<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________to________
Commission file number 0-12994
Nordstrom Credit, Inc.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Colorado 91-1181301
________________________________ ___________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
13531 East Caley, Englewood, Colorado 80111
_______________________________________________________
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: 303-397-4700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.50 par value
_______________________________
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
require to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES /X/ NO / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
On March 22, 1994 Registrant had 10,000 shares of Common stock ($.50 par
value) outstanding; all such shares are owned by Registrant's parent,
Nordstrom, Inc.
The Registrant meets the conditions set forth in General Instruction J(1)
(a) and (b) of Form 10-K and is therefore filing this Form with the
reduced disclosure format.
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<PAGE> 2
PART I
Item 1. Business.
- ------------------
In 1994, Nordstrom National Credit Bank (the "Bank") intends to issue a
VISA card. It is anticipated that receivables generated through the use
of the card will be purchased by Nordstrom Credit, Inc. (the "Company"),
without recourse, except for sales occurring at Nordstrom, Inc. stores.
This is expected to increase the external financing needs of the Company.
Service charges earned on these receivables are expected to be sufficient
to offset additional expenses generated through this activity. All other
operations of the Company will remain substantially the same.
Certain other information required under this item is included in Note 1
to the Financial Statements on page 12 of this report, which is
incorporated herein by reference.
Item 2. Properties.
- --------------------
The Company owns an office building in Englewood, Colorado where it
locates its principal offices.
Item 3. Legal Proceedings.
- ---------------------------
The Company is not a party to any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
Not required under reduced disclosure format.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
- ------------------------------------------------------------------------------
The class of securities registered is the Company's Common Stock, $.50
par value per share. There are 100,000 shares of authorized Common Stock,
of which 10,000 shares were issued and outstanding as of March 22, 1994.
The Company's common stock is owned entirely by Nordstrom. The stock has
not been traded and, accordingly, no market value has been established.
In addition, no dividends have been paid or declared.
Item 6. Selected Financial Data.
- ---------------------------------
Not required under reduced disclosure format.
Item 7. Management's Discussion and Analysis of Financial Conditions and
Results of Operations.
- -------------------------------------------------------------------------
Service charge income decreased in 1993 primarily because of a decrease
in the average amount of customer accounts receivable purchased.
Interest expense decreased in 1993 due to lower levels of debt and
decreased short-term interest rates.
Certain other information required under this item is included in Note 1
to the Financial Statements on page 12 of this report, which is
incorporated herein by
reference.
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<PAGE> 3
Item 8. Financial Statements and Supplementary Data.
- ----------------------------------------------------
A) Financial Statements and Supplementary Data
The financial statements listed in the Index to Financial
Statements and Schedules on page 6 of this Report are
incorporated herein by reference.
B) Other Financial Statements and Schedules
Schedules required under Regulation S-X are filed pursuant to
Item 14 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- ------------------------------------------------------------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
- ------------------------------------------------------------
Not required under reduced disclosure format.
Item 11. Executive Compensation.
- --------------------------------
Not required under reduced disclosure format.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
- ------------------------------------------------------------
Not required under reduced disclosure format.
Item 13. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Not required under reduced disclosure format.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
- ---------------------------------------------------------------------
(a)1. Financial Statements
--------------------
The following financial statements of the Company and the
Independent Auditors' Report are incorporated by reference in
Part II, Item 8:
Independent Auditors' Report
Statements of Earnings
Balance Sheets
Statements of Investment of Nordstrom, Inc.
Statements of Cash Flows
Notes to Financial Statements
3 of 16
<PAGE> 4
(a)2. Financial Statement Schedules
-----------------------------
The financial statement schedules listed in the Index to
Financial Statements and Schedules on page 6 of this Report
are incorporated herein by reference.
(a)3. Exhibits
--------
(3.1) Articles of Incorporation of the Registrant are hereby
incorporated by reference from the Registrant's Form 10-K for
the year ended January 31, 1991, Exhibit 3.1.
(3.2) By-laws of the Registrant are hereby incorporated by reference
from the Registrant's Form 10-K for the year ended January 31,
1991, Exhibit 3.2.
(4.1) Indenture between Registrant and First Interstate Bank of
Washington , N.A. dated November 15, 1984, the First Supplement
thereto dated January 15, 1988, the Second Supplement thereto
dated June 1, 1989 and the Third Supplement thereto dated
October 19, 1990 are hereby incorporated by reference from
Registration No. 33-3765, Exhibit 4.2; Registration No. 33-19743,
Exhibit 4.2; Registration No. 33-29193, Exhibit 4.3; and
Registrant's Form 10-K for the year ended January 31, 1991,
Exhibit 4.2, respectively.
(10.1) Investment Agreement dated October 8, 1984 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the
Registrant's Form 10, Exhibit 10.1.
(10.2) Operating Agreement dated August 30, 1991 between Registrant and
Nordstrom National Credit Bank is hereby incorporated by
reference from the Registrant's Form 10-Q for the quarter ended
July 31, 1991, Exhibit 10.1.
(10.3) Credit Agreement dated June 30, 1992, as amended January 1, 1993,
between Registrant and Seattle-First National Bank of Washington
is hereby incorporated by reference from the Registrant's Form
10-K for the year ended January 31, 1993, Exhibit 10.5
(10.4) Second Amendment to the Credit Agreement dated June 30, 1992, as
amended January 1, 1993, between Registrant and Seattle-First
National Bank of Washington dated June 29, 1993 is filed herein
as an Exhibit.
(10.5) Loan Agreement dated November 24, 1992 between Registrant and
Nordstrom, Inc. is hereby incorporated by reference from the
Registrant's Form 10-K for the year ended January 31, 1993,
Exhibit 10.6.
(10.6) Loan Agreement dated June 28, 1993 between Registrant and a
group of commercial banks is filed herein as an Exhibit.
(12.1) Statement regarding computation of ratio of earnings available
for fixed charges to fixed charges is filed herein as an Exhibit.
All other exhibits are omitted because they are not applicable, or not
required, or because the required information is included in the Financial
Statements or notes thereto.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the last quarter of
the period for which this report is filed.
4 of 16
<PAGE> 5
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
NORDSTROM CREDIT, INC.
(Registrant)
Date March 29, 1994 by /s/ John A. Goesling
________________________________ _________________________________
John A. Goesling
Executive Vice President and
Treasurer
(Principal Accounting and
Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.
/s/ John A. McMillan /s/ James F. Nordstrom
_____________________________________ _________________________________
John A. McMillan James F. Nordstrom
Co-Chairman of the Board of Directors Co-Chairman of the Board of
Directors
/s/ Bruce A. Nordstrom /s/ John N. Nordstrom
_____________________________________ _________________________________
Bruce A. Nordstrom John N. Nordstrom
Co-Chairman of the Board of Directors Co-Chairman of the Board of
Directors
/s/ John Walgamott /s/ John A. Goesling
_____________________________________ _________________________________
John Walgamott John A. Goesling
President Executive Vice President and
(Principal Executive Officer) Treasurer
(Principal Accounting and
Financial Officer)
Date March 29, 1994
______________________
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<PAGE> 6
NORDSTROM CREDIT, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page
Number
------
Independent Auditors' Report 7
Statements of Earnings 8
Balance Sheets 9
Statements of Investment of Nordstrom, Inc. 10
Statements of Cash Flows 11
Notes to Financial Statements 12
Additional financial information required to be furnished-
Schedules:
VIII - Valuation and Qualifying Accounts 15
IX - Short-term Borrowings 16
All other schedules have been omitted because they are inapplicable, not
required, or the information is included elsewhere in the financial
statements or notes thereto.
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<PAGE> 7
INDEPENDENT AUDITORS' REPORT
Board of Directors
Nordstrom Credit, Inc.
Englewood, Colorado
We have audited the accompanying balance sheets of Nordstrom Credit,
Inc. as of January 31, 1994 and 1993, and the related statements of
earnings, investment of Nordstrom, Inc. and cash flows for each of the
three years in the period ended January 31, 1994. Our audits also
included the financial statement schedules listed in Item 14(a)2. These
financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Nordstrom Credit, Inc. as
of January 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the three years in the period ended January 31,
1994, in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.
Deloitte & Touche
Seattle, Washington
March 11, 1994
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<PAGE> 8
NORDSTROM CREDIT, INC
STATEMENTS OF EARNINGS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended January 31, 1994 1993 1992
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Revenue:
Service charge income $91,026 $92,553 $88,626
Rental income from Nordstrom
National Credit Bank 1,044 1,044 441
------- ------- -------
Total revenue 92,070 93,597 89,067
Expenses:
Interest, net 29,465 33,593 34,775
Service fees paid to Nordstrom
National Credit Bank 28,551 28,848 12,747
General and administrative 1,682 1,835 17,522
------- ------- -------
Total expenses 59,698 64,276 65,044
------- ------- -------
Earnings before income taxes 32,372 29,321 24,023
Income taxes 11,700 10,400 9,200
------- ------- -------
Net earnings $20,672 $18,921 $14,823
======= ======= =======
Ratio of earnings available for
fixed charges to fixed charges 2.09 1.87 1.69
======= ======= =======
</TABLE>
See notes to financial statements.
8 of 16
<PAGE> 9
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
January 31, 1994 1993
- ----------- ---- ----
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 1,694 $ 388
Customer accounts receivable,
net of holdback allowance of
$23,145 and $23,969 564,495 583,211
Other accounts receivable 3,977 3,708
Property and equipment, net 5,987 6,183
Other assets 1,677 1,954
-------- --------
$577,830 $595,444
======== ========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- ---------------------------------------------
Notes payable to Nordstrom, Inc. $112,500 $112,500
Notes payable to bank 25,000 25,000
Commercial paper 15,337 13,319
Accrued interest, taxes and other 9,665 9,969
Long-term debt 265,600 305,600
-------- --------
Total liabilities 428,102 466,388
Investment of Nordstrom, Inc. 149,728 129,056
-------- --------
$577,830 $595,444
======== ========
</TABLE>
See notes to financial statements.
9 of 16
<PAGE> 10
NORDSTROM CREDIT, INC.
STATEMENTS OF INVESTMENT OF NORDSTROM, INC.
(Dollars in thousands except per share amount)
<TABLE>
<CAPTION>
Common Stock, $.50 par value,
100,000 shares authorized
------------------------- Retained
Shares Amount Earnings Total
------ ------ -------- -----
<S> <C> <C> <C> <C>
Balance at
January 1, 1991 10,000 $55,058 $40,254 $ 95,312
Net earnings - - 14,823 14,823
------ ------- ------- --------
Balance at
January 31, 1992 10,000 55,058 55,077 110,135
Net earnings - - 18,921 18,921
------ ------- ------- --------
Balance at
January 31, 1993 10,000 55,058 73,998 129,056
Net earnings - - 20,672 20,672
------ ------- ------- --------
Balance at
January 31, 1994 10,000 $55,058 $94,670 $149,728
====== ======= ======= ========
</TABLE>
See notes to financial statements.
10 of 16
<PAGE> 11
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended January 31, 1994 1993 1992
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings $20,672 $18,921 $14,823
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Depreciation and amortization 640 664 1,204
Change in:
Customer accounts receivable, net 18,716 981 (89,178)
Other accounts receivable (269) 3,787 (1,752)
Accrued interest, taxes and other (304) (85) (779)
------- ------- -------
Net cash provided by (used in)
operating activities 39,455 24,268 (75,682)
------- ------- -------
INVESTING ACTIVITIES:
(Additions to) disposition of property
and equipment, net (167) 4 2,014
------- ------- -------
FINANCING ACTIVITIES:
Increase (decrease) in commercial paper 2,018 (71,416) 4,681
Principal payments on long-term debt (40,000) (19,400) (3,000)
Increase in notes payable
to Nordstrom, Inc. - 90,150 22,350
Decrease in notes payable to Banks - (25,000) -
Proceeds from issuance of
long-term debt, net - - 49,613
------- ------- -------
Net cash (used in) provided by
financing activities (37,982) (25,666) 73,644
------- ------- -------
Net increase (decrease) in cash and
cash equivalents 1,306 (1,394) (24)
Cash and cash equivalents at beginning
of year 388 1,782 1,806
------- ------- -------
Cash and cash equivalents at end of year $ 1,694 $ 388 $ 1,782
======= ======= =======
</TABLE>
See notes to financial statements.
11 of 16
<PAGE> 12
NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 - DESCRIPTION OF BUSINESS
Nordstrom Credit, Inc. (the "Company"), a wholly-owned subsidiary of
Nordstrom, Inc. ("Nordstrom") was incorporated in the State of
Washington in 1982 and reincorporated in the State of Colorado in 1990.
The primary business of the Company is to finance customer accounts
receivable generated through sales of merchandise in Nordstrom stores
("Accounts"). The Accounts are originated through the use of credit cards
issued by Nordstrom National Credit Bank, a national banking association
organized as a wholly-owned subsidiary of Nordstrom (the "Bank"), effective
August 30, 1991.
