{"id":42674,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/power-of-attorney-target-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"power-of-attorney-target-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/power-of-attorney-target-corp.html","title":{"rendered":"Power of Attorney – Target Corp."},"content":{"rendered":"

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 9th day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Roxanne S. Austin<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Roxanne S. Austin<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n<\/p>\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 24th day of
\nJanuary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Calvin Darden<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Calvin Darden<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n<\/p>\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 2nd day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Mary Dillon<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Mary Dillon<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ James A. Johnson<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

James A. Johnson<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Mary E. Minnick<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Mary E. Minnick<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Anne M. Mulcahy<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Anne M. Mulcahy<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n<\/p>\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Derica W. Rice<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Derica W. Rice<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 21st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Stephen W. Sanger<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Stephen W. Sanger<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint
\nDOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY B. STANLEY, and
\neach or any one of them, the undersigned153s true and lawful attorneys-in-fact,
\nwith power of substitution, for the undersigned and in the undersigned153s name,
\nplace and stead, to sign and affix the undersigned153s name as director and\/or
\nofficer of the Corporation to (1) a Form 10-K, Annual Report, or other
\napplicable form, pursuant to the Securities Exchange Act of 1934, as amended
\n(the “1934 Act”), including any and all exhibits, schedules, supplements,
\ncertifications and supporting documents thereto, including, but not limited to,
\nthe Form 11-K Annual Reports of the Corporation153s 401(k) Plan and similar plans
\npursuant to the 1934 Act, and all amendments, supplementations and corrections
\nthereto, to be filed by the Corporation with the Securities and Exchange
\nCommission (the “SEC”), as required in connection with its registration under
\nthe 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act, or
\nForms 144 pursuant to the Securities Act of 1933, as amended (the “1933 Act”),
\nand all related documents, amendments, supplementations and corrections thereto;
\nand (3) one or more Registration Statements, on Form S-3, Form S-8, or other
\napplicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Gregg W. Steinhafel<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Gregg W. Steinhafel<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 1st day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ John G. Stumpf<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

John G. Stumpf<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n

TARGET CORPORATION<\/strong><\/p>\n

\n

Power of Attorney<\/p>\n

of Director and\/or Officer<\/p>\n

\n

The undersigned director and\/or officer of TARGET CORPORATION, a Minnesota
\ncorporation (the “Corporation”), does hereby make, constitute and appoint GREGG
\nW. STEINHAFEL, DOUGLAS A. SCOVANNER, TIMOTHY R. BAER, DAVID L. DONLIN and MARY
\nB. STANLEY, and each or any one of them, the undersigned153s true and lawful
\nattorneys-in-fact, with power of substitution, for the undersigned and in the
\nundersigned153s name, place and stead, to sign and affix the undersigned153s name as
\ndirector and\/or officer of the Corporation to (1) a Form 10-K, Annual Report, or
\nother applicable form, pursuant to the Securities Exchange Act of 1934, as
\namended (the “1934 Act”), including any and all exhibits, schedules,
\nsupplements, certifications and supporting documents thereto, including, but not
\nlimited to, the Form 11-K Annual Reports of the Corporation153s 401(k) Plan and
\nsimilar plans pursuant to the 1934 Act, and all amendments, supplementations and
\ncorrections thereto, to be filed by the Corporation with the Securities and
\nExchange Commission (the “SEC”), as required in connection with its registration
\nunder the 1934 Act; (2) one or more Forms 3, 4, or 5 pursuant to the 1934 Act,
\nor Forms 144 pursuant to the Securities Act of 1933, as amended (the “1933
\nAct”), and all related documents, amendments, supplementations and corrections
\nthereto; and (3) one or more Registration Statements, on Form S-3, Form S-8, or
\nother applicable forms, and all amendments, including post-effective amendments
\nthereto, to be filed by the Corporation with the SEC in connection with the
\nregistration under the 1933 Act, as amended, of debt, equity and other
\nsecurities of the Corporation, and to file the same, with all exhibits thereto
\nand other supporting documents, with the SEC.<\/p>\n<\/p>\n

The undersigned also grants to said attorneys-in-fact, and each of them, full
\npower and authority to do and perform any and all acts necessary or incidental
\nto the performance and execution of the powers herein expressly granted. This
\nPower of Attorney shall remain in effect until revoked in writing by the
\nundersigned.<\/p>\n<\/p>\n

IN WITNESS WHEREOF, the undersigned has signed below as of this 9th day of
\nFebruary, 2011.<\/p>\n<\/p>\n\n\n\n\n
\n<\/td>\n\n

\/s\/ Solomon D. Trujillo<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

Solomon D. Trujillo<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

10122<\/contract-id>Transaction Agreement – Target Corp.<\/contract-name><\/p>\n

ZELLERS INC.<\/strong>,<\/p>\n

\n

\n

HUDSON153S BAY COMPANY,<\/strong><\/p>\n

\n

\n

TARGET CORPORATION,<\/strong><\/p>\n

\n

\n

and<\/p>\n

\n

\n

TARGET CANADA CO.<\/strong><\/p>\n

\n

\n

\n

\n

TRANSACTION AGREEMENT<\/strong><\/p>\n

\n

January 12, 2011<\/p>\n

\n

\n

\n

\n

<\/p>\n

\n

TABLE OF CONTENTS<\/strong><\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n

\n<\/td>\n

\n

Page<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n

\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 1 INTERPRETATION<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.1<\/p>\n<\/td>\n

\n

Defined Terms<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.2<\/p>\n<\/td>\n

\n

Gender and Number<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.3<\/p>\n<\/td>\n

\n

Headings, etc.<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.4<\/p>\n<\/td>\n

\n

Currency<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.5<\/p>\n<\/td>\n

\n

Certain Phrases, etc.<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.6<\/p>\n<\/td>\n

\n

Knowledge<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.7<\/p>\n<\/td>\n

\n

Disclosure Letter<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.8<\/p>\n<\/td>\n

\n

References to Persons and Agreements<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.9<\/p>\n<\/td>\n

\n

Statutes<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.10<\/p>\n<\/td>\n

\n

Non-Business Days<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.11<\/p>\n<\/td>\n

\n

Time Periods<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.12<\/p>\n<\/td>\n

\n

Designation of Target Canada<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n

Section 1.13<\/p>\n<\/td>\n

\n

Leasehold Interests<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 2 AGREEMENT OF PURCHASE AND SALE<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.1<\/p>\n<\/td>\n

\n

First Tranche Subject Leased Properties<\/p>\n<\/td>\n

\n

11<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.2<\/p>\n<\/td>\n

\n

Second Tranche Subject Leased Properties<\/p>\n<\/td>\n

\n

12<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.3<\/p>\n<\/td>\n

\n

Right to Terminate Leases<\/p>\n<\/td>\n

\n

13<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.4<\/p>\n<\/td>\n

\n

Vacancy Date<\/p>\n<\/td>\n

\n

13<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.5<\/p>\n<\/td>\n

\n

Ordinary Course Operations<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.6<\/p>\n<\/td>\n

\n

Pharmacy Records<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.7<\/p>\n<\/td>\n

\n

Target Canada Assignment of Rights<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.8<\/p>\n<\/td>\n

\n

Access and Additional Information Relating to Leased Properties<\/p>\n<\/td>\n

\n

18<\/p>\n<\/td>\n<\/tr>\n

\n

Section 2.9<\/p>\n<\/td>\n

\n

Winnipeg Lease Option<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 3 PURCHASE PRICE<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.1<\/p>\n<\/td>\n

\n

Purchase Price<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.2<\/p>\n<\/td>\n

\n

Payment of the Purchase Price<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.3<\/p>\n<\/td>\n

\n

Adjustments<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.4<\/p>\n<\/td>\n

\n

Sales and Transfer Taxes<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.5<\/p>\n<\/td>\n

\n

Goods and Services Tax and Harmonized Sales Tax<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.6<\/p>\n<\/td>\n

\n

Self-Assessment of GST and HST on Real Property<\/p>\n<\/td>\n

\n

23<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.7<\/p>\n<\/td>\n

\n

Tax Refunds<\/p>\n<\/td>\n

\n

23<\/p>\n<\/td>\n<\/tr>\n

\n

Section 3.8<\/p>\n<\/td>\n

\n

Note Purchase Facility<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 4 ASSUMED LIABILITIES<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.1<\/p>\n<\/td>\n

\n

Assumed Liabilities<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.2<\/p>\n<\/td>\n

\n

Excluded Liabilities<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

\n

Section 4.3<\/p>\n<\/td>\n

\n

“As Is, Where Is”<\/p>\n<\/td>\n

\n

27<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ZELLERS<\/p>\n<\/td>\n

\n

28<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

i<\/p>\n

\n

<\/p>\n

\n

TABLE OF CONTENTS<\/strong><\/p>\n

(continued)<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n

\n<\/td>\n

\n

Page<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

Section 5.1<\/p>\n<\/td>\n

\n

Representations and Warranties of Zellers<\/p>\n<\/td>\n

\n

28<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF TARGET CANADA AND TARGET<\/p>\n<\/td>\n

\n

32<\/p>\n<\/td>\n<\/tr>\n

\n

Section 6.1<\/p>\n<\/td>\n

\n

Representations and Warranties of Target Canada and Target<\/p>\n<\/td>\n

\n

32<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 7 COVENANTS OF THE PARTIES<\/p>\n<\/td>\n

\n

33<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.1<\/p>\n<\/td>\n

\n

Actions to Satisfy Closing Conditions<\/p>\n<\/td>\n

\n

33<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.2<\/p>\n<\/td>\n

\n

Request for Consents<\/p>\n<\/td>\n

\n

34<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.3<\/p>\n<\/td>\n

\n

Filings and Authorizations<\/p>\n<\/td>\n

\n

35<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.4<\/p>\n<\/td>\n

\n

Risk of Loss<\/p>\n<\/td>\n

\n

36<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.5<\/p>\n<\/td>\n

\n

Confidentiality<\/p>\n<\/td>\n

\n

36<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.6<\/p>\n<\/td>\n

\n

Lease Amendments, Renewals and Notices<\/p>\n<\/td>\n

\n

37<\/p>\n<\/td>\n<\/tr>\n

\n

Section 7.7<\/p>\n<\/td>\n

\n

Zellers Entity Cooperation<\/p>\n<\/td>\n

\n

38<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 8 CONDITIONS OF CLOSING<\/p>\n<\/td>\n

\n

41<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.1<\/p>\n<\/td>\n

\n

Conditions for the Benefit of Target and Target Canada<\/p>\n<\/td>\n

\n

41<\/p>\n<\/td>\n<\/tr>\n

\n

Section 8.2<\/p>\n<\/td>\n

\n

Conditions for the Benefit of Zellers<\/p>\n<\/td>\n

\n

42<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 9 CLOSING<\/p>\n<\/td>\n

\n<\/td>\n\n

43<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.1<\/p>\n<\/td>\n

\n

Date, Time and Place of Closing<\/p>\n<\/td>\n

\n

43<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.2<\/p>\n<\/td>\n

\n

Zellers153 Closing Deliveries<\/p>\n<\/td>\n

\n

43<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.3<\/p>\n<\/td>\n

\n

Target Canada153s Closing Deliveries<\/p>\n<\/td>\n

\n

44<\/p>\n<\/td>\n<\/tr>\n

\n

Section 9.4<\/p>\n<\/td>\n

\n

Closing Procedures<\/p>\n<\/td>\n

\n

45<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 10 TERMINATION<\/p>\n<\/td>\n

\n

46<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.1<\/p>\n<\/td>\n

\n

Termination Rights<\/p>\n<\/td>\n

\n

46<\/p>\n<\/td>\n<\/tr>\n

\n

Section 10.2<\/p>\n<\/td>\n

\n

Effect of Termination<\/p>\n<\/td>\n

\n

46<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 11 INDEMNIFICATION<\/p>\n<\/td>\n

\n

46<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.1<\/p>\n<\/td>\n

\n

Liability for Representations and Warranties<\/p>\n<\/td>\n

\n

46<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.2<\/p>\n<\/td>\n

\n

Indemnification in Favour of Target and Target Canada<\/p>\n<\/td>\n

\n

47<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.3<\/p>\n<\/td>\n

\n

Indemnification in Favour of Zellers<\/p>\n<\/td>\n

\n

48<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.4<\/p>\n<\/td>\n

\n

Bulk Sales and Retail Sales Tax Waiver<\/p>\n<\/td>\n

\n

48<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.5<\/p>\n<\/td>\n

\n

Limitations<\/p>\n<\/td>\n

\n

48<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.6<\/p>\n<\/td>\n

\n

Notification<\/p>\n<\/td>\n

\n

49<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.7<\/p>\n<\/td>\n

\n

Limitation Periods<\/p>\n<\/td>\n

\n

49<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.8<\/p>\n<\/td>\n

\n

Procedure for Direct Claims<\/p>\n<\/td>\n

\n

50<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.9<\/p>\n<\/td>\n

\n

Procedure for Third Party Claims<\/p>\n<\/td>\n

\n

50<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.10<\/p>\n<\/td>\n

\n

Remedies<\/p>\n<\/td>\n

\n

51<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.11<\/p>\n<\/td>\n

\n

One Recovery<\/p>\n<\/td>\n

\n

52<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.12<\/p>\n<\/td>\n

\n

Duty to Mitigate<\/p>\n<\/td>\n

\n

52<\/p>\n<\/td>\n<\/tr>\n

\n

Section 11.13<\/p>\n<\/td>\n

\n

Adjustment to Purchase Price<\/p>\n<\/td>\n

\n

52<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

ii<\/p>\n

\n

<\/p>\n

\n

TABLE OF CONTENTS<\/strong><\/p>\n

(continued)<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n

\n<\/td>\n

\n

Page<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 12 OTHER COVENANTS<\/p>\n<\/td>\n

\n

53<\/p>\n<\/td>\n<\/tr>\n

\n

Section 12.1<\/p>\n<\/td>\n

\n

Guarantee by HBC<\/p>\n<\/td>\n

\n

53<\/p>\n<\/td>\n<\/tr>\n

\n

Section 12.2<\/p>\n<\/td>\n

\n

Target Guarantee<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n

Section 12.3<\/p>\n<\/td>\n

\n

Further Assurances<\/p>\n<\/td>\n

\n

54<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

\n<\/td>\n<\/tr>\n

\n

ARTICLE 13 MISCELLANEOUS<\/p>\n<\/td>\n

\n

55<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.1<\/p>\n<\/td>\n

\n

Notices<\/p>\n<\/td>\n

\n

55<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.2<\/p>\n<\/td>\n

\n

Time of the Essence<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.3<\/p>\n<\/td>\n

\n

Brokers<\/p>\n<\/td>\n

\n

56<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.4<\/p>\n<\/td>\n

\n

Announcements<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.5<\/p>\n<\/td>\n

\n

Third Party Beneficiaries<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.6<\/p>\n<\/td>\n

\n

Expenses<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.7<\/p>\n<\/td>\n

\n

Amendments<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.8<\/p>\n<\/td>\n

\n

Waiver<\/p>\n<\/td>\n

\n

57<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.9<\/p>\n<\/td>\n

\n

Non-Merger<\/p>\n<\/td>\n

\n

58<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.10<\/p>\n<\/td>\n

\n

Subdivision Laws<\/p>\n<\/td>\n

\n

58<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.11<\/p>\n<\/td>\n

\n

Entire Agreement<\/p>\n<\/td>\n

\n

58<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.12<\/p>\n<\/td>\n

\n

Successors and Assigns<\/p>\n<\/td>\n

\n

59<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.13<\/p>\n<\/td>\n

\n

Severability<\/p>\n<\/td>\n

\n

59<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.14<\/p>\n<\/td>\n

\n

Governing Law<\/p>\n<\/td>\n

\n

59<\/p>\n<\/td>\n<\/tr>\n

\n

Section 13.15<\/p>\n<\/td>\n

\n

Counterparts<\/p>\n<\/td>\n

\n

59<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

iii<\/p>\n

\n

TRANSACTION AGREEMENT<\/strong><\/p>\n

\n

Transaction Agreement dated January 12, 2011 between Zellers Inc.
\n(“Zellers”<\/strong>), Hudson153s Bay Company (“HBC<\/strong>“),
\nTarget Corporation (“Target<\/strong>“), and Target Canada Co.<\/p>\n<\/p>\n

RECITALS:<\/strong><\/p>\n<\/p>\n

A. Zellers operates a chain of retail department stores throughout Canada
\nunder the “Zellers” banner.<\/p>\n<\/p>\n

B. Target operates a chain of retail department stores throughout the United
\nStates.<\/p>\n<\/p>\n

C. Zellers wishes to assign certain of the leasehold interests that it
\ncurrently uses in its operations subject to subleases back to it so as to allow
\nit to continue to operate its business on such leased premises for varying
\nperiods of time.<\/p>\n<\/p>\n

D. Target wishes to obtain an assignment of the aforesaid leasehold interests
\nfrom Zellers to use for itself or to allow it to assign certain of such
\nleasehold interests to other parties on terms that it may negotiate, subject in
\neach case to the aforesaid subleases to Zellers.<\/p>\n<\/p>\n

E. The Parties wish to set out their agreement regarding certain matters
\nrelating to such transactions.<\/p>\n<\/p>\n

THEREFORE<\/strong>, the Parties agree as follows:<\/p>\n<\/p>\n

ARTICLE 1
\nINTERPRETATION<\/strong><\/p>\n

\n

Section 1.1<\/strong> Defined Terms.<\/strong><\/p>\n<\/p>\n

As used in this Agreement, the following terms have the following meanings:\n<\/p>\n<\/p>\n

“Accrued Interest”<\/strong> has the meaning specified in Section
\n3.8(3).<\/p>\n<\/p>\n

“Affiliate”<\/strong> of any Person means, at the time such
\ndetermination is being made, any other Person controlling, controlled by or
\nunder common control with such first Person, in each case, whether directly or
\nindirectly, and “control<\/strong>” and any derivation of such term means
\nthe possession, directly or indirectly, of the power to direct the management
\nand policies, business or affairs of a Person whether through the ownership of
\nvoting securities or otherwise.<\/p>\n<\/p>\n

“Agreement”<\/strong> means this transaction agreement.<\/p>\n<\/p>\n

“Ancillary Agreements”<\/strong> means the Lease Assignment and
\nAssumption Agreements, the Subleases, the Designee Assignment and Assumption
\nAgreements, and the Brand Waiver.<\/p>\n<\/p>\n

“Assignee” <\/strong>has the meaning specified in Section 12.2(1).\n<\/p>\n<\/p>\n

“Assumed Liabilities”<\/strong> has the meaning specified in Section
\n4.1.<\/p>\n

\n

\n

<\/p>\n

\n

“Authorization”<\/strong> means, with respect to any Person, any
\norder, permit, approval, consent, waiver, license, no action letter or similar
\nauthorization of any Governmental Entity having jurisdiction over the Person.\n<\/p>\n<\/p>\n

“Books and Records”<\/strong> means all books, records, files, reports
\nand documents (including all correspondence, real estate and engineering data,
\nfacilities reports, blueprints and other property records), in whatever format.\n<\/p>\n<\/p>\n

“Brand Waiver”<\/strong> has the meaning specified in Section 9.2(e).\n<\/p>\n<\/p>\n

“Business Day”<\/strong> means any day of the year, other than a
\nSaturday, Sunday or any day on which major banks are closed for business in
\nToronto, Ontario or Minneapolis, Minnesota.<\/p>\n<\/p>\n

“Closing Date” <\/strong>means, as applicable, the First Tranche
\nClosing Date or the Second Tranche Closing Date.<\/p>\n<\/p>\n

“Commissioner of Competition” <\/strong>means the Commissioner of
\nCompetition appointed pursuant to the Competition Act and includes Persons
\nauthorized by the Commissioner of Competition.<\/p>\n<\/p>\n

“Competition Act”<\/strong> means the Competition Act<\/em>
\n(Canada).<\/p>\n<\/p>\n

“Competition Act<\/strong> Approval”<\/strong> has the meaning
\nspecified in Section 7.3(4).<\/p>\n<\/p>\n

“Competition Tribunal”<\/strong> means the Competition Tribunal
\nestablished under the Competition Act.<\/p>\n<\/p>\n

“Cost Basis”<\/strong> has the meaning specified in Section 3.8(2).\n<\/p>\n<\/p>\n

“Damages”<\/strong> means any losses, liabilities, damages, out of
\npocket expenses or costs (including reasonable legal fees and expenses),
\ncontingent or otherwise, whether liquidated or unliquidated, whether resulting
\nfrom an action, suit, proceeding, arbitration, application, cause of action,
\nclaim or demand that is instituted or asserted by a third party, including a
\nGovernmental Entity, or a cause, matter, thing, act, omission or state of facts
\nnot involving a third party.<\/p>\n<\/p>\n

“Default Notice”<\/strong> means any written notice given by the
\nLandlord under any Lease claiming or alleging that Zellers (or any Affiliate of
\nZellers) is or may be in default of its obligations under such Lease and which
\ndefault or allegation of default remains uncured.<\/p>\n<\/p>\n

“Delivery Date<\/strong>” has the meaning specified in Section 2.1(4).\n<\/p>\n<\/p>\n

“Designee” <\/strong>has the meaning specified in Section 2.7(1).<\/p>\n<\/p>\n

“Designee Assignment and Assumption Agreement” <\/strong>has the
\nmeaning specified in Section 2.7(1)(a).<\/p>\n

\n

2<\/p>\n

\n

<\/p>\n

\n

“Direct Claim”<\/strong> means any cause, matter, thing, act, omission
\nor state of facts not involving a Third Party Claim which entitles an
\nIndemnified Party to make a claim for indemnification under this Agreement.<\/p>\n<\/p>\n

“Disclosure Letter” <\/strong>means the disclosure letter dated the
\nExecution Date and delivered by Zellers to Target with this Agreement.<\/p>\n<\/p>\n

“Due Diligence File”<\/strong> means the electronic files (other than
\nthose contained in the folder entitled “Bay Lease Info”) on a computer hard
\ndrive created by Zellers and provided to Target (as updated by the electronic
\nfiles on a computer hard drive created by Target and provided to Zellers on
\nJanuary 11, 2011) consisting of documents and information related to the Leases
\n(including copies of all leases, occupancy agreements and amendments thereto and
\nall other documents and correspondence in the possession or control of Zellers
\nwhich relate to the Leases and the Leased Properties) assembled and made
\navailable by Zellers to Target.<\/p>\n<\/p>\n

“Effective Time”<\/strong> means 12:01 a.m. (Toronto time) on the
\nrelevant Closing Date, Vacancy Date or Delivery Date, as the case may be.<\/p>\n<\/p>\n

“Encumbrances” <\/strong>means pledges, liens, charges, security
\ninterests, leases, title retention agreements, mortgages, hypothecs,
\nrestrictions, development or similar agreements, easements, rights-of-way, title
\ndefects, options or adverse claims or encumbrances of any kind or character
\nwhatsoever.<\/p>\n<\/p>\n

“Excluded Liabilities” <\/strong>has the meaning specified in Section
\n4.2.<\/p>\n<\/p>\n

“Execution Date”<\/strong> means the date upon which the last of
\nZellers, HBC, Target, and Target Canada Co. executed this Agreement.<\/p>\n<\/p>\n

“Failure to Operate”<\/strong> means a reduction, change or cessation
\nin Zellers153 operations at a Leased Property which, were it to continue, would
\ngive rise to a Landlord Recapture Right and which is not caused by a force
\nmajeure.<\/p>\n<\/p>\n

“Final Adjustments”<\/strong> has the meaning specified in Section
\n3.3.<\/p>\n<\/p>\n

“First Four Fiscal Quarters”<\/strong> means the four full Fiscal
\nQuarters ending immediately following the Execution Date.<\/p>\n<\/p>\n

“Fiscal Quarter”<\/strong> means any of the quarterly accounting
\nperiods of Zellers, ending on or about April 30, July 31, October 31 and January
\n31 of each year.<\/p>\n<\/p>\n

“First Tranche Closing Date”<\/strong> means the date that is 10
\nBusiness Days following the later of (i) the last day of the First Tranche
\nSelection Period or (ii) the date that Competition Act Approval is obtained, but
\nin either case subject to the satisfaction or waiver by the applicable Party or
\nParties of all conditions at the Effective Time on the First Tranche Closing
\nDate.<\/p>\n<\/p>\n

“First Tranche Purchase Price”<\/strong> has the meaning specified in
\nSection 3.1(1)(a).<\/p>\n<\/p>\n

“First Tranche Selection List” <\/strong>has the meaning specified in
\nSection 2.1(1).<\/p>\n

\n

3<\/p>\n

\n

<\/p>\n

\n

“First Tranche Selection Period” <\/strong>means the 120-day period
\nfollowing the Execution Date.<\/p>\n<\/p>\n

“First Tranche Subject Leases” <\/strong>means the Leases pertaining
\nto the First Tranche Subject Leased Properties, subject to Sections 2.1(4) and
\n7.2(3).<\/p>\n<\/p>\n

“First Tranche Subject Leased Properties” <\/strong>means the Leased
\nProperties listed on the First Tranche Selection List, subject to Section
\n2.1(4).<\/p>\n<\/p>\n

