Event or any event that, after the giving of notice or the lapse of time or both, would constitute an Early Amortization Event. (b) The Transferor may at any time, without the consent of the Investor Certificateholders, (i) sell or transfer all or a portion of the Class B Certificates and (ii) in connection with any such sale or transfer, enter into a supplemental agreement with the Trustee pursuant to which the Transferor and the Trustee may amend the Class B Certificate Rate, set forth the amount of monthly interest due Class B Certificateholders (the "Class B Interest"), provide for the payment of additional amounts (the "Class B Additional Interest") with respect to any shortfall (the "Class B Interest Shortfall") in such Class B Interest and provide for such other provisions with respect to the Class B Certificates as may be specified in such supplemental agreement, provided that in each such case (A) the Transferor shall have given notice to the Trustee, the Servicer and the Rating Agencies of such proposed sale or transfer of the Class B Certificates and such supplemental agreement at least five business days prior to the consummation of such sale or transfer and the execution of such proposed supplemental agreement; (B) the Rating Agency Condition shall have been satisfied; (C) no Early Amortization Event shall have occurred prior to the consummation of such proposed sale or transfer of Class B Certificates or the execution of such supplemental agreement; (D) the Transferor shall have delivered an Officer's Certificate, dated the date of the consummation of such sale or transfer and the effectiveness of such supplemental agreement, to the effect that, in the reasonable belief of the Transferor, such action will not, based on the facts known to such officer at the time of such certification, cause an Early Amortization Event to occur with respect to any Series, and (E) the Transferor will have delivered a Tax Opinion, dated the date of such certificate with respect to such action; provided, further, (i) as a condition to the sale or transfer of all or a portion of the Class B Certificates the transferee shall be required to agree not to institute against, or join any other Person in instituting against, the Trust or the Transferor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one year and one day after all Investor Certificates are paid in full and (ii) the Class B Certificates may not be sold or transferred, in whole or in part, to Target Capital Corporation. Section 7.4. Purchase of the Class A Certificates by the Transferor. The Transferor may from time to time, purchase Class A Certificates on the secondary market and request the Trustee to cancel such Class A Certificates held by the Transferor and reduce the Class A Invested Amount by a corresponding amount. ARTICLE VIII FINAL DISTRIBUTION Section 8.1. Sale of Receivables or Certificateholders' Interest pursuant to Section 2.6 or 10.1 of the Agreement and Section 7.1 or 7.2 of this Supplement. (a) The amount to be paid by the Transferor with respect to Series 2000-__ in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.6 of the Agreement or a repurchase of the Certificateholder's Interest pursuant to Section 10.1 shall equal the Reassignment Amount for the first Distribution Date following the Monthly Period in which the reassignment obligation arises under the Agreement. (b) With respect to the Reassignment Amount deposited into the Collection Account pursuant to Sections 7.1 or 8.1 or any amounts allocable to the Series 2000-__ Certificateholders' Interest deposited into the Collection Account pursuant to Section 7.2, the Trustee shall, not later than 10:00 a.m., New York City time, on the related Distribution Date, make deposits or distributions of the following amounts (in the priority set forth below and, in each case after giving effect to any deposits and distributions otherwise to be made on such date) in immediately available funds: (i) (x) the Class A Invested Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class A Certificateholders and (y) an amount equal to the sum of (A) Class A Interest for such Distribution Date, (B) any Class A Interest previously due but not distributed to the Class A Certificateholders on a prior Distribution Date and (C) the amount of Class A Additional Interest, if any, for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class A Certificateholders, (ii) (x) the Class B Invested Amount on such Distribution Date will be distributed to the Paying Agent for payment to the Class B Certificateholders and (y) an amount equal to the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Certificateholders on a prior Distribution Date and (C) the amount of Class B Additional Interest, if any, for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Certificateholders on any prior Distribution Date, will be distributed to the Paying Agent for payment to the Class B Certificateholders, (iii) any other amounts payable pursuant to subsection 4.6(a) shall be paid in accordance therewith and (iv) the balance, if any, will be distributed to the Holder of the Transferor Certificate. (c) Notwithstanding anything to the contrary in this Supplement or the Agreement, all amounts distributed to the Paying Agent pursuant to Section 8.1(b) for payment to the Series 2000-__ Certificateholders shall be deemed distributed in full to the Series 2000-__ Certificateholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and shall be deemed to be a final distribution pursuant to Section 12.2 of the Agreement. ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Delivery and Payment for the Series 2000- __ Certificates. The Transferor shall execute and deliver the Series 2000-__ Certificates to the Trustee for authentication in accordance with Section 6.1 of the Agreement. The Trustee shall deliver the Series 2000-__ Certificates to or upon the order of the Transferor when authenticated in accordance with Section 6.2 of the Agreement. Section 9.2. Form of Delivery of Series 2000-__ Certificates. The Class A certificates and the Class B Certificates shall be delivered as Registered Certificates as provided in Section 6.1 of the Agreement. Section 9.3. Legend on Class B Certificates. Each Class B Certificate will bear a legend substantially in the following form: EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED). THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS. THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES 2000-__ SUPPLEMENT. Section 9.4. Ratification of Agreement. As supplemented by this Supplement, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Supplement shall be read, taken, and construed as one and the same instrument. Section 9.5. Counterparts. This Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of such counterparts shall together constitute but one and the same instrument. Section 9.6. Paired Series. Subject to satisfaction of the Rating Agency Condition, and prior to the commencement of the Early Amortization Period, the Series 2000-__ Certificates may be paired with one or more other Series (each a "Paired Series"). Each Paired Series either will be pre-funded with an initial deposit to a prefunding account in an amount up to the initial principal balance of such Paired Series and primarily from the proceeds of the sale of such Paired Series or will have a variable principal amount. Any such prefunding account will be held for the benefit of such Paired Series and not for the benefit of the Series 2000-__ Certificateholders. As principal is paid with respect to the Series 2000-__ Certificates, either (i) in the case of a prefunded Paired Series, an equal amount of funds on deposit in any prefunding account for such prefunded Paired Series will be released (which funds will be distributed to the Transferor) or (ii) in the case of a Paired Series having a variable principal amount, an interest in such variable Paired Series in an equal or lesser amount may be sold by the Trust (and the proceeds thereof will be distributed to the Transferor) and, in either case, the invested amount in the Trust of such Paired Series will increase by up to a corresponding amount. Upon payment in full of the Series 2000-__ Certificates, assuming that there have been no unreimbursed charge-offs with respect to any related Paired Series, the aggregate invested amount of such related Paired Series will have been increased by an amount up to an aggregate amount equal to the Invested Amount paid to the Series 2000-__ Certificateholders since the issuance of such Paired Series. The issuance of a Paired Series will be subject to the conditions described in subsection 6.3 of the Agreement. Section 9.7. Jurisdiction; Service. Solely with respect to the Agreement (as supplemented hereby and as further amended, modified or supplemented from time to time) and the transactions and other matters contemplated thereby or relating thereto, each of the parties hereto hereby irrevocably and unconditionally agrees (a) to be subject to the jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware, and (b)(i) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal process, and (ii) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to (b)(i) or (ii) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware. For purposes of implementing the parties' foregoing agreement to appoint and maintain an agent for service of process in the State of Delaware solely in respect of the Agreement and the transactions and other matters contemplated thereby or relating thereto, each such party that has not as of the date hereof already duly appointed such an agent does hereby appoint RL&F Service Corp., One Rodney Square, 10th Floor, Wilmington, Delaware 19801, as such agent. SECTION 9.8. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 9.9. Instructions in Writing. All instructions or other communications given by the Servicer or any other person to the Trustee pursuant to this Supplement shall be in writing. IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused this Series 2000-__ Supplement to be duly executed by their respective officers as of the day and year first above written. TARGET RECEIVABLES CORPORATION, Transferor By:________________________________________ Name: Title: RETAILERS NATIONAL BANK, Servicer By:_______________________________________ Name: Title: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Trustee By:________________________________________ Name: Title: Exhibit A-1 [FORM OF CLASS A INVESTOR CERTIFICATE] REGISTERED $[ ] No. [ ] CUSIP NO. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. TARGET CREDIT CARD MASTER TRUST SERIES 2000-__ ____% CLASS A ASSET BACKED CERTIFICATE Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated from time to time in the ordinary course of business from a portfolio of consumer open end credit card accounts generated or to be generated by Retailers National Bank ("RNB" or the "Servicer") and other assets and interests constituting the Trust under the Agreement described below. (Not an interest in or a recourse obligation of Target Receivables Corporation, Target Capital Corporation or RNB or any affiliate of any of them.) This certifies that CEDE & CO. (the "Certificateholder") is the registered owner of a fractional undivided interest in the Target Credit Card Master Trust (the "Trust") issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, as amended (the "Pooling and Servicing Agreement"; such term to include any amendment thereto) by and between Target Receivables Corporation, as Transferor (the "Transferor"), RNB, as the Servicer, and Norwest Bank Minnesota, National Association, as Trustee (the "Trustee"), and the Series 2000-__ Supplement, dated as of ___________ (the "Series 2000-__ Supplement"), among the Transferor, the Servicer and the Trustee. The Pooling and Servicing Agreement, as supplemented by the Series 2000-__ Supplement, is herein referred to as the "Agreement"). The corpus of the Trust consists of all of the Transferor's right, title and interest in, to and under the Trust Assets (as defined in the Agreement). This Certificate does not purport to summarize the Agreement and reference is made to that Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is one of a class of Certificates entitled "Target Credit Card Master Trust $___________ ____% Class A Asset Backed Certificates, Series 2000-__" (the "Class A Certificates"), each of which represents a fractional undivided interest in the Trust, and is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Certificateholder by virtue of the acceptance hereof assents and by which the Certificateholder is bound. The Transferor has structured the Agreement, the Class A Certificates and the "Target Credit Card Master Trust $___________ Class B Asset Backed Certificates, Series 2000-__" (the "Class B Certificates") with the intention that the Class A Certificates will qualify under applicable tax law as debt, and both the Transferor and each holder of a Class A Certificate (a "Class A Certificateholder") or any interest therein by acceptance of its Certificate or any interest therein, agrees to treat the Class A Certificates for purposes of federal, state and local income or franchise taxes and any other tax imposed on or measured by income, as debt. No principal will be payable to the Class A Certificateholders until the earlier of (i) the first Distribution Date in the Early Amortization Period and (ii) the Class A Expected Final Payment Date. Each Class A Certificate represents the right to receive interest at the rate of ____% per annum (such rate, as in effect from time to time, the "Class A Certificate Rate"). Interest on the Class A Certificates will accrue from the Closing Date and will be distributed on ______________, and on the 25th day of each month thereafter, or if such day is not a business day, on the next succeeding business day (each, a "Distribution Date"), in an amount equal to one-twelfth of the product of (a) the Class A Certificate Rate and (b) the outstanding principal balance of the Class A Certificates as of the last day of the preceding Monthly Period (or in the case of the first Distribution Date, the initial Class A Invested Amount). Principal is scheduled to be paid in full on the __________ Distribution Date for the Class A Certificates, but may be paid earlier or later in certain circumstances. Unpaid principal, together with interest, will be payable monthly to Class A Certificateholders following the Class A Expected Final Payment Date to the extent principal has not been paid in full on the Class A Expected Final Payment Date. However, no payments of principal or interest will be made on the Series 2000-__ Certificates after the Series 2000-__ Termination Date, regardless of whether principal and interest have been paid in full with respect thereto. Interest will be distributed to the Class A Certificateholders monthly on each Distribution Date prior to the Series Termination Date. Interest for any Distribution Date will include accrued interest at the Class A Certificate Rate from and including the preceding Distribution Date or, in the case of the first Distribution Date from and including the Closing Date, to but excluding such Distribution Date. Interest for any Distribution Date due but not paid on any Distribution Date will be due on the next succeeding Distribution Date together with, to the extent permitted by applicable law, additional interest on such amount at the Class A Certificate Rate plus 2% per annum. In general, payments of principal with respect to the Class A Certificates are limited to the Class A Invested Amount, which may be less than the unpaid principal balance of the Class A Certificates. The Class A Expected Final Payment Date is the ____________ Distribution Date, but principal with respect to the Class A Certificates may be paid earlier or later under certain circumstances described in the Agreement and the Series 2000-__ Supplement. If for one or more months during the Accumulation Period there are not sufficient funds to pay the Controlled Deposit Amount, then to the extent that excess funds are not available on subsequent Distribution Dates with respect to the Accumulation Period to make up for such shortfalls, the final payment of principal of the Class A Certificates will occur later than the Class A Expected Final Payment Date. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose. IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed under its official seal. TARGET RECEIVABLES CORPORATION By:_____________________________________ Name: Title: Dated: __________ __, ____ CERTIFICATE OF AUTHENTICATION This is one of the Class A Certificates referred to in the within-mentioned Pooling and Servicing Agreement. NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION By:____________________________________ Name: Title: Exhibit A-2 [FORM OF CLASS B INVESTOR CERTIFICATE] REGISTERED $ No. [ ] EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF TARGET RECEIVABLES CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), ANY INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED). THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED ON OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET" WITHIN THE MEANING OF SECTION 7704(B)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER INCLUDING A MARKET WHEREIN INTERESTS IN THE CLASS B CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS B CERTIFICATES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS. THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION. NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED, SOLD PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE SECURITIES OR "BLUE SKY" LAWS OF THE UNITED STATES OR OTHER JURISDICTION OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS AND IN ACCORDANCE WITH THE PROVISIONS OF THE SERIES 2000-__ SUPPLEMENT. TARGET CREDIT CARD MASTER TRUST SERIES 2000-__ $__________ CLASS B ASSET BACKED CERTIFICATE Evidencing an undivided interest in a trust, the corpus of which consists of receivables generated from time to time in the ordinary course of business from a portfolio of consumer open end credit card accounts generated or to be generated by Retailers National Bank ("RNB" or the "Servicer") and other assets and interests constituting the Trust under the Agreement described below. (Not an interest in or a recourse obligation of Target Receivables Corporation, Target Capital Corporation or RNB or any affiliate of any of them.) This certifies that Target Receivables Corporation (the "Certificateholder") is the registered owner of a fractional undivided interest in the Target Credit Card Master Trust (the "Trust") issued pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (the "Pooling and Servicing Agreement"; such term to include any amendment thereto) by and between Target Receivables Corporation, as Transferor (the "Transferor"), RNB as the Servicer, and Norwest Bank Minnesota, National Association, as Trustee (the "Trustee"), and the Series 2000-__ Supplement, dated as of _____________ (the "Series 2000- __ Supplement"), among the Transferor, RNB, as Servicer and the Trustee. The Pooling and Servicing Agreement, as supplemented by the Series 2000-__ Supplement, is herein referred to as the "Agreement". The corpus of the Trust consists of all of the Transferor's right, title and interest in, to and under the Trust Assets (as defined in the Agreement). This Certificate does not purport to summarize the Agreement and reference is made to that Agreement for information with respect to the interests, rights, benefits, obligations, proceeds, and duties evidenced hereby and the rights, duties and obligations of the Trustee. To the extent not defined herein, the capitalized terms used herein have the meanings ascribed to them in the Agreement. This Certificate is one of a class of Certificates entitled "Target Credit Card Master Trust $_____________ Class B Asset Backed Certificates, Series 2000-__" (the "Class B Certificates"), each of which represents a fractional undivided interest in the Trust, and is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement, as amended from time to time, the Certificateholder by virtue of the acceptance hereof assents and by which the Certificateholder is bound. Unless the Rating Agency Condition and certain other conditions set forth in the Series 2000-__ Supplement are satisfied, (i) no principal will be payable to the Class B Certificateholders until the Class A Invested Amount is paid in full and (ii) no interest will accrue on the unpaid principal amount of the Class B Certificates. Principal is scheduled to be paid in full to the Class A Certificates on the _________ Distribution Date. In general, payments of principal with respect to the Class B Certificates are limited to the Class B Invested Amount, which may be less than the unpaid principal balance of the Class B Certificates. The Class B Expected Final Payment Date is the ___________ Distribution Date, but principal with respect to the Class B Certificates may be paid earlier or later under certain circumstances described in the Agreement and the Series 2000-__ Supplement. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee, by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose. IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly executed under its official seal. TARGET RECEIVABLES CORPORATION By:_____________________________________ Name: Title: Dated: __________ __, ____ CERTIFICATE OF AUTHENTICATION This is one of the Class B Certificates referred to in the within-mentioned Pooling and Servicing Agreement. NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION By:____________________________________ Name: Title: EXHIBIT B FORM OF MONTHLY SERIES 2000-__ CERTIFICATEHOLDERS' STATEMENT EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE RETAILERS NATIONAL BANK TARGET CREDIT CARD MASTER TRUST SERIES 2000-__ The undersigned, a duly authorized representative of Retailers National Bank, as Servicer ("RNB"), pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (as may be amended, from time to time, the "Agreement"), as supplemented by the Series 2000-__ Supplement (as amended and supplemented, the "Series Supplement"), among RNB, Target Receivables Corporation and Norwest Bank Minnesota, National Association, does hereby certify as follows: 1. Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement or the Series Supplement, as applicable. 2. RNB is, as of the date hereof, the Servicer under the Agreement. 3. The undersigned is a Servicing Officer. 4. This Certificate relates to the Distribution Date occurring on __________ __, ____ (the "________ __ Distribution Date"). 5. As of the date hereof, to the best knowledge of the undersigned, the Servicer has performed in all material respects all its obligations under the Agreement through the Monthly Period preceding such Distribution Date [or, if there has been a default in the performance of any such obligation, set forth in detail the (i) nature of such default, (ii) the action taken by the Servicer, if any, to remedy such default and (iii) the current status of each such default; if applicable, insert "None"]. 6. As of the date hereof, to the best knowledge of the undersigned, no Early Amortization Event occurred on or prior to such Distribution Date. IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Certificate this ____ day of ___________ ____. RETAILERS NATIONAL BANK, as Servicer By:_____________________________________ Name: Title: EX-4 5 0005.txt EXHIBIT 4(C) ============================================================================== RETAILERS NATIONAL BANK, Seller and TARGET CAPITAL CORPORATION, Purchaser AMENDED AND RESTATED BANK RECEIVABLES PURCHASE AGREEMENT Dated as of April 28, 2000 ============================================================================== TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.1. Definitions..................................... 