The Company and the Bank are parties to an Operating Agreement dated
August 30, 1991 (the "Operating Agreement") pursuant to which the Company
purchases Accounts from the Bank for a price equal to the amount of
Accounts originated less an allowance for amounts to be written off (the
"holdback allowance"). Under the terms of the Operating Agreement, the
Bank performs the servicing functions for the Accounts and the Company
pays the Bank a servicing fee which was initially established at 1.75% of
credit card sales. On February 1, 1993, the servicing fee increased to
1.82% and on November 1, 1993, it decreased to 1.59%.
Prior to the formation of the Bank, the Company and Nordstrom were parties
to a Prior Operating Agreement, whereby the Company purchased from
Nordstrom an undivided interest in the Accounts, which were generated
through the use of credit cards issued by Nordstrom, rather than the Bank.
Pursuant to the Prior Operating Agreement, the Company also provided
servicing for the Accounts.
The Company and Nordstrom are parties to an Investment Agreement dated
October 8, 1984 (the "Investment Agreement") which, among other things,
governs ownership of Company stock and the financial relationships between
Nordstrom and the Company. The Investment Agreement requires that
Nordstrom maintain the Company's ratio of earnings available for fixed
charges to fixed charges at not less than 1.25:1 and further requires that
Nordstrom retain ownership of all the outstanding shares of stock of the
Company. This agreement does not, however, represent a guarantee by
Nordstrom of the payment of any obligation of the Company.
NOTE 2 - RENTAL INCOME
The Company owns an office building in Englewood, Colorado, and leases
space in the building to the Bank under a month-to-month agreement for
$87 per month.
NOTE 3 - INTEREST EXPENSE
<TABLE>
<CAPTION>
The components of net interest expense are as follows:
Year ended January 31, 1994 1993 1992
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Notes payable to banks $ 771 $ 1,694 $ 2,865
Notes payable to Nordstrom, Inc. 1,696 461 178
Commercial paper 1,590 2,780 4,889
Long-term debt 25,543 28,906 27,105
------- ------- -------
Total interest expense 29,600 33,841 35,037
Less: Interest income (135) (248) (262)
------- ------- -------
Interest, net $29,465 $33,593 $34,775
======= ======= =======
</TABLE>
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<PAGE> 13
NOTE 4 - INCOME TAXES
The Company files consolidated income tax returns with Nordstrom. Income
taxes have been provided on a separate return basis, and the difference
between the effective tax rate and the statutory Federal income tax rate
is due to the provision for state and local income taxes. At January 31,
1994 and 1993, amount due to Nordstrom for income taxes totalled $1,592
and $1,460. The Company has no significant deferred taxes.
NOTE 5 - OTHER ACCOUNTS RECEIVABLE
Other accounts receivable consists primarily of amounts due from the Bank
for net activity in Accounts, less service fees due the Bank. These
amounts are settled on a second business day basis.
NOTE 6 - NOTES PAYABLE AND COMMERCIAL PAPER
The notes payable to bank represents amounts borrowed from a commercial
bank as fiduciary under a master note agreement which provides for
borrowings up to $25,000. Borrowings under the Agreement bear interest at
floating rates based on a published short-term interest rate composite
index (3.0% and 3.0% at January 31, 1994 and 1993) and mature up to six
months from the date of borrowing or on demand.
The notes payable to Nordstrom, Inc. represent amounts borrowed from
Nordstrom under an Agreement dated November 24, 1992 which provides for
borrowings from time to time, depending on seasonal cash flow requirements.
Borrowings under the Agreement bear interest at floating rates based on a
published short-term interest rate composite index (3.1% and 3.0% at
January 31, 1994 and 1993) and mature up to six months from the date of
borrowing or on demand. A summary of notes payable to Nordstrom, Inc. is
as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Average daily borrowings
outstanding $ 54,643 $ 14,072 $ 4,166
Maximum amount outstanding 182,500 138,000 57,350
Weighted average interest rate
during the year 3.1% 3.3% 4.3%
</TABLE>
The Company has $150,000 in unsecured lines of credit which are available
as liquidity support for notes payable to bank and commercial paper issued
by the Company. Under the terms of the line-of-credit agreements, the
Company must, among other things, comply with the terms of the Investment
Agreement between the Company and Nordstrom and the Operating Agreement
between the Company and Nordstrom National Credit Bank, and maintain a
ratio of total debt to tangible net worth no greater than 5 to 1. The
Company pays commitment fees for the lines in lieu of compensating balance
requirements.
The carrying amount of the notes payable and commercial paper approximates
fair value because of the short maturity of these instruments.
13 of 16
<PAGE> 14
NOTE 7 - LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
January 31, 1994 1993
- ----------- ---- ----
<S> <C> <C>
Medium-term notes, 8.05% - 9.6%,
due 1994 - 2001 $210,000 $250,000
Sinking fund debentures, 9.375%,
due 2016, payable in
annual installments of $3,750
beginning in 1997 55,600 55,600
-------- --------
Total long-term debt $265,600 $305,600
======== ========
</TABLE>
Aggregate principal payments on long-term debt for the next five fiscal
years are as follows: 1994 - $51,000, 1995 - $25,000, 1996 - $73,000,
1997 - $3,750, and 1998 - $53,750.
The fair value of long-term debt at January 31, 1994, estimated using
quoted market prices of the same or similar issues with the same
remaining maturity, was $292,360.
NOTE 8 - SUPPLEMENTARY CASH FLOW INFORMATION
For purposes of the Statements of Cash Flows, the Company considers all
short-term investments with a maturity at date of purchase of three
months or less to be cash equivalents. The carrying amount approximates
fair value because of the short maturity of these instruments.
Supplementary cash flow information is as follows:
<TABLE>
<CAPTION>
Year Ended January 31, 1994 1993 1992
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Cash paid during the year for:
Interest $30,224 $34,121 $34,355
Income taxes paid to
Nordstrom, Inc. 11,568 10,350 8,100
</TABLE>
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<PAGE> 15
NORDSTROM CREDIT, INC.
SCHEDULE VIII - VALUATION AND
QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
(Dollars in thousands)
Column A Column B Column C Column D Column E
Additions Deductions
- -------- ------------ --------- --------------------- --------
Account
Balance Charged write-offs Balance
beginning to other net of Other end of
Description of period accounts recoveries deductions period
- ----------- ------------ --------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Holdback allowance -
customer accounts
receivable
Year ended
January 31, 1994 $23,969 $25,713* $26,537 $ - $23,145
Year ended
January 31, 1993 $24,192 $29,469* $29,692 $ - $23,969
Year ended
January 31, 1992 $ 0 $37,281** $13,089 $ - $24,192
Amounts withheld
pending collection -
customer accounts
receivable
Year ended
January 31, 1992 $26,503 $ - $ - $26,053** $ 0
</TABLE>
* The Company purchases Accounts net of this amount which represents
the allowance for uncollectible amounts. Bad debt expenses are
reflected on the books of Nordstrom.
** Upon execution of the Operating Agreement between the Bank and
the Company, all Accounts were sold back to Nordstrom and the
corresponding withholding account was eliminated.
15 of 16
<PAGE> 16
NORDSTROM CREDIT, INC.
SCHEDULE IX - SHORT-TERM BORROWINGS
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Weighted
Maximum Average average
Weighted amount amount interest
Balance average outstanding outstanding rate
Category of aggregate at end of interest during the during the during
short-term borrowings period rate period period period
- --------------------- --------- -------- ----------- ----------- -------
(A) (B) (C)
<S> <C> <C> <C> <C> <C>
January 31, 1994
Notes payable
to banks $ 25,000 3.0% $ 25,000 $ 25,000 3.1%
Notes payable to
Nordstrom, Inc. 112,500 3.0 182,500 54,643 3.1
Commercial paper 15,337 3.4 92,023 50,300 3.2
January 31, 1993
Notes payable
to banks $ 25,000 3.0% $ 50,000 $ 45,697 3.7%
Notes payable to
Nordstrom, Inc. 112,500 3.0 138,000 14,072 3.3
Commercial paper 13,319 3.5 136,038 75,840 3.7
January 31, 1992
Notes payable
to banks $ 50,000 4.1% $ 50,000 $ 50,000 5.7%
Notes payable to
Nordstrom, Inc. 22,350 4.1 57,350 4,166 4.3
Commercial paper 84,735 4.1 140,000 86,073 5.7
</TABLE>
(A) The notes payable to banks and Nordstrom, Inc. have maturities of
up to six months or on demand. Notes payable to holders of commercial
paper generally have maturities ranging from one to two months.
(B) Average amount outstanding during the period is computed by
dividing the total of daily outstanding principal balances by the number
of days in the period.
(C) Average interest rate for the year is computed by dividing the
actual short-term interest expense by the average short-term borrowings
outstanding.
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<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT METHOD OF FILING
- ------------------------------- ------------------------------
<C> <S> <C>
3.1 Articles of Incorporation Incorporated by reference from
the Registrant's Form 10-K
for the year ended January
31, 1991, Exhibit 3.1.
3.2 By-laws Incorporated by reference
from the Registrant's Form
10-K for the year ended Jan-
uary 31, 1991, Exhibit 3.2
4.1 Indenture between Registrant and Incorporated by reference from
First Interstate Bank of Washing- Registation No. 33-3765, Ex-
ton, N.A. dated November 15, 1984, hibit 4.2; Registration No.
the First Supplement thereto dated 33-19743, Exhibit 4.2; Regis-
January 15, 1988, the Second Sup- tration No. 33-29193, Exhibit
plement thereto dated June 1, 1989, 4.3; and Registrant's Form
and the Third Supplement thereto 10-K for the year ended Jan-
dated October 19, 1990 uary 31, 1991, Exhibit 4.2.
10.1 Investment Agreement dated October Incorporated by reference from
8, 1984 between Registrant and Registrant's Form 10, Exhibit
Nordstrom, Inc. 10.1
10.2 Operating Agreement dated August Incorporated by reference from
30, 1991 between Registrant and Registrant's Form 10-Q for
Nordstrom National Credit Bank the quarter ended July 31,
1991, Exhibit 10.1
10.3 Credit Agreement dated June 30, Incorporated by reference from
1992, as amended January 1, 1993, Registrant's Form 10-K for
between Registrant and Seattle- the year ended January 31,
First National Bank of Washington 1993, Exhibit 10.5
10.4 Second Amendment to the Credit Filed herewith electronically
Agreement dated June 30, 1992, as
amended January 1, 1993 between
Registrant and Seattle-First
National Bank of Washington dated
June 29, 1993
10.5 Loan Agreement dated November 24, Incorporated by reference from
1992 between Registrant and Registrant's Form 10-K for
Nordstrom, Inc. the year ended January 31,
1993, Exhibit 10.6
10.6 Loan Agreement dated June 28, 1993 Filed herewith electronically
between Nordstrom Credit, Inc. and
and a group of Commerical Banks.
12.1 Computation of Ratio of Earnings Filed herewith electronically
Available for Fixed Charges to
Fixed Charges
</TABLE>
<PAGE> 1
AMENDMENT NO. 2
TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 dated as of June 29, 1993 between NORDSTROM
CREDIT, INC. ("Borrower") and SEATTLE-FIRST NATIONAL BANK ("BANK")
amends the Credit Agreement dated as of June 30, 1992 (as amended as of
January 1, 1993, the "Credit Agreement") between Borrower and Bank. On
June 30, 1992, Bank assigned to Bank of American National Trust and
Savings Association a portion of its rights and obligations under the
Credit Agreement.
1. Section 1.1 of the Credit Agreement (Revolving Loan Facility)
is amended by changing the "Maturity Date" from June 29, 1993 to June
30, 1994.
2. Section 3.8 of the Credit Agreement (Affiliate Debt) is amended
to read as follows:
3.8 Affiliate Debt. Not incur any debt
or make any loan or advance to any of its
affiliates other than (i) to Nordstrom
National Credit Bank, in the ordinary course
of Borrower's business in connection with
Borrower's purchase of accounts receivable
from Nordstrom National Credit Bank, or
(ii) to Nordstrom, Inc.; provided that loans
or advances by Borrower to Nordstrom, Inc.
shall (a) not exceed $50,000,000 in the
aggregate at any one time outstanding;
(b) not remain outstanding in excess of 60
days; (c) be made for general operating
purposes only; and (d) be made on terms and
conditions which are similar to those Borrower
could negotiate with a non-affiliated party,
including interest rates and collateral, and
do not involve more that normal risk of
repayment or present other unfavorable features.
As used herein, the term "affiliate" means any
person or entity which directly or indirectly
owns all or any part of Nordstrom, Inc., or
which is directly or indirectly owned in whole
or part by Nordstrom, Inc.
3. Except as expressly amended hereby, the Credit Agreement shall
remain in full force and effect.
4. This Amendment No. 2 may be executed in multiple counterparts
and by difference parties in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties hereto have caused this Amendment
No. 2 to be executed by their respective officers thereunto duly
authorized as of the date first above written.