“Governmental Entity”<\/strong> means (i) any international,
\nmultinational, national, federal, provincial, state, municipal, local or other
\ngovernmental or public department, central bank, court, minister,
\ngovernor-in-council, cabinet, commission, board, bureau, agency, commissioner,
\ntribunal or instrumentality, domestic or foreign, (ii) any subdivision or
\nauthority of any of the above, (iii) any stock exchange, and (iv) any
\nquasi-governmental or private body exercising any regulatory, expropriation or
\ntaxing authority under or for the account of any of the above.<\/p>\n<\/p>\n

“HBC” <\/strong>means Hudson153s Bay Company.<\/p>\n<\/p>\n

“HST Declaration and Indemnity<\/strong>” means the HST declaration
\nand indemnity in the form attached as Section 9.3(g) to the Disclosure Letter.\n<\/p>\n<\/p>\n

“Indemnified Party”<\/strong> means a Party with indemnification
\nrights or benefits under this Agreement, including pursuant to Article 11.<\/p>\n<\/p>\n

“Indemnifying Party”<\/strong> means a Party against which a claim may
\nbe made for indemnification under this Agreement, including pursuant to Article
\n11.<\/p>\n<\/p>\n

“Intercreditor Agreement” <\/strong>means that certain Intercreditor
\nAgreement dated as of October 2, 2006 among U.S. Bank National Association, as
\nTrustee for the benefit of the holders of Merrill Lynch Floating Trust
\nPass-Through Certificates, Series 2006-1, and the lenders under the Notes.<\/p>\n<\/p>\n

“Investment Grade Designee”<\/strong> means a Designee that, at the
\ntime of such Designee153s execution of a Designee Assignment and Assumption
\nAgreement pursuant to Section 2.7(1)(a) or other assumption document pursuant to
\nSection 2.7 with respect to the Subject Lease to be assigned and transferred to
\nsuch Designee, has outstanding senior debt rated by at least two of the
\nfollowing rating agencies with minimum ratings as follows:<\/p>\n<\/p>\n

(i) at least BBB–<\/strong> as determined by Standard & Poors,\n<\/p>\n<\/p>\n

(ii) at least Baa3 as determined by Moody153s, or<\/p>\n<\/p>\n

(iii) at least BBB low as determined by the Dominion Bond Rating Service;\n<\/p>\n<\/p>\n

and in each case such rating is not subject to a negative watch or other
\nsimilar notice suggesting a possible downgrade to below such level, and in each
\ncase Target Canada has provided to Zellers evidence reasonably satisfactory to
\nZellers of such ratings.<\/p>\n

\n

4<\/p>\n

\n

<\/p>\n

\n

“Landlord”<\/strong> means the Person from time to time holding the
\nlandlord153s interest under any Lease.<\/p>\n<\/p>\n

“Landlord Recapture Right”<\/strong> means the right of a Landlord
\n(through the exercise of an express right under a Lease) to terminate a Lease by
\nreason of Zellers153 Failure to Operate.<\/p>\n<\/p>\n

“Laws”<\/strong> means any and all applicable (i) laws, constitutions,
\ntreaties, statutes, codes, ordinances, orders, decrees, rules, regulations, and
\nby-laws, (ii) judgments, orders, writs, injunctions, decisions, awards and
\ndirectives of any Governmental Entity, and (iii) policies, guidelines, notices
\nand protocols, to the extent that they have the force of law.<\/p>\n<\/p>\n

“Lease Assignment and Assumption Agreement”<\/strong> has the meaning
\nspecified in Section 9.2(a).<\/p>\n<\/p>\n

“Lease Default”<\/strong> means an event which with the passage of
\ntime or the giving of notice or both would constitute a default or event of
\ndefault of the tenant under a Lease, in each case where the relevant Landlord
\nhas provided written notice of such default, provided that any default arising
\nas a result of the failure to obtain the consent of the applicable Landlords
\nunder the Subject Leases to the transactions contemplated by this Agreement
\n(inclusive of the Wind-Down Actions, the Subleases and the rights of Zellers
\ntherein) shall not constitute a Lease Default.<\/p>\n<\/p>\n

“Leased Properties” <\/strong>means the leasehold lands, premises,
\nbuildings, and leasehold improvements pertaining to the Leases, which premises
\nare listed and described in Section 5.1(i)(i) of the Disclosure Letter by
\nreference to their mall name or municipal address, as applicable, and Zellers
\nstore number.<\/p>\n<\/p>\n

“Leases” <\/strong>means all agreements of Zellers to lease or
\notherwise occupy the Leased Properties.<\/p>\n<\/p>\n

“Material Lease Default”<\/strong> means (i) a Lease Default which
\nwould result in an express termination of a Lease as a result of a Landlord
\nhaving provided a termination notice on or prior to the relevant Closing Date;
\nor (ii) a Lease Default which could reasonably be expected to give rise to the
\ntermination of a Lease by the relevant Landlord or which could reasonably be
\nexpected to give rise to Zellers153 loss of possession under the Subject Lease by
\nthe Landlord; except in the case of (i) and (ii) a Lease Default where such
\nbreach or termination could be remedied by Target Canada or its Designee within
\n12 months after the relevant Closing Date with an expenditure of money not
\nexceeding $50,000. For certainty, any default arising under the Leases as a
\nresult of the failure to obtain the consent of the applicable Landlords under
\nthe Leases to the transactions contemplated by this Agreement (inclusive of the
\nWind-Down Actions, the Subleases and the rights of Zellers therein) shall not
\nconstitute a Material Lease Default.<\/p>\n<\/p>\n

“Monetary Lien<\/strong>” means (1) any Encumbrance that secures the
\npayment of borrowed money, (2) any registered construction or mechanic153s lien,
\nany execution upon a judgment or any pre-fixture or fixture filing under
\npersonal property legislation and (3) any Encumbrance (other than an inchoate or
\nstatutory Encumbrance in favour of any Governmental Entity or public or private
\nutility for amounts not then due) that secures the payment of any cost or amount
\nwhich is Zellers153 responsibility to pay under this<\/p>\n

\n

5<\/p>\n

\n

<\/p>\n

\n

Agreement or under Laws and which is overdue or in default and, payment of
\nwhich is not subject to the allocation provisions of this Agreement (unless in
\nthe case of (3) Zellers otherwise gives Target Canada credit therefor whether or
\nnot allocation thereof is contemplated by this Agreement).<\/p>\n<\/p>\n

“Mortgages” <\/strong>means any mortgage of Zellers153 leasehold
\ninterest in the Leased Properties.<\/p>\n<\/p>\n

“Notes”<\/strong> means interests in (a) that certain Mezzanine A Loan
\nAgreement dated as of October 2, 2006, as amended, between LT Mezz A LLC, a
\nDelaware limited liability company, and Wells Fargo Bank, National Association,
\nas custodian for the Participation Holders (as defined therein), and (b) that
\ncertain Mezzanine B Loan Agreement dated as of October 2, 2006, as amended,
\nbetween LT Mezz B LLC, a Delaware limited liability company and GSRE-BS II,
\nLtd., as lender.<\/p>\n<\/p>\n

“Notice”<\/strong> has the meaning specified in Section 13.1.<\/p>\n<\/p>\n

“Notice Date”<\/strong> means the date upon which Target, Target
\nCanada or a Designee gives Notice to Zellers of the Vacancy Date for any
\nSubleases as contemplated by Section 2.4(1).<\/p>\n<\/p>\n

“Outside Date<\/strong>” means September 30, 2011, provided that if
\nthe Competition Act Approval is not obtained by August 15, 2011, Zellers or
\nTarget may elect to extend from time to time the Outside Date by specified
\nperiods of not less than 30 days to no later than December 31, 2011.<\/p>\n<\/p>\n

“Participation Agreement<\/strong>” means that certain Mezzanine Loan
\nParticipation Agreement dated as of December 12, 2006 among Wells Fargo Bank,
\nNational Association, as custodian, and the holders of the Notes associated with
\nthe Mezzanine A Loan Agreement.<\/p>\n<\/p>\n

“Parties”<\/strong> means Zellers, HBC, Target, Target Canada and any
\nother Person who becomes a party to this Agreement.<\/p>\n<\/p>\n

“Permitted Encumbrances”<\/strong> means the Encumbrances identified
\nin Section 5.1(i)(iv) of the Disclosure Letter.<\/p>\n<\/p>\n

“Person”<\/strong> means a natural person, partnership, limited
\npartnership, limited liability partnership, corporation, limited liability
\ncompany, unlimited liability company, joint stock company, trust, unincorporated
\nassociation, joint venture or other entity or Governmental Entity, and pronouns
\nhave a similarly extended meaning.<\/p>\n<\/p>\n

“Pharmacy Notice Date”<\/strong> has the meaning specified in Section
\n2.6.<\/p>\n<\/p>\n

“Pharmacy Records” <\/strong>means all of the prescription files and
\nprescription records, including patient profiles and refill histories, with
\nrespect to the pharmacies operated at the Subject Leased Properties.<\/p>\n<\/p>\n

“Purchase Price” <\/strong>means the aggregate of the First Tranche
\nPurchase Price and the Second Tranche Purchase Price.<\/p>\n

\n

6<\/p>\n

\n

<\/p>\n

\n

“Second Tranche Closing Date” <\/strong>means the date that is 10
\nBusiness Days following the last day of the Second Tranche Selection Period, but
\nsubject to the satisfaction or waiver by the applicable Party or Parties of all
\nconditions at the Effective Time on the Second Tranche Closing Date.<\/p>\n<\/p>\n

“Second Tranche Purchase Price”<\/strong> has the meaning specified in
\nSection 3.1(1)(a).<\/p>\n<\/p>\n

“Second Tranche Selection List”<\/strong> has the meaning specified in
\nSection 2.2(1).<\/p>\n<\/p>\n

“Second Tranche Selection Period”<\/strong> means the 240-day period
\nfollowing the Execution Date.<\/p>\n<\/p>\n

“Second Tranche Subject Leases” <\/strong>means the Leases pertaining
\nto the Second Tranche Subject Leased Properties, subject to Section 7.2(3).<\/p>\n<\/p>\n

“Second Tranche Subject Leased Properties” <\/strong>means the Leased
\nProperties listed on the Second Tranche Selection List.<\/p>\n<\/p>\n

“Subject Leases” <\/strong>means the First Tranche Subject Leases and
\nthe Second Tranche Subject Leases, subject to Section 7.2(3).<\/p>\n<\/p>\n

“Subject Leased Properties”<\/strong> means the First Tranche Subject
\nLeased Properties and the Second Tranche Subject Leased Properties.<\/p>\n<\/p>\n

“Subleases” <\/strong>means the subleases in respect of each of the
\nSubject Leased Properties by and between Zellers and Target Canada or its
\nDesignee, pursuant to which Zellers shall sublet from Target Canada or its
\nDesignee the Subject Leased Properties for a term commencing on the applicable
\nClosing Date and expiring on the earlier of (i) one day prior to the expiry or
\nearlier termination of the term of the applicable Subject Leases, and (ii) the
\napplicable Vacancy Date, and which subleases shall be in the form (and based on
\nthe terms and conditions set forth therein) attached as Section 1.1 to the
\nDisclosure Letter (or may be in the form of licenses, occupancy agreement, or
\nother agreements providing substantially all of the benefits and burdens as said
\nform of Sublease, provided such licenses, occupancy agreements or other
\nagreements are satisfactory in form to Zellers and Target Canada, each acting
\nreasonably).<\/p>\n<\/p>\n

“Target” <\/strong>means Target Corporation.<\/p>\n<\/p>\n

“Target Canada”<\/strong> means, collectively, Target Canada Co. and
\none or more other subsidiaries (within the meaning of the Business
\nCorporations Act <\/em>(Ontario)) of Target incorporated under the laws of Canada
\nor a province of Canada, as may be designated by Target in accordance with
\nSection 1.12 prior to the First Tranche Closing Date.<\/p>\n<\/p>\n

“Target Canada Liabilities” <\/strong>has the meaning specified in
\nSection 12.2(1).<\/p>\n<\/p>\n

“Target Entity”<\/strong> has the meaning specified in Section 7.7(2).\n<\/p>\n<\/p>\n

“Tax Act”<\/strong> means the Income Tax Act,<\/em> R.S.C. 1985
\n(5th Supp.) c.1.<\/p>\n<\/p>\n

“Tax Refund” <\/strong>has the meaning specified in Section 3.7.<\/p>\n

\n

7<\/p>\n

\n

<\/p>\n

\n

“Tax Returns”<\/strong> means any and all returns, reports,
\ndeclarations and elections (including any amendments, schedules and attachments
\nto them), made or filed or required to be made or filed in respect of Taxes.\n<\/p>\n<\/p>\n

“Taxes”<\/strong> means (i) any and all taxes, duties, fees, excises,
\npremiums, assessments, imposts, levies and other charges or assessments of any
\nkind whatsoever imposed by any Governmental Entity, and (ii) all interest,
\npenalties, fines, additions to tax or other additional amounts imposed by any
\nGovernmental Entity on or in respect of amounts of the type described in clause
\n(i) above or this clause (ii).<\/p>\n<\/p>\n

“Third Party Claim”<\/strong> means any action, suit, proceeding,
\narbitration, application, cause of action, claim or demand that is instituted or
\nasserted by a third party, including a Governmental Entity, against an
\nIndemnified Party which entitles the Indemnified Party to make a claim for
\nindemnification under this Agreement.<\/p>\n<\/p>\n

“Vacancy Date” <\/strong>means, with respect to a particular Sublease,
\nthe date that is 270 days following the Notice Date with respect to such
\nSublease; provided, Target or Target Canada may designate up to 20 particular
\nSubleases in each of the First Four Fiscal Quarters for which the Vacancy Date
\nwould mean the date that is 180 days following the Notice Date with respect to
\neach such Sublease; and provided further that:<\/p>\n<\/p>\n

(i) no Vacancy Date shall be earlier than January 31, 2012; and<\/p>\n<\/p>\n

(ii) no Vacancy Date shall be later than March 31, 2013.<\/p>\n<\/p>\n

“Wind-Down Actions” <\/strong>means the (i) conduct of liquidation
\nsales at a Subject Leased Property the period for which shall not exceed, in the
\naggregate, 12 weeks and (ii) winding-down and closure of Zellers153 business and
\noperations (including any action reasonably taken in connection therewith) so as
\nto satisfy the provisions of Section 2.4(2), the period for which shall not
\nexceed, in the aggregate, two weeks; provided however, that if a Landlord
\nrefuses to allow the conduct of a liquidation sale pursuant to clause (i) above
\nand Target Canada has provided Notice at least 120 days prior to the applicable
\nVacancy Date, then (a) with respect to up to 10 Subject Leased Properties
\ndesignated by Target Canada in such Notice from time to time, Zellers shall
\ncomplete such activities at such Subject Leased Properties within eight weeks
\nand (b) with respect to up to an additional 10 Subject Leased Properties
\ndesignated by Target Canada in such Notice from time to time, Zellers shall not
\nbe permitted to conduct any liquidation sales at such Subject Leased Properties.\n<\/p>\n<\/p>\n

“Winnipeg Premises<\/strong>” means the portion of the premises known
\nmunicipally as 450 Portage Avenue, Winnipeg, Manitoba and more particularly
\ndescribed in Section 2.9 of the Disclosure Letter.<\/p>\n<\/p>\n

“Zellers”<\/strong> means Zellers Inc.<\/p>\n<\/p>\n

“Zellers Entity”<\/strong> has the meaning specified in Section
\n7.7(1).<\/p>\n<\/p>\n

“Zellers Entity Location”<\/strong> has the meaning specified in
\nSection 7.7(1).<\/p>\n

\n

8<\/p>\n

\n

<\/p>\n

\n

“Zellers Liabilities” <\/strong>has the meaning specified in Section
\n12.1(1).<\/p>\n<\/p>\n

Section 1.2<\/strong> Gender and Number.<\/strong><\/p>\n<\/p>\n

Any reference in this Agreement or any Ancillary Agreement to gender includes
\nall genders. Words importing the singular number only include the plural and
\nvice versa.<\/p>\n<\/p>\n

Section 1.3<\/strong> Headings, etc.<\/strong><\/p>\n<\/p>\n

The provision of a Table of Contents, the division of this Agreement into
\nArticles and Sections and the insertion of headings are for convenient reference
\nonly and do not affect the interpretation of this Agreement.<\/p>\n<\/p>\n

Section 1.4<\/strong> Currency.<\/strong><\/p>\n<\/p>\n

All references in this Agreement or any Ancillary Agreement to dollars, or to
\n$ are expressed in Canadian currency unless otherwise specifically indicated.\n<\/p>\n<\/p>\n

Section 1.5<\/strong> Certain Phrases, etc.<\/strong><\/p>\n<\/p>\n

In this Agreement and any Ancillary Agreement (i) the words
\n“including<\/strong>“, “includes<\/strong>” and
\n“include<\/strong>” mean “including (or includes or include)
\nwithout limitation<\/strong>“, and (ii) the phrase “the aggregate
\nof<\/strong>“, “the total of<\/strong>“, “the sum of<\/strong>“, or
\na phrase of similar meaning means “the aggregate (or total or sum),
\nwithout duplication, of<\/strong>“. Unless otherwise specified, the words
\n“Article<\/strong>” and “Section<\/strong>” followed by a number
\nmean and refer to the specified Article or Section of this Agreement.<\/p>\n<\/p>\n

Section 1.6<\/strong> Knowledge.<\/strong><\/p>\n<\/p>\n

Where any representation or warranty contained in this Agreement or any
\nAncillary Agreement is qualified by reference to the knowledge of:<\/p>\n<\/p>\n

(1) Zellers, it refers to the actual knowledge (without further inquiry) of
\nMark Foote, as Chief Executive Officer of Zellers, Michael Culhane, as Senior
\nVice-President and Chief Financial Officer of Zellers, David Mock, as Senior
\nVice-President, Merchandise Hardlines of Zellers, and Bruce Moore, as Senior
\nVice-President, Real Estate of HBC;<\/p>\n<\/p>\n

(2) Target, it refers to the actual knowledge (without further inquiry) of
\nDouglas Scovanner, as Executive Vice-President and Chief Financial Officer of
\nTarget, and Timothy Baer, as Executive Vice-President and General Counsel of
\nTarget;<\/p>\n<\/p>\n

in each case, without personal liability on the part of any of them.<\/p>\n<\/p>\n

Section 1.7<\/strong> Disclosure Letter.<\/strong><\/p>\n<\/p>\n

(1) The Disclosure Letter forms an integral part of this Agreement for all
\npurposes of it.<\/p>\n<\/p>\n

(2) The purpose of the Disclosure Letter is to set out the qualifications,
\nexceptions and other information called for in this Agreement. The Parties
\nacknowledge and agree that the<\/p>\n

\n

9<\/p>\n

\n

<\/p>\n

\n

Disclosure Letter and the information and disclosures contained in it do not
\nconstitute or imply, and will not be construed as:<\/p>\n<\/p>\n

(a) any representation, warranty, covenant or agreement which is not
\nexpressly set out in this Agreement;<\/p>\n<\/p>\n

(b) an admission of any liability or obligation of any Party;<\/p>\n<\/p>\n

(c) an admission that the information is material;<\/p>\n<\/p>\n

(d) a standard of materiality, a standard for what is or is not in the
\nordinary course of business, or any other standard contrary to the standards
\ncontained in the Agreement; or<\/p>\n<\/p>\n

(e) an expansion of the scope of effect of any of the representations,
\nwarranties and covenants set out in the Agreement.<\/p>\n<\/p>\n

(3) Disclosure of any information in the Disclosure Letter that is not
\nstrictly required under this Agreement has been made for informational purposes
\nonly and does not imply disclosure of all matters of a similar nature. Inclusion
\nof an item in any section of the Disclosure Letter is deemed to be disclosure
\nfor all purposes for which disclosure is required under this Agreement to the
\nextent that the relevance of such disclosure to such other purposes is
\nreasonably apparent.<\/p>\n<\/p>\n

(4) The Disclosure Letter itself is confidential information and may not be
\ndisclosed unless (i) it is required to be disclosed pursuant to applicable Law,
\nunless such Law permits the Parties to refrain from disclosing the information
\nfor confidentiality or other purposes or (ii) a Party needs to disclose it in
\norder to enforce or exercise its rights under this Agreement.<\/p>\n<\/p>\n

Section 1.8<\/strong> References to Persons and
\nAgreements.<\/strong><\/p>\n<\/p>\n

Any reference in this Agreement to a Person includes its successors and
\npermitted assigns. The term “Agreement” and any reference to this Agreement or
\nany other agreement or document includes, and is a reference to, this Agreement
\nor such other agreement or document as it may have been, or may from time to
\ntime be amended, restated, replaced, supplemented or novated and includes all
\nschedules to it.<\/p>\n<\/p>\n

Section 1.9<\/strong> Statutes.<\/strong><\/p>\n<\/p>\n

Except as otherwise provided in this Agreement, any reference in this
\nAgreement to a statute refers to such statute and all rules and regulations made
\nunder it, as it or they may have been or may from time to time be amended or
\nre-enacted.<\/p>\n<\/p>\n

Section 1.10<\/strong> Non-Business Days.<\/strong><\/p>\n<\/p>\n

Whenever payments are to be made or an action is to be taken on a day which
\nis not a Business Day, such payment shall be made or such action shall be taken
\non or not later than the next succeeding Business Day.<\/p>\n

\n

10<\/p>\n

\n

Section 1.11<\/strong> Time Periods.<\/strong><\/p>\n<\/p>\n

Unless otherwise specified, time periods within or following which any
\npayment is to be made or act is to be done shall be calculated by excluding the
\nday on which the period commences and including the day on which the period ends
\nand by extending the period to the next Business Day following if the last day
\nof the period is not a Business Day.<\/p>\n<\/p>\n

Section 1.12<\/strong> Designation of Target Canada.<\/strong>\n<\/p>\n<\/p>\n

Target may, by Notice to Zellers given at least 10 Business Days prior to the
\nFirst Tranche Closing Date, designate one or more other subsidiaries of Target
\nas Target Canada and shall cause such subsidiaries to enter into and become
\nbound by this Agreement as Target Canada on or prior to the First Tranche
\nClosing Date. Upon such designation, such entities together with Target Canada
\nCo. shall be deemed for purposes of this Agreement and all Ancillary Agreements
\nto be “Target Canada”.<\/p>\n<\/p>\n

Section 1.13<\/strong> Leasehold Interests.<\/strong><\/p>\n<\/p>\n

Notwithstanding any provision of this Agreement or Ancillary Agreements to
\nthe contrary, for purposes of this Agreement and each Ancillary Agreement, (i)
\nall references to “Lease” include any sublease or agreement to sublease by which
\nZellers (as subtenant) holds its interest in the related Leased Property, (ii)
\nfor the Leased Properties which are subject to a sublease or agreement to
\nsublease (rather than a lease) in favour of Zellers, all references to Zellers153
\n“leasehold” interest in such Leased Property shall mean Zellers153 “subleasehold”
\ninterest (rather than a leasehold interest) in such Leased Property, any
\nreference to “Landlord” shall mean the sublandlord under the applicable sublease
\nor agreement to sublease pursuant to which Zellers (as subtenant) holds its
\ninterest in such Leased Property, and any reference to “Sublease” shall mean a
\nsub-sublease in such Leased Property in favour of Zellers, and (iii) all other
\nsimilar references relating to the Leases and Leased Properties shall be
\ninterpreted and construed in a similar manner.<\/p>\n<\/p>\n

ARTICLE 2
\nAGREEMENT OF PURCHASE AND SALE<\/strong><\/p>\n

\n

Section 2.1<\/strong> First Tranche Subject Leased
\nProperties.<\/strong><\/p>\n<\/p>\n

(1) From time to time during the First Tranche Selection Period, Target or
\nTarget Canada shall deliver to Zellers a Notice designating up to 110 Leases
\nthat shall be assigned and transferred on the First Tranche Closing Date (such
\nlist, as updated from time to time, including in accordance with Section 2.1(4),
\nthe “First Tranche Selection List<\/strong>“).<\/p>\n<\/p>\n

(2) Subject to the terms and conditions of this Agreement, Zellers agrees to
\nassign and transfer to Target Canada or at the direction of Target Canada to a
\nDesignee and Target Canada agrees to acquire and assume or cause to be acquired
\nand assumed by a Designee on the First Tranche Closing Date in accordance with
\nthe terms of this Agreement, effective as of the Effective Time of the First
\nTranche Closing Date, the First Tranche Subject Leases, including all rights of
\nZellers relating thereto or arising thereunder<\/p>\n

\n

11<\/p>\n

\n

<\/p>\n

\n

(inclusive of any options of Zellers therein). On or before the First Tranche
\nClosing Date:<\/p>\n<\/p>\n

(i) each of Zellers and Target Canada shall enter into a Lease Assignment and
\nAssumption Agreement with respect to those First Tranche Subject Leases to be
\nassigned to Target Canada; and<\/p>\n<\/p>\n