2 Section 1.2. Other Definitional Provisions................... 6 ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES Section 2.1. Purchase........................................ 8 Section 2.2. Addition of Additional Accounts................. 10 ARTICLE III CONSIDERATION AND PAYMENT Section 3.1. Purchase Price.................................. 12 Section 3.2. Adjustments to Purchase Price.................. 12 Section 3.3. Settlement and Ongoing Payment of Purchase Price................................ 12 ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1. Representations and Warranties of RNB Relating to RNB.............................. 14 Section 4.2. Representations and Warranties of RNB Relating to the Agreement and the Receivables................................... 16 Section 4.3. Representations and Warranties of TCC........... 19 ARTICLE V COVENANTS Section 5.1. RNB Covenants................................... 21 Section 5.2. TCC Covenant.................................... 24 ARTICLE VI REPURCHASE OBLIGATION Section 6.1. Reassignment of Ineligible Receivables................................... 25 Section 6.2. Reassignment of Certificateholders' Interest in Trust Portfolio................... 25 Section 6.3. Conveyance of Reassigned Receivables............ 26 ARTICLE VII CONDITIONS PRECEDENT Section 7.1. Conditions to TCC's Obligations Regarding Initial Receivables............................ 27 Section 7.2. Conditions to TCC's Obligations Regarding Additional Receivables........................ 27 Section 7.3. Conditions Precedent to Obligations of RNB........................................ 28 ARTICLE VIII TERM AND PURCHASE TERMINATION Section 8.1. Term............................................ 30 Section 8.2. Purchase Termination............................ 30 ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Amendment....................................... 32 Section 9.2. GOVERNING LAW; JURISDICTION..................... 32 Section 9.3. Notices.......................................... 33 Section 9.4. Severability of Provisions...................... 34 Section 9.5. Assignment, Sale of Accounts.................... 34 Section 9.6. Acknowledgement and Agreement of RNB............ 35 Section 9.7. Further Assurances.............................. 36 Section 9.8. No Waiver; Cumulative Remedies................... 36 Section 9.9. Counterparts..................................... 36 Section 9.10. Binding Third-Party Beneficiaries............... 36 Section 9.11. Merger and Integration........................... 37 Section 9.12. Headings........................................ 37 Section 9.13. Schedules and Exhibits.......................... 37 Section 9.14. Survival of Representations and Warranties..................................... 37 EXHIBIT Exhibit A - Form of Supplemental Conveyance SCHEDULE Schedule 1 - List of Accounts [Deemed Incorporated by Reference] AMENDED AND RESTATED BANK RECEIVABLES PURCHASE AGREEMENT, dated as of April 28, 2000, by and between RETAILERS NATIONAL BANK, a national banking association ("RNB"), and TARGET CAPITAL CORPORATION, a Minnesota corporation ("TCC"). W I T N E S S E T H: WHEREAS, RNB and TCC have heretofore executed and delivered a Bank Receivables Purchase Agreement, dated as of September 13, 1995 (as amended, supplemented or otherwise modified, the "Original Bank Receivables Purchase Agreement"), by and between Retailers National Bank, as the Seller, and Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), as the Purchaser; WHEREAS, the Purchaser, formerly known as Dayton Hudson Capital Corporation, has been renamed Target Capital Corporation and desires to amend and restate the Original Bank Receivables Purchase Agreement to read in its entirety as set forth below; WHEREAS, TCC desires to purchase, from time to time, certain Receivables (hereinafter defined) arising in certain Accounts (hereinafter defined) of RNB; WHEREAS, RNB desires to sell from time to time and assign such Receivables to TCC upon the terms and conditions hereinafter set forth; WHEREAS, it is contemplated that the Receivables purchased hereunder will be transferred by TCC to TRC and by TRC to the Trust (hereinafter defined) in connection with the issuance of certain Certificates (hereinafter defined); WHEREAS, RNB agrees that all covenants and agreements made by RNB herein with respect to the Accounts (hereinafter defined) and Receivables shall also be for the benefit of the Trustee (hereinafter defined) and all holders of the Certificates; WHEREAS, Section 9.1 of the Original Bank Receivables Purchase Agreement provides that RNB and TCC, without the consent of any of the Certificateholders, may amend the Original Bank Receivables Purchase Agreement from time to time so long as (x) the Rating Agency Condition shall have been satisfied with respect to such amendment and (y) the Trustee shall have received an Opinion of Counsel that such amendments do not adversely affect in any material respect the interests of the Trustee or the Certificateholders; and WHEREAS, all conditions precedent to the execution of this Agreement have been complied with; NOW, THEREFORE, pursuant to Section 9.1 of the Original Bank Receivables Purchase Agreement, RNB and TCC hereby agree that effective on and as of the date hereof, the Original Bank Receivables Purchase Agreement is hereby amended and restated in its entirety as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. Each capitalized term used herein or in any certificate, document, or Conveyance Paper made or delivered pursuant hereto, and not defined herein or therein, shall have the meaning specified in the Pooling and Servicing Agreement. In addition, the following words and phrases shall have the following meanings: "Account" shall mean each Initial Account, each Automatic Additional Account and each Supplemental Account, but shall exclude any Account all the Receivables in which are either reassigned or assigned to RNB or its designee pursuant to Section 6.2 or to the Servicer pursuant to Section 3.3 of the Pooling and Servicing Agreement and any inactive Accounts which in accordance with the Credit Card Guidelines have been removed from the active computer records of RNB. The definition of Account shall include each account into which an Account is transferred (a "Transferred Account"); provided that (i) such transfer is made in accordance with the Credit Card Guidelines and (ii) such Transferred Account can be traced or identified, by reference to or by way of the computer files, microfiche lists or printed lists delivered to TCC by RNB (and, in turn to TRC by TCC pursuant to Section 2.1 of the TRC Purchase Agreement and to the Trustee by TCC pursuant to Section 2.1 of the Pooling and Servicing Agreement), if applicable, as an account into which an Account has been transferred. The term "Account" shall be deemed to refer to an Automatic Additional Account or a Supplemental Account only from and after the Addition Date with respect thereto, and the term "Account" shall be deemed to refer to any Removed Account only prior to the Removal Date with respect thereto. "Addition Cut-Off Date" shall mean the date as of which any Supplemental Accounts or Participation Interests are designated by TRC for inclusion in the Trust, as specified in the related Assignment. "Addition Date" shall mean (i) with respect to Supplemental Accounts, the date on which the Receivables in such Supplemental Accounts are conveyed by RNB to TCC pursuant to Section 2.2, (ii) with respect to Automatic Additional Accounts, the date on which such accounts are created, and (iii) with respect to Participation Interests, the date from and after which such Participation Interests are to be included as Trust Assets pursuant to Section 2.2. "Addition Notice Date" shall have the meaning specified in Section 2.2(b) of this Agreement. "Additional Accounts" shall mean an Automatic Additional Account or a Supplemental Account. "Agreement" shall mean this Bank Receivables Purchase Agreement and all amendments hereof and supplements hereto. "Automatic Addition Suspension Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "Automatic Addition Termination Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "Automatic Additional Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement between RNB and the related Obligor coming into existence (i) after the Initial Cut-Off Date and prior to the earlier of the Automatic Addition Termination Date or an Automatic Addition Suspension Date and (ii) following an Automatic Addition Suspension Date and after a Restart Date and prior to a subsequent Automatic Addition Suspension Date or any Automatic Addition Termination Date. "Closing Date" shall mean September 13, 1995. "Conveyance" shall have the meaning specified in Section 2.1 (a). "Conveyance Papers" shall have the meaning specified in Section 4.1(c). "Credit Adjustment" shall have the meaning specified in Section 3.2. "Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the United States of America and (ii) all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, readjustment of debt, marshalling of assets or similar debtor relief laws of the United States, any state or any foreign country from time to time in effect affecting the rights of creditors generally. "Initial Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement between RNB and any Person existing on the Initial Cut-Off Date. "Initial Cut-Off Date" shall mean the close of business on June 30, 1995. "Insolvency Event" shall have the meaning specified in Section 8.2. "New Principal Receivables" shall have the meaning set forth in Section 3.1. "Pooling and Servicing Agreement" shall mean the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, among RNB, as Servicer, TRC, as Transferor and the Trustee, and all amendments and supplements thereto. "Portfolio Reassignment Price" shall mean the portion of the amount payable by TRC to the Trustee pursuant to Section 2.6 of the Pooling and Servicing Agreement with respect to Receivables previously sold pursuant to this Agreement. "Purchase Price" shall have the meaning set forth in Section 3.1. "Purchased Assets" shall have the meaning set forth in Section 2.1. "Receivable" shall mean any amount owing from time to time by an Obligor under an Account, including amounts owing for purchases of goods and services, and amounts payable for Finance Charge Receivables (exclusive of Deferred Billing Fees and Merchant Fees). A Receivable shall be deemed to have been created at the end of the day on the Date of Processing of such Receivable. Receivables which become Defaulted Receivables shall not be shown on RNB's records as amounts payable (and shall cease to be included as Receivables) on the day on which they become Defaulted Receivables. "Removal Date" shall mean the date for removal of the Removed Accounts and Participation Interests. "Removed Accounts" shall mean those Accounts which TRC may on any day of any Monthly Period, upon the satisfaction of certain conditions set forth in Section 2.10 of the Pooling and Servicing Agreement, 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 moneys due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to the Accounts then owned by RNB and designated by TRC or Participation Interests. "Restart Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "RNB" shall mean Retailers National Bank, a national banking association. "Settlement Statement" shall have the meaning specified in Section 3.3 of this Agreement. "Supplemental Accounts" shall have the meaning specified in Section 2.2(b) of this Agreement. "Supplemental Conveyance" shall have the meaning set forth in Section 2.2(b). "TCC" shall mean Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), a Minnesota corporation. "Transferred Account" shall have the meaning set forth in the definition of "Account." "TRC" shall mean Target Receivables Corporation (formerly known as Dayton Hudson Receivables Corporation), a Minnesota corporation. "TRC Purchase Agreement" shall mean the Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000, by and between TCC, as seller and TRC, as purchaser. "Trust" shall mean the trust created by the Pooling and Servicing Agreement. "Trustee" shall mean Norwest Bank Minnesota, National Association, a national banking association organized and existing under the laws of the United States, as, and acting in the capacity of, Trustee under the Pooling and Servicing Agreement, or its successor-in- interest, or any successor trustee appointed in accordance with the Pooling and Servicing Agreement. Section 1.2. Other Definitional Provisions. (a) Each capitalized term defined in this Agreement shall have the defined meaning when used in any certificate, other document, or Conveyance Paper made or delivered pursuant hereto unless otherwise defined therein. (b) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement or any Conveyance Paper shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, Subsection, Schedule and Exhibit references contained in this Agreement are references to Sections, Subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified. (c) All determinations of the Principal Receivables or Finance Charge Receivables, and of any collections thereof, shall be made in accordance with the Pooling and Servicing Agreement and all applicable Supplements. (d) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. (e) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any outstanding Series. (f) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day. ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES Section 2.1. Purchase. (a) By execution of this Agreement, RNB does hereby sell, transfer, assign, set over and otherwise convey to TCC (collectively, the "Conveyance"), without recourse all of its right, title and interest in, to and under (i) the Receivables existing at the close of business on the Initial Cut-Off Date and thereafter created from time to time and arising in the Initial Accounts and the Receivables existing on each applicable Addition Date and thereafter created from time to time and arising in any Automatic Additional Accounts, and in each case, thereafter created from time to time until the termination of the Trust, (ii) any Merchant Fees and Deferred Billing Fees, (iii) all Recoveries allocable to the foregoing Accounts and all Recoveries which are identified as relating to specific Defaulted Receivables and (iv) all monies due or to become due thereunder and all amounts received with respect thereto and all proceeds (including, without limitation, "proceeds" as such term is defined in the UCC) thereof (collectively, the "Purchased Assets"). (b) In connection with such Conveyance, TCC agrees (i) to record and file, at its own expense, any financing statements (and continuation statements with respect to such financing statements when applicable) and to take such other action with respect to the Receivables now existing and hereafter 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 Conveyance of such Purchased Assets from RNB to TCC on and after the Closing Date, (ii) that such financing statements shall name RNB, as seller, and TCC, as purchaser, of the Receivables and (iii) to deliver a file-stamped copy of such financing statements or other evidence of such filings (excluding continuation statements, which shall be delivered as filed) to RNB (or to the Trustee, if RNB so directs) as soon as is practicable after filing. (c) In connection with such Conveyance, RNB further agrees that it will, at its own expense, (i) on (A) the Automatic Addition Termination Date or Automatic Addition Suspension Date, in the case of the Initial Accounts and any Additional Accounts designated pursuant hereto prior to such dates, (B) the applicable Addition Date, in the case of Supplemental Accounts, and (C) the applicable Removal Date, in the case of Removed Accounts, indicate in its computer files or microfiche or printed lists that the Receivables created in connection with the Accounts have been (a) sold to TCC pursuant to this Agreement and (b) sold by TCC to TRC pursuant to the TRC Purchase Agreement and (c) transferred by TRC to the Trustee pursuant to the Pooling and Servicing Agreement for the benefit of the Certificateholders by including (or, in the case of Removed Accounts, either including such a code identifying the Removed Accounts only if the removal occurs prior to the Automatic Addition Termination Date or any Automatic Addition Suspension Date, or subsequent to a Restart Date, or deleting such code thereafter) in such computer files and microfiche or printed lists the code or other notation identifying each such Account and (ii) deliver to TCC on the date referred to in clauses (A), (B) or (C) above, as applicable, a computer file or microfiche or printed list containing a true and complete list of all such Accounts specifying for each such Account, as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date, in the case of clause (A) above, the applicable Addition Cut-Off Date, in the case of Supplemental Accounts, and the Removal Date, in the case of Removed Accounts, (A) its account number, (B) the aggregate amount outstanding in such Account and (C) the aggregate amount of Principal Receivables in such Account. Such computer files or microfiche or printed lists, as supplemented from time to time to reflect Supplemental Accounts or Removed Accounts, shall be marked as Schedule I to this Agreement, shall be delivered to TCC (or to the Trustee, if so directed by TCC) and marked as proprietary and confidential, and are hereby incorporated into and made a part of this Agreement. RNB further agrees not to alter the code or other notation referenced in clause (i) of this paragraph with respect to any Account during the term of this Agreement unless and until (x) such Account becomes a Removed Account, (y) a Restart Date has occurred on which RNB starts including Automatic Additional Accounts as Accounts or (z) RNB shall have delivered to TCC and the Trustee at least 30 days prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the respective interests of TCC and the Trustee in the Receivables and other Trust Assets to continue to be perfected with the priority required by this Agreement and the Pooling and Servicing Agreement, respectively. (d) It is the intention of the parties hereto that the conveyance of the Receivables and the other Purchased Assets by RNB to TCC as provided in this Section 2.1 be, and be construed as, an absolute sale, without recourse, of the Receivables by RNB to TCC. Furthermore, it is not intended that such conveyance be deemed a pledge of the Receivables and the other Purchased Assets by RNB to TCC to secure a debt or other obligation of RNB. If, however, notwithstanding the intention of the parties, the conveyance provided for in this Section 2.1 is determined to be a transfer for security, then this Agreement shall also be deemed to be a security agreement within the meaning of Article 9 of the UCC and RNB hereby grants to TCC a "security interest" within the meaning of Article 9 of the UCC in all of RNB's right, title and interest in and to the Receivables and the other Purchased Assets and all amounts payable to the holders of the Receivables after the Closing Date in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to secure a loan in an amount equal to the Purchase Price of the Receivables. Section 2.2. Addition of Additional Accounts. (a) All accounts which meet the definition of Automatic Additional Accounts shall be included as Accounts from and after the date upon which such Automatic Additional Accounts are created and all Receivables in such Automatic Additional Accounts, whether such Receivables are then existing or thereafter created, shall be transferred automatically to TCC upon creation by RNB. For all purposes of this Agreement, all receivables of such Automatic Additional Accounts shall be treated as Receivables upon their creation and shall be subject to the eligibility criteria specified in the definitions in the Pooling and Servicing Agreement of "Eligible Receivable" and "Eligible Account." RNB may elect at any time to terminate the inclusion in Accounts of new accounts which would otherwise be Automatic Additional Accounts as of any Business Day (the "Automatic Addition Termination Date") or suspend such inclusion as of any Business Day (an "Automatic Addition Suspension Date") until a future Business Day to be notified in writing by RNB to TCC (the "Restart Date"), by delivering to TCC ten days prior written notice of such election at least 10 days prior to such Automatic Addition Termination Date or Automatic Addition Suspension Date. Promptly after an Automatic Addition Termination Date, an Automatic Addition Suspension Date or a Restart Date, RNB and TCC agree to execute and TCC agrees to record and file at its own expense an amendment to the financing statements referred to in Section 2.1(b) hereof to specify the accounts then subject to this Agreement (which specification may incorporate a list of accounts by reference) and, except in connection with any such filing made after a Restart Date, to release any security interest in any accounts created after the Automatic Addition Termination Date or any Automatic Addition Suspension Date. (b) If, from time to time, TCC becomes obligated to designate supplemental accounts or Participation Interests pursuant to Section 2.2(b) of the TRC Purchase Agreement, then TCC shall give RNB written notice thereof on or before the eighth Business Day (the "Addition Notice Date") prior to the Addition Date therefor, and RNB shall on or before the Addition Date, designate sufficient Eligible Accounts (the "Supplemental Accounts") to be included as Accounts, or Participation Interests, as the case may be, so that after the inclusion thereof TCC will be in compliance with the requirements of Section 2.2(b) of the TRC Purchase Agreement; provided, however, that the failure of RNB to transfer Receivables to TCC as provided in this paragraph solely as a result of the unavailability of a sufficient amount of Eligible Receivables shall not constitute a breach of this Agreement. Additionally, subject to Section 2.9(b) of the Pooling and Servicing Agreement, from time to time, Accounts may be designated to be included as Supplemental Accounts or Participation Interests may be designated to be included as Trust Assets, in either case upon the mutual agreement of RNB and TCC. In either event, RNB shall have sole responsibility for selecting such Supplemental Accounts or Participation Interests. In the case of Supplemental Accounts, RNB shall on or prior to the Addition Date therefor execute and deliver to TCC a written assignment from RNB to TCC in substantially the form of Exhibit A (the "Supplemental Conveyance"). Upon such designation, such Supplemental Accounts shall be deemed to be Accounts hereunder. ARTICLE III CONSIDERATION AND PAYMENT Section 3.1. Purchase Price. (a) The "Purchase Price" for the Receivables which came into existence on or prior to the Closing Date conveyed to TCC under this Agreement shall be payable on the Closing Date and shall be an amount equal to 100% of Principal Receivables and Finance Charge Receivables so conveyed (less the amount of any participation interest in the Receivables previously issued to TCC by RNB). The Purchase Price for the Receivables (including Receivables in Additional Accounts) to be conveyed to TCC under this Agreement that are created on any Business Day after the Closing Date shall be payable on the date of conveyance in an amount equal to 100% of the Principal Receivables, based on estimated Principal Receivables (subject to adjustment on each Distribution Date to reflect actual Principal Receivables so conveyed (the "New Principal Receivables")), the Purchase Price to be adjusted from time to time with respect to New Principal Receivables originated thereafter to reflect such factors as RNB and TCC mutually agree will result in a Purchase Price determined to approximate the fair market value of such New Principal Receivables. (b) The Purchase Price to be paid by TCC on the Closing Date and with respect to each Receivable created thereafter shall be paid in cash in accordance with Section 3.3. Section 3.2. Adjustments to Purchase Price. The Purchase Price with respect to any Receivable previously sold to TCC by RNB which has since been reduced by RNB or the Servicer because of a rebate, refund, unauthorized charge or billing error to a cardholder because such Receivable was created in respect of merchandise that was refused or returned by a cardholder on each Business Day shall be reduced on such Business Day by the amount of such adjustment (a "Credit Adjustment") and such Credit Adjustment shall be payable on such Business Day, based on an estimate of credit adjustments, subject to adjustment for actual calculations on the related Distribution Date. Section 3.3. Settlement and Ongoing Payment of Purchase Price. On each Business Day, RNB shall deliver a settlement statement (the "Settlement Statement") to TCC, showing the aggregate Purchase Price of Receivables conveyed to TCC on such Business Day, and the amount which remains unpaid as Credit Adjustments made with respect to such Business Day pursuant to Section 3.2 hereof and any adjustment to the Purchase Price of Receivables with respect to such Business Day pursuant to Section 6.1 hereof. On each Distribution Date, RNB shall calculate the actual aggregate Purchase Price and Credit Adjustments for each day during the preceding Monthly Period which shall also reflect adjustments to the aggregate Purchase Price for such Monthly Period required pursuant to Section 6.1. Any balance due from TCC to RNB shall be paid in immediately available funds to RNB and any balance due from RNB to TCC shall be paid in immediately available funds to TCC. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1. Representations and Warranties of RNB Relating to RNB. RNB hereby represents and warrants to, and agrees with, TCC as of the Closing Date and on each Addition Date, that: (a) Organization and Good Standing. RNB is a national banking association validly existing in good standing under the laws of the United States, and has full corporate power, authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement. (b) Due Qualification. RNB is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would render any Credit Card Agreement relating to an Account owned by RNB or any Receivable unenforceable by RNB, the Seller, the Servicer or the Trustee and would have a material adverse effect on the interests of TCC or the Investor Certificateholders. (c) Due Authorization. The execution, delivery and performance of this Agreement and any other document or instrument delivered pursuant hereto (such other documents or instruments, collectively, the ("Conveyance Papers") and the consummation of the transactions provided for in this Agreement or any other Conveyance Papers have been duly authorized by all necessary corporate action on the part of RNB. (d) No Conflict. The execution and delivery of this Agreement and the Conveyance Papers by RNB, the performance of the transactions contemplated by this Agreement and the Conveyance Papers, and the fulfillment of the terms of this Agreement and the Conveyance Papers applicable to RNB 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 RNB is a party or by which it or any of its properties are bound. (e) No Violation. The execution, delivery and performance of this Agreement and the Conveyance Papers by RNB and the fulfillment by RNB of the terms hereof and thereof will not conflict with or violate any Requirements of Law applicable to RNB. (f) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of RNB, threatened against RNB, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or any of the Conveyance Papers, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Conveyance Papers, (iii) seeking any determination or ruling that, in the reasonable judgment of RNB, would materially and adversely affect the performance by RNB of its obligations under this Agreement or any of the Conveyance Papers, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or any of the Conveyance Papers or (v) seeking to affect adversely the income tax attributes of the Trust under United States Federal or applicable state income or franchise tax systems. (g) All Consents. All approvals, authorizations, consents, orders or registrations or declarations with any Person or any governmental body or official required in connection with the execution and delivery by RNB of this Agreement or any of the Conveyance Papers and the performance of the transactions contemplated by this Agreement or any of the Conveyance Papers by RNB have been duly obtained, effected or given and are in full force and effect. (h) Insolvency. RNB is not insolvent and no Insolvency Event with respect to RNB has occurred, and the transfer of the Receivables by RNB to TCC contemplated hereby has not been made in contemplation of such insolvency or Insolvency Event. The representations and warranties set forth in this Section 4.1 shall survive the transfer and assignment of the Receivables to TCC. Upon discovery by RNB or TCC of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give written notice to the other party within three Business Days following such discovery. RNB agrees to cooperate with TCC and the Trustee in attempting to cure any such breach. Section 4.2. Representations and Warranties of RNB Relating to the Agreement and the Receivables. (a) Representations and Warranties. RNB hereby represents and warrants to TCC as of the date of this Agreement, as of the Closing Date and, with respect to Additional Accounts, as of the related Addition Date that: (i) this Agreement and, in the case of Supplemental Accounts, the related Supplemental Conveyance, when executed and delivered on behalf of RNB, each constitute a valid and binding obligation of RNB enforceable against RNB in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (ii) as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date, and as of each subsequent Addition Date with respect to Supplemental Accounts, Schedule I to this Agreement and the related computer file, microfiche list or printed list delivered pursuant to this Agreement, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts as of such date or such Additional 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 such date or such applicable Additional Cut-Off Date, as the case may be; (iii) RNB is the legal and beneficial owner of all right, title and interest in and to each Receivable (subject, on the Closing Date, to any participation interest in the Receivables held by TCC), RNB has the full right, power and authority to transfer the Receivables pursuant to this Agreement; and each Receivable conveyed to TCC by RNB has been conveyed to TCC free and clear of any Lien of any Person claiming through or under RNB or any of its Affiliates (other than Liens permitted under Section 5.1(b)) and in compliance, in all material respects, with all Requirements of Law applicable to RNB; (iv) all authorizations, consents, orders, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by RNB in connection with the conveyance of such Receivable to TCC have been duly obtained, effected or given and are in full force and effect; (v) this Agreement or, in the case of Supplemental Accounts, the related Supplemental Conveyance, upon execution and delivery on behalf of RNB, constitutes a valid absolute sale and assignment to TCC of all right, title and interest of RNB in and to the Receivables and the other Purchased Assets, all monies due or to become due with respect thereto and all proceeds thereof, and, in the case of Supplemental Accounts, the related Supplemental Conveyance, will constitute, at the time of such addition, an absolute sale of such property and the proceeds thereof. Upon the filing of the financing statements pursuant to Section 2.1(a) and, in the case of Receivables hereafter created and the proceeds thereof, upon the creation thereof, TCC shall have a first-priority perfected security interest (as defined in the UCC) in such property and proceeds (as defined in the UCC) except for Liens permitted by Section 5.1(b); (vi) except as otherwise expressly provided in this Agreement, the Pooling and Servicing Agreement or any Supplement, neither RNB nor any Person claiming through or under RNB has any claim to or interest in the Collection Account, the Special Funding Account, any Series Account or any Enhancement; (vii) on the Initial Cut-Off Date, with respect to each Initial Account, on the date of its creation, with respect to each Automatic Additional Account and, on the applicable Addition Cut-Off Date, with respect to each related Supplemental Account each Account classified as an "Eligible Account" by RNB in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Account and each Receivable classified as an "Eligible Receivable" by RNB in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Receivable; (viii) on the Initial Cut-Off Date, each Receivable then existing is an Eligible Receivable, on the date of creation of each Automatic Additional Account, each Receivable contained in such Automatic Additional Account is an Eligible Receivable and, on the applicable Additional Cut-Off Date, each Receivable contained in any related Supplemental Account is an Eligible Receivable; and (ix) as of the date of the creation of any new Receivable, such Receivable is an Eligible Receivable. (b) Notice of Breach. The representations and warranties set forth in this Section 4.2 shall survive the transfer and assignment of the Receivables to TCC. Upon discovery by either RNB or TCC of a breach of any of the representations and warranties set forth in this Section 4.2, the party discovering such breach shall give written notice to the other party within three Business Days following such discovery; provided that the failure to give notice within three Business Days does not preclude subsequent notice. RNB hereby acknowledges that TCC intends to rely on the representations hereunder in connection with representations made by TCC to secured parties, assignees or subsequent transferees including but not limited to transfers made by TCC to TRC pursuant to the TRC Purchase Agreement. RNB agrees to cooperate with TCC and the Trustee in attempting to cure any such breach. Section 4.3. Representations and Warranties of TCC. As of the Closing Date, TCC hereby represents and warrants to, and agrees with, RNB that: (a) Organization and Good Standing. TCC is a corporation validly existing in good standing under the laws of the State of Minnesota and has full power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted and to execute, deliver and perform its obligations under this Agreement and the Conveyance Papers. (b) Due Authorization. The execution and delivery of this Agreement and the Conveyance Papers and the consummation of the transactions provided for in this Agreement and the Conveyance Papers have been duly authorized by TCC by all necessary corporate action on the part of TCC. (c) No Conflict. The execution and delivery of this Agreement and the Conveyance Papers, the performance of the transactions contemplated by this Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and thereof, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which TCC is a party or by which it or any of its properties are bound. (d) No Violation. The execution, delivery and performance of this Agreement and the Conveyance Papers by TCC and the fulfillment of the terms contemplated herein and therein applicable to TCC will not conflict with or violate any Requirements of Law applicable to TCC. (e) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of TCC, threatened against TCC, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or any of the Conveyance Papers, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Conveyance Papers, (iii) seeking any determination or ruling that, in the reasonable judgment of TCC, would materially and adversely affect the performance by TCC of its obligations under this Agreement or any of the Conveyance Papers or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or any of the Conveyance Papers. (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 TCC in connection with the execution and delivery by TCC of this Agreement and the Conveyance Papers and the performance of the transactions contemplated by this Agreement and the Conveyance Papers or the fulfillment of the terms of this Agreement and the Conveyance Papers by TCC have been duly obtained, effected or given and are in full force and effect. The representations and warranties set forth in this Article IV shall survive the Conveyance of the Receivables to TCC and termination of the rights and obligations of TCC and RNB under this Agreement. Upon discovery by TCC or RNB of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the other party. ARTICLE V COVENANTS Section 5.1. RNB Covenants. RNB hereby covenants and agrees with TCC as follows: (a) Receivables not to be Evidenced by Promissory Notes. Except in connection with the enforcement or collection of an Account, RNB will take no action to cause any Receivable transferred by it pursuant hereto to be evidenced by any "instrument," other than an instrument that, taken together with one or more other writings constitutes chattel paper (as such terms are defined in the UCC) and, if any such Receivable is so evidenced (whether or not in connection with the enforcement or collection of an Account), it shall be deemed to be an Ineligible Receivable in accordance with Section 6.1. (b) Security Interests. Except for the conveyances hereunder or as otherwise provided herein, RNB 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, whether now existing or hereafter created, or any interest therein; and RNB will immediately notify TCC of the existence of any Lien on any Receivable; and RNB shall defend the right, title and interest of TCC in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under RNB; provided, however, that nothing in this Section 5.1(b) shall prevent or be deemed to prohibit RNB from suffering to exist upon any of the Receivables any Lien for taxes if such taxes shall not at the time be due and payable or if the Seller 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) RNB's Interest. Except for the conveyances hereunder and in connection with any transaction permitted pursuant to Section 9.5 of the Pooling and Servicing Agreement, RNB hereby agrees not to transfer, assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a security interest in the Accounts and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or grant shall be void. (d) Delivery of Collections or Recoveries. If RNB receives Collections or Recoveries, RNB agrees to pay to TCC (or its designee if TCC so directs) all such Collections and Recoveries as soon as practicable after receipt thereof but in no event later than two Business Days after the Date of Processing by RNB; provided, however, that for so long as RNB is acting as Servicer pursuant to the Pooling and Servicing Agreement, RNB shall apply collections or recoveries received by it in accordance with the Pooling and Servicing Agreement. (e) Notice of Liens. RNB shall notify TCC promptly after becoming aware of any Lien on any Receivable other than the conveyances hereunder or any Lien permitted under Section 5.1(b) hereof or Section 2.7(b) of the Pooling and Servicing Agreement. (f) Periodic Rate Finance Charges. (i) Except (x) as otherwise required by any Requirement of Law or (y) as is deemed by RNB in its sole discretion to be appropriate, it shall not at any time reduce the annual percentage rates of the Periodic Finance Charges assessed on the Receivables or reduce other fees charged on any of the Accounts if, either (a) as a result of such reduction it is reasonably expected that such reduction will cause an Early Amortization Event to occur with respect to a Series or (b) such reduction (x) if RNB owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by RNB that have characteristics the same as or substantially similar to the Receivables that are the subject of such reduction and (y) if RNB does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. (g) Credit Card Agreements and Guidelines. RNB shall comply with and perform its obligations under the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines except insofar as any failure to so comply or perform would not materially and adversely affect the rights of TCC hereunder, the rights of TRC under the TRC Purchase Agreement and the rights of the Trust or the Certificateholders under the Pooling and Servicing Agreement or the Certificates. Subject to compliance with all Requirements of Law, RNB may not change the terms and provisions of the Credit Card Agreements or the Credit Card Guidelines with respect to any of the Accounts in any respect (including the calculation of the amount, or the timing, of charge-offs and the Periodic Finance Charges and other fees to be assessed thereon) if, either (a) as a result of such change it is reasonably expected that such change will cause an Early Amortization Event to occur with respect to a Series or (b) such change (x) if RNB owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by RNB that have characteristics the same as or substantially similar to the Receivables that are the subject of such change and (y) if RNB does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. (h) Documentation of Transfer. RNB shall cause to be executed and delivered to TCC any documents (including financing statements and/or continuation statements under the UCC) that would be necessary to perfect and maintain the security interest in and to the Purchased Assets contemplated by this Agreement. (i) Approval of Official Records. The execution, delivery and performance of RNB's obligations under this Agreement, and the transactions contemplated hereby, have been duly approved by RNB's Board of Directors. (j) Sale. RNB agrees to treat the Conveyance, for all purposes (including all relevant tax and financial accounting purposes) as a sale on all federal and state tax returns, financial statements and other applicable documents. (k) Continuous Perfection. RNB 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 within the meaning of Section 9-402(7) of the UCC (or any other then applicable provision of the UCC) unless RNB shall have delivered to TCC 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. RNB shall not change its chief executive office or change the location of its principal records concerning the Receivables or the Collections unless it has delivered to TCC 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 TCC in the Receivables and other Purchased Assets to continue to be perfected with the priority required by this Agreement. Section 5.2. TCC Covenant. Servicing Fee. TCC covenants and agrees with RNB to pay RNB from available amounts any portion of the Servicing Fee that is not paid to RNB pursuant to Section 3.2 of the Pooling and Servicing Agreement. If RNB is subsequently paid such Servicing Fee pursuant to the Pooling and Servicing Agreement, then RNB shall promptly return such payments to TCC. ARTICLE VI REPURCHASE OBLIGATION Section 6.1. Reassignment of Ineligible Receivables. In the event that (x) any representation or warranty under Section 4.2(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and correct in any material respect as of the date specified therein with respect to any Receivable or any related Account, and (y) the Receivable to which such untrue or incorrect representation or warranty relates is given a value of zero for purposes of determining the aggregate Principal Receivables under the terms of the Pooling and Servicing Agreement, RNB shall pay to TCC an amount in cash equal to the Purchase Price, adjusted for any Collections received, paid for any such Ineligible Receivable by TCC to RNB. Such amount may be offset against any amounts due from TCC to RNB with respect to the Purchase Price for Receivables sold to TCC on such day; provided, however, that RNB shall not be obligated to make any such cash payment until the Distribution Date following a Monthly Period with respect to amounts owing for such Monthly Period, which payment shall be made in accordance with Section 3.3. The obligation of RNB set forth in this Section shall constitute the sole remedy respecting any breach of the representations and warranties set forth in the above-referenced Sections or failure to meet the conditions set forth in the definition in the Pooling and Servicing Agreement of Eligible Receivable with respect to such Receivable available to TCC and TCC shall not be obligated to transfer any such Receivable to RNB. Section 6.2. Reassignment of Certificateholders' Interest in Trust Portfolio. In the event any representation or warranty set forth in Section 4.1(a) or (c) or Section 4.2(a)(i), (v) or (vi) is not true and correct in any material respect and as a result thereof TCC is required to accept a reassignment of the Receivables transferred to TRC by TCC pursuant to Section 6.2 of the TRC Purchase Agreement, RNB shall be obligated to accept a reassignment of TCC's interest in such Receivables on the terms set forth below. RNB shall pay to TCC by depositing in the Collection Account in same-day funds, not later than 10:00 A.M. New York City time, on the Distribution Date following the Monthly Period in which such reassignment obligation arises, in payment for such reassignment, an amount equal to the Portfolio Reassignment Price. Section 6.3 Conveyance of Reassigned Receivables. Upon the request of RNB, TCC shall execute and deliver to RNB a reconveyance substantially in such form and upon such terms as shall be acceptable to RNB, pursuant to which TCC evidences the conveyance to RNB of all of TCC's right, title, and interest in any Receivables reconveyed to RNB pursuant to Section 6.1 and 6.2. TCC shall (and shall cause TRC and the Trustee to) execute such other documents or instruments of conveyance or take such other actions as RNB may reasonably require to effect any repurchase of Receivables pursuant to this Article VI. ARTICLE VII CONDITIONS PRECEDENT Section 7.1. Conditions to TCC's Obligations Regarding Initial Receivables. The obligations of TCC to purchase the Receivables in the Initial Accounts on the Closing Date shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of RNB contained in this Agreement shall be true and correct in all material respects on the Closing Date with the same effect as though such representations and warranties had been made on such date; (b) All information concerning the Initial Accounts provided to TCC shall be true and correct in all material respects as of the Initial Cut-Off Date; (c) RNB shall have substantially performed all other obligations required to be performed by the provisions of this Agreement; (d) On or before the Closing Date, TCC and TRC shall have entered into the TRC Purchase Agreement, TRC and the Trustee shall have entered into the Pooling and Servicing Agreement, TRC, RNB and the Trustee shall have entered into the Participation Supplement and the closing under each such agreement shall take place simultaneously with the initial closing hereunder; and (e) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to TCC, and TCC shall have received from RNB copies of all documents (including, without limitation, records of corporate proceedings) relevant to the transactions herein contemplated as TCC may reasonably have requested. Section 7.2. Conditions to TCC's Obligations Regarding Additional Receivables. The obligations of TCC to purchase any Receivables created on or after the Closing Date, shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of RNB contained in this Agreement shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such purchase; (b) All