1
<PAGE> 2
NORDSTROM CREDIT, INC. SEATTLE-FIRST NATIONAL BANK
By /s/ John Walgamott By /s/ Kevin S. Berry
_________________________ _______________________________
John Walgamott Kevin S. Berry
Its President Its Vice President
BANK OF AMERICAN NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Karen A. Arneson
_________________________
Karen A. Arneson
Its Vice President
2
<PAGE>
LOAN AGREEMENT
THIS AGREEMENT is entered into as of this 28th day of June, 1993
by and among NORDSTROM CREDIT, INC., the BANKS listed on the signature
pages hereof and FIRST INTERSTATE BANK OF WASHINGTON, N.A., as Agent.
The parties hereto agree as follows:
Section 1. DEFINITIONS.
1.1 Terms Defined. As used herein, the following terms have the
meanings set forth below.
1.1.1 "Adjusted Fixed CD Reference Rate" has the meaning set
forth in paragraph 2.5.2.
1.1.2 "Agent" means First Interstate Bank of Washington,
N.A. in its capacity as agent for the Banks hereunder, or any successor
Agent appointed pursuant to paragraph 9.7.
1.1.3 "Agreement" or "Loan Agreement" means this Loan
Agreement as amended from time to time.
1.1.4 "Assessment Rate" has the meaning set forth in
paragraph 2.5.2.
1.1.5 "Bank" means each bank listed on the signature pages
hereof as having a Commitment, and its successors and assigns.
1.1.6 "Base Rate" means, for any day, a rate per annum equal
to the higher of (i) the Prime Rate for such day or (ii) the Federal
Funds Rate for such day plus one-half of one percent (0.5%).
1.1.7 "Borrower" means Nordstrom Credit, Inc., a Colorado
corporation, and its successors.
1.1.8 "Borrowing" means a borrowing under this Agreement
consisting of Loans made to the Borrower at the same time by all Banks
severally. A Borrowing is a "Fixed Rate Borrowing" if such Loans are
Fixed Rate Loans or a "Floating Rate Borrowing" if such Loans are
Floating Rate Loans. A Borrowing may include an Initial Borrowing under
which additional funds are advanced by the Banks or a Subsequent
Borrowing.
1.1.9 "Business Day" means any day except a Saturday, Sunday
or day on which commercial banks or the Federal Reserve Bank in New York
City or in the State of Washington are authorized by law to close.
<PAGE>
1.1.10 "Code" means the Internal Revenue Code of 1986, as
amended.
1.1.11 "Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature pages
hereof, as such amount may be reduced from time to time pursuant to
paragraph 2.8.
1.1.12 "Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of Borrower and its Subsidiaries less
their consolidated Intangible Assets, all determined as of such date.
For purposes of this definition, "Intangible Assets" means the amount
(to the extent reflected in determining such consolidated stockholders'
equity) of all unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, organization or developmental expense and other
intangible items.
1.1.13 "Consolidated Total Debt" means on a consolidated
basis, the total of all items of indebtedness, obligation or liability
(including, without limitation, indebtedness, obligation or liability
secured by a mortgage, pledge, lien, security interest or other
encumbrance on their respective properties whether or not assumed by
Borrower or any of its Subsidiaries, and guaranties) of Borrower and its
Subsidiaries.
1.1.14 "Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code.
1.1.15 "Default" means any condition or event which
constitutes an Event of Default or which with the giving of notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.
1.1.16 "Dollars" means United States Dollars unless otherwise
specified.
1.1.17 "Effective Date" means the first date upon which
counterparts hereof shall have been signed by all parties hereto and
delivered to Agent, notice of which date shall be given by Agent to
Borrower and each of the Banks.
1.1.18 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
1.1.19 "Event of Default" has the meaning set forth in Section 7.
1.1.20 "Federal Funds Rate" means the "Fed. Funds Effective
Rate" as reported in the most recently available Federal Reserve
Statistical Release H-15 (or any successor publication).
1.1.21 "Fixed CD Base Reference Rate" has the meaning set
forth in paragraph 2.5.2.
1.1.22 "Fixed Rate Loan" means a Loan to be made bearing
interest based on the Fixed CD Base Reference Rate pursuant to the terms
<PAGE>
of this Agreement.
1.1.23 "Floating Rate Loan" means a Loan to be made bearing
interest based on the Base Rate pursuant to the terms of this Agreement.
1.1.24 "Initial Borrowing" means a Borrowing under which
additional funds are severally advanced by the Banks hereunder.
1.1.25 "Interest Period" means,
(A) with respect to each Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending thirty (30), sixty
(60), ninety (90) or one hundred eighty (180) days thereafter, as
Borrower may elect in the applicable Notice of Borrowing; provided that
the first day of any such Interest Period shall be (i) for an Initial
Borrowing, the date new funds are advanced; (ii) for a Subsequent
Borrowing, the last day of the next preceding Interest Period applicable
to such Borrowing, which day shall also be a Business Day; and provided
further that in determining the Interest Period for each Fixed Rate
Borrowing:
(a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day; and
(b) in no event shall Borrower elect any Interest Period
ending later than Maturity of the Notes; and
(B) with respect to each Floating Rate Borrowing, the period commencing
on the date of such Borrowing and ending ninety (90) days thereafter;
provided that the first day of any such Interest Period shall be (i) for
an Initial Borrowing, the date new funds are advanced; (ii) for a
Subsequent Borrowing, the last day of the next preceding Interest Period
applicable to such Borrowing, which day shall also be a Business Day;
and provided further that in determining the Interest Period for each
Floating Rate Borrowing:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b)(i) below) which would otherwise end on
a day which is not a Business Day shall be extended to the next
succeeding Business Day;
(b) if any Interest Period includes a date on which a payment
of principal of the Loans is required but does not end on such date,
then (i) the principal amount (if any) of each Floating Rate Loan
required to be repaid on such date shall have an Interest Period ending
on such date and (ii) the remainder (if any) of such Floating Rate Loans
shall have an Interest Period determined as set forth above; and
(c) in no event shall Borrower elect any Interest Period
ending later than Maturity of the Notes.
1.1.26 "Line" means the revolving line of credit available to
Borrower pursuant to the terms and conditions of this Agreement.
1.1.27 Loan" means that portion of a Borrowing severally
advanced by each Bank pursuant to the terms hereof; such term shall
include a portion or portions of either Initial Borrowings or Subsequent
Borrowings.
<PAGE>
1.1.28 "Maturity of the Notes" means the date on which all
principal and interest of the Notes is fully due and payable, in no
event later than June 25, 1994.
1.1.29 "Nordstrom" means Nordstrom, Inc., a Washington
corporation and Borrower's parent company, owning one hundred percent
(100%) of Borrower's capital stock of all classes, issued and
outstanding.
1.1.30 "Note" or "Notes" means one or more master promissory
notes of Borrower, substantially in the form of Exhibit A hereto,
evidencing the obligation of Borrower to repay the Loans as more fully
described at paragraph 2.3.
1.1.31 "Notice of Borrowing" has the meaning set forth in
paragraph 2.2.2.
1.1.32 "NNCB" means Nordstrom National Credit Bank, a national
banking association all of the capital stock of which is, as of the date
of this Agreement, owned by Nordstrom.
1.1.33 "PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under ERISA.
1.1.34 "Plan" means at any time an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either (i)
maintained by Borrower or any member of a Controlled Group for employees
of Borrower or any member of such Controlled Group or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which
Borrower or any member of such Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding
five (5) plan years made contributions.
1.1.35 "Prime Rate" means the rate of interest publicly
announced or published by First Interstate Bank of Washington, N.A. from
time to time as its Prime Rate, and is not necessarily its lowest rate.
1.1.36 "Required Banks" means at any time Banks having at least
sixty-six and two-thirds percent (66-2/3%) of the aggregate amount of
the Commitments.
1.1.37 "Reserve Percentage" has the meaning set forth in
paragraph 2.5.2.
1.1.38 "Subordinated Debt" means all indebtedness for money
borrowed which, by the terms of any document or instrument representing
such indebtedness, is subordinate to debts to general creditors or
subordinated to debts incurred pursuant to this Agreement.
1.1.39 "Subsequent Borrowing" means a Borrowing which results
in no net increase in the aggregate outstanding principal amount of all
Loans made by the Banks hereunder and for which Borrower elects a new or
different Interest Period or interest rate election.
1.1.40 "Subsidiary" means a corporation fifty percent (50%) or
more of the outstanding voting stock of which is owned, directly or
indirectly, by Borrower or by one or more other Subsidiaries, or by
<PAGE>
Borrower and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which originally has voting power
for the election of directors, whether at all times or only so long as
no senior class of stock has such voting power by reason of any
contingency. Further for purposes of this Agreement and all financial
covenants contained herein, any "consolidation" of Borrower and its
Subsidiaries shall include all Subsidiaries whether or not consolidated
under generally accepted accounting principles.
1.1.41 "Telerate" means an automated rate quotation service
provided by Telerate, Inc. or its successors.
1.1.42 "Unfunded Vested Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present value of
all vested nonforfeitable benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of
Borrower or any member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
1.2 Other Accounting Terms. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of Borrower and its Subsidiaries
delivered to the Banks.
Section 2. THE LINE.
2.1 Agreement to Lend. Subject to the terms and conditions of
this Agreement, each Bank severally agrees to lend to Borrower and
Borrower may borrow amounts not to exceed in the aggregate at any one
time outstanding the amount of each Bank's Commitment. The Line shall
be a revolving line of credit under which Borrower may borrow, repay and
reborrow from time to time pursuant to the terms and conditions hereof.
Each Borrowing shall be made from the several Banks ratably in
proportion to their respective Commitments.
The making of Loans to Borrower may be suspended or terminated at
any time in the discretion of the Required Banks upon the occurrence of
a Default.
2.2 Method of Borrowing.
2.2.1 Amount. Each Fixed Rate Borrowing shall be in a
minimum principal amount of ten million Dollars ($10,000,000) or any
larger multiple of five million Dollars ($5,000,000); a Floating Rate
Borrowing may be of any amount of even One Million Dollar ($1,000,000)
increments; provided that in no event may any Borrowing be in excess of
the unused aggregate Commitments.
2.2.2 Notice of Borrowing.
(i) Borrower shall give Agent (a) a written notice signed by
an authorized officer of Borrower or (b) telephonic notice from an
<PAGE>
authorized officer of Borrower or a representative designated by an
authorized officer of Borrower (a "Notice of Borrowing") not later than
10:00 a.m. Seattle time at least two (2) Business Days before each
Borrowing, specifying:
(a) the date of such Borrowing (which shall be a
Business Day) and, to the extent that the Borrowing is a Subsequent
Borrowing, shall be no sooner than the last day of the Interest Period
applicable to such previous Borrowing(s);
(b) the aggregate amount of such Borrowing;
(c) whether the Loans comprising such Borrowing are to
be Floating Rate Loans or Fixed Rate Loans;
(d) in the case of a Fixed Rate Borrowing, the duration
of the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period; and
(e) that all of the conditions precedent to such
Borrowing set forth in Section 3 have been met, including but not
limited to all representations and warranties of Borrower hereunder
being true on and as of such date and no Default having occurred and
continuing.
(ii) Any telephonic Notice of Borrowing shall be followed by
a written Notice of Borrowing, properly executed by Borrower and
received by Agent within one (1) Business Day after the telephonic
Notice of Borrowing; provided, however that notwithstanding failure to
receive such written Notice of Borrowing as provided hereunder, Banks
may rely upon the previously given telephonic Notice of Borrowing.
(iii) Upon receipt of a Notice of Borrowing (written or
telephonic), Agent shall promptly notify each Bank by telephone or
telecopy of the contents thereof and of such Bank's ratable share of
such Borrowing; and such Notice of Borrowing shall not thereafter be
revocable by Borrower.
(iv) Not later than 10:00 a.m. Seattle time on the day of any
Borrowing, each Bank shall (except as provided in subsection (v) of this
paragraph) make available its ratable share of such Borrowing, in
federal or other funds immediately available in Seattle, Washington, to
Agent at its address specified on the signature page of this Agreement
or pursuant to paragraph 10.1. Unless Agent has actual knowledge that
any applicable condition precedent specified in Section 3 has not been
satisfied, Agent will make the funds so received from the Banks
available to Borrower by deposit to Borrower's account with Agent or
otherwise at Agent's address; otherwise Agent will promptly return funds
to the Banks.
(v) If any Bank makes a Loan hereunder on a day on which
Borrower is to repay all or any part of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its Loan to make such
repayment, and only an amount equal to the difference (if any) between
the amount being borrowed and the amount being repaid shall be made
available by such Bank to Agent as provided in subsection (iv) of this
paragraph 2.2.2, or remitted by Borrower to Agent as provided hereunder,
as the case may be. For purposes of this subsection (v), "a day on
which Borrower is to repay all or any part of an outstanding Loan" shall
<PAGE>
include the last day of each Interest Period.