(ii) Zellers shall, and Target Canada shall cause its Designees to, enter
\ninto a Designee Assignment and Assumption Agreement with respect to those First
\nTranche Subject Leases to be assigned to a Designee;<\/p>\n<\/p>\n

in respect of each of the First Tranche Subject Leases to effect the
\naforesaid assignment, transfer and assumption thereof.<\/p>\n<\/p>\n

(3) Contemporaneous with the assignment and transfer of the First Tranche
\nSubject Leases, each of Zellers and Target Canada shall enter into (or Target
\nCanada shall cause its Designee to enter into) Subleases in respect of each of
\nthe First Tranche Subject Leased Properties the terms of which will commence as
\nof the Effective Time of the First Tranche Closing Date.<\/p>\n<\/p>\n

(4) If at the end of the First Tranche Selection Period the First Tranche
\nSelection List includes fewer than 110 Subject Leases, Target Canada shall have
\nthe right to continue to designate additional Leases as First Tranche Subject
\nLeases (and the relevant Leased Properties shall be First Tranche Subject Leased
\nProperties), provided that the number of Leases designated on the First Tranche
\nSelection List plus the number of additional Leases designated as First Tranche
\nSubject Leases pursuant to this Section 2.1(4) may not exceed 110. Target Canada
\nshall have the right to take assignments of one or more First Tranche Subject
\nLeases on one or more dates (each, a “Delivery Date”<\/strong>) after the
\nFirst Tranche Closing Date, provided (i) Zellers and Target Canada shall
\nreasonably cooperate in executing, on the applicable Delivery Date, all
\ndocuments and instruments contemplated under this Agreement to be delivered on a
\nClosing Date, (ii) all such documents, when delivered, shall provide the Parties
\nwith all rights and obligations with respect to each Subject Leased Property
\nthat the Parties would have had if such documents and instruments had been
\ndelivered on the First Tranche Closing Date, (iii) such documents shall in all
\nevents be executed and delivered by the Parties on the earlier of (a) a date
\nselected by Target Canada on at least 10 days advance written notice from Target
\nCanada, and (b) the Second Tranche Closing Date, and (iv) no Delivery Date shall
\nbe within 10 Business Days of the Second Tranche Closing Date.<\/p>\n<\/p>\n

Section 2.2<\/strong> Second Tranche Subject Leased
\nProperties.<\/strong><\/p>\n<\/p>\n

(1) From time to time during the Second Tranche Selection Period, Target or
\nTarget Canada shall deliver to Zellers a written notice designating additional
\nLeases that shall be assigned and transferred on the Second Tranche Closing Date
\n(such list, as updated from time to time, the “Second Tranche Selection
\nList<\/strong>“), provided that the number of Leases designated on the Second
\nTranche Selection List when added to the number of Leases designated on the
\nFirst Tranche Selection List shall not be more than 220.<\/p>\n

\n

12<\/p>\n

\n

<\/p>\n

\n

(2) Subject to the terms and conditions of this Agreement, Zellers agrees to
\nassign and transfer to Target Canada or at the direction of Target Canada to a
\nDesignee and Target Canada agrees to acquire and assume or cause to be acquired
\nand assumed by a Designee on the Second Tranche Closing Date in accordance with
\nthe terms of this Agreement, effective as of the Effective Time of the Second
\nTranche Closing Date, the Second Tranche Subject Leases, including all rights of
\nZellers relating thereto or arising thereunder (inclusive of any options of
\nZellers therein). On or before the Second Tranche Closing Date:<\/p>\n<\/p>\n

(i) each of Zellers and Target Canada shall enter into a Lease Assignment and
\nAssumption Agreement with respect to those Second Tranche Subject Leases to be
\nassigned to Target Canada; and<\/p>\n<\/p>\n

(ii) Zellers shall, and Target Canada shall cause its Designees to, enter
\ninto a Designee Assignment and Assumption Agreement with respect to those Second
\nTranche Subject Leases to be assigned to a Designee;<\/p>\n<\/p>\n

in respect of each of the Second Tranche Subject Leases to effect the
\naforesaid assignment, transfer and assumption thereof.<\/p>\n<\/p>\n

(3) Contemporaneous with the assignment and transfer of the Second Tranche
\nSubject Leases, each of Zellers and Target Canada shall enter into (or Target
\nCanada shall cause its Designee to enter into) Subleases in respect of each of
\nthe Second Tranche Subject Leased Properties the terms of which will commence as
\nof the Effective Time of the Second Tranche Closing Date.<\/p>\n<\/p>\n

Section 2.3<\/strong> Right to Terminate Leases.<\/strong><\/p>\n<\/p>\n

Instead of taking an assignment of any Subject Lease (or directing the
\nassignment of such Subject Lease to a Designee) on the applicable Closing Date,
\nTarget Canada may negotiate with the applicable Landlord for the termination of
\nsuch Subject Lease, provided that (i) no such termination shall be effective
\nprior to the applicable Closing Date with respect to such Subject Lease; (ii)
\nfrom and after the applicable Closing Date to and including the applicable
\nVacancy Date, Zellers shall have the same right to use and occupy the Subject
\nLeased Property relating to such Subject Lease under a Sublease (or other
\nagreement providing substantially similar rights) on all the same terms and
\nconditions that would have applied had such Subject Lease been assigned to
\nTarget Canada (instead of terminated) and subleased to Zellers under a Sublease,
\nexcept that all amounts that would have been paid as rent under such Sublease
\nshall be paid to the Landlord, or as Target Canada may direct; (iii) such
\nSubject Lease shall count as one of the Leases that Target Canada is entitled to
\ndesignate under Section 2.1(1) or 2.2(1), notwithstanding Target Canada153s
\nelection to arrange for the termination (rather than assignment) of such Subject
\nLease; and (iv) the Vacancy Date for such Subject Leased Property shall be
\nestablished by Target Canada giving a Notice in accordance with Section 2.4.\n<\/p>\n<\/p>\n

Section 2.4<\/strong> Vacancy Date.<\/strong><\/p>\n<\/p>\n

(1) Target Canada, Target or a Designee may from time to time provide Notice
\nto Zellers establishing the Vacancy Date for one or more Subleases.<\/p>\n

\n

13<\/p>\n

\n

<\/p>\n

\n

(2) On each Vacancy Date, effective as of the applicable Effective Time, the
\nSublease(s) identified in the Notice shall be terminated and Target Canada or a
\nDesignee shall accept and take possession of the relevant Subject Leased
\nProperties, which Subject Leased Properties shall be (i) empty of all inventory,
\ntrade fixtures (including all store shelving, racks, display cases and stockroom
\nshelving systems), personal property and debris, and (ii) free from any
\nsubtenants, licensees or other Persons in possession of all or any portion of
\nthe relevant Subject Leased Properties. Notwithstanding the foregoing or any
\nother provision of this Agreement, the Subject Leases or any Ancillary
\nAgreement, Zellers shall have no obligation (a) to restore the Subject Leased
\nProperties to a base building condition or standard, (b) to remove any leasehold
\nimprovements from the Subject Leased Properties, or (c) to repair, patch or
\nreplace any walls, ceilings or flooring damaged by the removal of trade
\nfixtures, provided such removal is accomplished in a commercially reasonable
\nmanner.<\/p>\n<\/p>\n

Section 2.5<\/strong> Ordinary Course Operations.<\/strong>\n<\/p>\n<\/p>\n

From the Execution Date until the expiration of the Second Tranche Selection
\nPeriod, Zellers shall operate and cause to be operated the operations currently
\nconducted by it and its Affiliates, and use commercially reasonable efforts to
\ncause its licensees and subtenants to operate the operations currently operated
\nby each of them, in and on the Leased Properties in the ordinary course of
\nZellers153 business and consistent with Zellers153 and Zellers153 Affiliates153,
\nlicensees153 and subtenants153 past practices (including maintaining and updating
\nall Pharmacy Records in accordance with customary practices of the applicable
\npharmacy operator or required by Laws), Laws and in accordance with and subject
\nto the terms of the Leases (including, with respect to any Lease as to which
\nthere exists a dispute or default that is disclosed in Section 5.1(i)(iii),
\n5.1(i)(vii) or 5.1(i)(viii) of the Disclosure Letter, using commercially
\nreasonable efforts to resolve or cure such dispute or default), in each case in
\nall material respects. As to the Subject Leases and the Subject Leased
\nProperties only, from the expiration of the Second Tranche Selection Period
\nuntil the applicable Vacancy Date, Zellers shall operate and cause to be
\noperated the operations currently conducted by it and its Affiliates, and use
\ncommercially reasonable efforts to cause its pharmacy licensees and subtenants
\nto operate the operations currently operated by each of them, in and on the
\nSubject Leased Properties in the ordinary course of Zellers153 business and
\nconsistent with Zellers153 and Zellers153 Affiliates153, pharmacy licensees153 and
\nsubtenants153 past practices (including maintaining and updating all Pharmacy
\nRecords in accordance with customary practices of the applicable pharmacy
\noperator or required by Laws), Laws and in accordance with and subject to the
\nterms of the Subleases, in each case in all material respects. Notwithstanding
\nthe foregoing, (i) nothing in this Section 2.5 will derogate from Zellers153
\nrights contained in the Subleases or in Section 2.4 during the applicable
\nportion of the time period during the conduct of the Wind-Down Actions, nor
\nshall the exercise of such rights constitute a breach of this Section 2.5, (ii)
\nthe Wind-Down Actions shall not constitute a breach of this Section 2.5,
\nprovided such actions are taken in accordance with the terms of the respective
\nSublease and all Laws, (iii) the period during which liquidation sales may be
\nconducted (as established pursuant to the definition of Wind-Down Actions) shall
\nnot be limited as described in such definition with respect to any Subject
\nLeased Property as to which the conduct of a liquidation sale for such extended
\nperiod will not and does not (a) give rise to a Landlord Recapture Right, (b)
\ngive rise to a Lease Default; or (c) diminish or limit any right or privilege of
\nthe tenant under the applicable Subject Lease, and (iv) Zellers has the right to
\nterminate any sublease, license, concession or other occupancy agreement
\nrelating to the Leased<\/p>\n

\n

14<\/p>\n

\n

<\/p>\n

\n

Property at any time following the applicable Closing Date, excluding any
\npharmacy sublease, license, concession or other occupancy agreement.<\/p>\n<\/p>\n

Section 2.6<\/strong> Pharmacy Records.<\/strong><\/p>\n<\/p>\n

At the option of Target Canada, which may be exercised by Notice given by
\nTarget Canada to Zellers from time to time no later than 90 days prior to the
\napplicable Vacancy Date (the “Pharmacy Notice Date<\/strong>“), but
\nsubject to Laws, Zellers shall and shall cause its Affiliates and shall use
\ncommercially reasonable efforts to cause any third-party operator of the
\npharmacy in the applicable Subject Leased Property to transfer to or upon the
\ndirection of Target Canada all or any portion of the Pharmacy Records specified
\nin such Notice (to the extent a pharmacy is operating in the applicable Subject
\nLeased Property), including paper file backup and a backup tape for all
\nprescriptions (to the extent such exist), without retaining any copies of such
\nPharmacy Records other than such copies as Zellers or applicable pharmacy
\noperator is required to retain by Laws (and, in such case, only to the extent
\nand for so long as required by Laws). No additional consideration shall be
\npayable by Target or Target Canada in connection with such transfer of Pharmacy
\nRecords. Zellers shall, and shall cause its Affiliates to and use commercially
\nreasonable efforts to cause the applicable pharmacy operator to, make such
\ntransfer in respect of each applicable Subject Leased Property (i) in a format
\nreasonably requested by Target Canada, (ii) free and clear of all Encumbrances,
\n(iii) on the applicable Vacancy Date (or such earlier date as is specified in
\nsuch Notice, which date shall not be less than 30 days after the date such
\nNotice is given) in respect of such Subject Leased Property provided Target
\nCanada has provided appropriate notice by the applicable Pharmacy Notice Date,
\nand (iv) if requested by Target Canada, pursuant to a mutually agreed upon file
\ntransfer agreement with terms consistent with those set forth in this Section
\n2.6. The Parties shall cooperate to effect any such transfers in accordance with
\nLaws. Neither Zellers nor any of its Affiliates will directly or indirectly
\nsolicit the transfer of any of the Pharmacy Records that may be transferred to
\nor upon the direction of Target Canada pursuant to this Agreement to any stores
\nor pharmacies operated by Zellers or any of its Affiliates or, subject to Laws,
\nprovide to any other Person any of the Pharmacy Records that are to be
\ntransferred to or upon the direction of Target Canada pursuant to this
\nAgreement. Zellers shall use commercially reasonable efforts to enforce any
\ncontractual rights it may have with the third-party operator of a pharmacy in
\neach applicable Subject Leased Property restricting the solicitation or transfer
\nof any of the Pharmacy Records that are to be transferred to or upon the
\ndirection of Target Canada pursuant to this Agreement where Zellers has
\nknowledge of any actual or threatened breach of such provisions. For purposes of
\nthis Section 2.6 only, knowledge of Zellers shall include the actual knowledge
\nof the General Merchandise Manager, Pharmacy of Zellers.<\/p>\n<\/p>\n

Section 2.7<\/strong> Target Canada Assignment of
\nRights.<\/strong><\/p>\n<\/p>\n

(1) Target Canada may from time to time designate one or more Persons (each,
\na “Designee<\/strong>“) to be an immediate or subsequent assignee(s) of
\nthe Subject Leases, as follows:<\/p>\n<\/p>\n

(a) If Target Canada wishes to have one or more Subject Leases assigned
\ndirectly by Zellers to one or more Designee(s), Target Canada may upon at least
\n10 Business Days153 written notice in advance of a Delivery Date or a Closing
\nDate, as the case may be, identify the Designee(s) that is or are to be the
\nassignee(s) of the Subject<\/p>\n

\n

15<\/p>\n

\n

<\/p>\n

\n

Leases to be assigned and transferred by Zellers on the applicable Closing
\nDate or Delivery Date, in which case, on such date, with respect to the Subject
\nLease(s) so identified:<\/p>\n<\/p>\n

(i) the Designee(s) will execute and deliver an Assignment and Assumption of
\nLease Agreement in substantially the form specified in Section 2.7(1) of the
\nDisclosure Letter (as such form may be modified in accordance with Section
\n2.7(5) of this Agreement, a “Designee Assignment and Assumption
\nAgreement<\/strong>“) (and Zellers and Target Canada will not execute a Lease
\nAssignment and Assumption Agreement) with respect to such Subject Leases(s), and\n<\/p>\n<\/p>\n

(ii) such Designee(s) (and not Target Canada) will execute and deliver the
\nSublease(s) in favour of Zellers with respect to the applicable Subject Leased
\nProperties.<\/p>\n<\/p>\n

Zellers need not make any assignment directly to a Designee unless such
\nDesignee executes and delivers a Designee Assignment and Assumption Agreement on
\nthe applicable Closing Date or Delivery Date. If any Designee shall fail or
\nrefuse to execute and deliver a Designee Assignment and Assumption Agreement and
\nSublease with respect to any Subject Lease, Target Canada and Zellers shall,
\nupon Target Canada153s request, enter into a Lease Assignment and Assumption
\nAgreement and a corresponding Sublease in respect of the applicable Subject
\nLease on the Closing Date or Delivery Date.<\/p>\n<\/p>\n

(b) If Target Canada wishes to assign to one or more Designee(s) one or more
\nSubject Lease(s) previously assigned to Target Canada, Target Canada may at any
\ntime and from time to time do so without limit or qualification of any kind,
\nexcept that any such assignment by Target Canada shall be subject to the rights
\nof Zellers under any applicable Sublease then in effect.<\/p>\n<\/p>\n

(2) In connection with the assignment of any Subject Lease(s) to any
\nDesignee(s) pursuant to Section 2.7(1), Target Canada and\/or Target may by
\nseparate agreement with such Designee(s) provide representations and warranties
\nin such form and content as Target Canada and\/or Target may elect. Zellers shall
\nhave no direct liability or obligation to any Designee on account of any such
\nrepresentations or warranties. The assignment of a Subject Lease(s) to
\nDesignee(s) does not relieve Zellers of liability for a breach of any of the
\nrepresentations or warranties contained in Section 5.1 to the extent that such
\nbreach results in Damages to Target Canada or Target, subject, in all events, to
\nthe limitations contained in this Agreement, including Section 11.5.<\/p>\n<\/p>\n

(3) Upon assignment of a Subject Lease (whether by Zellers pursuant to
\nSection 2.7(1)(a) or by Target Canada pursuant to Section 2.7(1)(b)) to an
\nInvestment Grade Designee at any time up to the second anniversary of the
\napplicable Vacancy Date for such Subject Lease, Target Canada and Target shall
\nbe released from all Subject Lease Obligations relating to such Subject Lease,
\nto the extent, and only to the extent, (i) assumed by such Investment Grade
\nDesignee and (ii) an indemnity has been provided by such Designee with respect
\nto such Subject Lease Obligation assumed by such Designee, in each case, in
\nwriting. Such assumption and indemnity by an Investment Grade Designee may be
\naccomplished:<\/p>\n

\n

16<\/p>\n

\n

<\/p>\n

\n

(a) in the case of an assignment pursuant to Section 2.7(1)(a), pursuant to a
\nDesignee Assignment and Assumption Agreement, or pursuant to an assumption and
\nindemnity agreement by the Investment Grade Designee in favour of Zellers in a
\nform which is acceptable to Zellers, acting reasonably; or<\/p>\n<\/p>\n

(b) in the case of an assignment by Target Canada pursuant to Section
\n2.7(1)(b), pursuant to an assumption and indemnity agreement by the Investment
\nGrade Designee in favour of Zellers in a form which is acceptable to Zellers,
\nacting reasonably. If pursuant to an instrument of assignment between Target
\nCanada and a Designee, such Designee (i) assumes some or all Subject Lease
\nObligations with respect to a Subject Lease, and (ii) confirms in writing with
\nZellers that such assumption and indemnity runs in favour of Zellers, then
\nZellers shall join in (by attached joinder or otherwise) such instrument in
\norder to (x) accept such assumption and (y) confirm the release of Target and
\nTarget Canada to the extent of the Subject Lease Obligations so assumed and
\nindemnified.<\/p>\n<\/p>\n

Any release provided for in this Section 2.7(a)(3) shall be effective upon
\nthe execution by the Investment Grade Designee and receipt by Zellers of the
\naforesaid Designee Assignment and Assumption Agreement or other assumption and
\nindemnity agreement, and shall require no further act, deed or writing. Zellers
\nagrees from time to time upon request of Target or Target Canada to confirm such
\nreleases, but the failure of Target or Target Canada to request any such
\nconfirmation, and the failure of Zellers to provide any such confirmation, shall
\nnot affect the automatic release provided in the preceding sentence. For
\npurposes hereof, “Subject Lease Obligations<\/strong>” means all
\nobligations arising under (i) a Subject Lease assigned to a Designee, (ii) the
\nLease Assignment and Assumption Agreement or Designee Assignment and Assumption
\nAgreement, as applicable, pursuant to which such Subject Lease was assigned,
\n(iii) the Sublease entered into or to be entered into with respect to such
\nSubject Lease, and (iv) Sections 11.3(d) and 11.3(e) with respect to such
\nSubject Lease.<\/p>\n<\/p>\n

(4) No assignment of a Subject Lease to a Designee that is not an Investment
\nGrade Designee at the time of assignment shall release Target Canada or Target
\nfrom any Subject Lease Obligations.<\/p>\n<\/p>\n

(5) The form of Designee Assignment and Assumption Agreement may be varied
\nand modified by Target Canada in its discretion from time to time so long as
\nsuch variations and modifications do not (a) expand upon any representations,
\nwarranties, covenants, obligations, or liabilities of Zellers beyond those
\ncontained in the form of Designee Assignment and Assumption Agreement specified
\nin Section 2.7(1) of the Disclosure Letter, or (b) alter in any material respect
\nthe provisions of Section 5 of the form of Designee Assignment and Assumption
\nAgreement specified in Section 2.7(1) of the Disclosure Letter.<\/p>\n<\/p>\n

(6) Target and Target Canada shall remain responsible for and shall not, in
\nany event, be released from any of their covenants and obligations under this
\nAgreement in relation to the payment of the entire Purchase Price by reason of
\nany assignments made pursuant to this Section 2.7.<\/p>\n

\n

17<\/p>\n

\n

<\/p>\n

\n

Section 2.8<\/strong> Access and Additional Information
\nRelating to Leased Properties.<\/strong><\/p>\n<\/p>\n

(1) Subject to Target Canada complying with Laws, prior to the final Vacancy
\nDate, Zellers shall, upon reasonable prior Notice, permit Target Canada and its
\nrepresentatives and advisers reasonable access to the Leased Properties during
\nthe period commencing two hours prior to the Leased Property opening for
\nbusiness to the public and ending two hours after the close of business, subject
\nto the rights of all subtenants, licensees and concessionaires in the Leased
\nProperty (excluding, however, such subtenants, licensees and concessionaires
\nthat are Affiliates of Zellers) in order to make such reasonable investigations
\nas Target Canada shall reasonably determine are necessary or advisable. Target
\nCanada shall perform such investigations in compliance with Laws. Subject to
\nLaws, and at the sole cost and expense of Target Canada, Zellers shall give
\nTarget Canada153s representatives and agents reasonable means necessary to effect
\nsuch investigations and shall cause its agents, employees, officers and
\ndirectors to aid such representatives and agents in such investigations. Zellers
\nis not required to disclose any information to Target Canada where such
\ndisclosure is prohibited by Laws or by the terms of any agreement. Any
\ninvestigations or tests which require drilling or other invasive actions shall
\nbe performed outside of the hours when the Leased Property is open for business
\nto the public and shall be done only with the prior written consent of Zellers,
\nacting reasonably, and all such inspections and tests contemplated by this
\nAgreement shall not unduly interfere (and Target Canada and Target shall use
\ntheir reasonable commercial efforts not to so interfere) with the use, access,
\noperation and enjoyment by Zellers and its subtenants, licensees,
\nconcessionaries, customers and suppliers of the Leased Properties.<\/p>\n<\/p>\n

(2) Except as necessary to perform the investigations contemplated by this
\nSection 2.8, Target Canada and Target shall not make contact with any store
\nemployees of Zellers without the prior written consent of Zellers, such consent
\nnot to be unreasonably withheld.<\/p>\n<\/p>\n

(3) Prior to entry onto the Leased Properties, Target Canada or Target, as
\napplicable, shall have in effect a policy of general liability insurance with a
\nreputable national insurance company and with coverages in accordance with
\nnormal commercial practices in Toronto, Ontario; provided, however, that such
\ninsurance may be carried under a blanket policy or pursuant to Target153s
\nself-insurance program. At Zellers153 request, Target Canada or Target Canada153s
\nrepresentatives and agents, as the case may be, shall provide evidence of such
\ninsurance or self-insurance prior to any entry onto any of the Leased
\nProperties. Target Canada and Target each agree in favour of Zellers to repair
\nforthwith any damage to the Leased Properties arising from such access or
\ninvestigations (including by any Designee or potential Designee pursuant to
\nSection 2.8(6)) at Target Canada and Target153s expense and shall jointly and
\nseverally indemnify and hold Zellers harmless from and against any and all
\nlosses, Damages (including, for greater certainty, lost profits), claims, costs
\n(including costs on a solicitor and client basis) or liabilities in respect of
\nphysical injury or property damage that may be directly or indirectly suffered
\nor incurred by Zellers directly arising from or in respect of the access or
\ninvestigations by Target Canada, Target and\/or any Designee, potential Designee
\nand each of their representatives and advisors.<\/p>\n

\n

18<\/p>\n

\n

<\/p>\n

\n

(4) Zellers shall, within five days after receipt of a request from Target
\nCanada or Target Canada153s counsel, execute and deliver to Target Canada all
\nconsents reasonably necessary to permit Target Canada to have inspections made
\nby and to have existing records released to Target Canada by the municipal
\nbuilding and zoning departments, fire departments, public works departments,
\nenvironmental agencies, elevator inspections branch of the provincial or
\nterritorial departments of labour and other appropriate authorities as Target
\nCanada may consider advisable, acting reasonably, between the Execution Date and
\nthe Vacancy Date, respectively, for each Subject Lease.<\/p>\n<\/p>\n

(5) From the Execution Date until the applicable Closing Date or Delivery
\nDate, Zellers shall afford Target, Target Canada, and their respective
\nrepresentatives and advisers reasonable access to all Books and Records in
\nZellers153 possession or control relating to the Leased Properties or the Leases.\n<\/p>\n<\/p>\n

(6) Each Designee and each Person identified by Target Canada as a potential
\nDesignee shall have the same access and inspection rights afforded to Target
\nCanada under this Section 2.8, on and subject to the terms, conditions and
\nrequirements of this Section 2.8, provided that such potential Designee executes
\nand delivers in favour of Zellers an access, confidentiality and indemnification
\nagreement in the form attached as Section 2.8(6) to the Disclosure Letter and
\nthat the covenants and indemnity of Target and Target Canada in favour of
\nZellers and set out in Section 2.8(3) shall equally apply in respect of the
\nexaminations, investigations and testing undertaken by any Designee or any
\nPerson designated as a potential Designee. For greater certainty, nothing in
\nthis Section will in any way limit the indemnification obligations of Target and
\nTarget Canada in favour of Zellers under Section 2.8(3).<\/p>\n<\/p>\n