information (concerning any Account to which such Receivables relate) provided or to be provided to TCC shall be true and correct in all material respects on the date of such purchase; and (c) On and after the Automatic Addition Termination Date or any Automatic Addition Suspension Date (and in such latter case, until a Restart Date), RNB shall have indicated in its computer files, microfiche list or printed list that such Receivables (created in respect of any Account to which such Receivables relate) have been sold to TCC in accordance with this Agreement and transferred to the Trust pursuant to the Pooling and Servicing Agreement for the benefit of the Certificateholders. Section 7.3. Conditions Precedent to Obligations of RNB. The obligations of RNB to sell on any date Receivables shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of TCC contained in this Agreement shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such sale; (b) Payment or provision for payment of the Purchase Price in accordance with the provision of Sections 3.1, 3.2 and 3.3 hereof shall have been made; (c) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to RNB, and RNB shall have received from TCC copies of all documents (including, without limitation, records of corporate proceedings) relevant to the transactions herein contemplated as RNB may reasonably have requested; (d) TCC shall have recorded and filed, at its expense, with respect to the Initial Accounts and Automatic Additional Accounts on or prior to the Closing Date, with respect to Automatic Additional Accounts created on and after a Restart Date, on or prior to such Restart Date, and with respect to Supplemental Accounts on or prior to the applicable Addition Date of Receivables in such Accounts, any UCC-1 or other financing statement with respect to the Receivables then existing and thereafter created for the transfer of accounts (as defined in Section 9-106 of the UCC) meeting the requirements of applicable state law in such manner and in such jurisdictions as would be necessary or advisable to perfect or evidence the sale of the Receivables from RNB to TCC, and shall deliver a file- stamped copy of such financing statements or other evidence of such filings to RNB; and (e) On the Closing Date, the Trust shall have issued a Participation representing a 5% undivided interest in the Receivables, to RNB. ARTICLE VIII TERM AND PURCHASE TERMINATION Section 8.1. Term. This Agreement shall commence as of the date of execution and delivery hereof and shall continue until the termination of the Trust as provided in Article XII of the Pooling and Servicing Agreement. Section 8.2. Purchase Termination. If RNB shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or if a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of RNB in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, conservator, liquidator, assignee, trustee, custodian, sequestrator or other similar official of RNB or for any substantial part of RNB's property, or for the winding-up or liquidation of RNB's affairs and, if instituted against RNB, any such proceeding shall continue undismissed or unstayed and in effect, for a period of 60 consecutive days, or any of the actions sought in such proceeding shall occur; or if RNB shall commence a voluntary case under any Debtor Relief Law, or if RNB shall consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of, or for, any substantial part of its property, or any general assignment for the benefit of its creditors; or RNB or any subsidiary of RNB shall have taken any corporate action in furtherance of any of the foregoing actions (each an "Insolvency Event"); then RNB shall immediately cease to transfer Principal Receivables to TCC and shall promptly give notice to TCC and the Trustee of such Insolvency Event. Notwithstanding any cessation of the transfer to TCC of additional Principal Receivables, Principal Receivables transferred to TCC prior to the occurrence of such Insolvency Event and Collections in respect of such Principal Receivables and Finance Charge Receivables whenever created, accrued in respect of such Principal Receivables, shall continue to be property of TCC transferable by TCC to TRC pursuant to the TRC Purchase Agreement and by TRC to the Trust pursuant to the Pooling and Servicing Agreement. ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Amendment. This Agreement and any Conveyance Papers and the rights and obligations of the parties hereunder may not be changed orally, but only by an instrument in writing signed by TCC and RNB in accordance with this section 9.1. This Agreement and any Conveyance Papers may be amended from time to time by TCC and RNB (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein or in any such other Conveyance Papers, (iii) to add any other provisions with respect to matters or questions arising under this Agreement or any Conveyance Papers that shall not be inconsistent with the provisions of this Agreement or any Conveyance Papers, (iv) to change or modify the Purchase Price, (v) to change, modify, delete or add any other obligation of RNB or TCC and (vi) to provide for the transfer by RNB or TCC of its interest in and to all or part of the Accounts in accordance with the provisions of the Pooling and Servicing Agreement (if such transfer is for less than all of the Accounts, the respective rights, duties and obligations of TCC, RNB and the Servicer will be determined at the time of such transfer); provided, however, that no amendment pursuant to clause (v) of this Section 9.1 shall be effective unless RNB and TCC have been notified in writing that the Rating Agency Condition has been satisfied; provided, further, that such action shall not (as evidenced by an Opinion of Counsel delivered to the Trustee) adversely affect in any material respect the interests of the Trustee or the Certificateholders, unless the Trustee shall consent thereto. Any reconveyance executed in accordance with the provisions hereof shall not be considered to be an amendment to this Agreement. A copy of any amendment to this Agreement shall be sent to the Rating Agency. SECTION 9.2. GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE CONVEYANCE PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. [Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts) and further agrees that service of any process, summons, notice or document by prepaid certified mail with proof of mailing receipt validated by the United States Postal Service to its respective address set forth in Section 9.3 (or to the agent of such party appointed and maintained in the State of Delaware as such party's agent for acceptance of legal process) shall be effective service of process for any litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware or of the federal courts sitting in the State of Delaware and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum.] Section 9.3. Notices. (a) All demands, notices, instructions, directions and communications (collectively, ("Notices") under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at, mailed by registered mail, return receipt requested, or sent by facsimile transmission to (i) in the case of TCC, to Target Capital Corporation, 777 Nicollet Mall, Minneapolis, Minnesota 55402, Attention of Treasurer (facsimile no. (612) 370- 5508), (ii) in the case of RNB, to Retailers National Bank, 3901 West 53rd Street, Sioux Falls, South Dakota 57106, Attention: Vice President and Manager (facsimile no. (605) 362-2028) and (iii) in the case of the Trustee, to Norwest Bank Minnesota, National Association, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-0069, Attention of Joseph Travis (facsimile no. (612) 667-9825), (iv) in the case of Moody's, to 99 Church Street, New York, New York 10007, Attention of ABS Monitoring Department 4th Floor (facsimile no. 212-553- 4600) and (v) in the case of Standard & Poor's, to 55 Water Street, New York, New York 10041, Attention of Asset Backed Group (facsimile no. 212-___________). Section 9.4. Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement or any Conveyance Paper shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions, and terms of this Agreement or any Conveyance Paper and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of any Conveyance Paper. Section 9.5. Assignment, Sale of Accounts. (a) Notwithstanding anything to the contrary contained herein, except as set forth in Section 9.5(b) and other than TCC's assignment of its right, title, and interest in, to, and under this Agreement to TRC as contemplated by the TRC Purchase Agreement and Section 9.6 hereof and TRC's assignment of its right, title and interest in, to, and under this Agreement to the Trustee for the benefit of the Certificateholders as contemplated by the Pooling and Servicing Agreement and Section 9.6 hereof, this Agreement and all other Conveyance Papers may not be assigned by the parties hereto. (b) Notwithstanding the provisions of Section 9.5(a) hereof and of Section 8.2 of the Pooling and Servicing Agreement, RNB may assign, convey and transfer all of its consumer open end credit card accounts and the receivables arising thereunder, which may include the Accounts, and its interest in any Participation Interests (collectively, the "Assigned Assets"), together with all servicing functions under the Pooling and Servicing Agreement and other obligations under this Agreement or relating to the transactions contemplated hereby (collectively, the "Assumed Obligations"), to another entity (the "Assuming Entity") which may be an entity that is not affiliated with RNB, and RNB may assign, convey and transfer the Assigned Assets and the Assumed Obligations to the Assuming Entity, without the consent or approval of the Certificateholders, in each case upon satisfaction of the following conditions: (i) the Assuming Entity, RNB and the Trustee shall have entered into an assumption agreement (the "Assumption Agreement") providing for the Assuming Entity to assume the Assumed Obligations, including the obligation under this Agreement to transfer the Receivables arising under the Accounts to TCC, and RNB shall have delivered to TCC and the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such assumption and transfer comply with this Section, that such Assumption Agreement is a valid and binding obligation of such Assuming Entity enforceable against such Assuming Entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (ii) RNB or the Assuming Entity shall have delivered to the Trustee copies of UCC-1 financing statements covering such Accounts to perfect TCC's interest in the Receivables arising herein and any Conveyance Papers or Supplemental Conveyance; (iii) TCC shall have received written notice that the Rating Agency Condition has been satisfied with respect to such transfer and assumption and shall have delivered copies of each such written notice to the Servicer and the Trustee; (iv) TCC shall have received an opinion of Counsel with respect to clauses (i) and (ii) above and as to certain other matters that TCC may specify; and (v) the Trustee shall have received a Tax Opinion. Notwithstanding such assumption, RNB shall continue to be liable for all representations and warranties and covenants made by it and all obligations performed or to be performed by it in its capacity hereunder prior to such transfer or as Servicer prior to such transfer. Section 9.6. Acknowledgement and Agreement of RNB. By execution below, RNB expressly acknowledges and agrees that all of TCC's right, title, and interest in, to, and under this Agreement, including, without limitation, all of TCC's right, title, and interest in and to the Receivables purchased pursuant to this Agreement, will be assigned by TCC to TRC and by TRC to the Trustee for the benefit of the Certificateholders, and RNB consents to such assignment. Additionally, RNB agrees for the benefit of the Trustee that any amounts payable by RNB to TCC hereunder which are to be paid by TCC to TRC and by TRC to the Trustee for the benefit of the Certificateholders shall be paid by RNB, on behalf of TCC, directly to the Trustee. Any payment required to be made on or before a specified date in same-day funds may be made on the prior business day in next-day funds. Section 9.7. Further Assurances. TCC and RNB 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 other party more fully to effect the purposes of this Agreement and the Conveyance Papers, including, without limitation, the execution of any UCC financing statements or continuation statements or equivalent documents relating to the Receivables for filing under the provisions of the UCC or other law of any applicable jurisdiction. Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of TCC or RNB, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Section 9.9. Counterparts. This Agreement and all Conveyance Papers 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. Binding Third-Party Beneficiaries. This Agreement and the Conveyance Papers will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. The parties hereto intend that the Trustee shall be a third-party beneficiary of this Agreement. Section 9.11. Merger and Integration. Except as specifically stated otherwise herein, this Agreement and the Conveyance Papers set 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 and the Conveyance Papers. This Agreement and the Conveyance Papers may not be modified, amended, waived or supplemented except as provided herein. Section 9.12. Headings. The headings set forth herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 9.13. Schedules and Exhibits. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes. Section 9.14. Survival of Representations and Warranties. All representations, warranties and agreements contained in this Agreement or contained in any Assignment, shall remain operative and in full force and effect and shall survive conveyance of the Receivables by TRC to the Trustee pursuant to the Pooling and Servicing Agreement. IN WITNESS WHEREOF, TCC and RNB have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. TARGET CAPITAL CORPORATION By /s/ Stephen C. Kowalke ----------------------- Name: Stephen C. Kowalke Title: Treasurer RETAILERS NATIONAL BANK By /s/ Stephen C. Kowalke ----------------------- Name: Stephen C. Kowalke Title: Assistant Treasurer EXHIBIT A FORM OF SUPPLEMENTAL CONVEYANCE (As required by Section 2.2 of the Amended and Restated Bank Receivables Purchase Agreement) SUPPLEMENTAL CONVEYANCE NO. __________ dated as of _____________, ______, by and between RETAILERS NATIONAL BANK, as seller ("RNB"), and TARGET CAPITAL CORPORATION, as purchaser ("TCC"), pursuant to the Amended and Restated Bank Receivables Purchase Agreement referred to below. WITNESSETH: WHEREAS, RNB and TCC are parties to an Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000 (hereinafter as such agreement may have been, or may from time to time be, amended, supplemented or otherwise modified, the "Receivables Purchase Agreement"); WHEREAS, pursuant to the Receivables Purchase Agreement, RNB wishes to designate Supplemental Accounts to be included as Accounts and RNB wishes to convey the Receivables of such Supplemental Accounts, whether now existing or hereafter created, to TCC pursuant to the Receivables Purchase Agreement (as each such term is defined in the Receivables Purchase Agreement); and WHEREAS, TCC is willing to accept such designation and conveyance subject to the terms and conditions hereof. NOW, THEREFORE, RNB and TCC hereby agree as follows: 1. Defined Terms. Each capitalized term used herein shall have the meanings specified in the Receivables Purchase Agreement unless otherwise defined herein. "Addition Date" shall mean, with respect to the Supplemental Accounts designated hereby, __________, _____. 2. Designation of Supplemental Accounts. RNB delivers herewith a computer file, microfiche list or printed list containing a true and complete schedule identifying all such Supplemental Accounts and specifying for each such Account, as of the Additional Cut-Off Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables in such Account. Such computer file, microfiche list or printed list shall be, as of the date of this Supplemental Conveyance, incorporated into and made part of this Supplemental Conveyance and is marked as Schedule I to this Supplemental Conveyance. 3. Conveyance of Receivables. (a) RNB does hereby sell, transfer, assign, set over and otherwise convey to TCC (collectively, the "Conveyance"), without recourse, all of its right, title and interest in, to and under the Receivables generated by such Supplemental Accounts, now existing and hereafter created, all Recoveries allocable to such Supplemental Accounts and all monies due or to become due thereunder and all amounts received with respect thereto and all proceeds (including, without limitation, "proceeds" as defined in Article 9 of the UCC) thereof. The foregoing sale, transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by TCC of any obligation of the Servicer, RNB or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto. (b) In connection with the Conveyance, TCC agrees to record and file, at its own expense, one or more UCC financing statements (and continuation statements with respect to such financing statements when applicable) with respect to the Receivables, now existing and hereafter created, for the sale of accounts meeting the requirements of applicable state law in such manner and in such jurisdictions as may be necessary or advisable to perfect or evidence the sale and assignment of the Receivables to TCC, and to deliver a file-stamped copy of such financing statement or other evidence of such filing to RNB. (c) In connection with such sale, RNB further agrees, at its own expense, on or prior to the date of this Supplemental Conveyance, to indicate in the appropriate computer files, microfiche list or other records that all Receivables created in connection with the Supplemental Accounts designated hereby have been conveyed to TCC pursuant to this Supplemental Conveyance. 4. Acceptance by TCC. Subject to the satisfaction of the conditions set forth in Section 6 of this Supplemental Conveyance, TCC hereby acknowledges its acceptance of all right, title and interest to the property, now existing and hereafter created, conveyed to TCC pursuant to Section 3(a) of this Supplemental Conveyance, and declares that it shall maintain such right, title and interest. TCC further acknowledges that, prior to or simultaneously with the execution and delivery of this Supplemental Conveyance, RNB delivered to TCC (or to the Trustee if TCC has so directed) the computer file, microfiche list or printed list described in Section 2 of this Supplemental Conveyance. 5. Representations and Warranties of RNB. RNB hereby represents and warrants to TCC as of the date of this Supplemental Conveyance and as of the Addition Date that: (a) Legal, Valid and Binding Obligation. This Supplemental Conveyance constitutes a legal, valid and binding obligation of RNB enforceable against RNB in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity; (b) Eligibility of Accounts. Each Supplemental Account designated hereby is an Eligible Account; (c) Selection Procedures. No selection procedure was utilized by RNB which would result in a selection of Supplemental Accounts that would have a result that would be materially less favorable to the interests of TCC or the Investor Certificateholders of any Series as of the Addition Date than a random selection; (d) Insolvency. RNB is not insolvent and, after giving effect to the conveyance set forth in Section 3 of this Supplemental Conveyance, will not be insolvent; (e) Sale of Receivables. This Supplemental Conveyance constitutes a valid sale, transfer and assignment to TCC of all right, title and interest of RNB in the Receivables and other Purchased Assets now existing or hereafter created, all monies due or to become due and all amounts received with respect thereto and the "Proceeds" (as defined in the UCC) thereof, relating thereto; (f) No Conflict. The execution and delivery of this Supplemental Conveyance, the performance of the transactions contemplated by this Supplemental Conveyance and the fulfillment of the terms hereof, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which RNB is a party or by which it or its properties are bound; (g) No Violation. The execution and delivery of this Supplemental Conveyance by RNB, the performance of the transactions contemplated by this Supplemental Conveyance and the fulfillment of the terms hereof applicable to RNB will not conflict with or violate any Requirements of Law applicable to RNB; (h) No Proceedings. There are no proceedings or investigations, pending or, to the best knowledge of RNB, threatened against RNB before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of the Receivables Purchase Agreement or this Supplemental Conveyance, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Receivables Purchase Agreement or this Supplemental Conveyance, (iii) seeking any determination or ruling that, in the reasonable judgment of RNB, would materially and adversely affect the performance of RNB of its obligations under the Receivables Purchase Agreement or this Supplemental Conveyance or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Supplemental Conveyance; and (i) All Consents. All authorizations, consents, orders or approvals of any court or other governmental authority required to be obtained by RNB in connection with the execution and delivery of this Supplemental Conveyance by RNB and the performance of the transactions contemplated by this Supplemental Conveyance by RNB, have been obtained. 6. Conditions Precedent. The acceptance of TCC set forth in Section 4 of this Supplemental Conveyance is subject to the satisfaction, on or prior to the Addition Date, of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by RNB in Section 5 of this Supplemental Conveyance shall be true and correct in all material respects as of the date of this Supplemental Conveyance and as of the Addition Date; (b) Officer's Certificate. RNB shall have delivered to TCC an Officer's Certificate confirming that (i) the Supplemental Accounts shall be Eligible Accounts [or specify which, if any, of such Accounts are not Eligible Accounts] and (ii) (A) no selection procedure was utilized by RNB or TCC which would result in a selection of Supplemental Accounts that would have a result that would be materially less favorable to the interests of the Investor Certificateholders of any Series as of the Addition Date than a random selection; and (B) the list of Supplemental Accounts, as of the Additional Cut-Off Date, is a true and complete schedule identifying all such Supplemental Accounts and specifies for each such Account, as of the Additional Cut-Off Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables in such Account; and (c) Additional Information. RNB shall have delivered to TCC such information as was reasonably requested by TCC to satisfy itself as to the accuracy of the representation and warranty set forth in Section 5(d) of this Supplemental Conveyance. 7. Ratification of the Receivables Purchase Agreement. The Receivables Purchase Agreement is hereby ratified, and all references to the "Receivables Purchase Agreement," to "this Agreement" and "herein" shall be deemed from and after the Addition Date to be a reference to the Receivables Purchase Agreement as supplemented by this Supplemental Conveyance. Except as expressly amended hereby, all the representations, warranties, terms, covenants and conditions of the Receivables Purchase Agreement shall remain unamended and shall continue to be, and shall, remain, in full force and effect in accordance with its terms and except as expressly provided herein shall not constitute or be deemed to constitute a waiver of compliance with or consent to non-compliance with any term or provision of the Receivables Purchase Agreement. 