2.3 Notes. The obligation of Borrower to repay the Loans made by
each Bank pursuant to this Agreement shall be evidenced by one master
promissory note payable to the order of each such Bank, in the form of
Exhibit A, properly completed.
Upon receipt of each Bank's Note, Agent shall mail each Bank's
Note to such Bank by first class mail at the address set forth on the
signature pages hereof. Each Bank shall record in its books and
records, electronic or otherwise, and prior to any transfer of its Note
shall endorse on the appropriate schedules forming a part thereof
appropriate notations to evidence the date and amount of each Loan made
by it and the date and amount of each payment of principal made by
Borrower with respect thereto. Each Bank is hereby irrevocably
authorized by Borrower so to endorse its Note and to attach to and make
a part of such Note a continuation of any such schedule as and when
required; provided, that the failure of any Bank to do so shall not
affect the obligations of Borrower hereunder or under such Note.
Each Bank's records and/or such endorsement on any Note shall
constitute prima facie evidence of the amount of indebtedness under such
Note.
2.3.1 Interest Payments. Interest accrued on the
outstanding principal balance of each Loan shall be payable as follows:
(i) for Floating Rate Loans, on the last day of each
Interest Period; or
(ii) for Fixed Rate Loans, on the last day of each Interest
Period, or in the event that such Interest Period is longer than ninety
(90) days, at intervals of ninety (90) days after the first day of such
Interest Period;
provided that in any event, all accrued interest shall be fully due and
payable on Maturity of the Notes.
2.3.2 Optional Repayment of Principal.
(i) Borrower may, upon at least two (2) Business Days'
notice to Agent, repay Floating Rate Borrowings in whole at any time, or
from time to time in any amount of even one hundred thousand Dollar
($100,000) increments by paying the principal amount to be repaid
together with accrued interest thereon to the date of repayment. Each
such optional repayment shall be applied to repay the Floating Rate
Loans of the several Banks in proportion to their respective
Commitments.
(ii) Borrower may, upon at least four (4) Business Days'
notice to Agent in the case of Fixed Rate Loans (such notice in each
case to be received prior to 10:00 a.m. Seattle time on the day such
notice is given), repay on the last day of any Interest Period the full
principal amount of any such Fixed Rate Borrowings to which such
Interest Period applies, by paying the principal amount to be repaid
together with accrued interest thereon to the date of repayment. Each
such optional repayment shall be applied to repay such Fixed Rate
Borrowing(s) in proportion to the respective Fixed Rate Loans composing
such Borrowing(s), subject to paragraph 2.10.
<PAGE>
(iii) Upon receipt of a notice of repayment pursuant to this
paragraph 2.3.2, Agent shall promptly notify each Bank by telephone or
telecopy of the contents of such notice and of such Bank's ratable share
of such repayment, and such notice shall not thereafter be revocable by
Borrower.
2.3.3 Maturity. All outstanding principal and accrued but
unpaid interest of each Borrowing shall be fully due and payable on the
last day of the Interest Period for such Borrowing (in addition to any
payments required under 2.3.1 above), and in any event shall be fully
due and payable at Maturity of the Notes.
2.4 Interest Periods.
2.4.1 Election of Interest Period. The duration of the
Interest Period for each Fixed Rate Borrowing shall be as specified in
the applicable Notice of Borrowing as set forth in paragraph 2.2.2.
2.4.2 Failure to Elect. If Agent does not receive a Notice
of Borrowing for any Subsequent Borrowing or a notice of optional
repayment pursuant to paragraphs 2.2.2 or 2.3.2 above, respectively,
within the applicable time limits specified therein, Borrower shall be
deemed to have given a Notice of Borrowing requesting that a Floating
Rate Borrowing be made on the last day of the current Interest Period,
and shall be deemed to have made the statements, representations and
warranties contained in paragraph 2.2.2(e).
2.4.3 Limitations. Notwithstanding any ability of Borrower
to elect Interest Periods and/or repay principal, the duration of each
Interest Period shall be subject to the provisions of the definition of
Interest Period.
2.5 Interest Rates. From the date of this Agreement to and
including Maturity of the Notes:
2.5.1 Floating Rate Loan. Each Floating Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until due, at a rate per annum equal to
the Base Rate in effect for such day; the interest rate shall change
concurrently with each change in the Base Rate.
2.5.2 Fixed Rate Loan. Each Fixed Rate Loan shall bear
interest on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the sum of
three-eighths of one percent (3/8%) plus the applicable Adjusted Fixed
CD Reference Rate.
The "Adjusted Fixed CD Reference Rate" applicable to any
Interest Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [___________] + AR
[ 1.00 - RP ]
ACDR = Adjusted Fixed CD Reference Rate
CDBR = Fixed CD Base Reference Rate
RP = Reserve Percentage
AR = Assessment Rate
<PAGE>
___________
* The amount in brackets being rounded upwards, if necessary,
to the next higher 1/100 of 1%.
The "Fixed CD Base Reference Rate" applicable to any Interest
Period is the rate of interest determined by Agent to be the secondary
market bid quote for top-tier U.S. bank certificates of deposit having a
maturity comparable to such Interest Period appearing on the appropriate
page of Telerate one (1) Business Day before the first day of such
Interest Period. The "early" certificate of deposit bid quote is used
for Borrowings funded on or between the first and fifteenth day of any
month and the "late" CD bid quote is used for Borrowings funded on or
between the sixteenth and last day of any month.
"Reserve Percentage" means for any day that percentage
(including any supplemental percentage applied on a marginal basis or
any other reserve requirement having a similar effect), expressed as a
decimal, which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the
Federal Reserve System in respect of new non-personal time deposits in
Dollars having a maturity comparable to the related Interest Period, and
in an amount of one hundred thousand Dollars ($100,000) or more. The
Adjusted Fixed CD Reference Rate may be adjusted on and as of the
effective date of any change in the Reserve Percentage.
"Assessment Rate" means for any Interest Period the gross
annual assessment rate (rounded upwards, if necessary, to the next
higher 1/100 of 1%) incurred by First Interstate Bank of Washington,
N.A. to the Federal Deposit Insurance Corporation (or any successor) for
such Corporation's (or such successor's) insuring time deposits at
offices of First Interstate Bank of Washington, N.A. in the United
States during the most recent period for which such rate has been
determined prior to the commencement of such Interest Period.
2.5.3 Default Rates.
(i) Notwithstanding the foregoing, if any interest payment
is not made when due, the Loan on which such interest payment is
delinquent and, to the extent permitted by law, any overdue interest,
shall bear interest, payable on demand, for each day until paid at a per
annum rate equal to the sum of one percent (1%) plus the interest rate
then applicable to such Loan until the earlier of the end of (a) the
applicable Interest Period or (b) acceleration of the Loan pursuant to
Section 7, at which time the principal amount of such Loan shall be due
and owing.
(ii) If any principal payment is not made when due, the
principal amount, and to the extent permitted by law, any overdue
interest, shall bear interest payable on demand for each day until paid
at a per annum rate equal to the sum of one percent (1%) plus the rate
applicable to Floating Rate Loans for such day; all such interest shall
be payable on demand.
2.5.4 Determination of Interest Rates.
(i) Agent shall determine each interest rate applicable to
<PAGE>
the Loans hereunder. Agent shall give prompt notice to Borrower and the
Banks by telephone or telecopy of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of
manifest error.
(ii) In the event that the use of the procedure described in
paragraph 2.5.2 for computation of Fixed CD Reference Rate is precluded
for any reason, including but not limited to Agent's determination that
the information required to compute the effective interest rate is not
available through Telerate or similar service for more than one (1)
Business Day, Agent will use as the Fixed CD Base Reference Rate the
rate determined by Agent to be the arithmetic average (rounded upwarded,
if necessary, to the next higher 1/100 of 1%) of the rate quoted by two
(2) or more New York certificate of deposit dealers of recognized
standing determined to most closely approximate the Telerate quote
specified for determination of such rate in paragraph 2.5.2 for
certificates of deposit having a maturity comparable to the applicable
Interest Period and in an amount approximately equal to the Fixed Rate
Borrowing to be made by the several Banks.
Such procedure change will be communicated to Borrower and
each of the Banks. If no such quotation is available on a timely basis,
the provisions of paragraph 2.6.1 shall apply.
2.5.5 Computation. Interest on Fixed Rate Loans shall be
computed on the basis of a year of three hundred sixty (360) days and
paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but
excluding the last day thereof. Interest on Floating Rate Loans shall
be computed on the basis of a year of three hundred sixty-five (365)
days (366 in a leap year) and paid for the actual number of days
elapsed, calculated as to each Loan from and including the first day of
such Loan to but excluding the date of repayment.
2.6 A0djustments to Interest Rates.
2.6.1 Basis for Determining Interest Rate Inadequate or
Unfair.
(i) If with respect to any Interest Period for a Fixed Rate
Loan:
(a) Agent determines that the information required to
compute the effective interest rate is not available through Telerate or
some similar service because deposits in Dollars (in the applicable
amounts) are not being offered to or by (as the case may be) a
sufficient number of banks in the relevant market for such Interest
Period, or
(b) the Required Banks advise Agent that the Adjusted
Fixed CD Reference Rate as determined by Agent will not adequately and
fairly reflect the cost to such Banks of maintaining or funding their
Fixed Rate Loans for such Interest Period,
Agent shall forthwith give notice thereof to Borrower and the Banks,
whereupon until Agent notifies Borrower that the circumstances giving
rise to such suspension no longer exist, (A) the obligations of the
Banks to make Fixed Rate Loans shall be suspended and (B) Borrower shall
repay in full the then-outstanding principal amount of each affected
<PAGE>
Fixed Rate Loan together with accrued interest thereon, on the last day
of the then-current Interest Period applicable to such Loan.
Concurrently with repaying each such Fixed Rate Loan of each Bank pursuant
this paragraph, Borrower may borrow a Floating Rate
principal amount from such Bank, and such Bank shall make such a Floating
Rate Loan.
(ii) If with respect to any Interest Period for a Fixed Rate
Loan, any Bank provides reasonable proof to Agent and Borrower that the
Telerate quote for the Fixed CD Base Reference Rate does not adequately
and fairly reflect the cost to such Bank of maintaining or funding its
Fixed Rate Loans for such Interest Period in an amount deemed by such
Bank to be material, then within fifteen (15) days after demand by such
nd by such
Bank made to Agent and made promptly by Agent to Borrower, Borrower
shall pay to Agent for the account of such Bank such additional amount
or amounts as will compensate such Bank for such increased cost. Each
Bank will promptly notify Borrower and Agent of any event of which it
has knowledge, occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this paragraph by providing to Borrower
and Agent a certificate of such Bank claiming compensation under this
paragraph and setting forth the additional amounts to be paid to it
hereunder. Such certificate shall be conclusive in the absence of
manifest error.
2.6.2 Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any
Bank with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for any Bank to make, maintain or fund its
Fixed Rate Loans and such Bank shall so notify Agent, Agent shall
forthwith give notice thereof to the other Banks and Borrower. Upon
receipt of such notice, Borrower shall repay in full the then
outstanding principal amount of each Fixed Rate Loan of such Bank,
together with accrued interest thereon, on either (i) the last day of
the then-current Interest Period applicable to such Fixed Rate Loan if
such Bank may lawfully continue to maintain and fund such Fixed Rate
Loan to such day or (ii) immediately if such Bank may not lawfully
continue to fund and maintain such Fixed Rate Loan to such day.
Concurrently with repaying each affected Fixed Rate Loan of such Bank,
Borrower shall borrow a Floating Rate Loan in an equal principal amount
from such Bank, and such Bank shall make such a Floating Rate Loan.
2.6.3 Increased Cost and Reduced Returns.
(i) If after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(a) shall subject any Bank to any tax, duty, or other
charge with respect to its Loans, its Note or its obligation to make
Loans, or shall change the basis of taxation of payments to any Bank of
the principal of or interest on its Loans or any other amount due under
<PAGE>
this Agreement in respect of its Loans or its obligation to make Loans
(except for changes in the rate of tax on the overall net income of such
Bank imposed by the jurisdiction in which such Bank's principal
executive office is located); or
(b) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding, with respect to any Fixed
Rate Loan, any such requirement already included in an applicable
Reserve Percentage , or shall impose on any Bank or on the United States
market for certificates of deposit any other condition affecting its
Loans, its Note or its obligation to make Loans;
and the result of any of the foregoing is to increase the cost to such
Bank of making or maintaining any Loan, or to reduce the amount of any
sum received or receivable by such Bank under this Agreement or under
its Note by an amount deemed by such Bank to be material, then within
fifteen (15) days after demand by such Bank made to Agent and made
promptly by Agent to Borrower, Borrower shall pay to Agent for the
account of such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction. If any Bank
demands compensation under this paragraph 2.6.3(i), Agent shall so
notify all Banks hereunder, and Borrower may at any time, upon at least
five (5) Business Days' prior notice to Agent on behalf of such Bank,
and Agent having promptly notified such Bank of receipt of such notice,
repay to Agent for such Bank's account the full amount of the then
outstanding Fixed Rate Loans of such Bank, together with a) accrued
interest thereon to the date of prepayment and b) the compensation
requested. Concurrently with repaying such Fixed Rate Loans of such
Bank, Borrower shall borrow from such Bank a Floating Rate Loan in an
amount equal to the aggregate principal amount of such Fixed Rate Loans,
and such Bank shall make such a Floating Rate Loan.