Section 2.9<\/strong> Winnipeg Lease Option.<\/strong><\/p>\n<\/p>\n

Target Canada has the option to enter into an agreement with HBC to lease the
\nWinnipeg Premises, which agreement will be based on the terms and conditions set
\nforth in Section 2.9 to the Disclosure Letter. If Target Canada and HBC have not
\nexecuted such lease by the Second Tranche Closing Date, the Purchase Price shall
\nincrease by $12,500,000, which additional $12,500,000 shall be payable on the
\nSecond Tranche Closing Date.<\/p>\n<\/p>\n

ARTICLE 3
\nPURCHASE PRICE<\/strong><\/p>\n

\n

Section 3.1<\/strong> Purchase Price.<\/strong><\/p>\n<\/p>\n

(1) The Purchase Price for the Subject Leases is $1,825,000,000, payable as
\nfollows:<\/p>\n<\/p>\n

(a) the consideration payable by Target Canada to Zellers for the First
\nTranche Subject Leases on the First Tranche Closing Date is $912,500,000 (the
\n“First Tranche Purchase Price”<\/strong>), subject to adjustment in
\naccordance with Section 3.3; and<\/p>\n<\/p>\n

(b) the consideration payable by Target Canada to Zellers for the Second
\nTranche Subject Leases on the Second Tranche Closing Date is $912,500,000 (the\n<\/p>\n

\n

19<\/p>\n

\n

<\/p>\n

\n

“Second Tranche Purchase Price”<\/strong>), subject to adjustment
\npursuant to Section 2.9 and in accordance with Section 3.3.<\/p>\n<\/p>\n

(2) Zellers and Target Canada agree to allocate the entire amount of the
\nPurchase Price to the leasehold interests. The Parties agree to (and agree to
\ncause each of their Affiliates to) execute and file all Tax Returns and prepare
\nall of their own financial statements and other instruments on the basis of this
\nallocation.<\/p>\n<\/p>\n

Section 3.2<\/strong> Payment of the Purchase Price.<\/strong>\n<\/p>\n<\/p>\n

(1) On the First Tranche Closing Date, the First Tranche Purchase Price will
\nbe paid and satisfied, subject to adjustment in accordance with Section 3.3, as
\nfollows:<\/p>\n<\/p>\n

(a) as to the Cost Basis of the Notes transferred and assigned to or on the
\ndirection of Zellers on the First Tranche Closing Date pursuant to Section
\n3.8(4), if any, plus any Accrued Interest on such Notes that has not been paid
\nto Target Canada, by such transfer of such Notes; and<\/p>\n<\/p>\n

(b) as to the balance, by Target Canada paying to or to the order of Zellers
\nsuch amount by wire transfer of immediately available funds in accordance with a
\ndirection delivered by Zellers to Target Canada prior to the First Tranche
\nClosing Date.<\/p>\n<\/p>\n

(2) On the Second Tranche Closing Date, the Second Tranche Purchase Price
\nwill be paid and satisfied, subject to adjustment in accordance with Section
\n3.3, as follows:<\/p>\n<\/p>\n

(a) as to the Cost Basis of the Notes transferred and assigned to or on the
\ndirection of Zellers on the Second Tranche Closing Date pursuant to Section
\n3.8(5), if any, plus any Accrued Interest on such Notes that has not been paid
\nto Target Canada, by such transfer of such Notes; and<\/p>\n<\/p>\n

(b) as to the balance, by Target Canada paying to or to the order of Zellers
\nsuch amount by wire transfer of immediately available funds in accordance with a
\ndirection delivered by Zellers to Target Canada prior to the Second Tranche
\nClosing Date.<\/p>\n<\/p>\n

(3) For purposes of this Section 3.2, the conversion of the Cost Basis of any
\nNote to be transferred and assigned, together with the Accrued Interest thereon,
\nfrom United States dollars to Canadian dollars shall be determined by reference
\nto the applicable exchange rate, as reported by Bloomberg as of noon (Eastern
\nTime) on the Business Day immediately preceding the date on which such Note was
\nacquired by Target or Target Canada.<\/p>\n<\/p>\n

Section 3.3<\/strong> Adjustments.<\/strong><\/p>\n<\/p>\n

(1) Except as otherwise provided in this Section 3.3 and subject to the
\nrights and obligations of Zellers and Target Canada under the Subleases, all
\nadjustments for basic rent, additional rents, damage\/security deposits paid or
\npayable to Landlords and interest thereon, if any, prepaid rents and interest
\nthereon, if any, and operating expenses, utilities<\/p>\n

\n

20<\/p>\n

\n

\n

and realty taxes, payable or receivable under the Subject Leases, shall be
\nmade as of the relevant Vacancy Date (with all expenses, liabilities and
\nrevenues for the Vacancy Date being allocated to Zellers) and shall be paid on
\nthe relevant Vacancy Date pursuant to a statement of adjustments in respect of
\nthe relevant Leased Property to be prepared by Zellers and approved by Target
\nCanada, each acting reasonably, at least 10 days prior to the relevant Vacancy
\nDate (a “Statement of Adjustments<\/strong>“).<\/p>\n<\/p>\n

(2) If the final cost or amount of any item which is to be adjusted cannot be
\ndetermined at the relevant Vacancy Date, then (unless otherwise provided in this
\nSection 3.3) an initial adjustment for such item shall be made at the relevant
\nVacancy Date, such amount to be estimated by Zellers, acting reasonably, as of
\nthe relevant Vacancy Date on the basis of the best evidence available at such
\nVacancy Date as to what the final cost or amount of such item will be.
\nAdditional rents and operating cost adjustments to be determined by a Landlord
\nfollowing a fiscal or calendar year end shall not be adjusted until such
\ndetermination. All amounts which have been estimated because they have not been
\nfinally determined by the relevant Vacancy Date shall be finally adjusted in
\naccordance with this Section 3.3(2) (such final adjustments being the
\n“Post-Vacancy Adjustments<\/strong>“). In each case when such cost or
\namount is determined, Zellers or Target Canada, as the case may be, shall within
\n30 days thereafter provide a complete statement of such final determination to
\nthe other and within 30 days after such 30-day period (or if there is a dispute
\nover such amount, after the matter is determined by the Auditor pursuant to this
\nSection) the necessary Post-Vacancy Adjustment shall be made. In the case of any
\ndispute between the Parties with respect to any Post-Vacancy Adjustments, the
\nfinal cost or amount of an item shall be determined by a national audit firm
\n(the “Auditor<\/strong>“) appointed jointly by Zellers and Target Canada
\nwithin 10 Business Days after the issue is referred by one of the Parties to the
\nAuditor for such determination. The cost of such determination shall be shared
\nequally between the relevant Parties. Zellers and Target Canada agree to execute
\nand deliver on the relevant Vacancy Date an undertaking to re-adjust and pay the
\namount of any Post-Vacancy Adjustments as may be owing pursuant to the
\nprovisions of this Agreement. Notwithstanding any other provision of this
\nSection 3.3, save and except for those Post-Vacancy Adjustments being determined
\nby the Auditor in the manner set out herein (the “Audited
\nClaim<\/strong>“), all adjustments and Post-Vacancy Adjustments to be made
\npursuant to this Section 3.3 shall, in any event, be completed on or before the
\ndate which is no later than the second anniversary of the relevant Vacancy Date
\n(the “Final Adjustment Date<\/strong>“) and no claim for any
\nre-adjustment may be made by either party thereafter, unless and only to the
\nextent such claim is an Audited Claim or is an adjustment pursuant to Section
\n3.3(3) or Section 3.5. Subject to the terms of the applicable Sublease, Zellers
\nshall, without delay, be responsible to conclude all final reconciliations of
\nall sums payable or receivable by the tenant under the Subject Leases in
\naccordance with the terms of each Subject Lease and Target Canada shall provide
\nsuch assistance as may be reasonably required. Subject to the terms of the
\napplicable Sublease, Zellers and Target Canada agree that Target Canada shall
\nnot be responsible for any percentage rents attributable to Zellers153 sales,
\nspecial service costs (such as additional janitorial services, additional HVAC
\nsupplied) and other costs for special services provided at the request of
\nZellers to a standard higher than the norm called for by the terms of the
\nrelevant Lease, or penalties and interest charged by the Landlord in respect of
\namounts owing which are attributable to the period prior to the Vacancy Date.\n<\/p>\n

\n

21<\/p>\n

\n

<\/p>\n

\n

(3) Zellers shall be entitled after the Vacancy Date to any amounts payable
\nto Zellers and responsible for any amounts owing by Zellers, pursuant to, or in
\nrespect of any agreements with Governmental Entities or any owners of property
\nadjoining the Leased Properties or under or in respect of the Subject Leases or
\nthe Leased Properties whereby any other Person is required to pay, reimburse,
\nrefund or otherwise contribute any amount to Zellers in respect of any
\nimprovements, work, services or costs that have been supplied, constructed,
\ninstalled, performed or paid by Zellers prior to the relevant Vacancy Date (in
\neach case, a “Prepaid Cost Refund<\/strong>“) or whereby any other Person
\nis entitled to be paid any such similar amount by Zellers. This obligation
\nsurvives the relevant Vacancy Date and the Final Adjustment Date,
\nnotwithstanding any other provision of this Agreement or any Ancillary
\nAgreement. To the extent Target Canada receives any Prepaid Cost Refund, Target
\nCanada shall hold such Prepaid Cost Refund in trust for Zellers and shall
\nendorse in favour of Zellers and deliver to Zellers the Prepaid Cost Refund
\nforthwith upon receipt. Nothing in this Agreement, the Subject Leases or the
\nAncillary Agreements, shall preclude Zellers from commencing or maintaining an
\naction against a third party from whom Zellers is entitled to receive a Prepaid
\nCost Refund. Any such amount payable by Zellers shall be paid within 10 days
\nfollowing a request for payment from Target Canada or the applicable recipient.
\nNotwithstanding the foregoing, Zellers may, upon prior consultation with Target
\nCanada, deal directly with a Landlord following the applicable Closing Date in
\nconnection with all claims and disputes (including reconciliation of all
\npayments and charges thereunder) between the Landlord and Zellers with respect
\nto the Leased Property arising prior to the applicable Closing Date; provided,
\nhowever, such actions shall in no event adversely impact Target Canada153s rights
\nor obligations under the Subject Lease.<\/p>\n<\/p>\n

Section 3.4<\/strong> Sales and Transfer Taxes.<\/strong><\/p>\n<\/p>\n

Target Canada or the applicable Designee or Designees shall be liable for and
\npay all sales and transfer taxes (including land transfer taxes), registration
\ncharges and transfer fees payable (i) by the assignee in respect of the
\nassignment of the Subject Leases from Zellers to Target Canada or a Designee or
\nDesignees and (ii) in connection with any transfer of Pharmacy Records. Zellers
\nand Target Canada shall each be liable for and shall pay 50% of any sales and
\ntransfer taxes (including land transfer taxes), registration charges and
\ntransfer fees payable in connection with the registration of any of the Subject
\nLeases and any transfer thereof occurring prior to the applicable Closing Date
\n(to the extent that Target Canada or Target has requested such registration by
\nreason of such registration being reasonably required in order for Target Canada
\nor a Designee to register the assignment to Target Canada or such Designee or
\nobtain title insurance or a title opinion reasonably satisfactory to Target
\nCanada or such Designee). Zellers shall provide such assistance and execute such
\ndocuments as Target Canada may reasonably require to complete such
\nregistrations.<\/p>\n<\/p>\n

Section 3.5<\/strong> Goods and Services Tax and Harmonized
\nSales Tax.<\/strong><\/p>\n<\/p>\n

Subject to Section 3.6, Target Canada shall be liable for and shall pay, or
\nshall cause the applicable Designee or Designees to be liable for and pay, to
\nZellers an amount equal to any goods and services tax and harmonized sales tax
\npayable by Target Canada and collectible by Zellers under the Excise Tax
\nAct<\/em> (Canada), plus an amount equal to any similar value added or
\nmulti-staged tax imposed (including, for greater certainty, any applicable
\nQuebec Sales Tax) by any applicable provincial or territorial legislation, in
\nrespect of the assignment of the Subject<\/p>\n

\n

22<\/p>\n

\n

<\/p>\n

\n

Leases to Target Canada or the Designee or Designees. Any such taxes shall be
\npaid to Zellers no later than three Business Days before such taxes, if any, are
\ndue to be remitted by Zellers.<\/p>\n<\/p>\n

Section 3.6<\/strong> Self-Assessment of GST and HST on Real
\nProperty.<\/strong><\/p>\n<\/p>\n

To the extent permitted under subsection 221(2) of the Excise Tax
\nAct<\/em> (Canada) and any equivalent or corresponding provision under any
\napplicable provincial or territorial legislation and provided that Target Canada
\ndelivers or causes to be delivered by the applicable Designee or Designees on
\nthe Closing Date to Zellers the HST Declaration and Indemnity, Target Canada or
\nthe applicable Designee or Designees shall self-assess and remit, where
\napplicable, directly to the appropriate Governmental Entity any goods and
\nservices tax and harmonized sales tax imposed under the Excise Tax Act<\/em>
\n(Canada) and any similar value added or multi-staged tax imposed by any
\napplicable provincial or territorial legislation payable in connection with the
\nassignment of the Subject Leases under this Agreement. Target Canada or the
\napplicable Designee or Designees shall make and file any returns in accordance
\nwith the requirements of subsection 228(4) of the Excise Tax Act<\/em>
\n(Canada) and any equivalent or corresponding provision under any applicable
\nprovincial or territorial legislation.<\/p>\n<\/p>\n

Section 3.7<\/strong> Tax Refunds.<\/strong><\/p>\n<\/p>\n

In the event that there are any realty tax appeals in respect of any Subject
\nLeased Property for any tax year prior to and including the year in which the
\napplicable Vacancy Date for such Subject Leased Property occurs (but not any
\nsubsequent tax year), Zellers may, at its option, at no cost to Target Canada,
\nand provided that it does not and will not materially and adversely affect
\nfuture assessments, continue such appeals (or, at Zellers153 election, require
\nTarget Canada to pursue such appeals in good faith at Zellers153 expense, and
\nwithout Target Canada being required to incur any liabilities or obligations)
\nand shall be entitled to receive any rebate, refund, credit, reassessment,
\nreadjustment, payment and\/or the like from time to time (the full amounts of
\neach being a “Tax Refund<\/strong>“) resulting therefrom to the extent
\nrelating to the period prior to the applicable Vacancy Date; provided that
\nZellers shall consult with Target Canada (or Target Canada with Zellers as the
\ncase may be) with respect to, and Target Canada (or Zellers as the case may be)
\nacting reasonably shall have the right to approve, any final settlement or
\ndisposition of any such appeal (such approval shall be deemed to have been given
\nby Target Canada (or Zellers as the case may be) if Target Canada (or Zellers as
\nthe case may be) has not responded within 15 Business Days of a request by
\nZellers (or Target Canada as the case may be) for such approval). Each of Target
\nCanada and Zellers agrees to co-operate with the other with respect to all such
\nappeals or reassessments and to provide the other with access to any necessary
\ndocuments or materials required to continue any such appeals or reassessments.
\nTarget Canada shall cooperate with Zellers as to any tax appeals and shall, if
\nrequested to do so, execute such applications, authorizations or other documents
\nas may be necessary for Zellers to undertake and pursue the appeal. To the
\nextent Target Canada receives any Tax Refund in respect of the period prior to
\nthe applicable Vacancy Date, Target Canada shall hold such Tax Refund in trust
\nfor Zellers and shall endorse in favour of Zellers and deliver to Zellers the
\nTax Refund promptly upon receipt; provided that, in all cases, readjustments
\nwith the Landlords under the Subject Leases as the result of any Tax Refund may
\nbe effected by Target Canada prior to the payment of any Tax Refund to Zellers
\nand the amount otherwise owing to Zellers in accordance with the foregoing shall
\nbe reduced by any amount payable to any Landlord as a result of any such
\nadjustments (it being agreed that Target Canada shall provide Zellers with
\ncopies of any written communication with the Landlord in respect of the
\nforegoing). Similarly, to the extent Zellers<\/p>\n

\n

23<\/p>\n

\n

<\/p>\n

\n

receives any Tax Refund for the period following the relevant Vacancy Date,
\nZellers shall hold such Tax Refund in trust for Target Canada and shall endorse
\nin favour of Target Canada and deliver to Target Canada the Tax Refund forthwith
\nupon receipt. If Target Canada sells or otherwise disposes of its interest in
\nthe Subject Lease to any Person (including to any Designee), it shall obtain a
\ncovenant from such Person in favour of Zellers in which such Person agrees to
\nobserve and be bound by the terms of this Section.<\/p>\n<\/p>\n

Section 3.8<\/strong> Note Purchase Facility.<\/strong><\/p>\n<\/p>\n

(1) Target shall, or shall cause Target Canada or one or more other
\nAffiliates of Target to, acquire Notes for an acquisition cost of up to
\n$200,000,000 subject to and in accordance with the terms set out in this Section
\n3.8 and procedures to be agreed upon by the Parties.<\/p>\n<\/p>\n

(2) The acquisition cost to Target, Target Canada or such Affiliate of any
\nNotes (the “Cost Basis<\/strong>” of such Notes) shall not exceed the
\nprincipal amount of such Notes plus any interest that has accrued and is unpaid
\non such Notes at the time of such acquisition.<\/p>\n<\/p>\n

(3) Any interest accruing on any Notes from the time of acquisition of such
\nNotes pursuant to this Section 3.8 to the applicable Closing Date upon which
\nsuch Notes are transferred in accordance with Section 3.2 (the “Accrued
\nInterest<\/strong>“) shall accrue to the benefit of Target, Target Canada or the
\napplicable Affiliates, as the case may be. Any interest that is paid to Target,
\nTarget Canada or any such Affiliate on the Notes shall be retained by them.<\/p>\n<\/p>\n

(4) Subject to the terms and conditions of this Agreement, on the First
\nTranche Closing Date Target Canada shall transfer and assign or cause to be
\ntransferred and assigned to or at the direction of Zellers all right, title and
\ninterest of Target, Target Canada and such Affiliates, as the case may be, in
\nand to any and all Notes acquired pursuant to this Section 3.8 prior to such
\ntime.<\/p>\n<\/p>\n

(5) Subject to the terms and conditions of this Agreement, on the Second
\nTranche Closing Date Target Canada shall transfer and assign or cause to be
\ntransferred and assigned to or at the direction of Zellers all right, title and
\ninterest of Target, Target Canada and such Affiliates, as the case may be, in
\nand to any and all Notes acquired pursuant to this Section 3.8 that have not
\nbeen transferred and assigned pursuant to Section 3.8(4).<\/p>\n<\/p>\n

(6) All Notes transferred and assigned pursuant to Section 3.8(4) and Section
\n3.8(5) shall be free and clear of any Encumbrances other than any such
\nEncumbrances that existed when such Notes were acquired by Target, Target Canada
\nor such Affiliates, as the case may be.<\/p>\n<\/p>\n

(7) Target and Target Canada shall not be required to acquire any Notes
\npursuant to this Section 3.8 prior to the date that is 14 days after the
\nconditions set forth in Section 3.8(8)(d) and (e) have been satisfied or after
\nthe date that is 14 days before the Second Tranche Closing Date.<\/p>\n<\/p>\n

(8) The obligations pursuant to this Section 3.8 shall be subject to the
\nfollowing:<\/p>\n

\n

24<\/p>\n

\n

<\/p>\n

\n

(a) the availability of Notes for purchase in the market at prices and on
\nother terms and conditions consistent with this Section 3.8;<\/p>\n<\/p>\n

(b) compliance by the Parties with Laws;<\/p>\n<\/p>\n

(c) each of the Parties being satisfied, in its own discretion, with respect
\nto any proposed purchase of Notes contemplated by this Section 3.8:<\/p>\n<\/p>\n

(i) that such purchase is in the best interests of such Party in the context
\nof the transactions contemplated by this Agreement;<\/p>\n<\/p>\n

(ii) that such Notes may be acquired and transferred as contemplated by this
\nSection 3.8;<\/p>\n<\/p>\n

(iii) with the assets, liabilities, obligations, collateral, conditions,
\nobligors and guarantors associated with such Notes and any acquisition or
\ntransfer of such Notes; and<\/p>\n<\/p>\n

(iv) with the tax treatment of the transactions contemplated by this Section
\n3.8;<\/p>\n<\/p>\n

(d) in connection with each purchase of Notes, Zellers has obtained and
\ndelivered to Target Canada a Rating Agency Confirmation (as defined in the
\nIntercreditor Agreement and in the Participation Agreement) with respect to the
\ntransfer of such Notes to Target Canada; and<\/p>\n<\/p>\n

(e) in connection with each purchase of Notes, Zellers has obtained the
\nconsent of all of the holders of such Notes, and if required, the consent of the
\nSenior Lender (as defined in the Intercreditor Agreement) and any other consents
\nas may be required, to allow the transfer of such Notes from Target Canada to
\nZellers or its designee without any conditions (except as may be acceptable to
\neach Party in its own discretion) and has caused to be amended all agreements
\nthat restrict the transfer of such Notes to Zellers or its designee (including
\nthe Intercreditor Agreement and Participation Agreement) to allow such transfer
\nwithout any conditions (except as may be acceptable to each Party in its own
\ndiscretion), and if required, has delivered a Rating Agency Confirmation with
\nrespect to such amendments; provided that Target Canada agrees to consent to
\nelimination of any restrictions on transfer of the Notes to Zellers or its
\ndesignee.<\/p>\n<\/p>\n

(9) If, for any reason, Target Canada is not able to transfer and assign any
\nNotes acquired as contemplated by this Section 3.8 in satisfaction of a portion
\nof the Purchase Price as contemplated by Section 3.2, HBC will indemnify and
\nsave Target, Target Canada and Target153s other Affiliates harmless from and
\nagainst, and shall reimburse them for, the amount, if any, by which the Cost
\nBasis of such Notes and any Accrued Interest in respect of such Notes exceeds
\nthe amount realized by them upon disposition of such Notes.<\/p>\n

\n

25<\/p>\n

\n

<\/p>\n

\n

ARTICLE 4
\nASSUMED LIABILITIES<\/strong><\/p>\n

\n

Section 4.1<\/strong> Assumed Liabilities.<\/strong><\/p>\n<\/p>\n

Target Canada agrees to discharge, perform and fulfil the following, except
\nfor the Excluded Liabilities (collectively, the “Assumed
\nLiabilities<\/strong>“):<\/p>\n<\/p>\n

(a) all obligations and liabilities incurred or accruing after the Effective
\nTime on the applicable Closing Date relating to or arising under the Subject
\nLeases, except obligations and liabilities related to any Lease Default existing
\nprior to the relevant Closing Date;<\/p>\n<\/p>\n

(b) any defaults, obligations or claims arising solely as a result of the
\nfailure to obtain the consent of the applicable Landlords under the Subject
\nLeases to: (i) the transactions contemplated by this Agreement, (ii) the
\nassignment of the Subject Leases as contemplated by this Agreement, (iii) the
\nentering into the Subleases, and\/or (iv) the Wind-Down Actions; and<\/p>\n<\/p>\n

(c) all obligations and liabilities for Taxes allocated to Target Canada
\nunder Sections 3.5, 3.6, and 3.7.<\/p>\n<\/p>\n

Section 4.2<\/strong> Excluded Liabilities.<\/strong><\/p>\n<\/p>\n

Target Canada shall not assume, and shall have no obligation to discharge,
\nperform or fulfil, the following liabilities and obligations (the
\n“Excluded Liabilities<\/strong>“):<\/p>\n<\/p>\n

(a) except as otherwise expressly provided in Section 4.1(b), liabilities
\nincurred or accruing prior to the Effective Time on the applicable Closing Date
\nrelating to or arising under the Subject Leases, unless otherwise agreed to by
\nthe Parties;<\/p>\n<\/p>\n

(b) any Taxes, other than (i) Taxes incurred or accruing after the Effective
\nTime on the applicable Closing Date relating to or arising under the Subject
\nLeases, and (ii) Taxes allocated to Target Canada under Sections 3.5, 3.6, and
\n3.7; and<\/p>\n<\/p>\n

(c) any other obligation or liability which Target Canada has not expressly
\nagreed to discharge, perform or fulfil under this Agreement.<\/p>\n<\/p>\n

For the avoidance of doubt:<\/p>\n<\/p>\n

(d) any liabilities and obligations of Zellers under the Subleases shall be
\ndeemed to be Excluded Liabilities; and<\/p>\n<\/p>\n

(e) Target Canada shall not assume, and shall have no obligation to
\ndischarge, perform or fulfil, any liabilities or obligations relating to:<\/p>\n<\/p>\n

(i) contracts or agreements entered into by Zellers or its Affiliates (other
\nthan the Subject Leases); or<\/p>\n

\n

26<\/p>\n

\n

<\/p>\n

\n

(ii) employees of Zellers or its Affiliates or benefits relating to those
\nemployees.<\/p>\n<\/p>\n