8. Counterparts. This Supplemental Conveyance may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Supplemental Conveyance to be duly executed and delivered by their respective duly authorized officers on the day and the year first above written. TARGET CAPITAL CORPORATION By_________________________________________ Name: Title: RETAILERS NATIONAL BANK By_________________________________________ Name: Title: Schedule I to Supplemental Conveyance Supplemental Accounts Schedule I LIST OF ACCOUNTS DEEMED INCORPORATED BY REFERENCE EX-4 6 0006.txt EXHIBIT 4(D) ============================================================================== TARGET CAPITAL CORPORATION, Seller and TARGET RECEIVABLES CORPORATION, Purchaser AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT Dated as of April 28, 2000 ============================================================================= TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.1. Definitions...................................... 2 Section 1.2. Other Definitional Provisions................... 7 ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES Section 2.1. Purchase......................................... 9 Section 2.2. Addition of Additional Accounts................ 11 Section 2.3. Sale of Receivables to TCC..................... 13 ARTICLE III CONSIDERATION AND PAYMENT Section 3.1. Purchase Price................................. 14 Section 3.2. Adjustments to Purchase Price.................. 15 Section 3.3. Settlement and Ongoing Payment of Purchase Price............................... 15 ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1. Representations and Warranties of TCC Relating to TCC............................... 17 Section 4.2. Representations and Warranties of TCC Relating to the Agreement and the Receivables....................................19 Section 4.3. Representations and Warranties of TRC........... 22 ARTICLE V COVENANTS Section 5.1. TCC Covenants....................................24 Section 5.2. Covenants of TCC with Respect to the Bank Purchase Agreement.............................26 ARTICLE VI REPURCHASE OBLIGATION Section 6.1. Reassignment of Ineligible Receivables....................................28 Section 6.2. Reassignment of Certificateholders' Interest in Trust Portfolio................... 28 Section 6.3. Conveyance of Reassigned Receivables.............29 ARTICLE VII CONDITIONS PRECEDENT Section 7.1. Conditions to TRC's Obligations Regarding Initial Receivables........................... 30 Section 7.2. Conditions to TRC's Obligations Regarding Additional Receivables........................ 31 Section 7.3. Conditions Precedent to Obligations of TCC........................................ 32 ARTICLE VIII TERM AND PURCHASE TERMINATION Section 8.1. Term.............................................33 Section 8.2. Purchase Termination.............................33 ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Amendment....................................... 34 Section 9.2. Governing Law; Jurisdiction..................... 34 Section 9.3. Notices..........................................35 Section 9.4. Severability of Provisions...................... 36 Section 9.5. Assignment, Sale of Accounts.................... 36 Section 9.6. Acknowledgement and Agreement of TCC............ 37 Section 9.7. Further Assurances...............................38 Section 9.8. No Waiver; Cumulative Remedies.................. 38 Section 9.9. Counterparts.................................... 38 Section 9.10. Binding Third-Party Beneficiaries............... 38 Section 9.11. Merger and Integration.......................... 39 Section 9.12. Headings........................................ 39 Section 9.13. Schedules and Exhibits.......................... 39 Section 9.14. Survival of Representations and Warranties.................................... 39 EXHIBIT Exhibit A - Form of Supplemental Conveyance Exhibit B - Form of Revolving Note SCHEDULE Schedule 1 - List of Accounts [Deemed Incorporated by Reference] AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of April 28, 2000, by and between TARGET CAPITAL CORPORATION, a Minnesota corporation ("TCC"), and TARGET RECEIVABLES CORPORATION, a Minnesota corporation ("TRC"). W I T N E S S E T H: WHEREAS, TCC and TRC have heretofore executed and delivered a Receivables Purchase Agreement, dated as of September 13, 1995 (as amended, supplemented or otherwise modified, the "Original Receivables Purchase Agreement"), by and between Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), as the Seller, and Target Receivables Corporation (formerly known as Dayton Hudson Receivables Corporation), as the Purchaser; WHEREAS, the Seller, formerly known as Dayton Hudson Capital Corporation, has been renamed Target Capital Corporation and desires to amend and restate the Original Receivables Purchase Agreement to read in its entirety as set forth below; WHEREAS, the Purchaser, formerly known as Dayton Hudson Receivables Corporation, has been renamed Target Receivables Corporation and desires to amend and restate the Original Receivables Purchase Agreement to read in its entirety as set forth below; WHEREAS, TRC desires to purchase, from time to time, certain Receivables (hereinafter defined) arising in certain Accounts (hereinafter defined) of TCC; WHEREAS, TCC desires to sell from time to time and assign such Receivables to TRC upon the terms and conditions hereinafter set forth; WHEREAS, it is contemplated that the Receivables purchased hereunder will be transferred by TRC to the Trust (hereinafter defined) in connection with the issuance of certain Certificates (hereinafter defined); WHEREAS, TCC agrees that all covenants and agreements made by TCC herein with respect to the Accounts (hereinafter defined) and Receivables shall also be for the benefit of the Trustee (hereinafter defined) and all holders of the Certificates; WHEREAS, Section 9.1 of the Original Receivables Purchase Agreement provides that TCC and TRC, without the consent of any of the Certificateholders, may amend the Original Receivables Purchase Agreement from time to time so long as (x) the Rating Agency Condition shall have been satisfied with respect to such amendment and (y) the Trustee shall have received an Opinion of Counsel that such amendments do not adversely affect in any material respect the interests of the Trustee or the Certificateholders; and WHEREAS, all conditions precedent to the execution of this Agreement have been complied with; NOW, THEREFORE, pursuant to Section 9.1 of the Original Receivables Purchase Agreement, TCC and TRC hereby agree that effective on and as of the date hereof, the Original Receivables Purchase Agreement is hereby amended and restated in its entirety as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. Each capitalized term used herein or in any certificate, document, or Conveyance Paper made or delivered pursuant hereto, and not defined herein or therein, shall have the meaning specified in the Pooling and Servicing Agreement. In addition, the following words and phrases shall have the following meanings: "Account" shall mean each Initial Account, each Automatic Additional Account and each Supplemental Account, but shall exclude any Account all the Receivables in which are either reassigned or assigned to TCC or its designee pursuant to Section 6.2 or to the Servicer pursuant to Section 3.3 of the Pooling and Servicing Agreement and any inactive Accounts which in accordance with the Credit Card Guidelines have been removed from the active computer records of RNB. The definition of Account shall include each account into which an Account is transferred (a "Transferred Account"); provided that (i) such transfer is made in accordance with the Credit Card Guidelines and (ii) such Transferred Account can be traced or identified, by reference to or by way of the computer files, microfiche lists or printed lists delivered to TRC by TCC (and, in turn to the Trustee by TCC pursuant to Section 2.1 of the Pooling and Servicing Agreement), if applicable, as an account into which an Account has been transferred. The term "Account" shall be deemed to refer to an Automatic Additional Account or a Supplemental Account only from and after the Addition Date with respect thereto, and the term "Account" shall be deemed to refer to any Removed Account only prior to the Removal Date with respect thereto. "Addition Cut-Off Date" shall mean the date as of which any Supplemental Accounts or Participation Interests are designated by TRC for inclusion in the Trust, as specified in the related Assignment. "Addition Date" shall mean (i) with respect to Supplemental Accounts, the date on which the Receivables in such Supplemental Accounts are conveyed by TCC to TRC pursuant to Section 2.2, (ii) with respect to Automatic Additional Accounts, the date on which such accounts are created, and (iii) with respect to Participation Interests, the date from and after which such Participation Interests are to be included as Trust Assets pursuant to Section 2.2. "Addition Notice Date" shall have the meaning specified in Section 2.2(b) of this Agreement. "Additional Accounts" shall mean an Automatic Additional Account or a Supplemental Account. "Agreement" shall mean this Receivables Purchase Agreement and all amendments hereof and supplements hereto. "Automatic Addition Suspension Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "Automatic Addition Termination Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "Automatic Additional Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement between RNB and the related Obligor coming into existence (i) after the Initial Cut-Off Date and prior to the earlier of the Automatic Addition Termination Date or an Automatic Addition Suspension Date and (ii) following an Automatic Addition Suspension Date and after a Restart Date and prior to a subsequent Automatic Addition Suspension Date or any Automatic Addition Termination Date. "Bank Purchase Agreement" shall mean the Amended and Restated Bank Receivables Purchase Agreement, dated as of April 28, 2000, by and between RNB and TCC. "Capital Ratio" shall mean, as of any date, the ratio (expressed as a percentage) computed by dividing (a) shareholder's equity in TRC by (b) total assets (as shown on TRC's balance sheet prepared in accordance with GAAP) plus the aggregate Invested Amount of Certificates which have not been retained by TRC as of such date. "Closing Date" shall mean September 13, 1995. "Conveyance" shall have the meaning specified in Section 2.1 (a). "Conveyance Papers" shall have the meaning specified in Section 4.1(c). "Credit Adjustment" shall have the meaning specified in Section 3.2. "Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the United States of America and (ii) all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, readjustment of debt, marshalling of assets or similar debtor relief laws of the United States, any state or any foreign country from time to time in effect affecting the rights of creditors generally. "Initial Account" shall mean each open end credit card account established pursuant to a Credit Card Agreement between RNB and any Person existing on the Initial Cut-Off Date. "Initial Cut-Off Date" shall mean the close of business on June 30, 1995. "Insolvency Event" shall have the meaning specified in Section 8.2. "Minimum Capital Ratio" shall mean 5.50%, which percentage may be adjusted from time to time at the option of TRC if the Rating Agency Condition is satisfied with respect to Standard & Poor's. "New Principal Receivables" shall have the meaning set forth in Section 3.1. "Pooling and Servicing Agreement" shall mean the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000, among RNB, as Servicer, TRC, as Transferor and the Trustee, and all amendments and supplements thereto. "Portfolio Reassignment Price" shall mean the portion of the amount payable by TRC to the Trustee pursuant to Section 2.6 of the Pooling and Servicing Agreement with respect to Receivables previously sold pursuant to this Agreement. "Purchase Price" shall have the meaning set forth in Section 3.1. "Purchased Assets" shall have the meaning set forth in Section 2.1. "Receivable" shall mean any amount owing from time to time by an Obligor under an Account, including amounts owing for purchases of goods and services, and amounts payable for Finance Charge Receivables (exclusive of Deferred Billing Fees and Merchant Fees). A Receivable shall be deemed to have been created at the end of the day on the Date of Processing of such Receivable. Receivables which become Defaulted Receivables shall not be shown on RNB's records as amounts payable (and shall cease to be included as Receivables) on the day on which they become Defaulted Receivables. "Removal Date" shall mean the date for removal of the Removed Accounts and Participation Interests. "Removed Accounts" shall mean those Accounts which TRC may on any day of any Monthly Period, upon the satisfaction of certain conditions set forth in Section 2.10 of the Pooling and Servicing Agreement, 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 moneys due or to become due and all amounts received with respect thereto and all proceeds thereof in or with respect to the Accounts then owned by RNB and designated by TRC or Participation Interests. "Restart Date" shall have the meaning specified in Section 2.2(a) of this Agreement. "RNB" shall mean Retailers National Bank, a national banking association. "Settlement Statement" shall have the meaning specified in Section 3.3 of this Agreement. "Subordinated Note" shall mean the subordinated revolving promissory note dated September 13, 1995 by Dayton Hudson Receivables Corporation to Dayton Hudson Capital Corporation or any successor subordinated revolving promissory note from TRC to TCC, substantially in the form of Exhibit B hereto. "Supplemental Accounts" shall have the meaning specified in Section 2.2(b) of this Agreement. "Supplemental Conveyance" shall have the meaning set forth in Section 2.2(b). "TCC" shall mean Target Capital Corporation (formerly known as Dayton Hudson Capital Corporation), a Minnesota corporation. "Transferred Account" shall have the meaning set forth in the definition of "Account." "TRC" shall mean Target Receivables Corporation (formerly known as Dayton Hudson Receivables Corporation), a Minnesota corporation. "Trust" shall mean the trust created by the Pooling and Servicing Agreement. "Trustee" shall mean Norwest Bank Minnesota, National Association, a national banking association organized and existing under the laws of the United States, as, and acting in the capacity of, Trustee under the Pooling and Servicing Agreement, or its successor-in- interest, or any successor trustee appointed in accordance with the Pooling and Servicing Agreement. Section 1.2. Other Definitional Provisions. (a) Each capitalized term defined in this Agreement shall have the defined meaning when used in any certificate, other document, or Conveyance Paper made or delivered pursuant hereto unless otherwise defined therein. (b) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement or any Conveyance Paper shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, Subsection, Schedule and Exhibit references contained in this Agreement are references to Sections, Subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified. (c) All determinations of the Principal Receivables or Finance Charge Receivables, and of any collections thereof, shall be made in accordance with the Pooling and Servicing Agreement and all applicable Supplements. (d) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. (e) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any outstanding Series. (f) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day. ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES Section 2.1. Purchase. (a) By execution of this Agreement, TCC does hereby sell, transfer, assign, set over and otherwise convey to TRC (collectively, the "Conveyance"), without recourse all of its right, title and interest in, to and under (i) the Receivables existing at the close of business on the Initial Cut-Off Date and thereafter created from time to time and arising in the Initial Accounts and the Receivables existing on each applicable Addition Date and thereafter created from time to time and arising in any Automatic Additional Accounts, and in each case, thereafter created from time to time until the termination of the Trust, (ii) any Merchant Fees and Deferred Billing Fees, (iii) all Recoveries allocable to the foregoing Accounts and all Recoveries which are identified as relating to specific Defaulted Receivables, (iv) all monies due or to become due thereunder and all amounts received with respect thereto and all proceeds (including, without limitation, "proceeds" as such term is defined in the UCC) thereof and (v) the Bank Purchase Agreement (collectively, the "Purchased Assets"). (b) In connection with such Conveyance, TCC agrees (i) to record and file, at its own expense, any financing statements (and continuation statements with respect to such financing statements when applicable) and to take such other action with respect to the Receivables now existing and hereafter 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 Conveyance of such Purchased Assets from TCC to TRC on and after the Closing Date, (ii) that such financing statements shall name TCC, as seller, and TRC, as purchaser, of the Receivables and (iii) to deliver a file-stamped copy of such financing statements or other evidence of such filings (excluding continuation statements, which shall be delivered as filed) to TRC (or to the Trustee, if TRC so directs) as soon as is practicable after filing. (c) In connection with such Conveyance, TCC further agrees that it will, at its own expense, (i) on (A) the Automatic Addition Termination Date or Automatic Addition Suspension Date, in the case of the Initial Accounts and any Additional Accounts designated pursuant hereto prior to such dates, (B) the applicable Addition Date, in the case of Supplemental Accounts, and (C) the applicable Removal Date, in the case of Removed Accounts, indicate in its computer files or microfiche or printed lists that Receivables purchased or to be purchased by it from RNB pursuant to the Bank Purchase Agreement have been (a) sold to TRC pursuant to this Agreement and (b) transferred by TRC to the Trustee pursuant to the Pooling and Servicing Agreement for the benefit of the Certificateholders by including (or, in the case of Removed Accounts, either including such a code identifying the Removed Accounts only if the removal occurs prior to the Automatic Addition Termination Date or any Automatic Addition Suspension Date, or subsequent to a Restart Date or deleting such code thereafter) in such computer files and microfiche or printed lists the code or other notation identifying each such Account and (ii) deliver to TRC on or prior to the date referred to in clauses (A), (B) or (C) above, as applicable, a computer file or microfiche or printed list containing a true and complete list of all such Accounts specifying for each such Account, as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date, in the case of clause (A) above, the applicable Addition Cut-Off Date, in the case of Supplemental Accounts, and the Removal Date, in the case of Removed Accounts, (A) its account number, (B) the aggregate amount outstanding in such Account and (C) the aggregate amount of Principal Receivables in such Account. Such computer files or microfiche or printed lists, as supplemented from time to time to reflect Supplemental Accounts or Removed Accounts, shall be marked as Schedule I to this Agreement, shall be delivered to TRC (or to the Trustee, if so directed by TRC) and marked as proprietary and confidential, and are hereby incorporated into and made a part of this Agreement. TCC further agrees not to alter the code or other notation referenced in clause (i) of this paragraph with respect to any Account during the term of this Agreement unless and until (x) such Account becomes a Removed Account, (y) a Restart Date has occurred on which TCC starts including Automatic Additional Accounts as Accounts or (z) TCC shall have delivered to TRC and the Trustee at least 30 days prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the respective interests of TRC and the Trustee in the Receivables and other Trust Assets to continue to be perfected with the priority required by this Agreement and the Pooling and Servicing Agreement, respectively. (d) It is the intention of the parties hereto that the conveyance of the Receivables and the other Purchased Assets by TCC to TRC as provided in this Section 2.1 be, and be construed as, an absolute sale, without recourse, of the Receivables by TCC to TRC. Furthermore, it is not intended that such conveyance be deemed a pledge of the Receivables and the other Purchased Assets by TCC to TRC to secure a debt or other obligation of TCC. If, however, notwithstanding the intention of the parties, the conveyance provided for in this Section 2.1 is determined to be a transfer for security, then this Agreement shall also be deemed to be a security agreement within the meaning of Article 9 of the UCC and TCC hereby grants to TRC a "security interest" within the meaning of Article 9 of the UCC in all of TCC's right, title and interest in and to the Receivables and the other Purchased Assets and all amounts payable to the holders of the Receivables after the Closing Date in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to secure a loan in an amount equal to the Purchase Price of the Receivables. Section 2.2. Addition of Additional Accounts. (a) All accounts which meet the definition of Automatic Additional Accounts shall be included as Accounts from and after the date upon which such Automatic Additional Accounts are created and all Receivables in such Automatic Additional Accounts, whether such Receivables are then existing or thereafter created, shall be transferred automatically to TRC upon purchase by TCC. For all purposes of this Agreement, all receivables of such Automatic Additional Accounts shall be treated as Receivables upon their creation and shall be subject to the eligibility criteria specified in the definitions in the Pooling and Servicing Agreement of "Eligible Receivable" and "Eligible Account." TCC may elect at any time to terminate the inclusion in Accounts of new accounts which would otherwise be Automatic Additional Accounts as of any Business Day (the "Automatic Addition Termination Date") or suspend such inclusion as of any Business Day (an "Automatic Addition Suspension Date") until a future Business Day to be notified in writing by TCC to TRC (the "Restart Date"), by delivering to TRC ten days prior written notice of such election at least 10 days prior to such Automatic Addition Termination Date or Automatic Addition Suspension Date. Promptly after an Automatic Addition Termination Date, an Automatic Addition Suspension Date or a Restart Date, TCC and TRC agree to execute and TCC agrees to record and file at its own expense an amendment to the financing statements referred to in Section 2.1(b) hereof to specify the accounts then subject to this Agreement (which specification may incorporate a list of accounts by reference) and, except in connection with any such filing made after a Restart Date, to release any security interest in any accounts created after the Automatic Addition Termination Date or an Automatic Addition Suspension Date. (b) If, from time to time, TRC becomes obligated to designate supplemental accounts or Participation Interests pursuant to Section 2.9(a) of the Pooling and Servicing Agreement, then TRC shall give TCC written notice thereof on or before the eighth Business Day (the "Addition Notice Date") prior to the Addition Date therefor, and TCC shall on or before the Addition Date, designate sufficient Eligible Accounts (the "Supplemental Accounts") to be included as Accounts, or