(ii) If after the date hereof, any Bank shall have determined
that the adoption of or compliance with any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by Bank with
any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on Bank's capital as a consequence of its obligations hereunder
to a level below that which Bank could have achieved but for such
adoption, change or compliance (taking into consideration Bank's
policies with respect to capital adequacy) by an amount deemed by Bank
to be material, then from time to time, within fifteen (15) days after
demand by Bank, Borrower shall pay to such Bank such additional amount
or amounts as will compensate Bank for such reduction.
(iii) Each Bank will promptly notify Borrower and Agent of any
event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this paragraph. A
certificate of any Bank claiming compensation under this paragraph and
setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
<PAGE>
2.6.4 Floating Rate Loans Substituted for Affected Fixed
Rate Loans. If notice has been given by a Bank pursuant to paragraph
2.6.2 or by Borrower pursuant to paragraph 2.6.3 requiring Fixed Rate
Loans of any Bank to be repaid, then, unless and until such Bank
notifies Agent and Borrower that the circumstances giving rise to such
repayment no longer apply:
(i) all Loans which would otherwise be made by such Bank as
Fixed Rate Loans shall be made instead as Floating Rate Loans, and
(ii) after each of its Fixed Rate Loans has been so repaid,
all payments and prepayments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its
Floating Rate Loans instead.
If such Bank notifies Borrower and Agent that the circumstances giving
rise to such repayment no longer apply, Borrower may borrow a Fixed Rate
Loan from such Bank on the first day of the next succeeding Interest
Period applicable to each related Borrowing in the amount of the Fixed
Rate Loan which would have been outstanding from such Bank as part of
such Borrowing if the provisions of paragraphs 2.6.2 or 2.6.3 had never
applied, and concurrently with each such Borrowing shall repay an equal
principal amount of such Bank's outstanding Floating Rate Loans.
2.7 Commitment Fee. Borrower shall pay to Agent for the account
of each Bank a commitment fee at the rate of three-sixteenths of one
percent (3/16%) per annum on the total of each Bank's Commitment. Such
commitment fee shall accrue from and including the date of this
Agreement through the Maturity of the Notes, and shall be payable in
arrears on the last Business Day of each calendar quarter beginning
September 30, 1993. Such fee shall be based on the actual number of
days elapsed divided by three hundred sixty-five (365) (or three hundred
sixty-six (366) in a leap year).
2.8 Termination or Reduction of Commitments. Borrower may, upon
at least five (5) Business Days' notice to Agent, terminate entirely at
any time, or proportionately and permanently reduce from time to time by
an aggregate amount of ten million Dollars ($10,000,000) or any larger
multiple of five million Dollars ($5,000,000), the aggregate unused
portions of the Commitments. If the Commitments are terminated in part
or in their entirety, all accrued commitment fees on the terminated
portion shall be payable on the effective date of such termination.
2.9 General Provisions as to Payments.
2.9.1 Payment and Distribution. Borrower shall make each
payment of principal of, and interest on, the Loans and of commitment
fees and any other amounts due hereunder, not later than 10:00 a.m.
Seattle, Washington time on the date when due, in federal or other
Dollar funds immediately available in Seattle, Washington, to Agent for
the accounts of the several Banks at Agent's address specified on the
signature page hereof or such other address pursuant to paragraph 10.1.
Agent will promptly distribute to each Bank its ratable share of each
such payment received by Agent for the account of the Banks.
2.9.2 Adjusted Payment Date. Whenever any payment of
principal of, or interest on, the Loans or of commitment fees shall be
due on a day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day. If the date for
<PAGE>
any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
2.10 Funding Losses. (i) If Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Section 7 or
paragraphs 2.6.1(i), 2.6.2, 2.6.3 or 2.6.4 or otherwise) on any day
other than the last day of an Interest Period applicable thereto or (ii)
if Borrower fails to repay any Fixed Rate Loan after notice has been
given to any Bank in accordance with paragraph 2.3.2(iii), or (iii) if
Borrower fails to borrow after notice has been given by Agent to any
Bank in accordance with paragraph 2.2.2(iii), Borrower shall reimburse
each Bank on demand made through Agent for any resulting loss or expense
incurred by such Bank, including (without limitation) any loss incurred
in obtaining, liquidating or employing deposits from third parties,
including loss of margin for the period before, but excluding loss of
margin for the period after, any such payment; provided that such Bank
shall have delivered to Agent and Agent shall have delivered to Borrower
a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
Section 3. CONDITIONS PRECEDENT.
3.1 Conditions Precedent to Borrowing. The several obligations
of the Banks to make any Loan are subject to satisfaction of the
following conditions before the first Borrowing:
3.1.1 Agreement and Notes. Borrower shall have executed and
delivered to Agent for the account of each Bank this Loan Agreement and
the Notes, one payable to the order of each of the Banks, each such Note
dated on or before the date of the first Borrowing.
3.1.2 Opinion of Counsel. Borrower shall have delivered to
Agent, on or before the date of the first Borrowing, an opinion of
Borrower's counsel stating that:
(i) Borrower is a corporation duly organized, validly
existing and in good standing under the laws of Colorado, and Borrower
and each of its Subsidiaries has all corporate power required to carry
on its business as now conducted, and is duly qualified to do business
and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it, or in which the transaction of its
business, makes such qualification necessary.
(ii) The execution, delivery and performance by Borrower of
this Agreement and the Notes are within Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body,
agency or official, and do not contravene or constitute a default under
any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of Borrower or to the best of such counsel's
knowledge of any agreement, bond, debenture, note, contract, indenture,
judgment, injunction, order, decree or other instrument binding upon
Borrower, or result in the creation or imposition of any lien on any
asset of Borrower.
(iii) This Agreement and the Notes each constitutes a valid
and binding agreement of Borrower, each enforceable in accordance with
its terms subject to bankruptcy and insolvency laws and enforceability
of creditor's rights generally.
<PAGE>
(iv) There is no action, suit or proceeding pending against,
or to the best of counsel's knowledge threatened against or affecting,
Borrower or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely
affect the business, financial position or results of operations of
Borrower or which in any manner questions the validity of the Loan
Agreement or the Notes.
(v) To the best of counsel's knowledge, Borrower and all
members of the Controlled Group have fulfilled their obligations under
the minimum funding standards of ERISA with respect to each Plan to
which it is a party, and have not incurred any liability to the PBGC in
connection with any Plan established or maintained by Borrower or any
member of the Controlled Group.
(vi) Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
3.1.3 Certificate of Incumbency; Resolution. Agent shall
have received:
(i) a certificate signed by the Secretary of Borrower and
dated the Effective Date as to the incumbency of the person or persons
authorized to execute and deliver this Agreement, the Notes, Notices of
Borrowing, and all other documents or instruments required hereunder,
and to give telephonic Notices of Borrowing; and
(ii) certified copies of resolutions adopted by the Board of
Directors of Borrower authorizing execution, delivery and performance of
this Agreement, the Notes and all other instruments or agreements
required hereunder,
each of which shall affirmatively permit Agent and Banks to rely thereon
until Agent has received a certified copy of a resolution or incumbency
certificate revoking or modifying the previous certificate or
resolution.
3.1.4 Agent's Fee. Agent shall have received from Borrower
the sum of ten thousand Dollars ($10,000) as its agent's fee.
3.1.5 Other Evidence. Agent shall have received all
documents and other evidence it may reasonably request relating to the
existence of Borrower, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant hereto, all
in form and substance satisfactory to Agent.
3.2 Conditions Precedent to Each Borrowing. The several
obligations of the Banks to make each Loan or to make any such Loan is
subject to satisfaction of the conditions stated in 3.1 above and the
following additional conditions:
3.2.1 Notice of Borrowing. Agent shall have received a
Notice of Borrowing as required by paragraph 2.2.2 or shall be deemed to
have received such Notice of Borrowing under paragraph 2.4.2.
3.2.2 Representations and Warranties. All representations
and warranties set forth in Section 4 below shall be true as of the date
of any Borrowing with the same effect as if those such representations
<PAGE>
and warranties were made on and as of that date.
3.2.3 No Default. No Default hereunder shall be caused by
such Borrowing or shall have occurred and be continuing.
Each Notice of Borrowing pursuant to paragraph 2.2.2 and each Borrowing
hereunder shall be deemed to be a representation and warranty by
Borrower on the date of such notice or Borrowing, as the case may be, as
to the facts specified in paragraphs 3.2.2 and 3.2.3 above.
Section 4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants that:
4.1 Organization and Good Standing. It is a corporation duly
organized and validly existing in good standing under the laws of the
State of Colorado with corporate and other power and authority to own
its properties and conduct its business as presently conducted; it and
each of its Subsidiaries is duly licensed and qualified as a foreign
corporation in good standing in all jurisdictions in which the character
of the property owned or leased or the nature of the business conducted
by it requires such licensing or qualification.
4.2 Validity of Agreement. This Agreement has been duly
authorized, executed and delivered by it and constitutes its valid and
binding agreement, enforceable in accordance with its terms.
4.3 Validity of Notes. The Notes have been duly and validly
authorized by all necessary corporate action, and having been executed
and delivered pursuant to the provisions of this Agreement, each
constitutes Borrower's valid and binding obligation enforceable in
accordance with the terms of such Note and the terms of this Agreement.
4.4 Existing Defaults. It is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
bond, debenture, note, contract, indenture, mortgage, loan agreement,
lease or any other evidence of indebtedness, agreement or instrument to
which it is a party or by which it or any of its properties may be
bound.
4.5 No Default in Other Agreement. The execution, delivery and
performance of this Agreement, the incurrence of the obligations herein
set forth and the consummation of the transactions herein contemplated
will not result in the creation of a lien on any of its property and
will not conflict with, result in a breach of any of the terms,
conditions or provisions of, or constitute a default under its articles
of incorporation or by-laws or any bond, debenture, note, contract,
indenture, mortgage, loan agreement, lease or any other evidence of
indebtedness, agreement or instrument to which it is a party or by which
it or any of its properties may be bound, or result in violation by it
of any law, order, rule or regulation of any court or governmental
agency or body having jurisdiction over it or any of its properties.
4.6 No Consents or Approvals. No consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by it of the transactions contemplated by
this Agreement.
<PAGE>
4.7 Litigation. There is no material litigation at law or in
equity and no proceedings before any commission or other administrative
authority pending or to its knowledge threatened against or affecting it
or its Subsidiaries other than as disclosed pursuant to paragraph 6.11,
and there is no such matter which constitutes a Default hereunder.
4.8 Compliance With ERISA. Borrower and all members of the
Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA with respect to each Plan to which it is a
party and have not incurred any liability to the PBGC in connection with
any Plan established or maintained by Borrower or any member of the
Controlled Group.
4.9 Taxes. It has filed (or has obtained extensions of the time
by which it is required to file) all United States federal income tax
returns and all other material tax returns required to be filed by it
and has paid all taxes shown due on the returns so filed as well as all
other material taxes, assessments and governmental charges which have
become due, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided.
4.10 Not an Investment Company. It is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
4.11 Full Disclosure; No Material Change. All information
heretofore furnished by it to Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by it to Agent or any
Bank will be, true and accurate in every material respect or based on
reasonable estimates on the date as of which such information is stated
or certified, including but not limited to its financial statements
dated as of January 31, 1993.
It has disclosed to the Banks in writing any and all facts which
materially and adversely affect or may affect (to the extent Borrower
can reasonably foresee), its business, operations, prospects or
condition, financial or otherwise, and its Subsidiaries or its ability
to perform its obligations under this Agreement. There has been no
material adverse change in Borrower's financial condition since its
financial statements dated January 31, 1993.
4.12 Investment and Operating Agreements. That certain INVESTMENT
AGREEMENT Between NORDSTROM, INC. And NORDSTROM CREDIT, INC. Dated as of
October 8, 1984 wherein Nordstrom agrees, among other terms, to provide
certain financial support for Borrower and to subordinate all debt of
Borrower to Nordstrom or its subsidiaries to Borrower's other debt
(including indebtedness incurred hereunder), and that certain OPERATING
AGREEMENT Between NORDSTROM NATIONAL CREDIT BANK And NORDSTROM CREDIT,
INC. Dated as of August 30, 1991 are in full force and effect, have not
been amended, and are intended to benefit lenders to Borrower, and there
has been no default or breach of either of such agreements by any party
thereto.