Section 4.3<\/strong> “As Is, Where Is”.<\/strong><\/p>\n<\/p>\n

Except for the representations, warranties, covenants and certifications of
\nZellers and HBC expressly set out in (i) this Agreement, (ii) the Ancillary
\nAgreements and (iii) any closing documents delivered by Zellers on any Closing
\nDate or Delivery Date, Target Canada irrevocably acknowledges and agrees,
\nwithout condition, reservation or qualification of any kind whatsoever, that:\n<\/p>\n<\/p>\n

(a) in entering into this Agreement and completing the purchase of the
\nSubject Leases by Target Canada contemplated hereby, Target Canada and Target
\nhave relied and will continue to rely solely and exclusively upon their own
\ninspections, investigations and due diligence with respect to the Subject Leases
\nand the Subject Leased Properties;<\/p>\n<\/p>\n

(b) the Subject Leases are being purchased by Target Canada and the Subject
\nLeased Properties are being delivered strictly on an “as is, where is” basis, at
\nTarget and Target Canada153s sole risk and peril, without any express or implied
\nagreement or representation and warranty or certification of any kind whatsoever
\nor any liability or obligation by or on behalf of Zellers as to any matter
\nconcerning or relating to the Subject Leases or the Subject Leased Properties,
\nincluding its or their physical or financial condition, suitability for
\ndevelopment, fitness for a particular purpose, marketability, title, title liens
\nand Encumbrances (registered or otherwise), physical condition or
\ncharacteristics, profitability, use or zoning, environmental condition,
\nexistence of latent defects, quality, or any other condition or characteristic
\nthereof, or availability or non-availability of any Landlord consent required
\nfor any assignment of the Subject Leases unless such non-availability is due to
\na Lease Default; and<\/p>\n<\/p>\n

(c) as part of Target Canada153s agreement to purchase the Subject Leases and
\naccept the Subject Leases and the Leased Properties “as-is, where-is”, and not
\nas a limitation on such agreement, Target Canada and Target hereby
\nunconditionally and irrevocably waive any and all actual or potential rights or
\nDamages Target Canada or Target might have against Zellers pursuant to any
\nwarranty, express or implied, of any kind or type, other than those
\nrepresentations, warranties, covenants and certifications expressly set forth in
\nthis Agreement, the Ancillary Agreements and any closing documents delivered by
\nZellers or HBC on any Closing Date or Delivery Date. Such waiver includes waiver
\nof express warranties, implied warranties, warranties of fitness for a
\nparticular use, warranties of merchantability, warranties of occupancy, strict
\nliability and claims of every kind and type, including claims regarding defects,
\nwhether or not discoverable, product liability claims, or similar claims, and to
\nall other extent or later created or conceived of strict liability or strict
\nliability type claims and rights.<\/p>\n

\n

27<\/p>\n

\n

<\/p>\n

\n

ARTICLE 5
\nREPRESENTATIONS AND WARRANTIES OF ZELLERS<\/strong><\/p>\n

\n

Section 5.1<\/strong> Representations and Warranties of
\nZellers.<\/strong><\/p>\n<\/p>\n

Zellers represents and warrants as follows to Target and Target Canada and
\nacknowledges that Target and Target Canada are relying upon the representations
\nand warranties in connection with Target Canada153s purchase of the Subject Leases
\nand the assumption by Target Canada of the Assumed Liabilities:<\/p>\n<\/p>\n

Corporate Matters<\/strong><\/p>\n<\/p>\n

(a) Incorporation and Qualification<\/strong>. Zellers is a
\ncorporation incorporated and existing under the Laws of its jurisdiction of
\nincorporation and has the corporate power to own and operate its property, carry
\non its business and enter into and perform its obligations under this Agreement.\n<\/p>\n<\/p>\n

(b) Corporate Authorization<\/strong>. The execution and delivery of,
\nand performance by Zellers of, this Agreement and the Ancillary Agreements have
\nbeen authorized by all necessary corporate action on the part of Zellers.<\/p>\n<\/p>\n

(c) No Conflict<\/strong>. The execution and delivery of this
\nAgreement and the Ancillary Agreements, and the performance by Zellers of the
\ntransactions contemplated by this Agreement and the Ancillary Agreements, do not
\nconstitute or result in a violation or breach of, or conflict with, or default
\nunder, or give rise to or create an Encumbrance (other than any Permitted
\nEncumbrance) on any Lease under, or allow any Person to exercise any rights
\nunder, any of the terms or provisions of:<\/p>\n<\/p>\n

(i) its constating documents or by-laws, or<\/p>\n<\/p>\n

(ii) any Law applicable to Zellers.<\/p>\n<\/p>\n

(d) Required Authorizations<\/strong>. Except for the Competition Act
\nApproval and as disclosed in Section 5.1(d) of the Disclosure Letter, no
\nmaterial filing with, notice to, or Authorization of, any Governmental Entity is
\nrequired on the part of Zellers, as a condition to the lawful completion of the
\ntransactions contemplated by this Agreement, except with respect to any filing
\nrelated to the transfer of the Pharmacy Records or except for filings or
\nAuthorizations required as a result of the status or identity of Target Canada.\n<\/p>\n<\/p>\n

(e) Execution and Binding Obligation<\/strong>. This Agreement has
\nbeen duly executed and delivered by Zellers and constitutes legal, valid and
\nbinding agreements of it enforceable against it in accordance with its terms,
\nsubject to any limitation under applicable laws relating to (i) bankruptcy,
\nwinding-up, insolvency, arrangement, fraudulent preference and conveyance,
\nassignment and preference and other similar Laws of general application
\naffecting the enforcement of creditors153 rights, and (ii) the discretion that a
\ncourt may exercise in the granting of equitable remedies such as specific
\nperformance and injunction.<\/p>\n

\n

28<\/p>\n

\n

<\/p>\n

\n

(f) Residence of Zellers<\/strong>. Zellers is not a non-resident of
\nCanada within the meaning of the Tax Act.<\/p>\n<\/p>\n

General Matters<\/strong><\/p>\n<\/p>\n

(g) Compliance with Laws<\/strong>. Other than as disclosed in the Due
\nDiligence File or Section 5.1(g) of the Disclosure Letter, Zellers is operating
\nthe stores on the Leased Properties in compliance with all Laws in all material
\nrespects; provided, nothing in this Section 5.1(g) shall expand the scope of any
\nrepresentation or warranty contained in Section 5.1(i).<\/p>\n<\/p>\n

(h) No Options, etc. to Purchase Assets.<\/strong> Except for Target
\nCanada153s right under this Agreement, and except as disclosed in the Due
\nDiligence File and in Section 5.1(h) of the Disclosure Letter, no Person has any
\ncontractual right or privilege for the purchase or other acquisition from
\nZellers or any of its Affiliates of any of the Subject Leases or to Zellers153
\nknowledge, as of the Execution Date, any of the Pharmacy Records.<\/p>\n<\/p>\n

(i) Leases and Leased Properties<\/strong><\/p>\n<\/p>\n

(i) Section 5.1(i)(i) of the Disclosure Letter sets forth a true, accurate
\nand complete list of each Lease by reference to its municipal address or the
\nname of the shopping centre at which the Leased Properties are located.<\/p>\n<\/p>\n

(ii) Except as disclosed in Section 5.1(i)(ii) of the Disclosure Letter, the
\nDue Diligence File contains true, accurate and complete copies of the Leases and
\nall Default Notices, in each case in all material respects. Except as disclosed
\nin Section 5.1(i)(ii) of the Disclosure Letter or in the Due Diligence File, and
\nexcept for any amendment or other instrument entered into after the Execution
\nDate with Target Canada153s consent pursuant to Section 7.6, the Leases have not
\nbeen altered or amended in any material respect.<\/p>\n<\/p>\n

(iii) Except as disclosed in Section 5.1(i)(iii) of the Disclosure Letter,
\neach of the Leases creates a valid and binding leasehold interest which interest
\nis in full force and effect, excluding any failure of title arising from
\nnon-compliance with the Planning Act<\/em> (Ontario) or any similar Laws
\ngoverning subdivision or severance of real property in other provinces.<\/p>\n<\/p>\n

(iv) Zellers is the sole legal and beneficial owner of the leasehold interest
\nin the Leased Properties pursuant to the Leases and has leasehold title under
\neach of the Leases subject only to the Permitted Encumbrances, excluding any
\nfailure of title arising from non-compliance with the Planning Act<\/em>
\n(Ontario) or any similar Laws governing subdivision or severance of real
\nproperty in other provinces.<\/p>\n<\/p>\n

(v) Except as set forth in the Due Diligence File or Section 5.1(i)(v) of the
\nDisclosure Letter, to Zellers153 knowledge as of the Execution Date, there are no
\nprohibitions or material restrictions that have impaired the use of a<\/p>\n

\n

29<\/p>\n

\n

<\/p>\n

\n

Leased Property for a department store or junior department store including
\npharmacy and food sales operations, to the extent that such uses and operations
\nexist on such Leased Property as of the Execution Date as currently operated by
\nZellers, but excluding operations which are not typically conducted in a
\n“Target” store.<\/p>\n<\/p>\n

(vi) Zellers has not entered into any agreement to sell, transfer, mortgage,
\nor otherwise dispose of the leasehold right, title and interest of Zellers in
\nand to any Leased Property or the air or density rights relating to any Leased
\nProperty other than as set out in the Due Diligence File or in Section
\n5.1(i)(vi) of the Disclosure Letter.<\/p>\n<\/p>\n

(vii) To Zellers153 knowledge, all Material Lease Defaults are listed in
\nSection 5.1(i)(vii) of the Disclosure Letter.<\/p>\n<\/p>\n

(viii) Except as disclosed in Section 5.1(i)(viii) of the Disclosure Letter
\nor in the Due Diligence File:<\/p>\n<\/p>\n

(1) all payments owed by Zellers under each of the Leases are not overdue and
\nwill not be overdue as of the applicable Closing Date or will be adjusted in
\naccordance with Section 3.3;<\/p>\n<\/p>\n

(2) there is no Material Lease Default under any Lease;<\/p>\n<\/p>\n

(3) except in respect of any Failure to Operate caused by force majeure (to
\nZellers153 knowledge no such force majeure exists as of the Execution Date), at
\neach of the Leased Properties with respect to which the Landlord has a Landlord
\nRecapture Right under the applicable Lease, there is no Failure to Operate; and\n<\/p>\n<\/p>\n

(4) as of the Execution Date, Zellers has not given notice to the Landlord of
\na material default by the Landlord under any Lease.<\/p>\n<\/p>\n

(ix) Except as disclosed in the Due Diligence File or in Section 5.1(i)(ix)
\nof the Disclosure Letter, Zellers has not exercised any option to terminate or
\nright to terminate any Lease.<\/p>\n<\/p>\n

(x) Except as disclosed in Section 5.1(i)(x) of the Disclosure Letter neither
\nZellers nor any of Zellers153 Affiliates has any option to purchase, right of
\nfirst refusal or other similar right to acquire any Leased Property, other than
\nas set out in the Due Diligence File.<\/p>\n<\/p>\n

(xi) Except as disclosed in the Due Diligence File or Section 5.1(i)(xi) of
\nthe Disclosure Letter, Zellers has not expressly waived any material rights
\nunder any Lease (i) relating to the use of the Leased Property or (ii) impairing
\nthe visibility, signage, parking or access to the Leased Property<\/p>\n

\n

30<\/p>\n

\n

in any material respect, which remain uncompleted as of the Execution Date.\n<\/p>\n<\/p>\n

(xii) Except as disclosed in the Due Diligence File or in Section 5.1(i)(xii)
\nof the Disclosure Letter, to the knowledge of Zellers, no written order or
\ndirective (that has not been satisfied) has been received by Zellers from any
\nGovernmental Entity (a) prohibiting the operation of any Leased Property or (b)
\nrequiring the cure or rectification of any material defects in the construction
\nof the building or improvements on or forming a part of any of the Leased
\nProperties or relating to any work, in order to comply with any building codes,
\nland use, zoning by-laws, fire codes, environmental protection registration or
\nany other Laws which, if not cured or rectified, would have a material adverse
\neffect on any of the Leased Properties.<\/p>\n<\/p>\n

(xiii) Except as disclosed in Section 5.1(i)(xiii) of the Disclosure Letter,
\nno Person has any right to purchase, option to purchase, right of first offer,
\nright of first refusal or other similar right to acquire the Leased Properties
\nin favour of any Person which will prevent Target Canada153s acquisition of
\nZellers153 leasehold interest of any Leased Property other than Target Canada
\npursuant to this Agreement, and subject to generally applicable statutory rights
\nof a Governmental Entity, no Person other than Zellers and its subtenants,
\nlicensees and concessionaires whose occupancies will be terminated by Zellers by
\nthe applicable Vacancy Date is using or has any right to use, or is in
\npossession or occupancy of, any part of such Leased Property.<\/p>\n<\/p>\n

(xiv) Except as disclosed in the Due Diligence File, there is not presently
\noutstanding in respect of any Leased Property any judgment, decree, injunction
\nor order of any Governmental Entity or in favour of any Person which would have
\na material adverse effect on such Leased Property.<\/p>\n<\/p>\n

(xv) Except as disclosed in the Due Diligence File or in Section 5.1(i)(xv)
\nof the Disclosure Letter, Zellers has no knowledge of any expropriation or
\ncondemnation or similar proceeding pending or threatened against any of the
\nLeased Properties.<\/p>\n<\/p>\n

Other Matters<\/strong><\/p>\n<\/p>\n

(j) Litigation. <\/strong>There are no actions, suits, appeals,
\nclaims, applications, investigations, orders, proceedings, grievances,
\narbitrations or alternative dispute resolution processes in progress, pending,
\nor to Zellers153 knowledge, threatened against Zellers, which, to the extent
\noutstanding or if determined adversely to Zellers, would prohibit a material
\nportion of the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

(k) Taxes<\/strong>. No failure, if any, of Zellers to duly and timely
\nwithhold, collect, report, remit or pay any Taxes as required by Laws will
\nresult in an Encumbrance of any nature on the Subject Leases or the Pharmacy
\nRecords. There are no proceedings,<\/p>\n

\n

31<\/p>\n

\n

<\/p>\n

investigations, audits or claims now pending or threatened against Zellers in
\nrespect of any Taxes, and there are no matters under discussion, audit or appeal
\nwith any Governmental Entity relating to Taxes, that may result in an
\nEncumbrance of any nature on the Subject Leases or the Pharmacy Records. Zellers
\nis duly registered under Subdivision (d) of Division V of Part IX of the
\nExcise Tax Act<\/em> (Canada) with respect to the goods and services tax and
\nharmonized sales tax and under Division I of Chapter VIII of Title I of An
\nAct Respecting the Quebec Sales Tax <\/em>with respect to the Quebec sales tax,
\nand its registration numbers are: 12196 8549 RT0001 and 101049 4016 TQ1002,
\nrespectively.<\/p>\n<\/p>\n

(l) Brokers<\/strong>. No broker, agent or other intermediary is
\nentitled to any fee, commission or other remuneration in connection with the
\ntransactions contemplated by this Agreement based upon arrangements made by or
\non behalf of Zellers or any of its Affiliates.<\/p>\n<\/p>\n

ARTICLE 6
\nREPRESENTATIONS AND WARRANTIES OF TARGET CANADA AND TARGET<\/strong><\/p>\n

\n

Section 6.1<\/strong> Representations and Warranties of Target
\nCanada and Target.<\/strong><\/p>\n<\/p>\n

Target Canada and Target represent and warrant as follows to Zellers and
\nacknowledge and confirm that Zellers is relying on such representations and
\nwarranties in connection with the sale by Zellers of the Subject Leases and the
\nPharmacy Records:<\/p>\n<\/p>\n

(a) Incorporation and Corporate Power<\/strong>. Target is and Target
\nCanada is or will be a corporation incorporated and existing under the laws of
\nits jurisdiction of incorporation and it has or will have the corporate power to
\nenter into and perform its obligations under this Agreement and the Ancillary
\nAgreements.<\/p>\n<\/p>\n

(b) Corporate Authorization<\/strong>. The execution and delivery of
\nand performance by Target and Target Canada of this Agreement and the Ancillary
\nAgreements have been or will be at or prior to the First Tranche Closing Date
\nauthorized by all necessary corporate action on the part of Target and each
\nTarget Canada.<\/p>\n<\/p>\n

(c) No Conflict<\/strong>. The execution and delivery of this
\nAgreement and the Ancillary Agreements, and the performance by Target and Target
\nCanada of the transactions contemplated by this Agreement and the Ancillary
\nAgreements, do not constitute or result in a violation or breach of, or conflict
\nwith, or default under, or allow any Person to exercise any rights under, any of
\nthe terms or provisions of:<\/p>\n<\/p>\n

(i) its constating documents or by-laws; or<\/p>\n<\/p>\n

(ii) any Laws applicable to Target or a Target Canada, as applicable.<\/p>\n<\/p>\n

(d) Required Authorizations<\/strong>. Except for the Competition Act
\nApproval, no material filing with, notice to or Authorization of, any
\nGovernmental Entity is required on the part of Target or Target Canada as a
\ncondition to the lawful<\/p>\n

\n

32<\/p>\n

\n

<\/p>\n

completion of the transactions contemplated by this Agreement, except with
\nrespect to any filing related to the transfer of the Pharmacy Records.<\/p>\n<\/p>\n

(e) Execution and Binding Obligation<\/strong>. This Agreement has
\nbeen duly executed and delivered by Target and constitutes legal, valid and
\nbinding agreements of it, enforceable against it in accordance with its terms,
\nsubject to any limitation under applicable Laws relating to (i) bankruptcy,
\nwinding-up insolvency, arrangement, fraudulent preference and conveyance,
\nassignment and preference and other similar Laws of general application
\naffecting the enforcement of creditors153 rights, and (ii) the discretion that a
\ncourt may exercise in the granting of equitable remedies including specific
\nperformance and injunction.<\/p>\n<\/p>\n

(f) Financing. <\/strong>Target has, and will have at the relevant
\nClosing Date, sufficient funds on hand or available to fund the payment of the
\nPurchase Price by Target Canada.<\/p>\n<\/p>\n

(g) Litigation. <\/strong>There are no actions, suits, appeals,
\nclaims, applications, investigations, orders, proceedings, grievances,
\narbitrations or alternative dispute resolution processes in progress, pending,
\nor to Target153s knowledge, threatened against Target or Target Canada, which, to
\nthe extent outstanding or if determined adversely to Target or Target Canada,
\nwould prohibit any of the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

(h) Brokers.<\/strong> No broker, agent or other intermediary is
\nentitled to any fee, commission or other remuneration in connection with the
\ntransactions contemplated by this Agreement based upon arrangements made by or
\non behalf of Target or Target Canada.<\/p>\n<\/p>\n

(i) Due Diligence. <\/strong>Target and Target Canada have conducted
\nto their satisfaction an independent investigation of the Subject Leases and
\nSubject Leased Properties (including all matters relating to the leasehold and
\nunderlying freehold title thereto), and, in making the determination to proceed
\nwith the transactions contemplated by the Agreement, has relied solely on the
\nresults of their own independent investigation, the representations and
\nwarranties of Zellers in this Agreement and the covenants of Zellers pursuant to
\nthis Agreement and the Ancillary Agreements; provided that nothing in this
\nSection 6.1(i) shall be construed as limiting the scope of Zellers153
\nrepresentations, warranties, and covenants pursuant to this Agreement and the
\nAncillary Agreements or the ability of Target or Target Canada to rely upon
\nthem.<\/p>\n<\/p>\n

ARTICLE 7
\nCOVENANTS OF THE PARTIES<\/strong><\/p>\n

\n

Section 7.1<\/strong> Actions to Satisfy Closing
\nConditions.<\/strong><\/p>\n<\/p>\n

Subject to this Article 7, Zellers will use its commercially reasonable
\nefforts to ensure compliance with all of the conditions set forth in Section 8.1
\n(provided that, solely for purposes of this Section 7.1, the condition set forth
\nin Section 8.1(a)(ii) shall be deemed to require the representations and
\nwarranties contained in Section 5.1(i) to be true and correct in all material\n<\/p>\n

\n

33<\/p>\n

\n

<\/p>\n

respects as of the relevant Closing Date with respect to each of the First
\nTranche Subject Leases or the Second Tranche Subject Leases, as the case may be)
\nand Target will use its commercially reasonable efforts to ensure compliance
\nwith all of the conditions set forth in Section 8.2.<\/p>\n<\/p>\n

Section 7.2<\/strong> Request for Consents.<\/strong><\/p>\n<\/p>\n

(1) From and after the Execution Date, Target and Target Canada shall request
\nsuch consents, approvals, licenses and agreements (including amendments to
\nLeases) from such Landlords and other Persons as Target may determine to be
\nnecessary or desirable. Subject to Section 7.2(4), Zellers agrees to reasonably
\ncooperate with Target and Target Canada in such efforts, as Target may from time
\nto time request.<\/p>\n<\/p>\n

(2) Target agrees that, if it elects to approach a Landlord with a request
\nfor a consent or approval, Target will include among its requests to such
\nLandlord a request that Zellers be released from all Lease obligations accruing
\nafter the relevant Closing Date (provided that nothing in this Section 7.2(2)
\nshall limit the obligations of Zellers as subtenant under the Subleases).
\nObtaining the agreement of any Landlord to any such request shall not be a
\ncondition to Closing and in no event will Target have any liability to Zellers
\nif any request for such release is not granted.<\/p>\n<\/p>\n

(3) If Target or Target Canada has designated a Lease as a Subject Lease for
\nassignment on a Closing Date but has not obtained all consents and approvals
\ndetermined by Target or Target Canada to be necessary or desirable, Target shall
\nhave the option to exclude such Lease from the Subject Leases to be assigned at
\nthe Closing and such excluded Lease shall no longer be a Subject Lease, but
\nthere shall be no reduction in the Purchase Price on account of such exclusion.\n<\/p>\n<\/p>\n

(4) In no event shall Zellers or HBC be obligated to bear any expense or pay
\nany fee or grant any concession in connection with Target or Target Canada
\nseeking to obtain consents, authorizations or approvals to the assignment of
\nSubject Leases. All fees, costs and expenses payable to third parties in
\nconnection with obtaining consents, including increased rents, landlord
\nadministration and consent fees and landlord counsel fees shall be paid by
\nTarget Canada.<\/p>\n<\/p>\n

(5) If any Landlord fails or refuses to provide any consent requested by
\nTarget or Target Canada (or requested by Zellers, at the request of Target or
\nTarget Canada), Zellers shall assign to Target Canada with respect to Subject
\nLeases that are assigned to Target Canada or its Designee any rights, claims or
\nDamages that may be available by reason of such failure or refusal (including
\nany right to commence and prosecute any legal action against such Landlord on
\naccount of such failure or refusal), and Zellers will cooperate with Target
\nCanada153s efforts in connection with any such action.<\/p>\n<\/p>\n

(6) Target and Target Canada acknowledge and agree as follows:<\/p>\n<\/p>\n

(a) Target Canada and Target shall be solely responsible for any costs, fees,
\nDamages, Lease Defaults, any increase in any base rent, operating costs,
\nadditional rents, percentage rents, and other charges payable under any of the
\nSubject Leases and any other consequences as a result of the failure to request
\nor to obtain any consents, authorizations or approvals to the assignment of the\n<\/p>\n

\n

34<\/p>\n

\n

<\/p>\n

\n

Subject Leases to Target Canada or a Designee or Designees (whether on or any
\ntime after the relevant Closing Date) or to the Subleases or to the Wind-Down
\nActions of Zellers and furthermore that such failure to request or obtain said
\nconsents, authorizations or approvals does not in any way limit or otherwise
\nimpact the obligations of Target or Target Canada under this Agreement,
\nincluding Target Canada153s obligation to complete the transactions contemplated
\nherein on the relevant Closing Date; and<\/p>\n<\/p>\n

(b) that it shall indemnify and hold harmless Zellers and HBC of and from any
\ncosts, fees and Damages resulting from the actions of Target or Target Canada or
\nany Designee or those acting by or on behalf of Target or Target Canada or any
\nDesignees in seeking consents and approvals to assign the Subject Leases to
\nTarget Canada or its Designee or Designees (whether on or anytime after the
\nrelevant Closing Dates), the Subleases and the Wind-Down Actions (including
\nunder Section 7.2(6)(a) and Section 7.2(4)).<\/p>\n<\/p>\n

Section 7.3<\/strong> Filings and Authorizations.<\/strong>\n<\/p>\n<\/p>\n

(1) Each of Zellers and Target Canada, as promptly as practicable after the
\nexecution of this Agreement, will use its commercially reasonable efforts to
\nmake, or cause to be made, all filings with, give all notices to, and obtain all
\nAuthorizations from, Governmental Entities that are necessary and desirable for
\nthe lawful completion of the assignment of the Subject Leases to Target Canada
\nor applicable Designee or Designees and where the failure to do so would have a
\nmaterial adverse effect on the business of Target Canada, after the First
\nTranche Closing Date, taken as a whole. Target Canada will pay all filing fees
\nincurred in connection with any such required Authorization, including
\nCompetition Act Approval.<\/p>\n<\/p>\n