Participation Interests, as the case may be, so that after the inclusion thereof TRC will be in compliance with the requirements of Section 2.9 of the Pooling and Servicing Agreement; provided, however, that the failure of TCC to transfer Receivables to TRC as provided in this paragraph solely as a result of the unavailability of a sufficient amount of Eligible Receivables shall not constitute a breach of this Agreement. Additionally, subject to Section 2.9(b) of the Pooling and Servicing Agreement, from time to time, Accounts may be designated to be included as Supplemental Accounts or Participation Interests may be designated to be included as Trust Assets, in either case upon the mutual agreement of TCC and TRC. In either event, TCC or its designee shall have sole responsibility for selecting such Supplemental Accounts or Participation Interests. In the case of Supplemental Accounts, TCC shall on or prior to the Addition Date therefor execute and deliver to TRC a written assignment from TCC to TRC in substantially the form of Exhibit A (the "Supplemental Conveyance"). Upon such designation, such Supplemental Accounts shall be deemed to be Accounts hereunder. Section 2.3. Sale of Receivables to TCC. In the event any Receivables are sold by TRC to TCC, the purchase price for such Receivables shall equal the greater of (i) the fair market value (as of the date of the sale) of such Receivables and (ii) the amount of the Principal Receivables to be sold. ARTICLE III CONSIDERATION AND PAYMENT Section 3.1. Purchase Price. (a) The "Purchase Price" for the Receivables which came into existence on or prior to the Closing Date conveyed to TRC under this Agreement shall be payable on the Closing Date and shall be an amount equal to 100% of Principal Receivables and Finance Charge Receivables so conveyed. The Purchase Price for the Receivables (including Receivables in Additional Accounts) to be conveyed to TRC under this Agreement that are created on any Business Day after the Closing Date shall be payable on the Distribution Date following the Monthly Period during which such Receivables are conveyed by TCC to TRC in an amount equal to 100% of the Principal Receivables so conveyed (the "New Principal Receivables"), the Purchase Price to be adjusted from time to time with respect to New Principal Receivables originated thereafter to reflect such factors as TCC and TRC mutually agree will result in a Purchase Price determined to approximate the fair market value of such New Principal Receivables. (b) The Purchase Price to be paid by TRC with respect to the Receivables on the Closing Date and with respect to each Receivable created thereafter shall be paid (i) in cash, (ii) with the consent of TRC, by means of capital contributed by TCC to TRC in the form of a contribution of the Receivables, (iii) with the consent of TCC, by issuance to TCC of a Subordinated Note or by increase in the amount outstanding thereunder, or (iv) any combination of the foregoing, in each case in accordance with Section 3.3. (c) To the extent that TRC shall not have paid before, or shall not have available to it, cash in U.S. dollars in same day funds sufficient to pay (or cause to be paid) to TCC the Purchase Price for Receivables that have been newly created during a Monthly Period, the remainder of the Purchase Price shall be paid on each Distribution Date by increasing the principal amount of the Subordinated Note by an amount equal to such insufficiency; provided, however, that to the extent that any such increase in the principal amount of the Subordinated Note would cause the Capital Ratio as of the end of the preceding Monthly Period to be less than the Minimum Capital Ratio as of the end of the preceding Monthly Period, Receivables having an outstanding balance of Principal Receivables sufficient to avoid the Capital Ratio being less than the Minimum Capital Ratio shall be deemed contributed to the capital of TRC by TCC; provided, further, that the portion of the Purchase Price paid on such Distribution Date with a Subordinated Note as of the end of the preceding Monthly Period shall not cause (a) the sum of (i) the principal amount of the Subordinated Note and (ii) the outstanding principal amount of all certificates issued by the Trust that are or may be classified as debt for federal income tax purposes, net of amounts in the principal funding accounts for all Series of certificates, to exceed (b) 80% of (x) the aggregate amount of Principal Receivables and amounts on deposit in the Special Funding Account minus (y) the principal amount of any Supplemental Certificate, Participation Interest and any other interest in the Transferor's Interest not held by the Transferor. Section 3.2. Adjustments to Purchase Price. The Purchase Price with respect to any Receivable previously sold to TRC by TCC which has since been reduced by TCC or the Servicer because of a rebate, refund, unauthorized charge or billing error to a cardholder because such Receivable was created in respect of merchandise that was refused or returned by a cardholder during any Monthly Period shall be reduced on the following Determination Date by the amount of such adjustment (a "Credit Adjustment"). Section 3.3. Settlement and Ongoing Payment of Purchase Price. On each Distribution Date under the Pooling and Servicing Agreement, TCC shall deliver a settlement statement (the "Settlement Statement") to TRC, showing the aggregate Purchase Price of Receivables conveyed to TRC during the prior Monthly Period, the portion thereof paid in cash, the portion represented by an increase in the Subordinated Note and the portion represented by a capital contribution, and the amount which remains unpaid as Credit Adjustments made with respect to such prior Monthly Period pursuant to Section 3.2 hereof and any adjustment to the Purchase Price of Receivables with respect to such Monthly Period pursuant to Section 6.1 hereof. Any cash balance due from TRC to TCC shall be paid in cash in immediately available funds to TCC or TCC shall convey such amount as a capital contribution to TRC or the outstanding balance of the Subordinated Note shall be increased to reflect such unpaid balance or a combination of the foregoing shall occur, and any balance due from TCC to TRC shall be paid in immediately available funds to TRC. To the extent that TCC has received an amount greater than the Purchase Price of such Receivables, TCC shall first apply such amount to the payment of the unpaid principal of the Subordinated Note, if any. If, after giving effect to any such payment in respect of the Subordinated Note, TCC has received an amount greater than the Purchase Price, TCC shall retain such amounts and, at the option of TRC (x) issue its note to TRC with terms substantially similar to the terms of the Subordinated Note or (y) subject to applicable legal restrictions and the Minimum Capital Ratio, elect to treat such amounts as a dividend or return of capital to TCC. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1. Representations and Warranties of TCC Relating to TCC. TCC hereby represents and warrants to, and agrees with, TRC as of the Closing Date and on each Addition Date, that: (a) Organization and Good Standing. TCC is a corporation validly existing in good standing under the laws of the State of Minnesota, and has full corporate power, authority and legal right to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement. (b) Due Qualification. TCC is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements), and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a material adverse effect on the interests of TRC or the Investor Certificateholders. (c) Due Authorization. The execution, delivery and performance of this Agreement and any other document or instrument delivered pursuant hereto (such other documents or instruments, collectively, the ("Conveyance Papers") and the consummation of the transactions provided for in this Agreement or any other Conveyance Papers have been duly authorized by all necessary corporate action on the part of TCC. (d) No Conflict. The execution and delivery of this Agreement and the Conveyance Papers by TCC, the performance of the transactions contemplated by this Agreement and the Conveyance Papers, and the fulfillment of the terms of this Agreement and the Conveyance Papers applicable to TCC 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 TCC is a party or by which it or any of its properties are bound. (e) No Violation. The execution, delivery and performance of this Agreement and the Conveyance Papers by TCC and the fulfillment by TCC of the terms hereof and thereof will not conflict with or violate any Requirements of Law applicable to TCC. (f) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of TCC, threatened against TCC, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or any of the Conveyance Papers, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Conveyance Papers, (iii) seeking any determination or ruling that, in the reasonable judgment of TCC, would materially and adversely affect the performance by TCC of its obligations under this Agreement or any of the Conveyance Papers, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or any of the Conveyance Papers or (v) seeking to affect adversely the income tax attributes of the Trust under United States Federal or applicable state income or franchise tax systems. (g) All Consents. All approvals, authorizations, consents, orders or registrations or declarations with any Person or any governmental body or official required in connection with the execution and delivery by TCC of this Agreement or any of the Conveyance Papers and the performance of the transactions contemplated by this Agreement or any of the Conveyance Papers by TCC have been duly obtained, effected or given and are in full force and effect. (h) Insolvency. TCC is not insolvent and no Insolvency Event with respect to TCC has occurred, and the transfer of the Receivables by TCC to TRC contemplated hereby has not been made in contemplation of such insolvency or Insolvency Event. The representations and warranties set forth in this Section 4.1 shall survive the transfer and assignment of the Receivables to TRC. Upon discovery by TCC or TRC of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give written notice to the other party within three Business Days following such discovery. TCC agrees to cooperate with TRC and the Trustee in attempting to cure any such breach. Section 4.2. Representations and Warranties of TCC Relating to the Agreement and the Receivables. (a) Representations and Warranties. TCC hereby represents and warrants to TRC as of the date of this Agreement, as of the Closing Date and, with respect to Additional Accounts, as of the related Addition Date that: (i) this Agreement and, in the case of Supplemental Accounts, the related Supplemental Conveyance, when executed and delivered on behalf of TCC, each constitute a valid and binding obligation of TCC enforceable against TCC in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity); (ii) as of the Automatic Addition Termination Date or any Automatic Addition Suspension Date, and as of each subsequent Addition Date with respect to Supplemental Accounts, Schedule I to this Agreement and the related computer file, microfiche list or printed list delivered pursuant to this Agreement, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts as of such date or such Additional 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 such date or such applicable Additional Cut-Off Date, as the case may be; (iii) TCC is the legal and beneficial owner of all right, title and interest in and to each Receivable, TCC has the full right, power and authority to transfer the Receivables pursuant to this Agreement; and each Receivable conveyed to TRC by TCC has been conveyed to TRC free and clear of any Lien of any Person claiming through or under TCC or any of its Affiliates (other than Liens permitted under Section 5.1(b)) and in compliance, in all material respects, with all Requirements of Law applicable to TCC; (iv) all authorizations, consents, orders, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by TCC in connection with the conveyance of such Receivable to TRC have been duly obtained, effected or given and are in full force and effect; (v) this Agreement or, in the case of Supplemental Accounts, the related Supplemental Conveyance, upon execution and delivery on behalf of TCC, constitutes a valid absolute sale and assignment to TRC of all right, title and interest of TCC in and to the Receivables and the other Purchased Assets, all monies due or to become due with respect thereto and all proceeds thereof, and, in the case of Supplemental Accounts, the related Supplemental Conveyance, will constitute, at the time of such addition, an absolute sale of such property and the proceeds thereof. Upon the filing of the financing statements pursuant to Section 2.1(a) and, in the case of Receivables hereafter created and the proceeds thereof, upon the creation thereof, TRC shall have a first-priority perfected security interest (as defined in the UCC) in such property and proceeds (as defined in the UCC) except for Liens permitted by Section 5.1(b); (vi) except as otherwise expressly provided in this Agreement, the Pooling and Servicing Agreement or any Supplement, neither TCC nor any Person claiming through or under TCC has any claim to or interest in the Collection Account, the Special Funding Account, any Series Account or any Enhancement; (vii) on the Initial Cut-Off Date, with respect to each Initial Account, on the date of its creation, with respect to each Automatic Additional Account and, on the applicable Addition Cut-Off Date, with respect to each related Supplemental Account each Account classified as an "Eligible Account" by TCC in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Account and each Receivable classified as an "Eligible Receivable" by TCC in any document or report delivered hereunder will satisfy the requirements contained in the definition of Eligible Receivable; (viii) on the Initial Cut-Off Date, each Receivable then existing is an Eligible Receivable, on the date of creation of each Automatic Additional Account, each Receivable contained in such Automatic Additional Account is an Eligible Receivable and, on the applicable Additional Cut-Off Date, each Receivable contained in any related Supplemental Account is an Eligible Receivable; and (ix) as of the date of the creation of any new Receivable, such Receivable is an Eligible Receivable. (b) Notice of Breach. The representations and warranties set forth in this Section 4.2 shall survive the transfer and assignment of the Receivables to TRC. Upon discovery by either TCC or TRC of a breach of any of the representations and warranties set forth in this Section 4.2, the party discovering such breach shall give written notice to the other party within three Business Days following such discovery; provided that the failure to give notice within three Business Days does not preclude subsequent notice. TCC hereby acknowledges that TRC intends to rely on the representations hereunder in connection with representations made by TRC to secured parties, assignees or subsequent transferees including but not limited to transfers made by TRC to the Trust pursuant to the Pooling and Servicing Agreement. TCC agrees to cooperate with TRC and the Trustee in attempting to cure any such breach. Section 4.3. Representations and Warranties of TRC. As of the Closing Date, TRC hereby represents and warrants to, and agrees with, TCC that: (a) Organization and Good Standing. TRC is a corporation validly existing in good standing under the laws of the State of Minnesota and has full power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted and to execute, deliver and perform its obligations under this Agreement and the Conveyance Papers. (b) Due Authorization. The execution and delivery of this Agreement and the Conveyance Papers and the consummation of the transactions provided for in this Agreement and the Conveyance Papers have been duly authorized by TRC by all necessary corporate action on the part of TRC. (c) No Conflict. The execution and delivery of this Agreement and the Conveyance Papers, the performance of the transactions contemplated by this Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and thereof, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which TRC is a party or by which it or any of its properties are bound. (d) No Violation. The execution, delivery and performance of this Agreement and the Conveyance Papers by TRC and the fulfillment of the terms contemplated herein and therein applicable to TRC will not conflict with or violate any Requirements of Law applicable to TRC. (e) No Proceedings. There are no proceedings or investigations pending or, to the best knowledge of TRC, threatened against TRC, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or any of the Conveyance Papers, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the Conveyance Papers, (iii) seeking any determination or ruling that, in the reasonable judgment of TRC, would materially and adversely affect the performance by TRC of its obligations under this Agreement or any of the Conveyance Papers or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or any of the Conveyance Papers. (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 TRC in connection with the execution and delivery by TRC of this Agreement and the Conveyance Papers and the performance of the transactions contemplated by this Agreement and the Conveyance Papers or the fulfillment of the terms of this Agreement and the Conveyance Papers by TRC have been duly obtained, effected or given and are in full force and effect. The representations and warranties set forth in this Article IV shall survive the Conveyance of the Receivables to TRC and termination of the rights and obligations of TRC and TCC under this Agreement. Upon discovery by TRC or TCC of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the other party. ARTICLE V COVENANTS Section 5.1. TCC Covenants. TCC hereby covenants and agrees with TRC as follows: (a) Receivables not to be Evidenced by Promissory Notes. Except in connection with the enforcement or collection of an Account, TCC will take no action to cause any Receivable transferred by it pursuant hereto to be evidenced by any "instrument," other than an instrument that, taken together with one or more other writings constitutes chattel paper (as such terms are defined in the UCC) and, if any such Receivable is so evidenced (whether or not in connection with the enforcement or collection of an Account), it shall be deemed to be an Ineligible Receivable in accordance with Section 6.1. (b) Security Interests. Except for the conveyances hereunder or as otherwise provided herein, TCC 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, whether now existing or hereafter created, or any interest therein; and TCC will immediately notify TRC of the existence of any Lien on any Receivable; and TCC shall defend the right, title and interest of TRC in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under TCC; provided, however, that nothing in this Section 5.1(b) shall prevent or be deemed to prohibit TCC from suffering to exist upon any of the Receivables any Lien for taxes if such taxes shall not at the time be due and payable or if the Seller 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) TCC's Interest. Except for the conveyances hereunder and in connection with any transaction permitted pursuant to Section 9.5 of the Pooling and Servicing Agreement, TCC hereby agrees not to transfer, assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a security interest in the Accounts and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or grant shall be void. (d) Delivery of Collections or Recoveries. If TCC receives Collections or Recoveries, TCC agrees to pay to TRC (or to the Servicer if TRC so directs) all such Collections and Recoveries as soon as practicable after receipt thereof but in no event later than two Business Days after the Date of Processing by TCC. (e) Notice of Liens. TCC shall notify TRC promptly after becoming aware of any Lien on any Receivable other than the conveyances hereunder or any Lien permitted under Section 5.1(b) hereof or Section 2.7(b) of the Pooling and Servicing Agreement. (f) Documentation of Transfer. TCC shall cause to be executed, delivered and/or filed any documents (including financing statements and/or continuation statements under the UCC) that would be necessary to perfect and maintain the security interest in and to the Purchased Assets contemplated by this Agreement. (g) Approval of Official Records. The execution, delivery and performance of TCC's obligations under this Agreement, and the transactions contemplated hereby, have been duly approved by TCC's Board of Directors. (h) Sale. TCC agrees to treat the Conveyance, for all purposes (including all relevant tax and financial accounting purposes) as a sale on all federal and state tax returns, financial statements and other applicable documents. (i) Continuous Perfection. TCC 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 within the meaning of Section 9-402(7) of the UCC (or any other then applicable provision of the UCC) unless TCC shall have delivered to TRC 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. TCC shall not change its chief executive office or change the location of its principal records concerning the Receivables or the Collections unless it has delivered to TRC 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 TRC in the Receivables and other Purchased Assets to continue to be perfected with the priority required by this Agreement. Section 5.2. Covenants of TCC with Respect to the Bank Purchase Agreement. TCC, in its capacity as purchaser of the Receivables from RNB pursuant to the Bank Purchase Agreement, hereby covenants that TCC will at all times enforce the covenants and agreements of RNB in the Bank Purchase Agreement, including, without limitation, covenants to the effect set forth below. (a) Periodic Rate Finance Charges. (i) Except (x) as otherwise required by any Requirement of Law or (y) as is deemed by RNB in its sole discretion to be appropriate, it shall not at any time reduce the annual percentage rates of the Periodic Finance Charges assessed on the Receivables or reduce other fees charged on any of the Accounts if, either (a) as a result of such reduction it is reasonably expected that such reduction will cause an Early Amortization Event to occur with respect to a Series or (b) such reduction (x) if RNB owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by RNB that have characteristics the same as or substantially similar to the Receivables that are the subject of such reduction and (y) if RNB does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. (b) Credit Card Agreements and Guidelines. RNB shall comply with and perform its obligations under the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines except insofar as any failure to so comply or perform would not materially and adversely affect the rights of TCC hereunder, the rights of TRC under the TRC Purchase Agreement and the rights of the Trust or the Certificateholders under the Pooling and Servicing Agreement or the Certificates. Subject to compliance with all Requirements of Law, RNB may not change the terms and provisions of the Credit Card Agreements or the Credit Card Guidelines with respect to any of the Accounts in any respect (including the calculation of the amount, or the timing, of charge-offs and the Periodic Finance Charges and other fees to be assessed thereon) if, either (a) as a result of such change it is reasonably expected that such change will cause an Early Amortization Event to occur with respect to a Series or (b) such change (x) if RNB owns a comparable segment of receivables, is not applied to any such comparable