Section 5. NEGATIVE COVENANTS. Borrower hereby covenants and agrees that
so long as any Commitment hereby granted shall remain available and
until full and final payment of all indebtedness incurred hereunder, it
will not without the prior written consent of the Required Banks:
5.1 Other Activities. Change the general character of its
<PAGE>
business as conducted at the date hereof or engage, directly or through
a Subsidiary, in any type of business not reasonably related to its
business as normally conducted.
5.2 Sale of Assets. Sell, lease or otherwise dispose of (or
allow any Subsidiary to do any of the foregoing) such property as in the
opinion of the Required Banks constitutes a material portion of its
assets except in the ordinary course of business and for full, fair and
reasonable consideration. For purposes of this paragraph, assets
constituting five percent (5%) or more of Borrower's or any Subsidiary's
respective assets in any fiscal year, non-cumulative from year to year,
shall be presumptively deemed "material" although a lesser amount may
constitute "a material portion" in the proper circumstances.
5.3 Stock Acquisition. Purchase (nor will it permit any
Subsidiary to purchase) any stock of any class of Borrower or any
debentures, notes or other debt instruments of Borrower.
5.4 Stock Issuance; Disposition. Issue or sell any shares of its
stock, other than to Nordstrom. Nordstrom shall at all times directly
or indirectly own and hold the entire legal and beneficial interest in
and to all the outstanding shares of stock of Borrower and shall not
have, directly or indirectly, sold, exchanged, transferred, pledged or
any way encumbered or otherwise disposed of any such shares of stock.
5.5 Liquidation, Merger, Dissolution. (i) Liquidate or dissolve
or enter into any consolidation, merger, pool, joint venture, syndicate
or other combination unless Borrower is the surviving corporation and no
Default would be caused thereby, or (ii) sell, lease or dispose of its
business or assets as a whole.
5.6 Extension of Credit; Dealings With Nordstrom. Purchase or
otherwise acquire, hold or invest in the securities of or make any loans
or advances to any other person or entity except (i) in the ordinary
course of business or (ii) to Nordstrom, NNCB or any of their respective
subsidiaries or to any Subsidiary of Borrower unless such loans (a) do
not exceed fifty million Dollars ($50,000,000) in the aggregate at any
one time outstanding, (b) do not remain outstanding in excess of sixty
(60) days; (c) are for general operating purposes only; and (d) are on
terms and conditions similar to those Borrower could negotiate with a
non-affiliated party, including interest rates and collateral and do not
involve more than normal risk of repayment or present other unfavorable
features; provided however, in no event shall Borrower lend to Nordstrom
or NNCB directly or indirectly any part of the Line or proceeds thereof.
The performance by NNCB and Borrower of the activities contemplated by
the Operating Agreement shall not be construed as a violation of this
Section 5.6.
5.7 Liens and Encumbrances. Create or suffer to exist any
security interest, lien or other encumbrance on any of its or its
Subsidiaries' property or assets of any kind or nature except those that
exist at the date of, or are contemplated by, this Agreement or exist on
such property at the date of its purchase by Borrower or its Subsidiary;
provided that liens are allowed on fixed assets securing debt incurred
or assumed for the purpose of financing all or any part of the cost of
acquiring such fixed asset; provided further that such lien attaches to
such fixed asset concurrently with or within 90 days after the
acquisition thereof; and provided further that liens are allowed for
taxes, assessments, governmental charges, materialmen's liens or
<PAGE>
mechanic's liens not yet due or which are being contested in good faith
by appropriate proceedings.
5.8 Regulation U. Use any proceeds of the Loans, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any "margin stock", within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System.
Neither Borrower nor any Subsidiary will engage principally, or as one
of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any such margin stock within the
meaning of such Regulation U.
5.9 Investment and Operating Agreements. Amend the INVESTMENT
AGREEMENT Between NORDSTROM, INC. And NORDSTROM CREDIT, INC. Dated as of
October 8, 1984 or the OPERATING AGREEMENT Between NORDSTROM NATIONAL
CREDIT BANK And NORDSTROM CREDIT, INC. Dated as of August 30, 1991,
either formally or through course of dealing in any manner that will
have a material impact on Borrower, or terminate or fail to enforce or
ensure compliance with such agreements or either of them if such
termination or failure will have a material impact on Borrower; without
limiting the generality of the foregoing, Borrower and Banks
specifically agree that "material impact" shall presumptively include
but not be limited to (i) ownership of all or any part of the voting
stock of Borrower by any person or entity other than Nordstrom, (ii)
abrogation of Nordstrom's obligation to ensure that Borrower maintains a
positive net worth, (iii) abrogation of Nordstrom's obligation to ensure
that Borrower's Fixed Charges Ratio (as defined in the INVESTMENT
AGREEMENT Between NORDSTROM, INC. And NORDSTROM CREDIT, INC. Dated as of
October 8, 1984) is no less than 1.25 to 1; or (iv) failure by Nordstrom
to subordinate all debt of Borrower to Nordstrom and its subsidiaries to
Borrower's other debt.
Section 6. AFFIRMATIVE COVENANTS. In addition to other terms and conditions
under this Agreement and the Notes, Borrower agrees with Banks that so long
as any unpaid balance of any Loan or any Commitment under this Agreement
shall be outstanding, Borrower will:
6.1 Consolidated Coverage. Maintain as at the end of each fiscal
quarter a Consolidated Coverage Ratio of not less than 1.25 to 1.
The "Consolidated Coverage Ratio" means a ratio at the date at
which the determination is made determined pursuant to the following
formula based on figures for the immediately preceding fiscal quarter:
the immediately preceding fiscal quarter:
IAFC
----
CCR = FC
CCR = Consolidated Coverage Ratio
IAFC = Income Available for Fixed Charges
FC = Fixed Charges
"Income Available for Fixed Charges" means the net income of
Borrower determined in accordance with generally accepted accounting
principles, except that such determination shall be made before any
deduction for Fixed Charges or provision for taxes in respect of income.
"Fixed Charges" means the quarterly interest charges on the
aggregate principal amount of Debt of Borrower outstanding during the
<PAGE>
period.
"Debt" means all obligations of Borrower which in accordance with
generally accepted accounting principles would be included in
determining total liabilities as shown on the liability side of a
balance sheet as of the date that Debt is to be determined.
6.2 Consolidated Total Debt to Consolidated Tangible Net Worth.
Maintain as at the end of each fiscal quarter a ratio of Consolidated
Total Debt (adjusted by deducting consolidated Subordinated Debt) to
Consolidated Tangible Net Worth (adjusted by adding consolidated
Subordinated Debt) of five to one (5.0:1.0) or less.
6.3 Consolidated Tangible Net Worth. Maintain at all times a
positive Consolidated Tangible Net Worth.
6.4 Financial Information. Deliver to Agent for the benefit of
each Bank:
(i) as soon as practicable but in no event later than forty
five (45) days after the close of each of the first three (3) quarters
of each fiscal year a consolidated financial statement (including at
least a consolidated balance sheet as of the close of such quarter, and
consolidated statement of income, shareholders' equity and cash flow
statement for each such quarter and for that part of the fiscal year
ending with the last day of each such quarter) for each of Borrower,
Nordstrom and NNCB++ , each prepared for such entity and any
subsidiaries by such entity's chief accounting or chief financial
officer in accordance with generally accepted accounting principles
consistently applied;
(ii) as soon as practicable but in no event later than ninety
(90) days after the close of each fiscal year, consolidated financial
statement for each of Borrower, Nordstrom and NNCB and any subsidiaries
of each such entity (including at least a consolidated balance sheet as
of the close of each such fiscal year and a consolidated statement of
income, shareholders' equity and cash flow statement for each such
fiscal year as at the end thereof, each setting forth the same data for
the immediately preceding fiscal year) prepared and audited by an
independent certified public accountant acceptable to the Banks in
accordance with generally accepted accounting principles consistently
applied;
(iii) simultaneously with the delivery of each set of
financial statements referred to in clauses (i) and (ii) above, a
certificate of the president, chief financial officer or the chief
accounting officer of Borrower (a) setting forth in reasonable detail
the calculations required to establish whether Borrower was in
compliance with the requirements of paragraphs 6.1 through 6.3
inclusive, on the date of such financial statements and (b) stating
whether there exists on the date of such certificate any Default and, if
any Default then exists, setting forth the details
thereof and the action which Borrower is taking or proposes to take with
respect thereto;
(iv) simultaneously with the delivery of each set of
financial statements referred to in clause (ii) above, a statement of
the firm of independent public accountants which reported on such
<PAGE>
statements stating whether anything has come to their attention to cause
them to believe that there existed on the date of such statements any
Default;
(v) forthwith upon the occurrence of any Default, a
certificate of the chief financial officer or the chief accounting
officer of Borrower setting forth the details thereof and the action
which Borrower is taking or proposes to take with respect thereto;
(vi) promptly upon the mailing thereof to the shareholders of
each of Borrower, Nordstrom and/or NNCB copies of all financial
statements, reports and proxy statements so mailed;
(vii) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly or monthly reports which
Borrower, Nordstrom and/or NNCB shall have filed with the Securities and
Exchange Commission;
(viii) if and when Borrower or any member of the Controlled
Group gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to be given to
the PBGC; and
(ix) from time to time such additional information regarding
the operation, financial position or business of Borrower, Nordstrom,
NNCB and/or any of their respective subsidiaries as Agent, at the
request of any Bank, may reasonably request.
6.5 Accounting. Keep, and cause each Subsidiary to keep, its
books of account in accordance with generally accepted accounting
principles consistently applied.
6.6 Insurance. Maintain, and cause each Subsidiary to maintain,
insurance with financially sound and reputable insurance companies or
associations (or provide adequate self-insurance) of the kinds covering
the risks and in such amounts usually carried by companies engaged in
businesses similar to that of Borrower, and further agrees to provide to
Agent evidence of said insurance as any Bank through Agent may, from
time to time, request.
6.7 Maintenance of Property. Maintain, preserve and keep its
buildings, machinery, equipment and other property in good condition,
repair and working order for the proper and efficient operation of its
business, take all such actions as are necessary and reasonable to
prevent offsets or defenses to assets which represent a right to
payment, and cause each Subsidiary to similarly maintain and preserve
its assets.
6.8 Taxes; Legal Compliance. Pay all taxes, assessments or
governmental charges levied, assessed or imposed against it or its
income or its properties, real, personal or mixed, or arising out of its
operations promptly as they become due and payable; comply promptly with
all laws and regulations of the federal government and of any state of
the United States or of any foreign jurisdiction in which it transacts
business or owns property, or any of their subdivisions, departments or
<PAGE>
agencies applicable to the business; and cause each Subsidiary to
similarly pay and comply. Borrower will (and will cause each Subsidiary
to) promptly pay and discharge all claims of any kind (including claims
for labor, material and supplies) which, if unpaid, might by law become
a lien or charge upon its property; provided, however, that neither
Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim as long as the amount, applicability
or validity thereof shall be contested in good faith by appropriate
proceeding.
6.9 Legal Existence. Maintain, and cause each Subsidiary to
maintain, its legal existence and its right to carry on business in any
jurisdiction where it is doing business and remain in and continuously
operate the same lines of business presently engaged in except for
periodic shut-down in the ordinary course of business and interruptions
caused by strike, labor dispute, catastrophe or any other events over
which it has no control.
6.10 Inspection. Permit any Bank at any reasonable time, and
from time to time, to visit and inspect its and its Subsidiaries'
properties and offices and to examine such books of account and to
conduct such investigation as such Bank may deem appropriate.
6.11 Lawsuits. Promptly notify Agent of any lawsuit, claim,
proceeding or action of any kind against Borrower or its Subsidiaries in
which the amount sought is or may be one million Dollars ($1,000,000) or
more, or of any lawsuits, claims, proceedings and/or actions of any kind
for which the aggregate amount sought, threatened or pending at any one
time is or may be five million Dollars ($5,000,000) or more.
6.12 Principal Executive Office. Promptly notify Agent of any
move or contemplated move of its principal executive office from the
State of Colorado.
6.13 Costs and Attorneys' Fees. Promptly upon demand by Agent pay
to and reimburse Agent for the account of each Bank for all costs and
expenses, which any Bank may expend or incur in the enforcement of any
of the terms or provisions of this Agreement, the Notes, any security
agreements or any other documents pertaining to or arising from the
Loans or any of them. In the event any obligation of Borrower is
referred to an attorney for protecting or defending a Bank's or Agent's
interest hereunder or for collection or realization procedures, Borrower
agrees to pay to the Bank or Banks or Agent as the case may be on demand
all attorney's fees, including allocated costs or fees of in-house
counsel, fees incurred in both trial and appellate courts, or fees
incurred without suit, and expenses of title search and all court costs
and costs of public officials. The sums agreed to be paid in this
paragraph shall be deducted from any remittance or collection prior to
application to principal or interest of the Loans as applicable.