(2) Notwithstanding any other provision in this Agreement, Target will take
\nand will cause Target Canada to take all actions necessary to obtain as
\nexpeditiously as possible (and in any event so as to permit the First Tranche
\nClosing Date to occur as soon as possible), at its own expense, all
\nAuthorizations (including Competition Act Approval) required in connection with
\nthe lawful assignment of the Subject Leases to Target Canada or applicable
\nDesignee or Designees, including negotiating and effecting by consent agreement
\nor order, hold separate arrangement, undertakings or any form of behavioural
\nremedy or commitment.<\/p>\n<\/p>\n

(3) The Parties will coordinate and cooperate in exchanging information and
\nsupplying assistance that is reasonably requested in connection with this
\nSection 7.3(3) and Section 7.3(2) including providing each other with advance
\ncopies and reasonable opportunity to comment on all notices and information
\nsupplied to or filed with any Governmental Entity (including notices and
\ninformation which Zellers or Target Canada, in each case acting reasonably,
\nconsider highly confidential and sensitive, which notices and information may be
\nprovided on a confidential and privileged basis to outside counsel of the other
\nParty), and all notices and correspondences received from any Governmental
\nEntity. Each of Zellers and Target Canada shall keep the other apprised of the
\nstatus of any such communications with, and any such inquiries or requests for
\nadditional information from, any Governmental Entities, and each Party shall
\ncomply promptly with such inquiry or request. No Party shall independently
\nparticipate in any meeting,<\/p>\n

\n

35<\/p>\n

\n

<\/p>\n

negotiation or material discussion with any Governmental Entity in respect of
\nany such filings, inquiries, or requests, without giving the other prior notice
\nof the meeting and, to the extent permitted by such Governmental Entity, the
\nopportunity to attend and participate.<\/p>\n<\/p>\n

(4) As used in this Agreement, “Competition Act Approval<\/strong>”
\nmeans the earlier of:<\/p>\n<\/p>\n

(a) either (A) the issuance to Target Canada of an advance ruling certificate
\nby the Commissioner of Competition under Subsection 102(1) of the Competition
\nAct to the effect that the Commissioner of Competition is satisfied that she
\nwould not have sufficient grounds upon which to apply to the Competition
\nTribunal for an order under Section 92 of the Competition Act with respect to
\nthe transactions contemplated by this Agreement, or (B) Target Canada shall have
\nbeen advised in writing by the Commissioner of Competition that she is of the
\nview that grounds do not exist as of the date of the advice to initiate
\nproceedings under the merger provisions of the Competition Act in respect of the
\ntransactions contemplated by this Agreement; and<\/p>\n<\/p>\n

(b) the waiting period, including any extension thereof, under Section 123 of
\nthe Competition Act shall have expired or been terminated or the obligation to
\nprovide a pre-merger notification in accordance with Part IX of the Competition
\nAct shall have been waived in accordance with paragraph 113(c) of the
\nCompetition Act.<\/p>\n<\/p>\n

Section 7.4<\/strong> Risk of Loss.<\/strong><\/p>\n<\/p>\n

If, prior to the relevant Closing Date, all or any part of the Subject Leased
\nProperties are destroyed or damaged by fire or any other casualty or are
\nappropriated, expropriated or seized by any Governmental Entity, the
\nrepresentations and warranties of Zellers that are not true and correct in all
\nmaterial respects as of the relevant Closing Date solely as a result of such
\ndestruction, damage, appropriation, expropriation or seizure will be deemed to
\nbe true and correct in all material respects as of the relevant Closing Date for
\nall purposes of this Agreement, and Target Canada will complete the transactions
\ncontemplated by this Agreement without reduction of the Purchase Price, in which
\nevent all proceeds of any insurance (or which would have been available except
\nfor Zellers153 election of deductibles or self-insurance, which amounts Zellers
\nshall be responsible to contribute) or compensation will be payable to Target
\nCanada and all right and claim of Zellers to any such amounts not paid by the
\nrelevant Closing Date will be assigned to Target Canada.<\/p>\n<\/p>\n

Section 7.5<\/strong> Confidentiality.<\/strong><\/p>\n<\/p>\n

Target acknowledges having signed a confidentiality agreement between Target
\nand Zellers. Subject to Section 7.2, Target Canada agrees that except as
\nprovided in this Agreement and the Ancillary Agreements, the confidentiality
\nagreement continues to apply and Target Canada is bound by its terms. The
\nconfidentiality agreement will cease to apply with respect to each Subject Lease
\nand Subject Leased Property upon the assignment of such Subject Lease in
\naccordance with this Agreement, and following the Second Tranche Closing Date
\nthe confidentiality agreement will terminate except as to Leases that are not
\nSubject Leases. Zellers<\/p>\n

\n

36<\/p>\n

\n

<\/p>\n

acknowledges that Target will be filing a copy of this Agreement with the
\nUnited States Securities and Exchange Commission in accordance with Laws.<\/p>\n<\/p>\n

Section 7.6<\/strong> Lease Amendments, Renewals and
\nNotices.<\/strong><\/p>\n<\/p>\n

(1) From and after the Execution Date to and including the Second Tranche
\nClosing Date Zellers will not amend, modify, consent to, grant any approval or
\ntake any action, or omit to take any action, under or with respect to any Lease
\n(other than the enforcement of rights under or with respect to any Lease),
\nwithout the prior written consent of Target Canada, provided (i) if the action
\ntaken with respect to the Lease in question is required to allow the continued
\noperation of the Zellers store, then Target Canada153s consent may not be
\nunreasonably conditioned or withheld, and (ii) if the immediately preceding
\nclause (i) does not apply, then Target Canada may provide, condition or withhold
\nsuch consent in its sole and absolute discretion. For the purposes of each of
\nthe foregoing matters referred to in this Section 7.6(1) in respect of any Lease
\nand\/or any other matter relating to the operation and administration of any
\nLeased Property prior to the Second Tranche Closing Date that require Target
\nCanada153s consent or approval (each a “Consent Matter<\/strong>“),
\nZellers, through Brian Pall or Bruce Moore (each an “Authorized Zellers
\nRepresentative<\/strong>“), may make requests from time to time for Target
\nCanada153s consent or approval with respect to any Consent Matter directly to Joan
\nAhrens (the “Authorized Target Representative<\/strong>“). For the
\npurposes of this Agreement, any consent or approval with respect to any Consent
\nMatter given by the Authorized Target Representative to an Authorized Zellers
\nRepresentative from time to time, by email or other form of written
\ncommunication (which email or other communication shall clearly reference this
\nSection 7.6), shall constitute written consent of Target Canada for all purposes
\nwith respect to such Consent Matter.<\/p>\n<\/p>\n

(2) Section 7.6(2) of the Disclosure Letter lists each Lease (if any) that
\nrequires Zellers to deliver notice or otherwise take steps in order to extend or
\nrenew the term of such Lease after the Execution Date and prior to December 31,
\n2011, and the last date (the “Renewal Notice Expiration Date<\/strong>“)
\nby which such notice must be given or such steps taken. Target Canada shall
\nelect by Notice given to Zellers no later than 30 days (or 14 days, with respect
\nto Leases with a Renewal Notice Expiration Date prior to February 28, 2011)
\nprior to the Renewal Notice Expiration Date as to whether the Lease is a Subject
\nLease and if so, whether Target Canada wishes to have the term extended or
\nrenewed. Failing delivery of Target Canada153s Notice as aforesaid, Zellers may
\nelect whether or not to renew or extend such Lease in its discretion, and in no
\nevent will Zellers have any liability to Target or Target Canada if such Notice
\nis not delivered.<\/p>\n<\/p>\n

(3) From and after the Execution Date, to and including the Second Tranche
\nClosing Date, Zellers will use its commercially reasonable efforts to provide to
\nTarget Canada (a) a copy of each Default Notice relating to the Leased
\nProperties within two Business Days of receipt by Zellers or any Affiliate of
\nZellers of such Default Notice, and (b) a copy of each notice of default or
\nclaimed default sent by Zellers to any Landlord within two Business Days of the
\ndate any such notice is sent.<\/p>\n<\/p>\n

(4) The terms of this Section 7.6 do not apply in respect of any Lease which
\nTarget Canada or Target notifies Zellers will not be a Subject Lease.<\/p>\n

\n

37<\/p>\n

\n

<\/p>\n

Section 7.7<\/strong> Zellers Entity Cooperation.<\/strong>\n<\/p>\n<\/p>\n

(1) Zellers, HBC and their Affiliates (each, a “Zellers
\nEntity<\/strong>“) currently own, lease, ground lease or hold other similar
\ninterests in one or more of the developments in which a Subject Leased Property
\nwas or is located (each, a “Subject Development<\/strong>“).<\/p>\n<\/p>\n

(2) Zellers and HBC, on behalf of each Zellers Entity, agree to fully
\ncooperate, subject to the allocation of costs set out in Section 7.7(2)(h), in
\norder to allow Target Canada, Target, any Designee permitted under Section 2.7
\nand any of their respective Affiliates (each, a “Target
\nEntity<\/strong>“), to enter, operate, develop, remodel and\/or redevelop each
\nSubject Development for any uses which are consistent with a first class retail
\nshopping centre in Canada, including a Target discount department store (which
\nstore may include, pharmacy, restaurant and food sales operations without
\nrestriction as to product types or size of areas devoted to such items) as is
\ntypically operated, from time to time, in the United States or Canada (the
\n“Permitted Use<\/strong>“). Zellers and HBC will cause each Zellers
\nEntity on its own behalf and on behalf of those claiming, by, through and under
\nsuch Zellers Entity, with respect to a Subject Development only:<\/p>\n<\/p>\n

(a) to modify, waive, release and terminate all use restrictions and use
\nexclusives benefiting or enforceable by the Zellers Entity that would limit or
\nprohibit the operation of any Permitted Use by a Target Entity.<\/p>\n<\/p>\n

(b) to consent to the temporary reduction, cessation or reasonable
\nmodification of operations of the Target Entity at any Subject Leased Property
\nso as to allow for the remodelling, development or redevelopment of such Subject
\nLeased Property which consent shall be given without such Zellers Entity
\navailing itself of any rights in connection with such consent, including a
\nreduction of rent, right to cease operations, right of termination or any other
\nsimilar provision, if such consent relates to any Subject Development;<\/p>\n<\/p>\n

(c) to grant all consents and approvals for the remodelling, developing or
\nredeveloping the interior of any building (provided that any change to the
\nlocation or size of such building shall be subject to the provisions of Section
\n7.7(2)(e)) located or to be located on or within a Subject Development;<\/p>\n<\/p>\n

(d) to grant all consents and approvals for the remodelling, developing or
\nredeveloping the exterior elevations of any building (including building
\nsignage, branding, architectural details and closure of entrances to the Target
\nEntity153s building) located or to be located on or within a Subject Development
\n(provided that any change to the location or size of such building shall be
\nsubject to the provisions of Section 7.7(2)(e)), as well as any appurtenances
\nimmediately adjacent to the Target Entity153s building (e.g., sidewalks,
\nlandscaping and loading docks), but not other common areas;<\/p>\n<\/p>\n

(e) to grant all consents and approvals for remodelling, developing or
\nredeveloping any Subject Development (including the relocation or any change in
\nthe size of any building) and any freestanding signage; provided however, that
\nnotwithstanding the foregoing, the Zellers Entities shall have no obligation
\nunder this Section 7.7(2)(e) to (i) incur any Damages, liability, costs or
\nexpenses from a<\/p>\n

\n

38<\/p>\n

\n

<\/p>\n

third party claim (other than those contemplated to be incurred by a Zellers
\nEntity pursuant to Section 7.7(2)(h)); (ii) take or to refrain from taking any
\naction, or to consent, approve, support or withhold objection to any matter or
\nthing, which would or could reasonably be expected to result in Damages,
\nliability, costs or expenses to any Zellers Entity from a third party claim
\n(other than those contemplated to be incurred by a Zellers Entity pursuant to
\nSection 7.7(2)(h)), in connection with the breach of any Laws or any
\nEncumbrances existing as of the Execution Date by or to which a Zellers Entity
\nis a party or to which it is subject, or which affects a Subject Development; or
\n(iii) take or to refrain from taking any action, or to consent, approve, support
\nor withhold objection to any matter or thing which would, or could reasonably be
\nexpected to, materially adversely affect the use, operation, signage, parking
\nrights in any “primary parking field”, access to common areas, full pedestrian
\nand vehicular access to all existing internal and external roadways and walkways
\nof any Bay store or the business conducted therein (clauses (i), (ii) and (iii)
\nare collectively, the “Approval Restrictions<\/strong>“). If any Approval
\nRestrictions do exist under item (ii) above, each Zellers Entity will use its
\ncommercially reasonable efforts (without payment of consideration or repayment
\nof debt) to (a) obtain the consent from any Person benefiting from such Approval
\nRestriction and\/or (b) allow for the requested co-operation of the Zellers
\nEntity to be given in accordance with this Section 7.7;<\/p>\n<\/p>\n

(f) to join in applications for all permits, variances, special uses,
\nlicenses or authorizations deemed necessary or desirable by the Target Entity in
\nconnection with remodelling, development or redevelopment of the Subject Leased
\nProperty for the foregoing purposes, and to the extent such request is in
\ncompliance with Section 7.7(2)(e), the balance of any Subject Development;
\nprovided however, that no Zellers Entity shall have any obligation to join in
\nany of the foregoing to the extent that such item would expose such Zellers
\nEntity to Damages, liability, costs or expenses except to the extent the
\nforegoing relate to the Zellers Entity153s authority to issue such authorization
\nor the Target Entity agrees to protect the Zellers Entity with respect to risks
\nthrough an indemnity or other arrangement satisfactory to Zellers;<\/p>\n<\/p>\n

(g) not to seek, request or demand any charge or concession from any Target
\nEntity or any other third party in connection with fulfilling its obligations
\nunder this Section 7.7, except as set forth in Section 7.7(2)(h); and<\/p>\n<\/p>\n

(h) for each of the first 10 locations selected by any Target Entity (on an
\naggregate basis for all Target Entities) for cooperation by any Zellers Entity
\nunder this Section 7.7, such Zellers Entity shall be responsible and pay for all
\nof the out of pocket costs incurred by such Zellers Entity in connection with
\nany requests for cooperation made by such Target Entity relating to the initial
\nredevelopment of such location by the Target Entity. Thereafter, all requests
\nfor cooperation by any Target Entity relating to (i) each additional location,
\nor (ii) to the extent unrelated to the initial redevelopment, each of the
\ninitial 10 locations, the related Zellers Entity and the Target Entity shall
\neach be responsible for paying 50% of the out of pocket costs incurred by such
\nZellers Entity with respect to any such requests, and the Target Entity shall
\nreimburse the Zellers Entity for its share of such costs<\/p>\n

\n

39<\/p>\n

\n

<\/p>\n

in accordance with arrangements to be made between the related Target Entity
\nand the Zellers Entity each acting reasonably.<\/p>\n<\/p>\n

(3) Target Canada acknowledges that five Subject Developments (which are the
\nfollowing: Devonshire Mall, Windsor; Square One, Mississauga; Centrepoint Mall,
\nNorth York; Les Promenades, St Bruno; and downtown Winnipeg, Manitoba) held by
\nZellers Entity Affiliates are subject to an existing Mortgage in favour of GE
\nCapital Canada Finance Inc. which may be breached by the actions contemplated
\nunder Sections 7.7(2)(a) through (d) above. The remaining Subject Developments
\nare not subject to any other material restrictions relating to such actions
\nunder any Mortgage known to Zellers relating to the Subject Development as of
\nthe Execution Date. If the Zellers Entity reasonably determines that such a
\nbreach will occur, then the Zellers Entity will use its commercially reasonable
\nefforts (without payment of consideration or repayment of debt) to (i) obtain
\nthe consent from the Mortgage holder benefiting from the Approval Restriction in
\nSection 7.7(2)(e)(ii) and\/or (ii) allow for the requested co-operation of the
\nZellers Entity to be given in accordance with this Section 7.7.<\/p>\n<\/p>\n

(4) So as to allow each Target Entity to confirm a Zellers Entity153s
\ncompliance with the provisions of this Section 7.7 prior to commencing any of
\nthe above activities, each Zellers Entity will, upon a request of a Target
\nEntity, enter into reasonable written documentation evidencing its agreement
\nwith respect to all approvals, consents and other requests of such Target Entity
\nwith respect to such contemplated location prior to the acquisition by such
\nparty.<\/p>\n<\/p>\n

(5) Zellers and HBC, on behalf of each Zellers Entity, each agree that no
\nZellers Entity will subordinate its interest (or further restrict its rights to
\ncomply with the provisions of this Section 7.7) in any Subject Development to
\nany future encumbrance unless such Zellers Entity receives a written
\nnon-disturbance agreement from the holder of such encumbrance with respect to
\nthe provisions of this Section 7.7.<\/p>\n<\/p>\n

(6) The obligations of Zellers, HBC and each Zellers Entity pursuant to this
\nSection 7.7 shall be binding upon the successors and assigns of each such
\nZellers Entity, including each successor owner of the Zellers Entity153s interest
\nin the Subject Development to which such obligations may now or in the future
\nrelate. Such obligations shall bind and benefit, as the case may require, the
\nheirs, legal representatives, assigns and successors of the respective parties,
\nand all covenants, conditions and agreements contained in this Section 7.7 shall
\nbe construed (to the extent permitted by Laws) as covenants running with the
\nland with respect to each Subject Development. Without limiting the generality
\nof the foregoing, each Zellers Entity shall, at its sole cost and expense (a)
\ninform in writing each successor, assign and purchaser of each Subject
\nDevelopment of the provisions of this Section 7.7, and (b) cause each such
\nsuccessor, assign and purchaser to assume in writing the obligations of this
\nSection 7.7.<\/p>\n<\/p>\n

(7) Zellers and HBC, on behalf of each Zellers Entity, each agree that upon
\nthe request of any Target Entity, it shall execute, or cause the relevant
\nZellers Entity to execute, to the extent permitted by Laws (with such
\nrecordation being at the sole cost of such Target Entity), a recordable
\nmemorandum evidencing (i) the agreements contained in this Section 7.7 which may
\n(at the Target Entity153s option and cost) be registered on title in the<\/p>\n

\n

40<\/p>\n

\n

applicable real estate records and (ii) all actions taken by such Zellers
\nEntity pursuant to this Section 7.7.<\/p>\n<\/p>\n

(8) Notwithstanding anything to the contrary in this Agreement, the
\nobligations of each Zellers Entity and Target Entity under this Section 7.7
\nshall commence on the Execution Date and expire on that date that is 10 years
\nafter the Second Tranche Closing Date.<\/p>\n<\/p>\n

ARTICLE 8
\nCONDITIONS OF CLOSING<\/strong><\/p>\n

\n

Section 8.1<\/strong> Conditions for the Benefit of Target and
\nTarget Canada.<\/strong><\/p>\n<\/p>\n

The assignment and transfer of the Subject Leases and the payment of the
\napplicable portion of the Purchase Price are subject to the following conditions
\nbeing satisfied on or prior to the relevant Closing Date, which conditions are
\nfor the exclusive benefit of Target Canada and Target and may be waived, in
\nwhole or in part, by Target in its sole discretion:<\/p>\n<\/p>\n

(a) Truth of Representations and Warranties<\/strong>.<\/p>\n<\/p>\n

(i) The representations and warranties of Zellers contained in this Agreement
\nother than the representations and warranties contained in Sections 5.1(g),
\n5.1(h) and 5.1(i) must be true and correct in all material respects as of the
\nrelevant Closing Date with the same force and effect as if such representations
\nand warranties were made on and as of such date. However, (A) any such
\nrepresentations or warranties relating to Subject Leases as of the First Tranche
\nClosing Date need only be true and correct in all material respects as they
\nrelate to the First Tranche Subject Leases, (B) any such representations or
\nwarranties relating to Subject Leases as of the Second Tranche Closing Date need
\nonly be true and correct in all material respects as they relate to the Second
\nTranche Subject Leases, (C) if any such representation and warranty is qualified
\nby materiality, it must be true and correct in all respects after giving effect
\nto such qualification and (D) if any such representation and warranty speaks
\nonly as of a specific date it only needs to be true and correct as of that date.\n<\/p>\n<\/p>\n

(ii) The failure of the representations and warranties of Zellers contained
\nin Sections 5.1(g), 5.1(h) and 5.1(i) (without regard, in the case of the
\nrepresentations and warranties contained in Sections 5.1(i)(iii), 5.1(i)(vii),
\nand 5.1(i)(viii), to any qualification to such representations and warranties
\nmade in the Disclosure Letter) to be true and correct in all material respects
\nas of the relevant Closing Date shall not affect 100 or more Leases designated
\nat any time on (even if later removed from) the First Tranche Selection List or
\nthe Second Tranche Selection List in the aggregate for all Closing Dates.
\nHowever, (A) any such representations or warranties relating to Subject Leases
\nas of the First Tranche Closing Date need only be true and correct in all
\nmaterial respects as they relate to the First Tranche Subject Leases, (B) any
\nsuch representations or warranties relating to Subject Leases as of the Second
\nTranche Closing Date need only be true and correct in all material respects as
\nthey relate to the Second<\/p>\n

\n

41<\/p>\n

\n

<\/p>\n

Tranche Subject Leases, (C) if any such representation and warranty is
\nqualified by materiality, it must be true and correct in all respects after
\ngiving effect to such qualification, and (D) if any such representation and
\nwarranty speaks only as of a specific date it only needs to be true and correct
\nas of that date.<\/p>\n<\/p>\n

(iii) Target Canada must receive a certificate of a senior officer of Zellers
\nas to the matters in this Section 8.1(a).<\/p>\n<\/p>\n

(b) Performance of Covenants<\/strong>. Zellers must have fulfilled,
\nor complied with, in all material respects, all covenants contained in this
\nAgreement to be fulfilled or complied with by it at or prior to the relevant
\nClosing Date (except for any such covenants requiring Zellers to use
\ncommercially reasonable or similar efforts), and Target Canada must receive a
\ncertificate of a senior officer of Zellers to that effect.<\/p>\n<\/p>\n

(c) Competition Act Approval<\/strong>. The Competition Act Approval
\nmust have been obtained.<\/p>\n<\/p>\n

(d) No Legal Action.<\/strong> No action, proceeding, order or notice
\nwill have been made, issued or delivered by any Governmental Entity prohibiting
\na material portion of the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

(e) Release of Monetary Liens<\/strong>. Target shall have received
\nevidence reasonably satisfactory to it of the release of any Monetary Liens on
\nZellers153 leasehold interest in any of the First Tranche Subject Leased
\nProperties (as of the First Tranche Closing Date) or the Second Tranche Subject
\nLeased Properties (as of the Second Tranche Closing Date), except that, with
\nrespect to any Monetary Lien under clause (3) of the definition of Monetary
\nLien, Target shall have received evidence reasonably satisfactory to it of the
\npayment of the obligation underlying such Monetary Lien or such underlying
\nobligation shall be the subject of an adjustment under Section 3.3.<\/p>\n<\/p>\n

Section 8.2<\/strong> Conditions for the Benefit of
\nZellers.<\/strong><\/p>\n<\/p>\n

The assignment and transfer of the Subject Leases and the payment of the
\napplicable portion of the Purchase Price are subject to the following conditions
\nbeing satisfied on or prior to the relevant Closing Date, which conditions are
\nfor the exclusive benefit of Zellers and may be waived, in whole or in part, by
\nZellers in its sole discretion:<\/p>\n<\/p>\n

(a) Truth of Representations and Warranties<\/strong>. The
\nrepresentations and warranties of each of Target Canada and Target contained in
\nthis Agreement must be true and correct in all material respects as of the
\nrelevant Closing Date with the same force and effect as if such representations
\nand warranties had been made on and as of such date. However, if a
\nrepresentation and warranty is qualified by materiality, it must be true and
\ncorrect in all respects after giving effect to such qualification. Zellers must
\nreceive a certificate of a senior officer of each of Target Canada and Target to
\nthe matters in this paragraph.<\/p>\n

\n

42<\/p>\n

\n

<\/p>\n

(b) Performance of Covenants<\/strong>. Each of Target Canada and
\nTarget must have fulfilled or complied with all covenants contained in this
\nAgreement to be fulfilled or complied with by it at or prior to the relevant
\nClosing Date (except for any such covenants requiring Target or Target Canada to
\nuse commercially reasonable or similar efforts), and Zellers must receive a
\ncertificate of a senior officer of each of Target Canada and Target to that
\neffect.<\/p>\n<\/p>\n

(c) Competition Act Approval.<\/strong> The Competition Act Approval
\nmust have been obtained.<\/p>\n<\/p>\n

(d) No Legal Action<\/strong>. No action, proceeding, order or notice
\nwill have been made, issued or delivered by any Governmental Entity prohibiting
\na material portion of the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