segment of consumer open end credit accounts owned by RNB that have characteristics the same as or substantially similar to the Receivables that are the subject of such change and (y) if RNB does not own such a comparable segment of receivables, will not be made with the intent to materially benefit the Transferor over the Investor Certificateholders or to materially adversely affect the Investor Certificateholders, except as otherwise restricted by an endorsement, sponsorship, or other agreement between the Transferor and an unrelated third party or by the terms of the Accounts. ARTICLE VI REPURCHASE OBLIGATION Section 6.1. Reassignment of Ineligible Receivables. In the event that (x) any representation or warranty under Section 4.2(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and correct in any material respect as of the date specified therein with respect to any Receivable or any related Account, and (y) the Receivable to which such untrue or incorrect representation or warranty relates is given a value of zero for purposes of determining the aggregate Principal Receivables under the terms of the Pooling and Servicing Agreement, TCC shall pay to TRC an amount in cash equal to the Purchase Price, adjusted for any Collections received, paid for any such Ineligible Receivable by TRC to TCC. Such amount may be offset against any amounts due from TRC to TCC with respect to the Purchase Price for Receivables sold to TRC on such day; provided, however, that TCC shall not be obligated to make any such cash payment until the Distribution Date following a Monthly Period with respect to amounts owing for such Monthly Period, which payment shall be made in accordance with Section 3.3. The obligation of TCC set forth in this Section shall constitute the sole remedy respecting any breach of the representations and warranties set forth in the above-referenced Sections or failure to meet the conditions set forth in the definition in the Pooling and Servicing Agreement of Eligible Receivable with respect to such Receivable available to TRC and TRC shall not be obligated to transfer any such Receivable to TCC. Section 6.2. Reassignment of Certificateholders' Interest in Trust Portfolio. In the event any representation or warranty set forth in Section 4.1(a) or (c) or Section 4.2(a)(i), (v) or (vi) is not true and correct in any material respect and as a result thereof TRC is required to accept a reassignment of the Receivables transferred to the Trust by TRC pursuant to Section 2.6 of the Pooling and Servicing Agreement, TCC shall be obligated to accept a reassignment of TRC's interest in such Receivables on the terms set forth below. TCC shall pay to TRC by depositing in the Collection Account in same-day funds, not later than 10:00 A.M. New York City time, on the Distribution Date following the Monthly Period in which such reassignment obligation arises, in payment for such reassignment, an amount equal to the Portfolio Reassignment Price. Section 6.3 Conveyance of Reassigned Receivables. Upon the request of TCC, TRC shall execute and deliver to TCC a reconveyance substantially in such form and upon such terms as shall be acceptable to TCC, pursuant to which TRC evidences the conveyance to TCC of all of TRC's right, title, and interest in any Receivables reconveyed to TCC pursuant to Sections 6.1 and 6.2. TRC shall (and shall cause the Trustee to) execute such other documents or instruments of conveyance or take such other actions as TCC may reasonably require to effect any repurchase of Receivables pursuant to this Article VI. ARTICLE VII CONDITIONS PRECEDENT Section 7.1. Conditions to TRC's Obligations Regarding Initial Receivables. The obligations of TRC to purchase the Receivables in the Initial Accounts on the Closing Date shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of TCC contained in this Agreement shall be true and correct in all material respects on the Closing Date with the same effect as though such representations and warranties had been made on such date; (b) All information concerning the Initial Accounts provided to TRC shall be true and correct in all material respects as of the Initial Cut-Off Date; (c) TCC shall have substantially performed all other obligations required to be performed by the provisions of this Agreement; (d) TCC shall have recorded and filed, at its expense, with respect to the Initial Accounts and Automatic Additional Accounts on or prior to the Closing Date and with respect to Supplemental Accounts on or prior to the applicable Addition Date of Receivables in such Accounts, any UCC-1 or other financing statement with respect to the Receivables then existing and thereafter created for the transfer of accounts (as defined in Section 9-106 of the UCC) meeting the requirements of applicable state law in such manner and in such jurisdictions as would be necessary or advisable to perfect or evidence the sale of the Receivables from TCC to TRC, and shall deliver a file-stamped copy of such financing statements or other evidence of such filings to TRC; (e) On or before the Closing Date, TRC and the Trustee shall have entered into the Pooling and Servicing Agreement, TRC, RNB and the Trustee shall have entered into the Participation Supplement and the closing under each such agreement shall take place simultaneously with the initial closing hereunder; and (f) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to TRC, and TRC shall have received from TCC copies of all documents (including, without limitation, records of corporate proceedings) relevant to the transactions herein contemplated as TRC may reasonably have requested. Section 7.2. Conditions to TRC's Obligations Regarding Additional Receivables. The obligations of TRC to purchase any Receivables created on or after the Closing Date, shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of TCC contained in this Agreement shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such purchase; (b) All information (concerning any Account to which such Receivables relate) provided or to be provided to TRC shall be true and correct in all material respects on the date of such purchase; (c) On and after the Automatic Addition Termination Date or any Automatic Addition Suspension Date (and in such latter case, until a Restart Date), TCC shall have indicated in its computer files, microfiche list or printed list that such Receivables (created in respect of any Account to which such Receivables relate) have been sold to TRC in accordance with this Agreement and transferred to the Trust pursuant to the Pooling and Servicing Agreement for the benefit of the Certificateholders; and (d) TCC shall have recorded and filed, at its expense, with respect to the Initial Accounts and Automatic Additional Accounts on or prior to the Closing Date, with respect to Automatic Additional Accounts created on and after a Restart Date, on or prior to such Restart Date, and with respect to Supplemental Accounts on or prior to the applicable Addition Date of Receivables in such Accounts, any UCC-1 or other financing statement with respect to such Receivables in any Accounts in connection with the transfer of accounts (as defined in Section 9-106 of the UCC) meeting the requirements of applicable state law in such manner and in such jurisdictions as may be necessary or advisable to perfect or evidence the sale of such Receivables from TCC to TRC, and shall deliver a file-stamped copy of such financing statements or other evidence of such filings to TRC. Section 7.3. Conditions Precedent to Obligations of TCC. The obligations of TCC to sell on any date Receivables shall be subject to the satisfaction of the following conditions: (a) All representations and warranties of TRC contained in this Agreement shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such sale; (b) Payment or provision for payment of the Purchase Price in accordance with the provision of Sections 3.1, 3.2 and 3.3 hereof shall have been made; and (c) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to TCC, and TCC shall have received from TRC copies of all documents (including, without limitation, records of corporate proceedings) relevant to the transactions herein contemplated as TCC may reasonably have requested. ARTICLE VIII TERM AND PURCHASE TERMINATION Section 8.1. Term. This Agreement shall commence as of the date of execution and delivery hereof and shall continue until the termination of the Trust as provided in Article XII of the Pooling and Servicing Agreement. Section 8.2. Purchase Termination. If TCC shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or if a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of TCC in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of TCC or for any substantial part of TCC's property, or for the winding-up or liquidation of TCC's affairs and, if instituted against TCC, any such proceeding shall continue undismissed or unstayed and in effect, for a period of 60 consecutive days, or any of the actions sought in such proceeding shall occur; or if TCC shall commence a voluntary case under any Debtor Relief Law, or if TCC shall consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of, or for, any substantial part of its property, or any general assignment for the benefit of its creditors; or TCC or any subsidiary of TCC shall have taken any corporate action in furtherance of any of the foregoing actions (each an "Insolvency Event"); then TCC shall immediately cease to transfer Principal Receivables to TRC and shall promptly give notice to TRC and the Trustee of such Insolvency Event. Notwithstanding any cessation of the transfer to TRC of additional Principal Receivables, Principal Receivables transferred to TRC prior to the occurrence of such Insolvency Event and Collections in respect of such Principal Receivables and Finance Charge Receivables whenever created, accrued in respect of such Principal Receivables, shall continue to be property of TRC transferable by TRC to the Trust pursuant to the Pooling and Servicing Agreement. ARTICLE IX MISCELLANEOUS PROVISIONS Section 9.1. Amendment. This Agreement and any Conveyance Papers and the rights and obligations of the parties hereunder may not be changed orally, but only by an instrument in writing signed by TRC and TCC in accordance with this section 9.1. This Agreement and any Conveyance Papers may be amended from time to time by TRC and TCC (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein or in any such other Conveyance Papers, (iii) to add any other provisions with respect to matters or questions arising under this Agreement or any Conveyance Papers that shall not be inconsistent with the provisions of this Agreement or any Conveyance Papers, (iv) to change or modify the Purchase Price, (v) to change, modify, delete or add any other obligation of TCC or TRC and (vi) to provide for the transfer by TCC or TRC of its interest in and to all or part of the Accounts in accordance with the provisions of the Pooling and Servicing Agreement (if such transfer is for less than all of the Accounts, the respective rights, duties and obligations of TRC, TCC and the Servicer will be determined at the time of such transfer); provided, however, that no amendment pursuant to clause (v) of this Section 9.1 shall be effective unless TCC and TRC have been notified in writing that the Rating Agency Condition has been satisfied; provided, further, that such action shall not (as evidenced by an Opinion of Counsel delivered to the Trustee) adversely affect in any material respect the interests of the Trustee or the Certificateholders, unless the Trustee shall consent thereto. Any reconveyance executed in accordance with the provisions hereof shall not be considered to be an amendment to this Agreement. A copy of any amendment to this Agreement shall be sent to the Rating Agency. SECTION 9.2. GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND THE CONVEYANCE PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. [Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts) and further agrees that service of any process, summons, notice or document by prepaid certified mail with proof of mailing receipt validated by the United States Postal Service to its respective address set forth in Section 9.3 (or to the agent of such party appointed and maintained in the State of Delaware as such party's agent for acceptance of legal process) shall be effective service of process for any litigation brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware or of the federal courts sitting in the State of Delaware and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum.] Section 9.3. Notices. (a) All demands, notices, instructions, directions and communications (collectively, ("Notices") under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at, mailed by registered mail, return receipt requested, or sent by facsimile transmission to (i) in the case of TRC, to Target Receivables Corporation, 80 South Eighth Street, 14th Floor, Suite 1401, Minneapolis, Minnesota 55402, Attention of Treasurer (facsimile no. (612) 370-5508), (ii) in the case of TCC, to Target Capital Corporation, 777 Nicollet Mall, Minneapolis, Minnesota 55402, Attention of Treasurer (facsimile no. (612) 370-5508) and (iii) in the case of the Trustee, to Norwest Bank Minnesota, National Association, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-0069, Attention of Joseph Travis (facsimile no. (612) 667- 9825), (iv) in the case of Moody's, to 99 Church Street, New York, New York 10007, Attention of ABS Monitoring Department 4th Floor (facsimile no. 212-553-4600) and (v) in the case of Standard & Poor's, to 55 Water Street, New York, New York 10041, Attention of Asset Backed Group (facsimile no. 212-_______). Section 9.4. Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement or any Conveyance Paper shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions, and terms of this Agreement or any Conveyance Paper and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of any Conveyance Paper. Section 9.5. Assignment, Sale of Accounts. (a) Notwithstanding anything to the contrary contained herein, except as set forth in Section 9.5(b) and other than TRC's assignment of its right, title, and interest in, to, and under this Agreement to the Trustee for the benefit of the Certificateholders as contemplated by the Pooling and Servicing Agreement and Section 9.6 hereof, this Agreement and all other Conveyance Papers may not be assigned by the parties hereto. (b) Notwithstanding the provisions of Section 9.5(a) hereof, TCC may assign, convey and transfer its interest in the receivables arising under the consumer open end card accounts owned by RNB, which may include the Accounts, and its interest in any Participation Interests (collectively, the "Assigned Assets"), together with obligations under this Agreement or relating to the transactions contemplated hereby (collectively, the "Assumed Obligations"), to another entity (the "Assuming Entity") which may be an entity that is not affiliated with TCC, and TCC may assign, convey and transfer the Assigned Assets and the Assumed Obligations to the Assuming Entity, without the consent or approval of the Certificateholders, in each case upon satisfaction of the following conditions: (i) the Assuming Entity, TCC and the Trustee shall have entered into an assumption agreement (the "Assumption Agreement") providing for the Assuming Entity to assume the Assumed Obligations, including the obligation under this Agreement to transfer the Receivables arising under the Accounts to TRC, and TCC shall have delivered to TRC and the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such assumption and transfer comply with this Section, that such Assumption Agreement is a valid and binding obligation of such Assuming Entity enforceable against such Assuming Entity in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity), and that all conditions precedent herein provided for relating to such transaction have been complied with; (ii) TCC or the Assuming Entity shall have delivered to the Trustee copies of UCC-1 financing statements covering such Accounts to perfect TRC's interest in the Receivables arising herein and any Conveyance Papers or Supplemental Conveyance; (iii) TRC shall have received written notice that the Rating Agency Condition has been satisfied with respect to such transfer and assumption and shall have delivered copies of each such written notice to the Servicer and the Trustee; (iv) TRC shall have received an opinion of Counsel with respect to clauses (i) and (ii) above and as to certain other matters that TRC may specify; and (v) the Trustee shall have received a Tax Opinion. Notwithstanding such assumption, TCC shall continue to be liable for all representations and warranties and covenants made by it and all obligations performed or to be performed by it in its capacity hereunder prior to such transfer. Section 9.6. Acknowledgement and Agreement of TCC. By execution below, TCC expressly acknowledges and agrees that all of TRC's right, title, and interest in, to, and under this Agreement, including, without limitation, all of TRC's right, title, and interest in and to the Receivables purchased pursuant to this Agreement, will be assigned by TRC to the Trustee for the benefit of the Certificateholders, and TCC consents to such assignment. Additionally, TCC agrees for the benefit of the Trustee that any amounts payable by TCC to TRC hereunder which are to be paid by TRC to the Trustee for the benefit of the Certificateholders shall be paid by TCC, on behalf of TRC, directly to the Trustee. Any payment required to be made on or before a specified date in same-day funds may be made on the prior business day in next-day funds. Section 9.7. Further Assurances. TRC and TCC 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 other party more fully to effect the purposes of this Agreement and the Conveyance Papers, including, without limitation, the execution of any UCC financing statements or continuation statements or equivalent documents relating to the Receivables for filing under the provisions of the UCC or other law of any applicable jurisdiction. Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of TRC or TCC, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Section 9.9. Counterparts. This Agreement and all Conveyance Papers 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. Binding Third-Party Beneficiaries. This Agreement and the Conveyance Papers will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. The parties hereto intend that the Trustee shall be a third-party beneficiary of this Agreement. Section 9.11. Merger and Integration. Except as specifically stated otherwise herein, this Agreement and the Conveyance Papers set 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 and the Conveyance Papers. This Agreement and the Conveyance Papers may not be modified, amended, waived or supplemented except as provided herein. Section 9.12. Headings. The headings set forth herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. Section 9.13. Schedules and Exhibits. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes. Section 9.14. Survival of Representations and Warranties. All representations, warranties and agreements contained in this Agreement or contained in any Assignment, shall remain operative and in full force and effect and shall survive conveyance of the Receivables by TRC to the Trustee pursuant to the Pooling and Servicing Agreement. IN WITNESS WHEREOF, TRC and TCC have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. TARGET RECEIVABLES CORPORATION By /s/ Stephen C. Kowalke ----------------------- Name: Stephen C. Kowalke Title: Vice President and Treasurer TARGET CAPITAL CORPORATION By /s/ Stephen C. Kowalke ----------------------- Name: Stephen C. Kowalke Title: Treasurer EXHIBIT A FORM OF SUPPLEMENTAL CONVEYANCE (As required by Section 2.2 of the Amended and Restated Receivables Purchase Agreement) SUPPLEMENTAL CONVEYANCE NO. ______ dated as of _________________, by and between TARGET CAPITAL CORPORATION, as seller ("TCC"), and TARGET RECEIVABLES CORPORATION, as purchaser ("TRC"), pursuant to the Receivables Purchase Agreement referred to below. WITNESSETH: WHEREAS, TCC and TRC are parties to an Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000 (hereinafter as such agreement may have been, or may from time to time be, amended, supplemented or otherwise modified, the "Receivables Purchase Agreement"); WHEREAS, pursuant to the Receivables Purchase Agreement, TCC wishes to designate Supplemental Accounts to be included as Accounts and TCC wishes to convey the Receivables of such Supplemental Accounts, whether now existing or hereafter created, to TRC pursuant to the Receivables Purchase Agreement (as each such term is defined in the Receivables Purchase Agreement); and WHEREAS, TRC is willing to accept such designation and conveyance subject to the terms and conditions hereof. NOW, THEREFORE, TCC and TRC hereby agree as follows: 1. Defined Terms. Each capitalized term used herein shall have the meanings specified in the Receivables Purchase Agreement unless otherwise defined herein. "Addition Date" shall mean, with respect to the Supplemental Accounts designated hereby, _________, ____. 2. Designation of Supplemental Accounts. TCC delivers herewith a computer file, microfiche list or printed list containing a true and complete schedule identifying all such Supplemental Accounts and specifying for each such Account, as of the Additional Cut-Off Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables in such Account. Such computer file, microfiche list or printed list shall be, as of the date of this Supplemental Conveyance, incorporated into and made part of this Supplemental Conveyance and is marked as Schedule I to this Supplemental Conveyance. 3. Conveyance of Receivables. (a) TCC does hereby sell, transfer, assign, set over and otherwise convey to TRC (collectively, the "Conveyance"), without recourse, all of its right, title and interest in, to and under the Receivables generated by such Supplemental Accounts, now existing and hereafter created, all Recoveries allocable to such Supplemental Accounts and all monies due or to become due thereunder and all amounts received with respect thereto and all proceeds (including, without limitation, "proceeds" as defined in Article 9 of the UCC) thereof. The foregoing sale, transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by TRC of any obligation of the Servicer, TCC or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto. (b) In connection with the Conveyance, TCC agrees to record and file, at its own expense, one or more UCC financing statements (and continuation statements with respect to such financing statements when applicable) with respect to the Receivables, now existing and hereafter created, for the sale of accounts meeting the requirements of applicable state law in such manner and in such jurisdictions as may be necessary or advisable to perfect or evidence the sale and assignment of the Receivables to TRC, and to deliver a file-stamped copy of such financing statement or other evidence of such filing to TRC. (c) In connection with such sale, TCC further agrees, at its own expense, on or prior to the date of this Supplemental Conveyance, to indicate in the appropriate computer files, microfiche list or other records that all Receivables created in connection with the Supplemental Accounts designated hereby have been conveyed to TRC pursuant to this Supplemental Conveyance. 4. Acceptance by TRC. Subject to the satisfaction of the conditions set forth in Section 6 of this Supplemental Conveyance, TRC hereby acknowledges its acceptance of all right, title and interest to the property, now existing and hereafter created, conveyed to TRC pursuant to Section 3(a) of this Supplemental Conveyance, and declares that it shall maintain such right, title and interest. TRC further acknowledges that, prior to or simultaneously with the execution and delivery of this Supplemental Conveyance, TCC delivered to TRC (or to the Trustee if TRC has so directed) the computer file, microfiche list or printed list described in Section 2 of this Supplemental Conveyance. 