6.14 Other Documents. Execute and deliver to Agent all documents
and instruments deemed necessary by Banks to carry out this Agreement.
Section 7. EVENTS OF DEFAULT; REMEDIES. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
7.1 Nonpayment. Borrower shall fail to pay when due any
principal of or within five (5) days of when due any interest on any
Notes, any fees or any other amount payable hereunder;
<PAGE>
7.2 Covenants; Agreements. Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement; provided,
however that failure to comply with paragraphs 6.4 through 6.9 inclusive
and 6.11 through 6.12 inclusive shall constitute an Event of Default
hereunder only in the event Agent, at the request of the Required Banks,
has given written notice of such breach to Borrower and Borrower shall
have failed to cure such breach within thirty (30) days from the date of
such notice; provided, further that notwithstanding the foregoing, the
notice referenced herein shall not be required nor shall any cure period
be allowed if Borrower has failed to disclose such breach or Default
pursuant to paragraph 6.4;
7.3 Representations and Warranties. Any representation,
warranty, certification or statement made by Borrower in this Agreement
or in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect in any
material respect when made (or deemed made), or the representation
contained in paragraph 4.12 shall prove to be untrue or inaccurate at
any time while any indebtedness or Commitment is outstanding hereunder;
7.4 Other Default. The occurrence of an event of default or an
event which with the lapse of time or notice or both would (i) become an
event of default under or in respect of any agreement by which Borrower
or any Subsidiary is bound relating to an obligation exceeding one
million Dollars ($1,000,000); or (ii) which causes or permits
acceleration of any obligation of Borrower or any Subsidiary under or in
respect of any such agreement; or (iii) which is a breach of any
indenture of any kind to which Borrower or any Subsidiary is a party;
7.5 Bankruptcy; Insolvency.
7.5.1 Voluntary Action. Borrower or any Subsidiary of
Borrower shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official for it or any
substantial part of its property, or shall consent to any such relief or
to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make
a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
7.5.2 Involuntary Action. An involuntary case or other
proceeding shall be commenced against Borrower or any Subsidiary of
Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for
it or any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of
sixty (60) days; or an order for relief shall be entered against
Borrower or any Subsidiary of Borrower under the federal bankruptcy laws
as now or hereafter in effect;
7.6 ERISA. Borrower or any member of the Controlled Group shall
fail to pay when due an amount or amounts which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
<PAGE>
notice of intent to terminate a Plan or Plans having Unfunded Vested
Liabilities shall be filed under Title IV of ERISA by Borrower,
any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such plan or Plans or a proceeding shall be
instituted by a fiduciary of any such plan or Plans against Borrower or
any member of the Controlled Group to enforce Section 515 of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be
terminated;
7.7 Judgments. A judgment or order for the payment of money
individually or in the aggregate in excess of one million Dollars
($1,000,000) shall be rendered against Borrower or any Subsidiary, and
such judgment(s) or order(s) shall continue unsatisfied or unstayed for
a period of twenty (20) days;
7.8 Subsidiaries. Borrower shall create or suffer to exist any
Subsidiary (other than those existing at the date of this Agreement)
which does not become a party signatory to this Agreement and each of
the Notes (with any appropriate modifications to accommodate such
addition) within thirty (30) days of its creation or acquisition by
Borrower; or
7.9 Nordstrom or Nordstrom National Credit Bank Bankruptcy;
Insolvency.
7.9.1 Voluntary Action. Nordstrom, NNCB, or any of their
respective subsidiaries, shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for
it or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take
any corporate action to authorize any of the foregoing;
7.9.2 Involuntary Action. An involuntary case or other
proceeding shall be commenced against Nordstrom, NNCB or any of their
respective subsidiaries, seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days; or an order for relief shall
be entered against Nordstrom, or any of its subsidiaries under the
federal bankruptcy laws as now or hereafter in effect;
then, and in every such event, Agent shall (i) if requested by
the Required Banks, by notice to Borrower terminate the Commitments
and they shall thereupon terminate, and (ii) if requested by the
Required Banks, by notice to Borrower declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or
<PAGE>
other notice of any kind, all of which are hereby waived by Borrower;
provided that in the case of any of the Events of Default specified in
paragraphs 7.5.1, 7.5.2, 7.9.1 or 7.9.2 above, without any notice to
Borrower or any other act by Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest
thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
waived by Borrower.
Section 8. TERMINATION OF ADVANCES. In addition and not in substitution
of any other right of the Banks to cease making Loans hereunder, in the
event Nordstrom, NNCB or either of them fails to comply with or fulfill
the following terms, conditions or covenants, the making of Loans to
Borrower may be suspended or terminated at any time in the discretion of
the Required Banks:
8.1 Default. The occurrence of an event of default or an event
which with the lapse of time or notice or both (i) would become an event
of default under or in respect of any agreement by which Nordstrom, NNCB
or any of their respective subsidiaries is bound relating to an
obligation exceeding one million Dollars ($1,000,000) which is not cured
within any applicable cure period; or (ii) which causes or permits
acceleration of any obligation of Nordstrom, NNCB or any subsidiary of
either of them under or in respect of any such agreement; or (iii) which
is a breach of any indenture of any kind to which Nordstrom, NNCB or any
subsidiary of either of them is a party;
8.2 Nordstrom Bankruptcy; Insolvency.
8.2.1 Voluntary Action. Nordstrom, NNCB or any of their
respective subsidiaries, shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for
it or any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take
any corporate action to authorize any of the foregoing;
8.2.2 Involuntary Action. An involuntary case or other
proceeding shall be commenced against Nordstrom, NNCB or any subsidiary
of either of them, seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law nor or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
for it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days; or an order for relief shall be entered
against Nordstrom, or any of its subsidiaries under the federal
bankruptcy laws as now or hereafter in effect;
8.3 ERISA. Nordstrom, NNCB or any member of the Controlled Group
shall fail to pay when due an amount or amounts which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans having Unfunded Vested
Liabilities shall be filed under Title IV of ERISA by Nordstrom, NNCB,
<PAGE>
any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against Nordstrom or
any member of the Controlled Group to enforce Section 515 of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be
terminated;
8.4 Judgments. A judgment or order for the payment of money
individually or in the aggregate in excess of one million Dollars
($1,000,000) shall be rendered against Nordstrom, NNCB or any of their
respective subsidiaries and such judgment(s) or order(s) shall continue
unsatisfied or unstayed for a period of twenty (20) days.
8.5 Wind-Up or Liquidation. Nordstrom or NNCB shall (i)
liquidate, dissolve or enter into any consolidation, merger, pool, joint
venture, syndicate or other combination unless it is the surviving
corporation or (ii) sell, lease or dispose of its business or assets as
a whole.
Section 9. THE AGENT.
9.1 Appointment and Authorization. Each Bank irrevocably
appoints and authorizes Agent to (i) take such action on that Bank's
behalf and (ii) exercise such powers as are delegated to Agent by the
terms of this Agreement and the Notes, together with all such powers as
are reasonably incidental thereto.
9.2 Agent and Affiliates. First Interstate Bank of Washington,
N.A. shall have the same rights and powers under this Agreement as any
other Bank, and may exercise or refrain from exercising the same as
though it were not Agent; First Interstate Bank of Washington, N.A. and
its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with Borrower as if it were not Agent
hereunder.
9.3 Action by Agent. The obligations of Agent hereunder are only
those expressly set forth herein. Without limiting the generality of
the foregoing, (i) Agent shall not be required to take any action with
respect to any Default, except as expressly provided in Section 7, and
(ii) each Bank severally acknowledges that it has made its own analysis
of Borrower, the Line, this Agreement and the Notes, independently and
without reliance on Agent, and has made its own decision to enter into
this Agreement and the transactions contemplated hereby.
9.4 Consultation With Experts. Agent may consult with legal
counsel (who may be counsel for Borrower or Agent's counsel, in-house or
otherwise), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the advice of such counsel,
accountants or experts.
9.5 Liability of Agent. Neither Agent nor any of its directors,
officers, agents, or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the
request of the Required Banks (or of a greater or lesser number of
Banks, if specifically provided for herein) or (ii) in the absence of
<PAGE>
its own gross negligence or willful misconduct. Neither Agent nor any
of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (a) any statement,
warranty or representation made in connection with this Agreement or any
Borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of Borrower; (c) the satisfaction of any
condition specified in Section 3, except receipt of items required to be
delivered to Agent; or (d) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished
in connection herewith other than by Agent. Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar
writing) or any telephonic notice reasonably believed by it to be
genuine or to be signed or given by the proper party or parties.
9.6 Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify Agent (to the extent not reimbursed by
Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from Agent's gross negligence or willful misconduct) that Agent
may suffer or incur in connection with this Agreement or any action
taken or omitted by Agent hereunder.
9.7 Successor Agent. Agent may resign at any time by giving
written notice thereof to the Banks and Borrower, and may be removed at
any time by vote of one hundred percent (100%) the Banks other than
Agent holding the outstanding principal balance of Loans hereunder (or
representing one hundred percent (100%) of the outstanding Commitments,
other than Agent's, if no Loans be then outstanding). Upon any such
resignation or removal, the Required Banks shall have the right to
appoint, on behalf of Borrower and the Banks, a successor Agent. If no
successor Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of Borrower and the Banks, a successor Agent.
Such successor Agent shall be one of the other Banks. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent hereunder.
Section 10. MISCELLANEOUS.
10.1 Notices. Except as expressly set forth herein, all notices,
requests and other communications to any party hereunder shall be in
writing (including bank wire, telex, telecopy or similar writing) and
shall be given to such party at its applicable address or telecopy
number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify for the purpose by
notice to Agent and Borrower. Each such notice, request or other
communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this
paragraph and verification of receipt received, (ii) if given by mail,
seventy-two (72) hours after such communication is deposited in the
mails with first-class postage prepaid, addressed as aforesaid or (iii)
<PAGE>
if given by any other means, when delivered at the address specified in
this Section; provided that notices to Agent under paragraphs 2.2.2,
2.3.2, 2.6 or 2.8 through 2.10 inclusive shall not be effective until
received.
10.2 No Waivers. No failure or delay by Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
10.3 Expenses; Documentary Taxes. Borrower shall pay on demand
(i) all out-of-pocket expenses and other reasonable charges of Agent and
any Bank or Banks, including fees and disbursements or allocated costs
of counsel for the Banks and Agent, whether in-house or otherwise, in
connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default by
Borrower hereunder; and (ii) if an Event of Default occurs, all out-of
pocket expenses incurred by Agent or any Bank or Banks, including fees
and disbursements or allocated costs of counsel, whether in-house or
otherwise, in connection with such Event of Default and collection and
other enforcement proceedings resulting therefrom. Borrower shall
indemnify each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of
the execution and delivery of this Agreement or the Notes.
10.4 Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim, or otherwise, receive
payment of a proportional amount of the aggregate amount of principal
and interest due with respect to any Note held by it which is greater
than the proportional amount received by any other Bank in respect of
the aggregate amount of principal and interest due with respect to any
Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes held by
the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with
respect to the Notes held by the Banks shall be shared by the Banks pro
rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have
and to apply the amount subject to such exercise to the payment of
indebtedness of Borrower other than to its indebtedness under the Notes
and this Agreement. Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully as if such
holder of a participation were a direct creditor of Borrower in the
amount of such participation. Each Bank agrees that if it exercises any
right of set-off or counterclaim, it will promptly notify Agent, who
will promptly notify the other Banks.
10.5 Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by Borrower and the Required Banks
(and, if the rights or duties of Agent are affected thereby, by Agent);
provided that no such amendment or waiver shall, unless signed by all
the Banks, (i) increase the Commitment of any Bank or subject any Bank
<PAGE>
to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any Loan or any
fees hereunder; including but not limited to extension of the Maturity
of the Notes and/or any extension of the period of availability of the
Commitments or (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks
which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
10.6 Successors and Assigns.
10.6.1 Binding Effect. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that Borrower may not
assign or otherwise transfer any of its rights or obligations under this
Agreement.
10.6.2 Participations and Loan Sales. Any Bank may grant a
participation in any of its rights to payment under this Agreement and
its Notes (as used herein, "participation" is the sharing of an
undivided interest in such Bank's Loan or Loans hereunder), and may
provide to participants or prospective participants any and all
information provided to Banks hereunder or may sell or assign its full
right to payment in individual Loans; provided, however in no event
shall any such participant or purchaser of any Loan have any rights
against Borrower with respect to any enforcement of, or modification to,
any provision of this Agreement or any Note or any right to vote as a
"Required Bank" hereunder, all such rights to remain with the Bank named
herein, to be exercised on behalf of such participant(s) or purchaser(s)
name. Further, Borrower agrees that (i) each participant shall be
entitled to the benefits of paragraphs 2.6 and 2.10 hereof to the extent
of its respective participation as if it were a Bank hereunder; and (ii)
no assignee or other transferee of any Bank's Loan(s) (other than a
participant) shall be entitled to receive any greater payment under
paragraphs 2.6.1(ii) or 2.6.3 than such Bank would have been entitled to
receive with respect to the rights assigned or otherwise transferred,
unless such assignment or transfer is made with Borrower's prior written
consent.