(e) Tax Registration.<\/strong> Target Canada will be duly registered
\nunder subdivision (d) of Division V of Part IX of the Excise Tax Act<\/em>
\n(Canada) with respect to goods and service tax and harmonized sales tax and,
\nwhere applicable, under Division I of Chapter VIII of Title I of An Act
\nRespecting the Quebec Sales Tax<\/em>, and its registration numbers will have
\nbeen provided to Zellers prior to the First Tranche Closing Date.<\/p>\n<\/p>\n

ARTICLE 9
\nCLOSING<\/strong><\/p>\n

\n

Section 9.1<\/strong> Date, Time and Place of
\nClosing.<\/strong><\/p>\n<\/p>\n

The completion of the transaction of purchase and sale contemplated by this
\nAgreement will take place at the offices of Stikeman Elliott LLP, Suite 5300,
\nCommerce Court West, Toronto, Ontario, at 10:00 a.m. (Toronto time) on each
\nClosing Date or at such other place, on such other date and at such other time
\nas Zellers and Target Canada may agree to in writing.<\/p>\n<\/p>\n

Section 9.2<\/strong> Zellers153 Closing Deliveries.<\/strong>\n<\/p>\n<\/p>\n

On each Closing Date Zellers shall deliver or cause to be delivered to Target
\nCanada the following documents (other than the Brand Waiver, which shall only be
\ndelivered on the First Tranche Closing Date), executed by Zellers or such other
\nnecessary Persons where applicable:<\/p>\n<\/p>\n

(a) (i) an assignment and assumption agreement with respect to each of the
\nrelevant Subject Leases which Target Canada has not identified for assignment to
\na Designee, substantially in the form attached as Section 9.2(a) of the
\nDisclosure Letter (the “Lease Assignment and Assumption
\nAgreement<\/strong>“), and (ii) a Designee Assignment and Assumption Agreement
\nwith respect to each of the relevant Subject Leases which Target Canada has
\nidentified for assignment to a Designee;<\/p>\n<\/p>\n

(b) the Subleases with respect to the relevant Subject Leased Properties;\n<\/p>\n<\/p>\n

(c) a certificate of a duly authorized officer of Zellers certifying: (i) the
\nconstating documents and by-laws of Zellers; (ii) resolutions of the directors
\nof Zellers<\/p>\n

\n

43<\/p>\n

\n

<\/p>\n

authorizing this Agreement and the consummation of the transactions
\ncontemplated by this Agreement; (iii) the incumbency and signatures of the
\nofficers of Zellers executing this Agreement; and (iv) the matters set forth in
\nSection 8.1(a) and Section 8.1(b);<\/p>\n<\/p>\n

(d) a certificate of a duly authorized officer of HBC certifying: (i) the
\nconstating documents and by-laws of HBC; (ii) resolutions of the directors of
\nHBC authorizing this Agreement and its obligations under this Agreement; (iii)
\nthe incumbency and signatures of the officers of HBC executing this Agreement;\n<\/p>\n<\/p>\n

(e) an agreement waiving exclusivity by Zellers and HBC, on their own behalf
\nand on behalf of their Affiliates, with respect to brands licensed to or
\ncontrolled by Zellers and agreeing not to enforce by any means any of their
\ncurrent trademarks against any trademarks used by, applied for, or registered to
\nTarget, in the form attached as Section 9.2(e) of the Disclosure Letter (the
\n“Brand Waiver<\/strong>“);<\/p>\n<\/p>\n

(f) such documentation, including declarations and certificates, as may be
\ncustomarily required by any title insurer (provided Zellers and any officer
\nthereof shall not be required to provide any such documentation to the extent
\nsame expands the scope of any representation or covenant furnished to Target
\nCanada in this Agreement or which creates personal liability to the title
\ninsurer) and shall execute the statements required of a vendor in s. 50(22) of
\nthe Planning Act<\/em> (Ontario) and similar legislation in other provinces
\n(to the extent Zellers does not have knowledge contrary to such statements);\n<\/p>\n<\/p>\n

(g) an undertaking by Zellers to re-adjust the Final Adjustments in
\naccordance with Section 3.3;<\/p>\n<\/p>\n

(h) all Books and Records of Zellers and its Affiliates in their possession
\nor control relating to the relevant Subject Leased Properties or the relevant
\nSubject Leases; provided that, subject to Zellers153 execution of a
\nconfidentiality agreement in a form reasonably acceptable to Zellers and Target
\nCanada with respect to such Books and Records, Zellers shall have the right to
\nretain a copy of any Books and Records for use in compliance with Laws or in
\nconnection with investigations or litigation; and<\/p>\n<\/p>\n

(i) all other documents which Target Canada reasonably requests to give
\neffect to the transactions contemplated by this Agreement.<\/p>\n<\/p>\n

Section 9.3<\/strong> Target Canada153s Closing
\nDeliveries.<\/strong><\/p>\n<\/p>\n

On each Closing Date Target Canada shall deliver or cause to be delivered to
\nZellers the following documents (other than the Brand Waiver, which shall only
\nbe delivered on the First Tranche Closing Date), executed by Target Canada or
\nsuch other necessary Persons (other than Zellers or Affiliate of Zellers that is
\ntransferring Pharmacy Records hereunder) where applicable:<\/p>\n<\/p>\n

(a) a wire transfer in satisfaction of the First Tranche Purchase Price or
\nthe Second Tranche Purchase Price, as applicable, in accordance with Section
\n3.2;<\/p>\n

\n

44<\/p>\n

\n

<\/p>\n

(b) (i) a Lease Assignment and Assumption Agreement with respect to each of
\nthe relevant Subject Leases which Target Canada has not identified for
\nassignment to a Designee, and (ii) a Designee Assignment and Assumption
\nAgreement, duly executed by the applicable Designee (and not by Target Canada),
\nwith respect to each of the relevant Subject Leases which Target Canada has
\nidentified for assignment to a Designee;<\/p>\n<\/p>\n

(c) the Subleases with respect to the relevant Subject Leased Properties duly
\nexecuted by Target Canada, or if applicable, its Designees;<\/p>\n<\/p>\n

(d) a certificate of a duly authorized officer of Target Canada certifying:
\n(i) the constating documents and by-laws of Target Canada; (ii) resolutions of
\nthe directors of Target Canada authorizing this Agreement and the consummation
\nof the transactions contemplated by Target Canada; (iii) the incumbency and
\nsignatures of the officers of Target Canada executing this Agreement; and (iv)
\nthe matters set forth in Section 8.2(a) and Section 8.2(b);<\/p>\n<\/p>\n

(e) a certificate of a duly authorized officer of Target certifying: (i) the
\nconstating documents and by-laws of Target; (ii) resolutions of the directors of
\nTarget authorizing this Agreement and its obligations under this Agreement;
\n(iii) the incumbency and signatures of the officers of Target executing this
\nAgreement; and (iv) the matters set forth in Section 8.2(a) and Section 8.2(b);\n<\/p>\n<\/p>\n

(f) an undertaking by Target Canada to re-adjust the Final Adjustments in
\naccordance with Section 3.3;<\/p>\n<\/p>\n

(g) a Goods and Services Tax, Harmonized Sales Tax and Quebec Sales Tax
\nDeclaration and Indemnity in the form specified in Section 9.3(g) of the
\nDisclosure Letter; and<\/p>\n<\/p>\n

(h) all other documents which Zellers reasonably requests to give effect to
\nthe transactions contemplated by this Agreement.<\/p>\n<\/p>\n

Section 9.4<\/strong> Closing Procedures.<\/strong><\/p>\n<\/p>\n

(1) Subject to satisfaction or waiver by the relevant Party of the conditions
\nof closing, on each Closing Date, Zellers will deliver the instruments of
\nconveyance described in Section 9.2 to Target Canada and upon such delivery
\nTarget Canada will pay or satisfy the Purchase Price in accordance with Section
\n3.2. The assignment of a Subject Lease will take effect at the Effective Time on
\nthe applicable Closing Date or Delivery Date.<\/p>\n<\/p>\n

(2) Zellers and Target Canada covenant and agree to enter into and to cause
\ntheir respective solicitors to enter into a closing arrangement as is customary
\nfor each province providing for the delivery of closing documents, the
\nelectronic submission or physical submission of documents for registration, as
\napplicable, and other details relating to closing and registration.<\/p>\n

\n

45<\/p>\n

\n

<\/p>\n

\n

ARTICLE 10
\nTERMINATION<\/strong><\/p>\n

\n

Section 10.1<\/strong> Termination Rights.<\/strong><\/p>\n<\/p>\n

This Agreement may, by notice in writing, be terminated on the Outside Date:\n<\/p>\n<\/p>\n

(a) by Target Canada if any of the conditions in Section 8.1 have not been
\nsatisfied in respect of the First Tranche Subject Leased Properties as of the
\nOutside Date and Target Canada has not waived such conditions at or prior to the
\nFirst Tranche Closing Date, provided that Target Canada may not terminate this
\nAgreement under this Section 10.1(a) to the extent that such conditions have not
\nbeen satisfied as a result of the failure of Target or Target Canada to perform
\nany one or more of its obligations or covenants under this Agreement to be
\nperformed at or prior to the First Tranche Closing Date; or<\/p>\n<\/p>\n

(b) by Zellers if any of the conditions in Section 8.2 have not been
\nsatisfied as in respect of the First Tranche Subject Leased Properties as of the
\nOutside Date and Zellers has not waived such condition at or prior to the First
\nTranche Closing Date, provided that Zellers may not terminate this Agreement
\nunder this Section 10.1(b) to the extent that such conditions have not been
\nsatisfied as a result of a failure of Zellers or HBC to perform any one or more
\nof its obligations or covenants under this Agreement to be performed at or prior
\nto the First Tranche Closing Date.<\/strong><\/p>\n<\/p>\n

Section 10.2<\/strong> Effect of Termination.<\/strong><\/p>\n<\/p>\n

If a Party waives compliance with any of the conditions, obligations or
\ncovenants contained in this Agreement, the waiver will be without prejudice to
\nany of its rights in the event of non-fulfilment, non-observance or
\nnon-performance of any other representation, warranty, condition, obligation or
\ncovenant in whole or in part or to its rights to recover Damages for any
\nincorrectness in or breach of any representation, warranty, condition,
\nobligation or covenant in whole or in part.<\/p>\n<\/p>\n

ARTICLE 11
\nINDEMNIFICATION<\/strong><\/p>\n

\n

Section 11.1<\/strong> Liability for Representations and
\nWarranties.<\/strong><\/p>\n<\/p>\n

The representations and warranties contained in this Agreement and the
\ncertificates delivered pursuant to Section 8.1(a) and Section 8.2(a) continue in
\nfull force and effect for a period of one year after the relevant Closing Date,
\nexcept that:<\/p>\n<\/p>\n

(a) the representations and warranties set out in Section 5.1(a), Section
\n5.1(b), Section 5.1(e), Section 5.1(f), Section 6.1(a), Section 6.1(b), and
\nSection 6.1(e) and the corresponding representations and warranties set out in
\nthe certificates delivered pursuant to Section 8.1(a) and Section 8.2(a) survive
\nand continue in full force and effect without limitation of time;<\/p>\n

\n

46<\/p>\n

\n

<\/p>\n

(b) the representations and warranties set out in Section 5.1(k) (and the
\ncorresponding representations and warranties set out in the certificates to be
\ndelivered pursuant to Section 8.1(a)), will survive and continue in full force
\nand effect until 6 months after the expiration of the period during which any
\ntax assessment may be issued by a Governmental Entity in respect of any taxation
\nyear to which such representations and warranties extend. Such period will be
\ndetermined without regard to any consent, waiver, agreement or other document,
\nmade or filed after the Closing Date that extends the period during which a
\nGovernmental Entity may issue a tax assessment. A tax assessment includes any
\nassessment, reassessment or other form of recognized document assessing
\nliability for Taxes under Laws;<\/p>\n<\/p>\n

(c) the representations and warranties set out in Section 5.1(h) and Section
\n5.1(i) (and the corresponding representations and warranties set out in the
\ncertificates to be delivered pursuant to Section 8.1(a)) as they relate to a
\nSubject Lease will survive and continue in full force and effect until the date
\nthat is one year after the relevant Vacancy Date for such Subject Lease; and\n<\/p>\n<\/p>\n

(d) there is no limitation as to time for claims against a Party based on
\nfraudulent misrepresentation by that Party.<\/p>\n<\/p>\n

Section 11.2<\/strong> Indemnification in Favour of Target and
\nTarget Canada.<\/strong><\/p>\n<\/p>\n

Subject to Section 11.5, Zellers will indemnify and save Target and Target
\nCanada and their respective directors, officers, employees, agents and
\nshareholders harmless from and against, and will pay for, all Damages suffered
\nby, imposed upon or asserted against any of them as a result of, in respect of,
\nconnected with, or arising out of, under, or pursuant to:<\/p>\n<\/p>\n

(a) any failure of any representation or warranty in Article 5 to be true and
\ncorrect as of the Execution Date or to be true and correct in all material
\nrespects as of the relevant Closing Date (or, with respect to any such
\nrepresentation or warranty that speaks only as of a specific date, any failure
\nof such representation or warranty to be true and correct as of such date), in
\neach case for which a notice of claim under Section 11.6 has been provided to
\nZellers within the applicable time period specified in Section 11.1;<\/p>\n<\/p>\n

(b) any failure of Zellers to perform or fulfil any of its covenants or
\nobligations under this Agreement;<\/p>\n<\/p>\n

(c) the use or occupancy of any Subject Leased Property on or prior to the
\napplicable Closing Date;<\/p>\n<\/p>\n

(d) the ownership, management or control of the operations conducted on any
\nSubject Leased Property on or prior to the relevant Closing Date by Zellers (or
\nany of its Affiliates, subtenants or licensees) where such ownership, management
\nor control results in the release of contaminants for which Target or Target
\nCanada is found liable by a Governmental Entity; and<\/p>\n<\/p>\n

(e) any Excluded Liabilities.<\/p>\n

\n

47<\/p>\n

\n

<\/p>\n

Section 11.3<\/strong> Indemnification in Favour of
\nZellers.<\/strong><\/p>\n<\/p>\n

Subject to Section 11.5, Target Canada will indemnify and save Zellers and
\nits directors, officers, employees, agents and shareholders harmless from and
\nagainst, and will pay for, all Damages suffered by, imposed upon or asserted
\nagainst any of them as a result of, in respect of, connected with, or arising
\nout of, under, or pursuant to:<\/p>\n<\/p>\n

(a) any failure of any representation or warranty in Article 6 to be true and
\ncorrect as of the Execution Date or to be true and correct in all material
\nrespects as of the relevant Closing Date (or, with respect to any such
\nrepresentation or warranty that speaks only as of a specific date, any failure
\nof such representation or warranty to be true and correct as of such date), in
\neach case for which a notice of claim under Section 11.6 has been provided to
\nTarget Canada within the applicable time period specified in Section 11.1;<\/p>\n<\/p>\n

(b) any failure of Target Canada to perform or fulfil any of its covenants or
\nobligations under this Agreement;<\/p>\n<\/p>\n

(c) the Assumed Liabilities;<\/p>\n<\/p>\n

(d) the use or occupancy of any Subject Leased Property after the applicable
\nClosing Date, subject to the obligations of Zellers under the applicable
\nSublease; and<\/p>\n<\/p>\n

(e) the ownership, management or control of the operations conducted on any
\nof the Subject Leased Properties after the relevant Closing Date by Target
\nCanada (or any of its Affiliates, subtenants or licensees) where such ownership,
\nmanagement or control results in the release of contaminants for which Zellers
\nis found liable by a Governmental Entity, subject to the obligations of Zellers
\nunder the applicable Sublease.<\/p>\n<\/p>\n

Section 11.4<\/strong> Bulk Sales and Retail Sales Tax
\nWaiver.<\/strong><\/p>\n<\/p>\n

In respect of the transactions contemplated by this Agreement, Target Canada
\nand the applicable Designee or Designees shall not require Zellers to comply, or
\nto assist Target Canada or the applicable Designee or Designees to comply, with
\nthe requirements of (a) the Bulk Sales Act<\/em> (Ontario), if applicable, or
\n(b) section 6 of the Retail Sales Tax Act<\/em> (Ontario) or any equivalent
\nor corresponding provisions under any other applicable legislation.
\nNotwithstanding the foregoing, Zellers shall indemnify and save harmless Target,
\nTarget Canada and the applicable Designee or Designees and their respective
\ndirectors, officers, employees, agents and shareholders, on an after-Tax basis,
\nfrom and against, and will pay for, all Damages suffered by, imposed upon or
\nasserted against any of them as a result of, in respect of, connected with, or
\narising out of, under or pursuant to such non-compliance.<\/p>\n<\/p>\n

Section 11.5<\/strong> Limitations.<\/strong><\/p>\n<\/p>\n

(1) A Party has no obligation or liability for indemnification or otherwise
\nwith respect to any representation or warranty made by such Party in this
\nAgreement, or the certificates delivered pursuant to Section 8.1(a) and Section
\n8.2(a), after the end of the applicable<\/p>\n

\n

48<\/p>\n

\n

<\/p>\n

time period specified in Section 11.1, except for claims relating to the
\nrepresentations and warranties that the Party has been notified of prior to the
\nend of the applicable time period.<\/p>\n<\/p>\n

(2) A Party has no liability for, or obligation with respect to, any punitive
\nor aggravated damages, except to the extent awarded to a third party in a Third
\nParty Claim.<\/p>\n<\/p>\n

(3) A Party has no obligation to make any payment for Damages for
\nindemnification or otherwise with respect to the matters described in Section
\n11.2 or Section 11.3, as applicable:<\/p>\n<\/p>\n

(a) until the total of all Damages with respect to such matters exceeds $18
\nmillion, after which such Party shall be liable to make payment for all such
\nDamages including such $18 million; and<\/p>\n<\/p>\n

(b) to the extent such Damages exceed a maximum of $450 million;<\/p>\n<\/p>\n

provided that the forgoing limitations shall not apply to Damages with
\nrespect to any breach of covenant, Excluded Liabilities, Assumed Liabilities or
\nany of the matters referred to in Section 11.1(a), Section 11.1(b), Section
\n11.1(d), Section 11.2(c), Section 11.2(d), Section 11.3(d) or Section 11.3(e).\n<\/p>\n<\/p>\n

(4) A Party has no obligation to make any payment for Damages for
\nindemnification or otherwise to the extent such Damages exceed a maximum of
\n$1,825,000,000.<\/p>\n<\/p>\n

Section 11.6<\/strong> Notification.<\/strong><\/p>\n<\/p>\n

(1) If a Third Party Claim is instituted or asserted against an Indemnified
\nParty, the Indemnified Party will promptly notify the Indemnifying Party in
\nwriting of the Third Party Claim. The notice must specify in reasonable detail,
\nthe identity of the Person making the Third Party Claim and, to the extent
\nknown, the nature of the Damages and the estimated amount needed to investigate,
\ndefend, remedy or address the Third Party Claim.<\/p>\n<\/p>\n

(2) If an Indemnified Party becomes aware of a Direct Claim, the Indemnified
\nParty will promptly notify the Indemnifying Party in writing of the Direct
\nClaim.<\/p>\n<\/p>\n

(3) Notice to an Indemnifying Party under this Section 11.6 of a Direct Claim
\nor a Third Party Claim is assertion of a claim for indemnification against the
\nIndemnifying Party under this Agreement. Upon receipt of such notice, the
\nprovisions of Section 11.9 will apply to any Third Party Claim and the
\nprovisions of Section 11.8 will apply to any Direct Claim.<\/p>\n<\/p>\n

Section 11.7<\/strong> Limitation Periods.<\/strong><\/p>\n<\/p>\n

Notwithstanding the provisions of the Limitations Act, 2002<\/em>
\n(Ontario) or any other statute, a proceeding in respect of a claim for
\nindemnification or otherwise arising from any breach or inaccuracy of any
\nrepresentation or warranty in this Agreement may be commenced in accordance with
\nthis Agreement. Any applicable limitation period is extended or varied to the
\nfull extent permitted by law to give effect to this Section 11.7.<\/p>\n

\n

49<\/p>\n

\n

<\/p>\n

Section 11.8<\/strong> Procedure for Direct Claims.<\/strong>\n<\/p>\n<\/p>\n

(1) Following receipt of notice of a Direct Claim, the Indemnifying Party has
\n60 days to investigate the Direct Claim and respond in writing. For purposes of
\nthe investigation, the Indemnified Party shall make available to the
\nIndemnifying Party the information relied upon by the Indemnified Party to
\nsubstantiate the Direct Claim, together with such other information as the
\nIndemnifying Party may reasonably request.<\/p>\n<\/p>\n

(2) If the Indemnifying Party disputes the validity or amount of the Direct
\nClaim, the Indemnifying Party shall provide written notice of the dispute to the
\nIndemnified Party within the 60-day period specified in Section 11.8(1). The
\ndispute notice must describe in reasonable detail the nature of the Indemnifying
\nParty153s dispute. During the 30-day period immediately following receipt of a
\ndispute notice by the Indemnified Party, the Indemnifying Party and the
\nIndemnified Party shall attempt in good faith to resolve the dispute. If the
\nIndemnifying Party and the Indemnified Party fail to resolve the dispute within
\nthat 30-day time period, the Indemnified Party is free to pursue all rights and
\nremedies available to it, subject to this Agreement. If the Indemnifying Party
\nfails to respond in writing to the Direct Claim within the 60-day period
\nspecified in Section 11.8(1), the Indemnifying Party is deemed to have rejected
\nthe Direct Claim, in which event the Indemnified Party is free to pursue all
\nrights remedies available to it, subject to this Agreement.<\/p>\n<\/p>\n

Section 11.9<\/strong> Procedure for Third Party
\nClaims.<\/strong><\/p>\n<\/p>\n

(1) Upon receiving notice of a Third Party Claim, the Indemnifying Party may
\nparticipate in the investigation and defence of the Third Party Claim and may
\nalso elect to assume the investigation and defence of the Third Party Claim.\n<\/p>\n<\/p>\n

(2) In order to assume the investigation and defence of a Third Party Claim,
\nthe Indemnifying Party must give the Indemnified Party written notice of its
\nelection within 30 days of Indemnifying Party153s receipt of notice of the Third
\nParty Claim and acknowledge that the Third Party Claim is within the scope of
\nits obligation to indemnify the Indemnified Party in accordance with and subject
\nto the terms of this Article 11.<\/p>\n<\/p>\n

(3) If the Indemnifying Party assumes the investigation and defence of a
\nThird Party Claim:<\/p>\n<\/p>\n

(a) the Indemnifying Party will pay for all costs and expenses of the
\ninvestigation and defence of the Third Party Claim except that the Indemnifying
\nParty will not, so long as it diligently conducts such defence, be liable to the
\nIndemnified Party for any fees of other counsel or any other expenses with
\nrespect to the defence of the Third Party Claim, incurred by the Indemnified
\nParty after the date the Indemnifying Party validly exercised its right to
\nassume the investigation and defence of the Third Party Claim; provided,
\nhowever, that if the defendants named in the Third Party Claim include both the
\nIndemnified Party and the Indemnifying Party, and the Indemnified Party shall
\nhave reasonably concluded that there are legal defences or rights available to
\nit that are in actual or potential conflict with those available to the
\nIndemnifying Party, then the Indemnified Party shall have the right to select
\none law firm to act, at the Indemnifying Party153s expense, as separate counsel on
\nbehalf of the Indemnified Party; and<\/p>\n

\n

50<\/p>\n

\n

(b) the Indemnifying Party will reimburse the Indemnified Party for all costs
\nand expenses incurred by the Indemnified Party in connection with the
\ninvestigation and defence of the Third Party Claim prior to the date the
\nIndemnifying Party validly exercised its right to assume the investigation and
\ndefence of the Third Party Claim.<\/p>\n<\/p>\n

(4) If the Indemnified Party undertakes the defence of the Third Party Claim,
\nthe Indemnifying Party will not be bound by any compromise or settlement of the
\nThird Party Claim effected without the consent of the Indemnifying Party (which
\nconsent may not be unreasonably withheld or delayed).<\/p>\n<\/p>\n

(5) The Indemnifying Party will not be permitted to compromise and settle or
\nto cause a compromise and settlement of a Third Party Claim without the prior
\nwritten consent of the Indemnified Party, which consent may not be unreasonably
\nwithheld or delayed, unless:<\/p>\n<\/p>\n

(a) the terms of the compromise and settlement require only the payment of
\nmoney for which the Indemnified Party is entitled to full indemnification under
\nthis Agreement; and<\/p>\n<\/p>\n

(b) the Indemnified Party is not required to admit any wrongdoing, take or
\nrefrain from taking any action, acknowledge any rights of the Person making the
\nThird Party Claim or waive any rights that the Indemnified Party may have
\nagainst the Person making the Third Party Claim.<\/p>\n<\/p>\n