5. Representations and Warranties of TCC. TCC hereby represents and warrants to TRC as of the date of this Supplemental Conveyance and as of the Addition Date that: (a) Legal, Valid and Binding Obligation. This Supplemental Conveyance constitutes a legal, valid and binding obligation of TCC enforceable against TCC in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and except as such enforceability may be limited by general principles of equity; (b) Eligibility of Accounts. Each Supplemental Account designated hereby is an Eligible Account; (c) Selection Procedures. No selection procedure was utilized by TCC which would result in a selection of Supplemental Accounts that would have a result that would be materially less favorable to the interests of TRC or the Investor Certificateholders of any Series as of the Addition Date than a random selection; (d) Insolvency. TCC is not insolvent and, after giving effect to the conveyance set forth in Section 3 of this Supplemental Conveyance, will not be insolvent; (e) Sale of Receivables. This Supplemental Conveyance constitutes a valid sale, transfer and assignment to TRC of all right, title and interest of TCC in the Receivables and other Purchased Assets now existing or hereafter created, all monies due or to become due and all amounts received with respect thereto and the "Proceeds" (as defined in the UCC) thereof, relating thereto; (f) No Conflict. The execution and delivery of this Supplemental Conveyance, the performance of the transactions contemplated by this Supplemental Conveyance and the fulfillment of the terms hereof, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which TCC is a party or by which it or its properties are bound; (g) No Violation. The execution and delivery of this Supplemental Conveyance by TCC, the performance of the transactions contemplated by this Supplemental Conveyance and the fulfillment of the terms hereof applicable to TCC will not conflict with or violate any Requirements of Law applicable to TCC; (h) No Proceedings. There are no proceedings or investigations, pending or, to the best knowledge of TCC, threatened against TCC before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of the Receivables Purchase Agreement or this Supplemental Conveyance, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Receivables Purchase Agreement or this Supplemental Conveyance, (iii) seeking any determination or ruling that, in the reasonable judgment of TCC, would materially and adversely affect the performance of TCC of its obligations under the Receivables Purchase Agreement or this Supplemental Conveyance or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Supplemental Conveyance; and (i) All Consents. All authorizations, consents, orders or approvals of any court or other governmental authority required to be obtained by TCC in connection with the execution and delivery of this Supplemental Conveyance by TCC and the performance of the transactions contemplated by this Supplemental Conveyance by TCC, have been obtained. 6. Conditions Precedent. The acceptance of TRC set forth in Section 4 of this Supplemental Conveyance is subject to the satisfaction, on or prior to the Addition Date, of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by TCC in Section 5 of this Supplemental Conveyance shall be true and correct in all material respects as of the date of this Supplemental Conveyance and as of the Addition Date; (b) Officer's Certificate. TCC shall have delivered to TRC an Officer's Certificate confirming that (i) the Supplemental Accounts shall be Eligible Accounts [or specify which, if any, of such Accounts are not Eligible Accounts] and (ii) (A) no selection procedure was utilized by TCC or TRC which would result in a selection of Supplemental Accounts that would have a result that would be materially less favorable to the interests of the Investor Certificateholders of any Series as of the Addition Date than a random selection; and (B) the list of Supplemental Accounts, as of the Additional Cut-Off Date, is a true and complete schedule identifying all such Supplemental Accounts and specifies for each such Account, as of the Additional Cut-Off Date, its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables in such Account; and (c) Additional Information. TCC shall have delivered to TRC such information as was reasonably requested by TRC to satisfy itself as to the accuracy of the representation and warranty set forth in Section 5(d) of this Supplemental Conveyance. 7. Ratification of the Receivables Purchase Agreement. The Receivables Purchase Agreement is hereby ratified, and all references to the "Receivables Purchase Agreement," to "this Agreement" and "herein" shall be deemed from and after the Addition Date to be a reference to the Receivables Purchase Agreement as supplemented by this Supplemental Conveyance. Except as expressly amended hereby, all the representations, warranties, terms, covenants and conditions of the Receivables Purchase Agreement shall remain unamended and shall continue to be, and shall, remain, in full force and effect in accordance with its terms and except as expressly provided herein shall not constitute or be deemed to constitute a waiver of compliance with or consent to non-compliance with any term or provision of the Receivables Purchase Agreement. 8. Counterparts. This Supplemental Conveyance may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Supplemental Conveyance to be duly executed and delivered by their respective duly authorized officers on the day and the year first above written. TARGET RECEIVABLES CORPORATION By_____________________________________________ Name: Title: TARGET CAPITAL CORPORATION By_____________________________________________ Name: Title: Schedule I to Supplemental Conveyance Supplemental Accounts EXHIBIT B FORM OF REVOLVING NOTE REVOLVING NOTE This Revolving Note, dated as of ____________, ____, by TARGET RECEIVABLES CORPORATION (formerly known as Dayton Hudson Receivables Corporation), a Minnesota corporation (the "Borrower") to TARGET CAPITAL CORPORATION (formerly known as Dayton Hudson Capital Corporation), a Minnesota corporation (the "Lender"). The Lender and the Borrower have entered into an Amended and Restated Receivables Purchase Agreement (the "Receivables Purchase Agreement") dated as of April 28, 2000 providing for the purchase from time to time by the Borrower of certain receivables generated from time to time in a portfolio of consumer open end credit card accounts (the "Receivables"). Except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement. 1. The Note. For value received, the Borrower hereby promises to pay to the order of the Lender at its offices at 777 Nicollet Mall, Minneapolis, Minnesota 55402, the principal amount of $________________ (the "Initial Loan") or so much of the aggregate principal amount of all Loans (as hereinafter defined) made by the Lender to the Borrower under the terms of this Note as remains unpaid, as shown in the schedule attached hereto and any continuations thereof, on the day which is one year and a day after the payment in full of the Transferor Amount and all Invested Amounts of each Series issued pursuant to the Pooling and Servicing Agreement (the "Maturity Date"). The Borrower shall pay interest on the unpaid principal amount of the Loans as provided herein. 2. The Loans. (a) From time to time between the date of this Note and the Maturity Date, and subject to the restrictions on lending under this Note contained in the Receivables Purchase Agreement, the Lender may lend to the Borrower additional sums (each a "Loan" and, together with the Initial Loan, the "Loans"), as provided herein. (b) The obligation of the Borrower to repay the aggregate unpaid principal amount of the Loans outstanding shall be evidenced by this Note and the schedule attached hereto. The Lender is hereby authorized to endorse on the schedule or on a continuation of such schedule, appropriate notations regarding each Loan evidenced by this Note; provided, however, that the failure to make, or error in making, any notation shall not limit or otherwise affect the obligation of the Borrower hereunder. (c) When the Borrower requests a Loan in connection with the acquisition of any Receivables, the Borrower shall notify the Lender by telephone specifying the amount and the date on which such Loan is requested. Unless otherwise specified, the maturity of each such Loan shall be the Maturity Date. (d) The Lender agrees that on each Distribution Date, the Lender shall determine whether the Capital Ratio as of the end of the preceding Monthly Period equaled or exceeded the Minimum Capital Ratio. If, as of any such date, the Capital Ratio was less than the Minimum Capital Ratio, from and after the date of such determination the Lender shall not increase the principal amount of this Revolving Note until the Capital Ratio is at least equal to the Minimum Capital Ratio. (e) The Lender agrees that the portion of the Purchase Price paid with this Revolving Note shall not cause (a) the sum of (i) the principal amount of this Revolving Note and (ii) the outstanding principal amount of all certificates issued by the Trust that are or may be classified as debt for federal income tax purposes to exceed (b) 80% of (x) the aggregate amount of Principal Receivables and amounts on deposit in the Special Funding Account minus (y) the principal amount of any Supplemental Certificate, Participation Interest and any other interest in the Transferor's Interest not held by the Transferor. 3. Interest. Each Loan shall bear interest which shall be calculated as the arithmetic mean of the beginning and ending principal balances for such month, from the date hereof until this Revolving Note is fully paid, at a monthly rate equal to one-twelfth of the Federal Funds rate near closing bid as published in the Wall Street Journal on the fifteenth of that month, or the next Business Day if the fifteenth is not a Business Day. Interest shall be due and payable semi-annually on the last day of April and October of each year (each, an "Interest Payment Date"), commencing on April 30, 1996. Interest is based on twelve 30-day months. 4. Payment. Subject to the limitations on payment set forth in Section 5 hereof, the Lender shall be entitled to and may require the Borrower to, make a payment of the loans, in whole or in part, on any day upon providing one Business Day's written notice to the Borrower. 5. Subordination of Obligations. The Lender irrevocably agrees that the obligations of the Borrower under this Note with respect to the payment of principal and interest are and shall be fully and irrevocably subordinate in right of payment and subject to the prior payment or provision for payment in full of all Senior Indebtedness, that such obligations may only be satisfied to the extent of cash or other assets of the Borrower then available for such purpose after giving effect to all required payments in respect of Senior Indebtedness, and that such obligations shall not constitute a claim against the Borrower at any time that, and for so long as, cash or such other assets available therefor are insufficient. "Senior Indebtedness" means the principal of and interest, including post-default interest, on any indebtedness of or guaranteed by the Borrower, whether outstanding or guaranteed on the date hereof or thereafter created, incurred, assumed or guaranteed for money borrowed or for the deferred purchase price of property purchased by any person including, for this purpose, all obligations of the Borrower under capitalized leases or purchase money mortgages, and, in each such case, all renewals, extensions and refundings thereof including, without limitation, all obligations of the Borrower arising under or in respect of the Pooling and Servicing Agreement; provided, however, that Senior Indebtedness shall not include any obligation of or guarantee by the Borrower, whether outstanding or guaranteed on the date hereof of thereafter created, incurred, assumed or guaranteed that by agreement, operation of law or by its terms is subordinate in right of payment to this Note. In the event of the appointment of a receiver or trustee of the Borrower or in the event of its insolvency, bankruptcy, assignment for the benefit of creditors or reorganization, whether or not pursuant to the bankruptcy laws, or any other marshalling of the assets and liabilities of the Borrower, the Lender shall not be entitled to participate or share, ratably or otherwise, in the distribution of the assets of the Borrower until all claims of all other present and future creditors of the Borrower, whose claims are senior hereto, have been fully satisfied, or provisions have been made therefor. 6. Acceleration Upon Certain Events. The Borrower's obligation to pay the unpaid principal amount hereof shall forthwith mature, together with interest accrued thereon, in the event of any receivership, insolvency, liquidation, bankruptcy, assignment for the benefit of creditors, reorganization whether or not pursuant to bankruptcy laws, or any other marshalling of the assets and liabilities of the Borrower, but payment of the same shall remain subordinate as hereinabove set forth. 7. Effect of Default. Default in any payment hereunder, including the payment of interest, shall not accelerate the maturity hereof except as herein specifically provided, and the obligation to make payments shall remain subordinated as hereinabove set forth. 8. Upon Whom Binding. The provisions of this Note shall be binding upon the Lender, its successors and assigns and upon the Borrower. 9. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO HAVE BEEN MADE UNDER, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE IN ALL RESPECTS. 10. Cancellation. This Note shall not be subject to cancellation by either party. 11. No Security. The Lender agrees that it is not taking and will not take or assert as security for the payment of this Note any security interest in or lien upon, whether created by contract, statute or otherwise, any property of the Borrower or any property in which the Borrower may have an interest, which is or at any time may be in possession or subject to the control of the Lender. The Lender hereby waives, and further agrees that it will not seek to obtain payment of this Note in whole or in any part by exercising any right of set-off it may assert or possess whether created by contract, statute or otherwise. Any agreement between the Borrower and the Lender (whether in the nature of a general loan and collateral agreement, a security or pledge agreement or otherwise), shall be deemed amended hereby to the extent necessary so as not to be inconsistent with the provisions of this Note. 12. Assignment. This Note shall inure to the benefit of and be binding upon the parties hereto and each of their respective successors and assigns. The Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Lender. 13. No Bankruptcy Petition Against the Borrower. The Lender (in its capacity as Lender, but in no other capacity), by its acceptance of this Note, hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of the Transferor Amount and all Invested Amounts of all Series issued pursuant to the Pooling and Servicing Agreement, it will not institute against or join any other Person in instituting against the Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its officers or employees thereunto duly authorized and directed by appropriate corporate authority. TARGET RECEIVABLES CORPORATION By:________________________ Title:_____________________ THE TERMS AND CONDITIONS HEREOF ARE HEREBY ACKNOWLEDGED AND ACCEPTED: TARGET CAPITAL CORPORATION By:____________________________ Title:_________________________ Schedule I LIST OF ACCOUNTS DEEMED INCORPORATED BY REFERENCE EX-5 7 0007.txt EXHIBIT 5 - OPINION [Target Corporation Letterhead] May 31, 2000 Target Receivables Corporation 80 South 8th Street-14th Fl., Suite 1401 Minneapolis, MN 55402 Re: Registration Statement on Form S-3 Registration No. 333-95585 (the "Registration Statement") Ladies and Gentlemen: I am Executive Vice President, General Counsel and Secretary of Target Corporation and have acted as counsel to Target Receivables Corporation, a Minnesota corporation ("TRC"), in connection with (a) the transfer of receivables ("Receivables") generated from time to time in a portfolio of open end credit card accounts originated by Retailers National Bank, a national banking association ("RNB"), to Target Capital Corporation, a Minnesota corporation ("TCC"), (b) the transfer of the Receivables from TCC to Target Receivables Corporation, a Minnesota corporation ("TRC"), and (c) the transfer of the Receivables from TRC to the Target Credit Card Master Trust (the "Trust") pursuant to the Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 among TRC as transferor, RNB as servicer and Norwest Bank Minnesota, N.A., a national banking association, as trustee (the "Trustee"), a copy of which agreement was filed as an exhibit to the above-referenced Registration Statement (the "Pooling and Servicing Agreement"), relating to the proposed issuance and sale of Asset Backed Certificates (the "Certificates"). In connection herewith, I, or the attorneys over whom I exercise supervision, have examined and relied upon the forms of the Pooling and Servicing Agreement, the Series Supplement thereto and the Underwriting Agreement, each filed as an exhibit to the Registration Statement. We have also examined such corporate records, certificates and other documents, and reviewed such questions of law as we deemed appropriate for this opinion. Based upon the foregoing, I am of the opinion that: 1. The Pooling and Servicing Agreement, filed as an exhibit to the Registration Statement, has been duly authorized and executed and when the applicable Series Supplement thereto have been duly authorized by all necessary corporate action and have been duly executed and delivered by TRC, they will constitute valid and binding obligations of TRC enforceable in accordance with their terms, subject to applicable bankruptcy, reorganization, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is pursuant to a proceeding in equity or at law). 2. When the issuance, execution and delivery of the Certificats have been duly authorized by TRC, as transferor, and when the Certificates have been duly executed, delivered and sold in accordance with the Pooling and Servicing Agreement and authenticated by the Trustee and issued and sold as described in the Registration Statement, the Certificates will be legally issued, fully paid and non-assessable, and the holder of the Certificates will be entitled to the benefits provided by the Pooling and Servicing Agreement. In rendering the foregoing opinions, I have assumed the accuracy and truthfulness of all public records of TRC and of all certifications, documents and other proceedings examined by me that have been produced by officials of TRC acting within the scope of their official capacities, without verifying the accuracy or truthfulness of such representation. I have also assumed the genuineness of such signatures appearing upon such public records, certifications, documents and proceedings. In addition, I have assumed that the applicable Series Supplement to the Pooling and Servicing Agreement and the Certificates will be executed and delivered in substantially the form filed as exhibits to the Registration Statement, and that the Certificates will be sold as described therein. I express no opinion as to the laws of any jurisdiction other than the laws of the State of Minnesota and the federal laws of the United States of America. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the heading "Legal Matters" in the Prospectus included in the Registration Statement without implying or admitting that I am an"expert" within the meaning of the Securities Act of 1933, as amended, or other rules and regulations of the Securities and Exchange Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit. Very truly yours, /s/ James T. Hale James T. Hale Executive Vice President, General Counsel and Secretary EX-8 8 0008.txt EXHIBIT 8 - OPINION May 31, 2000 Target Receivables Corporation 80 South Eighth Street 14th Floor, Suite 1401 Minneapolis, Minnesota 55402 Re: Amendment No. 1 to the Registration Statement on Form S-3 of Target Receivables Corporation to the Target Credit Card Master Trust Dear Ladies and Gentlemen: In connection with the filing with the Securities and Exchange Commission contemporaneously herewith of Amendment No. 1 to the registration statement on Form S-3 (No. 333-95585) of Target Receivables Corporation (together with all amendments thereto, the "Registration Statement") relating to the issuance by Target Credit Card Master Trust of asset backed certificates established pursuant to an Amended and Restated Pooling and Servicing Agreement, dated as of April 28, 2000 (the "Pooling Agreement") and various Supplements thereto (each, a "Supplement") to be entered into from time to time (collectively, the "Agreement")1 between Target Receivables Corporation, as transferor (the "Transferor"), Retailers National Bank ("RNB"), as servicer (the "Servicer"), and Norwest Bank Minnesota, N.A., as trustee (the "Trustee"), you have requested our opinion regarding certain descriptions of tax consequences contained in the form of prospectus (the "Prospectus") included in the Registration Statement. - -------- 1 All capitalized terms used below that are not otherwise defined have the same meaning as set forth in the Pooling Agreement. Our opinion is based on an examination of the forms of (i) the prospectus (the "Prospectus") included in the Registration Statement; (ii) the Agreement; (iii) the Amended and Restated Bank Receivables Purchase Agreement, dated as of April 28, 2000 between RNB and Target Capital Corporation, a Minnesota Corporation ("TCC"), (iv) the Amended and Restated Receivables Purchase Agreement, dated as of April 28, 2000 between TCC and the Transferor, (v) the Agreement; (vi) a demand note evidencing indebtedness of Target Corporation (formerly known as Dayton Hudson Corporation), a Minnesota corporation, as maker to Target Receivables Corporation as Payee; (vii) the Participation Supplement, between the Transferor, the Servicer as purchaser of the Participation and the Trustee; and (viii) such other documents as we have deemed material to the opinions set forth herein. Our opinion is also based upon the Internal Revenue Code of 1986, as amended, administrative rulings, judicial decisions, Treasury regulations and other applicable authorities. The statutory provisions, regulations and interpretations on which our opinion is based are subject to changes, and such changes could apply retroactively. In addition, there can be no assurance that positions contrary to those stated in our opinion may not be taken by the Internal Revenue Service. Based on the foregoing, we hereby confirm that the statements in the Prospectus under the headings "Tax Matters," subject to the qualifications set forth therein, accurately describe the material federal income tax consequences to holders of each class of certificates of each series that are offered pursuant to a prospectus supplement to the Prospectus, under existing law and the assumptions stated therein. We also note that the Prospectus and the Agreement do not relate to a specific transaction. Accordingly, the above-referenced description of Federal income tax consequences may require modification in the context of an actual transaction. We express no opinion with respect to the matters addressed in this letter other than as set forth above. We consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom LLP -----END PRIVACY-ENHANCED MESSAGE-----