10.7 Washington Law; Jurisdiction. This Agreement and each Note
shall be construed in accordance with and governed by the law of the
State of Washington; and each party hereto irrevocably agrees that the
proper jurisdiction and venue for any cause of action hereunder or
relating hereto shall be Seattle, King County, Washington.
10.8 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when Agent shall have
received counterparts hereof signed by all of the parties hereto.
10.9 Oral Agreements. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the
day and year first above written.
<PAGE>
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By___________________________
John Walgamott
President
Nordstrom Credit, Inc.
13531 E. Coley
Englewood, Colorado
Attention: John Walgamott
Telecopy No.: (303) 397-4775
Commitments
FIRST INTERSTATE BANK OF
$30,000,000 WASHINGTON, N.A.
/s/ Louise Kaputska
By____________________________
Vice President
First Interstate Bank of
Washington, N.A.
999 Third Avenue
Seattle, WA 98104
Attention: Louise Kapustka
MS 713
Telecopy No.:(206) 292-3120
$18,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
/s/ Carl J. Mehldau, Jr.
By____________________________
Associate
Morgan Guaranty Trust Company
of New York
60 Wall Street
22nd Floor
New York, New York 10260
Attention: David Ellis
Telecopy No.: (212) 648-5014
$12,000,000 ABN AMRO BANK N.V.
/s/ Lee - Lee Miao
By____________________________
Vice President
/s/ Walter Euyang
By____________________________
Vice President
ABN AMRO Bank N.V.
<PAGE>
1 Union Square
Suite 2323
Seattle, WA 98101
Attention: Lee-Lee Miao
Telecopy No.: (206) 682-5641
$18,000,000 NATIONSBANK OF TEXAS, N.A.
/s/ William Guffey
By____________________________
Vice President
NationsBank of Texas, N.A.
444 S. Flower St.
Suite 1500
Los Angeles, CA 90071
Attention: Bill Guffey
Telecopy No.: (213) 624-5815
$12,000,000 SWISS BANK CORPORATION
/s/ Stephen M. Flynn
By____________________________
Director
Merchant Banking
/s/ Christopher Fischli
By____________________________
Assistant Vice President
Swiss Bank Corporation
San Francisco Branch
101 California Street
San Francisco, CA 94111
Attention: Mark Sunderland
Telecopy No.: (415) 989-7570
<PAGE>
Exhibit A
PROMISSORY NOTE
Seattle, Washington
June 28, 1993
On Maturity of the Notes (as defined in the Loan Agreement referred to
below), for value received, Nordstrom Credit, Inc., a Colorado
corporation (the "Borrower"), promises to pay to the order of First
Interstate Bank of Washinton, N.A.(the "Bank") the aggregate unpaid
principal amount of all Loans made by the Bank to the Borrower pursuant
to the Loan Agreement referred to below. The Borrower promises to pay
interest on the aggregate unpaid principal amount of such Loans on the
dates and at the rate or rates provided for in the Loan Agreement. All
such payments of principal and interest shall be made in lawful money of
the United States in Federal or other immediately available funds at the
office of First Interstate Bank of Washington, N.A., 999 Third Avenue,
Seattle, Washington.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on its books and records, and/or endorsed by the
holder hereof on one or more of the grids attached to this note, such
books and records or grid(s) being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive
presentment, demand, protest and notice of dishonor and agree to remain
bound for payment of this obligation notwithstanding any and all
renewals and extensions of time of payment hereof, substitution or
release of security by agreement between the holder hereof and any
owners of the collateral affected by instruments securing this note,
hereby waiving notice of such renewals, extensions, substitutions,
releases or other indulgences.
This note is made with reference to and is to be construed in accordance
with the laws of the State of Washington. Jurisdiction over and venue
of any action to enforce, interpret, construe or otherwise in connection
herewith shall be had in the United States District Court or Superior
Court of King County, Washington.
This note is one of the Notes referred to in the Loan Agreement dated as
of June 28, 1993 among the Borrower, the Banks listed on the signature
pages thereof and First Interstate Bank of Washington, N.A., as Agent
(as the same has been and may be amended from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein with
the same meanings. Reference is made to the Loan Agreement for
provisions for the repayment hereof and the acceleration of the maturity
hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
<PAGE>
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By_____________________________
John Walgamott
President
Exhibit A
PROMISSORY NOTE
Seattle, Washington
June 28, 1993
<PAGE>
On Maturity of the Notes (as defined in the Loan Agreement referred to
below), for value received, Nordstrom Credit, Inc., a Colorado
corporation (the "Borrower"), promises to pay to the order of ABN AMRO
Bank N.V.(the "Bank") the aggregate unpaid principal amount of all Loans
made by the Bank to the Borrower pursuant to the Loan Agreement referred
to below. The Borrower promises to pay interest on the aggregate unpaid
principal amount of such Loans on the dates and at the rate or rates
provided for in the Loan Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal
or other immediately available funds at the office of First Interstate
Bank of Washington, N.A., 999 Third Avenue, Seattle, Washington.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on its books and records, and/or endorsed by the
holder hereof on one or more of the grids attached to this note, such
books and records or grid(s) being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive
presentment, demand, protest and notice of dishonor and agree to remain
bound for payment of this obligation notwithstanding any and all
renewals and extensions of time of payment hereof, substitution or
release of security by agreement between the holder hereof and any
owners of the collateral affected by instruments securing this note,
hereby waiving notice of such renewals, extensions, substitutions,
releases or other indulgences.
This note is made with reference to and is to be construed in accordance
with the laws of the State of Washington. Jurisdiction over and venue
of any action to enforce, interpret, construe or otherwise in connection
herewith shall be had in the United States District Court or Superior
Court of King County, Washington.
This note is one of the Notes referred to in the Loan Agreement dated as
of June 28, 1993 among the Borrower, the Banks listed on the signature
pages thereof and First Interstate Bank of Washington, N.A., as Agent
(as the same has been and may be amended from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein with
the same meanings. Reference is made to the Loan Agreement for
provisions for the repayment hereof and the acceleration of the maturity
hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By_____________________________
John Walgamott
President
<PAGE>
Exhibit A
PROMISSORY NOTE
Seattle, Washington
June 28, 1993
On Maturity of the Notes (as defined in the Loan Agreement referred to
below), for value received, Nordstrom Credit, Inc., a Colorado
corporation (the "Borrower"), promises to pay to the order of Morgan
Guarnaty Trust Company of New York (the "Bank") the aggregate unpaid
principal amount of all Loans made by the Bank to the Borrower pursuant
to the Loan Agreement referred to below. The Borrower promises to pay
interest on the aggregate unpaid principal amount of such Loans on the
dates and at the rate or rates provided for in the Loan Agreement. All
such payments of principal and interest shall be made in lawful money of
the United States in Federal or other immediately available funds at the
office of First Interstate Bank of Washington, N.A., 999 Third Avenue,
<PAGE>
Seattle, Washington.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on its books and records, and/or endorsed by the
holder hereof on one or more of the grids attached to this note, such
books and records or grid(s) being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive
presentment, demand, protest and notice of dishonor and agree to remain
bound for payment of this obligation notwithstanding any and all
renewals and extensions of time of payment hereof, substitution or
release of security by agreement between the holder hereof and any
owners of the collateral affected by instruments securing this note,
hereby waiving notice of such renewals, extensions, substitutions,
releases or other indulgences.
This note is made with reference to and is to be construed in accordance
with the laws of the State of Washington. Jurisdiction over and venue
of any action to enforce, interpret, construe or otherwise in connection
herewith shall be had in the United States District Court or Superior
Court of King County, Washington.
This note is one of the Notes referred to in the Loan Agreement dated as
of June 28, 1993 among the Borrower, the Banks listed on the signature
pages thereof and First Interstate Bank of Washington, N.A., as Agent
(as the same has been and may be amended from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein with
the same meanings. Reference is made to the Loan Agreement for
provisions for the repayment hereof and the acceleration of the maturity
hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By_____________________________
John Walgamott
President
<PAGE>
Exhibit A
PROMISSORY NOTE
Seattle, Washington
June 28, 1993
On Maturity of the Notes (as defined in the Loan Agreement referred to
below), for value received, Nordstrom Credit, Inc., a Colorado
corporation (the "Borrower"), promises to pay to the order of
Nationsbank of Texas, N.A. (the "Bank") the aggregate unpaid
principal amount of all Loans made by the Bank to the Borrower pursuant
to the Loan Agreement referred to below. The Borrower promises to pay
interest on the aggregate unpaid principal amount of such Loans on the
dates and at the rate or rates provided for in the Loan Agreement. All
such payments of principal and interest shall be made in lawful money of
the United States in Federal or other immediately available funds at the
office of First Interstate Bank of Washington, N.A., 999 Third Avenue,
Seattle, Washington.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on its books and records, and/or endorsed by the
holder hereof on one or more of the grids attached to this note, such
books and records or grid(s) being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive
presentment, demand, protest and notice of dishonor and agree to remain
<PAGE>
bound for payment of this obligation notwithstanding any and all
renewals and extensions of time of payment hereof, substitution or
release of security by agreement between the holder hereof and any
owners of the collateral affected by instruments securing this note,
hereby waiving notice of such renewals, extensions, substitutions,
releases or other indulgences.
This note is made with reference to and is to be construed in accordance
with the laws of the State of Washington. Jurisdiction over and venue
of any action to enforce, interpret, construe or otherwise in connection
herewith shall be had in the United States District Court or Superior
Court of King County, Washington.
This note is one of the Notes referred to in the Loan Agreement dated as
of June 28, 1993 among the Borrower, the Banks listed on the signature
pages thereof and First Interstate Bank of Washington, N.A., as Agent
(as the same has been and may be amended from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein with
the same meanings. Reference is made to the Loan Agreement for
provisions for the repayment hereof and the acceleration of the maturity
hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By_____________________________
John Walgamott
President
<PAGE>
Exhibit A
PROMISSORY NOTE
Seattle, Washington
June 28, 1993
On Maturity of the Notes (as defined in the Loan Agreement referred to
below), for value received, Nordstrom Credit, Inc., a Colorado
corporation (the "Borrower"), promises to pay to the order of Swiss Bank
Corporation (the "Bank") the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower pursuant to the Loan Agreement
referred to below. The Borrower promises to pay interest on the
aggregate unpaid principal amount of such Loans on the dates and at the
rate or rates provided for in the Loan Agreement. All such payments of
principal and interest shall be made in lawful money of the United
States in Federal or other immediately available funds at the office of
First Interstate Bank of Washington, N.A., 999 Third Avenue, Seattle,
Washington.
All Loans made by the Bank and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on its books and records, and/or endorsed by the
holder hereof on one or more of the grids attached to this note, such
books and records or grid(s) being incorporated as a part hereof.
The makers, endorsers, sureties and guarantors hereof hereby agree to be
jointly and severally bound, and jointly and severally waive
presentment, demand, protest and notice of dishonor and agree to remain
bound for payment of this obligation notwithstanding any and all
renewals and extensions of time of payment hereof, substitution or
release of security by agreement between the holder hereof and any
owners of the collateral affected by instruments securing this note,
hereby waiving notice of such renewals, extensions, substitutions,
releases or other indulgences.
This note is made with reference to and is to be construed in accordance
with the laws of the State of Washington. Jurisdiction over and venue
of any action to enforce, interpret, construe or otherwise in connection
herewith shall be had in the United States District Court or Superior
<PAGE>
Court of King County, Washington.
This note is one of the Notes referred to in the Loan Agreement dated as
of June 28, 1993 among the Borrower, the Banks listed on the signature
pages thereof and First Interstate Bank of Washington, N.A., as Agent
(as the same has been and may be amended from time to time, the "Loan
Agreement"). Terms defined in the Loan Agreement are used herein with
the same meanings. Reference is made to the Loan Agreement for
provisions for the repayment hereof and the acceleration of the maturity
hereof.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
NORDSTROM CREDIT, INC.
/s/ John Walgamott
By_____________________________
John Walgamott
President
<PAGE> 1
Exhibit 12.1
NORDSTROM CREDIT, INC.
Computation of Ratio of Earnings Available for
Fixed Charges to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Year ended January 31, 1994 1993 1992 1991 1990
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings before
income taxes $32,372 $29,321 $24,023 $16,389 $13,236
Fixed charges
(gross interest expense) 29,600 33,841 35,037 36,816 33,884
------- ------ ------ ------ ------
Earnings available for
fixed charges $61,972 $63,162 $59,060 $53,205 $47,120
======= ======= ======= ======= =======
Ratio of earnings available
for fixed charges to fixed
charges 2.09 1.87 1.69 1.45 1.39
======= ======= ======= ======= =======
</TABLE>