(6) The Indemnified Party and the Indemnifying Party agree to keep the other
\nfully informed of the status of any Third Party Claim and any related
\nproceedings. If the Indemnifying Party assumes the investigation and defence of
\na Third Party Claim, the Indemnified Party will, at the request and expense of
\nthe Indemnifying Party, use its reasonable efforts to make available to the
\nIndemnifying Party, on a timely basis, those employees whose assistance,
\ntestimony or presence is necessary to assist the Indemnifying Party in
\ninvestigating and defending the Third Party Claim. The Indemnified Party shall,
\nat the request and expense of the Indemnifying Party, make available to the
\nIndemnifying Party, or its representatives, on a timely basis all documents,
\nrecords and other materials in the possession, control or power of the
\nIndemnified Party, reasonably required by the Indemnifying Party for its use
\nsolely in defending any Third Party Claim which it has elected to assume the
\ninvestigation and defence of. The Indemnified Party shall cooperate on a timely
\nbasis with the Indemnifying Party in the defence of any Third Party Claim.<\/p>\n<\/p>\n

Section 11.10<\/strong> Remedies.<\/strong><\/p>\n<\/p>\n

(1) Except as provided in this Section 11.10, the indemnities provided in
\nthis Agreement constitute the only remedy of a Party against another Party in
\nthe event of any breach of a representation, warranty, covenant or agreement of
\nsuch Party contained in this Agreement.<\/p>\n<\/p>\n

(2) The Parties may exercise their rights of termination in Section 10.1 and
\ntheir rights of indemnity in Section 13.3.<\/p>\n

\n

51<\/p>\n

\n

<\/p>\n

\n

(3) Target and Target Canada may set off against any amounts payable by
\neither or both of them to Zellers or HBC under this Agreement, any amounts owing
\nto either or both of them by Zellers, HBC or any of their Affiliates under this
\nAgreement or any Ancillary Agreement, including any amounts so owing under any
\nindemnification obligations, up to a maximum aggregate amount to be so set off
\nof $90 million.<\/p>\n<\/p>\n

(4) The Parties acknowledge that the failure to comply with a covenant or
\nobligation contained in this Agreement may give rise to irreparable injury to a
\nParty inadequately compensable in damages. Accordingly, a Party may seek to
\nenforce the performance of this Agreement by injunction or specific performance
\nupon application to a court of competent jurisdiction without proof of actual
\ndamage (and without requirement of posting a bond or other security).<\/p>\n<\/p>\n

(5) Each of the Parties expressly waives and renounces any other remedies
\nwhatsoever, whether at law or in equity, which it would otherwise be entitled to
\nas against any other Party.<\/p>\n<\/p>\n

Section 11.11<\/strong> One Recovery.<\/strong><\/p>\n<\/p>\n

An Indemnified Party is not entitled to double recovery for any claims even
\nthough they may have resulted from the breach, inaccuracy or failure to perform
\nof more than one of the representations, warranties, covenants and obligations
\nof the Indemnifying Party in this Agreement.<\/p>\n<\/p>\n

Section 11.12<\/strong> Duty to Mitigate.<\/strong><\/p>\n<\/p>\n

Nothing in this Agreement in any way restricts or limits the general
\nobligation at Law of an Indemnified Party to mitigate any loss which it may
\nsuffer or incur by reason of the breach, inaccuracy or failure to perform of any
\nrepresentation, warranty, covenant or obligation of the Indemnifying Party under
\nthis Agreement. If any claim can be reduced by any recovery, settlement or
\notherwise under or pursuant to any insurance coverage, or pursuant to any claim,
\nrecovery, settlement or payment by or against any other Person, the Indemnified
\nParty shall take all appropriate steps to enforce such recovery, settlement or
\npayment and the amount of any Damages of the Indemnified Party will be reduced
\nby the amount of insurance proceeds actually recovered by the Indemnified Party,
\nnet of any out-of-pocket costs incurred in obtaining such recovery and net of
\nthe present value of any increase in insurance premiums reasonably attributable
\nto such recovery.<\/p>\n<\/p>\n

Section 11.13<\/strong> Adjustment to Purchase Price.<\/strong>\n<\/p>\n<\/p>\n

Any payment made by Zellers or HBC to Target Canada under this Article 11
\nshall be deemed to be a dollar-for-dollar decrease in the Purchase Price. A
\npayment made by Target Canada or Target under this Article 11 shall be deemed to
\nbe a dollar-for-dollar increase in the Purchase Price.<\/p>\n

\n

52<\/p>\n

\n

<\/p>\n

\n

ARTICLE 12
\nOTHER COVENANTS<\/strong><\/p>\n

\n

Section 12.1<\/strong> Guarantee by HBC.<\/strong><\/p>\n<\/p>\n

(1) HBC hereby unconditionally, absolutely, continuingly and irrevocably
\nguarantees to Target Canada and the Indemnified Parties listed in Section 11.2
\nthe timely payment, if any, and performance by Zellers (and its permitted
\nassignees) of its obligations and liabilities arising under or pursuant to this
\nAgreement and the Ancillary Agreements whether direct or indirect, absolute or
\ncontingent, now or hereafter existing, or due or to become due (collectively,
\nthe “Zellers Liabilities”<\/strong>).<\/p>\n<\/p>\n

(2) Target Canada shall not be required to prosecute collection or seek to
\nenforce or resort to any remedies against Zellers or any other Person liable to
\nTarget Canada or any such Indemnified Parties on account of Zellers Liabilities
\nor any guaranty thereof. HBC153s liabilities shall in no way be impaired,
\naffected, reduced or released by reason of (i) the failure or delay by Target
\nCanada or any of such Indemnified Parties to do or take any of the actions or
\nthings described in this Agreement, (ii) the voluntary or involuntary
\nliquidation, dissolution, sale or other disposition of all or substantially all
\nthe assets of Zellers (or its permitted assignees) or the marshalling of assets
\nand liabilities, receivership, insolvency, bankruptcy, assignment for the
\nbenefit of creditors, reorganization, arrangement, composition with creditors or
\nreadjustment of, or other similar proceedings or any other inability to pay or
\nperform affecting, Zellers (or its permitted assignees) or any of its respective
\nassets, or (iii) any allegation concerning, or contest of the legality or
\nvalidity of, the indemnification obligations under this Agreement.<\/p>\n<\/p>\n

(3) HBC hereby expressly waives the right to interpose all substantive and
\nprocedural defences of the law of guaranty, indemnification and suretyship,
\nexcept the defences of prior payment or prior performance.<\/p>\n<\/p>\n

(4) Without limiting the generality of Section 12.1(1), Section 12.1(2) or
\nSection 12.1(3), the liability of HBC under this Section 12.1 shall not be
\ndeemed to have been waived, released, discharged, impaired or affected by (a)
\nthe granting of any indulgence or extension of time to Zellers as subtenant
\nunder any Sublease, (b) the assignment of any Sublease, or the subletting of the
\npremises under any Sublease by Zellers as subtenant under any Sublease, with or
\nwithout Target Canada153s consent, (c) the expiration of the term of any Sublease,
\n(d) if Zellers, as subtenant under any Sublease, holds over beyond the term of
\nthe Sublease, (e) the rejection, disaffirmance or disclaimer of any Sublease by
\nany party in any action or proceeding, (f) any defect or invalidity of any
\nSublease, or (g) any amendment, supplement or replacement of any Sublease. The
\nliability of HBC shall not be affected by any repossession, re-entry or
\nre-letting of any Subject Leased Property by Target Canada as sublandlord under
\nany Sublease.<\/p>\n<\/p>\n

(5) In addition to the guarantee specified in Section 12.1(1), HBC shall
\nindemnify and save Target Canada and the Indemnified Parties listed in Section
\n11.2 harmless from and against all Damages it or they may suffer as a result or
\nconsequence of any inability by Target Canada or such Indemnified Parties to
\nrecover the ultimate balance due or<\/p>\n

\n

53<\/p>\n

\n

<\/p>\n

\n

remaining due or remaining unpaid to Target Canada and such Indemnified
\nParties in respect of Zellers Liabilities.<\/p>\n<\/p>\n

Section 12.2<\/strong> Target Guarantee.<\/strong><\/p>\n<\/p>\n

(1) Target hereby unconditionally, absolutely, continuingly and irrevocably
\nguarantees to Zellers, HBC, and the Indemnified Parties listed in Section 11.3
\nthe timely payment, if any, and performance by Target Canada (and its permitted
\nassignees, including any Designee pursuant to Section 2.7, but excluding each
\nInvestment Grade Designee who enters into a Designee Assignment and Assumption
\nAgreement or other assumption document pursuant to Section 2.7 (the
\n“Assignees<\/strong>“)), of its obligations and liabilities arising under
\nor pursuant to this Agreement and the Ancillary Agreements, whether direct or
\nindirect, absolute or contingent, now or hereafter existing, or due or to become
\ndue (collectively, the “Target Canada Liabilities”<\/strong>).<\/p>\n<\/p>\n

(2) Zellers shall not be required to prosecute collection or seek to enforce
\nor resort to any remedies against Target Canada, any Assignee or any other
\nPerson liable to Zellers or any such Indemnified Parties on account of Target
\nCanada Liabilities or any guaranty thereof. Target153s liabilities shall in no way
\nbe impaired, affected, reduced or released by reason of (i) the failure or delay
\nby Zellers or any of such Indemnified Parties to do or take any of the actions
\nor things described in this Agreement, (ii) the voluntary or involuntary
\nliquidation, dissolution, sale or other disposition of all or substantially all
\nthe assets of Target Canada (or Assignees153) or the marshalling of assets and
\nliabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
\ncreditors, reorganization, arrangement, composition with creditors or
\nreadjustment of, or other similar proceedings or any other inability to pay or
\nperform affecting, Target Canada (or its Assignees) or any of its respective
\nassets, or (iii) any allegation concerning, or contest of the legality or
\nvalidity of, the indemnification obligations under this Agreement.<\/p>\n<\/p>\n

(3) Target hereby expressly waives the right to interpose all substantive and
\nprocedural defences of the law of guaranty, indemnification and suretyship,
\nexcept the defences of prior payment or prior performance.<\/p>\n<\/p>\n

(4) In addition to the guarantee specified in Section 12.2(1), Target shall
\nindemnify and save Zellers, HBC and the Indemnified Parties listed in Section
\n11.3 harmless from and against all Damages it or they may suffer as a result or
\nconsequence of any inability by Zellers, HBC or such Indemnified Parties to
\nrecover the ultimate balance due or remaining due or remaining unpaid to
\nZellers, HBC and such Indemnified Parties in respect of Target Canada
\nLiabilities.<\/p>\n<\/p>\n

Section 12.3<\/strong> Further Assurances.<\/strong><\/p>\n<\/p>\n

From time to time before and after the relevant Closing Date, each Party
\nwill, at the request of any other Party, execute and deliver such additional
\nconveyances, transfers, documents, instruments and other assurances as may be
\nreasonably required to effectively consummate the transactions contemplated by
\nthis Agreement and carry out the intent of this Agreement.<\/p>\n

\n

54<\/p>\n

\n

<\/p>\n

\n

ARTICLE 13
\nMISCELLANEOUS<\/strong><\/p>\n

\n

Section 13.1<\/strong> Notices.<\/strong><\/p>\n<\/p>\n

Any notice, direction or other communication given regarding the matters
\ncontemplated by this Agreement or any Ancillary Agreement (each a
\n“Notice”<\/strong>) must be in writing, sent by personal delivery,
\ncourier or facsimile (but not by electronic mail) and addressed:<\/p>\n<\/p>\n

(a) to Zellers and HBC at:<\/p>\n<\/p>\n

401 Bay Street
\nSuite 500
\nToronto, Ontario M5H 2Y4<\/p>\n<\/p>\n\n\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n<\/td>\n\n

General Manager, Legal Services<\/p>\n<\/td>\n<\/tr>\n

\n

Telephone:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 861-6932<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 861-4200<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

with a copy (which shall not constitute notice) to:<\/p>\n<\/p>\n

Hudson153s Bay Trading Company, LP
\n3 Manhattanville Road, 2nd Floor
\nPurchase, New York 10577<\/p>\n<\/p>\n\n\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n<\/td>\n\n

Vice President and Secretary<\/p>\n<\/td>\n<\/tr>\n

\n

Telephone:<\/p>\n<\/td>\n

\n<\/td>\n\n

(914) 272-8067<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

\n<\/td>\n\n

(914) 272-8088<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

with a copy (which shall not constitute notice) to:<\/p>\n<\/p>\n

Stikeman Elliott LLP
\n5300 Commerce Court West
\n199 Bay Street
\nToronto, Ontario M5L 1B9<\/p>\n<\/p>\n\n\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n<\/td>\n\n

Ian Putnam<\/p>\n<\/td>\n<\/tr>\n

\n

Telephone:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 869-5506<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 947-0866<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

(b) to Target Canada and Target at:<\/p>\n<\/p>\n

Target Corporation<\/p>\n

1000 Nicollet Mall, TPS-2670<\/p>\n

Minneapolis, MN 55403<\/p>\n<\/p>\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n<\/td>\n\n

Timothy R. Baer, Executive Vice-President, General Counsel,<\/p>\n

Sean D. Kelly, Senior Group Counsel, and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

55<\/p>\n

\n

<\/p>\n

\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n

Alexander G. Tselos, Senior Counsel, Real Estate<\/p>\n<\/td>\n<\/tr>\n

\n

Telephone:<\/p>\n<\/td>\n

\n<\/td>\n\n

(612) 696-6908<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

\n<\/td>\n\n

(612) 696-6909<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

with a copy (which shall not constitute notice) to:<\/p>\n<\/p>\n

Osler, Hoskin & Harcourt LLP
\nBox 50, Suite 6100
\n1 First Canadian Place
\nToronto, Ontario M5X 1B8<\/p>\n<\/p>\n\n\n\n\n\n
\n

Attention:<\/p>\n<\/td>\n

\n<\/td>\n\n

Terry Burgoyne and Heather McKean<\/p>\n<\/td>\n<\/tr>\n

\n

Telephone:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 362-2111<\/p>\n<\/td>\n<\/tr>\n

\n

Facsimile:<\/p>\n<\/td>\n

\n<\/td>\n\n

(416) 862-6666<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

with a further copy (which shall not constitute notice) to:<\/p>\n<\/p>\n

Faegre & Benson LLP
\n2200 Wells Fargo Center
\n90 South Seventh Street
\nMinneapolis, Minnesota 55402<\/p>\n<\/p>\n

Attention: Michael A. Stanchfield and John R. Wheaton
\nTelephone: (612) 766-7000
\nFacsimile: (612) 766-1600<\/p>\n<\/p>\n

A Notice is deemed to be given and received (i) if sent by personal delivery
\nor same-day courier, on the date of delivery if it is a Business Day and the
\ndelivery was made prior to 4:00 p.m. (local time in place of receipt) and
\notherwise on the next Business Day, (ii) if sent by overnight courier, on the
\nnext Business Day, or (iii) if sent by facsimile, on the Business Day following
\nthe date of confirmation of transmission by the originating facsimile. A Party
\nmay change its address for service from time to time by providing a Notice in
\naccordance with the foregoing. Any subsequent Notice must be sent to the Party
\nat its changed address. Any element of a Party153s address that is not
\nspecifically changed in a Notice will be assumed not to be changed.<\/p>\n<\/p>\n

Section 13.2<\/strong> Time of the Essence.<\/strong><\/p>\n<\/p>\n

Time is of the essence in this Agreement.<\/p>\n<\/p>\n

Section 13.3<\/strong> Brokers.<\/strong><\/p>\n<\/p>\n

Zellers shall indemnify and save harmless Target Canada and Target from and
\nagainst any and all Damages and Third Party Claims whatsoever for any fee,
\ncommission or other remuneration payable or alleged to be payable to any broker,
\nagent or other intermediary who purports to act or have acted for Zellers or any
\nof its Affiliates. Target Canada shall indemnify and save harmless Zellers and
\nHBC from and against any and all Damages and Third Party Claims whatsoever for
\nany fee, commission or other remuneration payable or alleged to be payable to
\nany broker, agent or other intermediary who purports to act or have acted for
\nTarget Canada or any of its Affiliates. These indemnities are not subject to any
\nof the limitations set out in Article 11.<\/p>\n

\n

56<\/p>\n

\n

<\/p>\n

\n

Section 13.4<\/strong> Announcements.<\/strong><\/p>\n<\/p>\n

No press release, public statement or announcement or other public disclosure
\nwith respect to this Agreement or the transactions contemplated in this
\nAgreement may be made except with the prior written consent and approval of
\nTarget, or except if required by Law or a Governmental Entity. Where the public
\ndisclosure is required by Law or a Governmental Entity, the Party required to
\nmake the public disclosure (if not Target) will use its commercially reasonable
\nefforts to obtain the approval of Target as to the form, nature and extent of
\nthe disclosure. The initial announcements of the transactions contemplated by
\nthis Agreement will be made in the form of attached as Section 13.4 of the
\nDisclosure Letter.<\/p>\n<\/p>\n

Section 13.5<\/strong> Third Party Beneficiaries.<\/strong>\n<\/p>\n<\/p>\n

Except as provided in Section 7.7, Zellers, HBC, Target and Target Canada
\nintend that this Agreement will not benefit or create any right or cause of
\naction directly in favour of any Person, other than the Parties; provided
\nhowever, that the foregoing shall not limit or prohibit (i) Target or Target
\nCanada from pursuing any and all claims, damages, remedies and rights provided
\nhereunder on behalf of itself or for the benefit of any Designee or other
\nassignee of Target Canada or (ii) any Designee from directly pursuing any rights
\nunder any Ancillary Agreements to which such Designee is a party. Except for the
\nIndemnified Parties, no Person, other than the Parties, shall be entitled to
\ndirectly rely on the provisions of this Agreement in any action, suit,
\nproceeding, hearing or other forum. To the extent required by law to give full
\neffect to these direct rights, Target Canada agrees and acknowledges that it is
\nacting as agent and\/or as trustee of its Indemnified Parties. The Parties
\nreserve their right, subject to unanimous agreement among the Parties, to vary
\nor rescind the rights, granted by or under this Agreement to any Person who is
\nnot a Party, at any time and in any way whatsoever, without notice to or consent
\nof that Person, including any Indemnified Party.<\/p>\n<\/p>\n

Section 13.6<\/strong> Expenses.<\/strong><\/p>\n<\/p>\n

Except as otherwise expressly provided in this Agreement, each Party will pay
\nfor its own costs and expenses incurred in connection with this Agreement and
\nthe transactions contemplated by this Agreement. The fees and expenses referred
\nto in this Section are those which are incurred in connection with the
\nnegotiation, preparation, execution and performance of this Agreement and the
\nAncillary Agreements, and the transactions contemplated by this Agreement and
\nthe Ancillary Agreements, including the fees and expenses of legal counsel,
\ninvestment advisers and accountants.<\/p>\n<\/p>\n

Section 13.7<\/strong> Amendments.<\/strong><\/p>\n<\/p>\n

This Agreement may only be amended, supplemented or otherwise modified by
\nwritten agreement signed by Zellers and Target.<\/p>\n<\/p>\n

Section 13.8<\/strong> Waiver.<\/strong><\/p>\n<\/p>\n

No waiver of any of the provisions of this Agreement will constitute a waiver
\nof any other provision (whether or not similar). No waiver will be binding
\nunless executed in writing by the Party to be bound by the waiver. A Party153s
\nfailure or delay in exercising any right under this Agreement will not operate
\nas a waiver of that right. A single or partial exercise of any right will<\/p>\n

\n

57<\/p>\n

\n

<\/p>\n

\n

not preclude a Party from any other or further exercise of that right or the
\nexercise of any other right.<\/p>\n<\/p>\n

Section 13.9<\/strong> Non-Merger.<\/strong><\/p>\n<\/p>\n

Except as otherwise expressly provided in this Agreement, the covenants,
\nrepresentations and warranties shall not merge on and shall survive each of the
\nrelevant Closing Dates.<\/p>\n<\/p>\n

Section 13.10<\/strong> Subdivision Laws.<\/strong><\/p>\n<\/p>\n

This Agreement shall only be effective to create an interest in the Subject
\nLeased Properties if the subdivision control provisions of the Planning
\nAct<\/em> (Ontario) and similar Laws governing the subdivision or severance of
\nreal property in other provinces are complied with on or before the relevant
\nClosing Date in respect of such Subject Leased Properties. If necessary at any
\ntime and from time to time, Zellers shall forthwith apply for and use reasonable
\ncommercial efforts to obtain all necessary consents under such Laws as required
\nin order to carry out the transactions contemplated by this Agreement in respect
\nof the Subject Leased Properties including, without limitation:<\/p>\n<\/p>\n

(i) any necessary consents that were or are required in respect of any
\nSubject Lease and any transfer occurring prior to the Execution Date; and<\/p>\n<\/p>\n

(ii) any necessary consents that were or are required to allow Target Canada
\nto obtain the benefit of the full term (including renewal rights) in excess of
\nany reduced term that is deemed to be incorporated in the Subject Lease in the
\nevent a required consent was not obtained;<\/p>\n<\/p>\n

on or before the relevant Closing, and comply with any and all conditions
\nimposed in respect of such consent, at its sole cost and expense. Nothing in
\nthis Section 13.10, including non-compliance with the Planning Act<\/em>
\n(Ontario) and similar Laws governing subdivision or severance of real property
\nin other provinces, will in any way affect Target Canada153s obligation to
\ncomplete the transactions contemplated by this Agreement, including paying the
\nentire Purchase Price as contemplated by Section 3.1 without deduction or
\nabatement of any kind; provided, however, that if such a consent will not
\nreasonably be obtained by the relevant Closing Date, Target or Target Canada may
\ntake such interest, subject to such consent being obtained by Target or Target
\nCanada at its expense following the relevant Closing Date or select another
\nSubject Lease by notice given to Zellers.<\/p>\n<\/p>\n

Section 13.11<\/strong> Entire Agreement.<\/strong><\/p>\n<\/p>\n

This Agreement, together with Ancillary Agreements, constitutes the entire
\nagreement between the Parties with respect to the transactions contemplated by
\nthis Agreement and supersedes all prior agreements, understandings, negotiations
\nand discussions, whether oral or written, of the Parties. There are no
\nrepresentations, warranties, covenants, conditions or other agreements, express
\nor implied, collateral, statutory or otherwise, between the Parties in
\nconnection with the subject matter of this Agreement, except as specifically set
\nforth in this Agreement or the Ancillary Agreements. The Parties have not relied
\nand are not relying on any other information, discussion or understanding in
\nentering into and completing the transactions contemplated by this Agreement.\n<\/p>\n

\n

58<\/p>\n

\n

<\/p>\n

\n

Section 13.12<\/strong> Successors and Assigns.<\/strong><\/p>\n<\/p>\n

(1) This Agreement becomes effective only when executed by Zellers, HBC and
\nTarget. After that time, it is binding on and enures to the benefit of Zellers,
\nHBC and Target, and Target Canada upon compliance with Section 1.12, and their
\nrespective successors and permitted assigns.<\/p>\n<\/p>\n

(2) Other than as contemplated in Section 13.12 and Section 2.7, neither this
\nAgreement nor any of the rights or obligations under this Agreement are
\nassignable or transferable by any Party without the prior written consent of the
\nother Parties.<\/p>\n<\/p>\n

Section 13.13<\/strong> Severability.<\/strong><\/p>\n<\/p>\n

If, in any jurisdiction, any provision of this Agreement or its application
\nto any Party or circumstance is restricted, prohibited or unenforceable, such
\nprovision shall, as to such jurisdiction, be ineffective only to the extent of
\nsuch restriction, prohibition or unenforceability without invalidating the
\nremaining provisions of this Agreement and without affecting the validity or
\nenforceability of such provision in any other jurisdiction or without affecting
\nits application to other Parties or circumstances.<\/p>\n<\/p>\n

Section 13.14<\/strong> Governing Law.<\/strong><\/p>\n<\/p>\n

(1) This Agreement is governed by and interpreted and enforced in accordance
\nwith the laws of the Province of Ontario and the federal laws of Canada
\napplicable therein.<\/p>\n<\/p>\n

(2) Each Party irrevocably attorns and submits to the exclusive jurisdiction
\nof the Ontario courts situated in the City of Toronto and waives objection to
\nthe venue of any proceeding in such court or that such court provides an
\ninconvenient forum.<\/p>\n<\/p>\n

Section 13.15<\/strong> Counterparts.<\/strong><\/p>\n<\/p>\n

This Agreement may be executed in any number of counterparts (including
\ncounterparts by facsimile) and all such counterparts taken together shall be
\ndeemed to constitute one and the same instrument.<\/p>\n<\/p>\n

[Remainder of page intentionally left blank.
\nSignature page follows.]<\/em><\/strong><\/p>\n

\n

59<\/p>\n

\n

<\/p>\n

\n

IN WITNESS WHEREOF<\/strong> the Parties have executed this
\nTransaction Agreement.<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n

ZELLERS INC.<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Richard Baker<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Francis Casale<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Dated:<\/p>\n<\/td>\n

\n

1\/12\/2011<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

HUDSON153S BAY COMPANY<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Richard Baker<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Francis Casale<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Dated:<\/p>\n<\/td>\n

\n

1\/12\/2011<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

TARGET CORPORATION<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Gregg Steinhafel<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Dated:<\/p>\n<\/td>\n

\n

1\/12\/2011<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

TARGET CANADA CO.<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ John Griffith<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n

Authorized Signing Officer<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

Dated:<\/p>\n<\/td>\n

\n

1\/12\/2011<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

\n

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