<PAGE>
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, 1995
__________________
/ / 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, $.50 par value
_______________________________
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES /X/ NO / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. /X/
On March 21, 1995 Registrant had 10,000 shares of Common stock ($.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.
1 of 17
<PAGE>
PART I
Item 1. Business.
------------------
The information required under this item is included in Note 1 to
the Financial Statements on page 13 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 21, 1995. The
Company's common stock is owned entirely by Nordstrom, Inc. 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 Condition and
Results of Operations.
-------------------------------------------------------------------------
Interest expense increased in 1994 due primarily to higher short-term interest
rates.
Certain other information required under this item is included in Note 1 to
the Financial Statements on page 13 of this report, which is incorporated
herein by reference.
2 of 17
<PAGE>
Item 8. Financial Statements and Supplementary Data.
----------------------------------------------------
A) Financial Statements and Supplementary Data
The financial statements listed in the Index to Financial Statements
and Schedule on page 7 of this Report are incorporated herein by
reference.
B) Other Financial Statements and Schedule
The schedule required under Regulation S-X is 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.
3 of 17
<PAGE>
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
(a)2. Financial Statement Schedules
-----------------------------
The financial statement schedule listed in the Index to Financial
Statements and Schedule on page 7 of this Report is 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 Denver,
N.A., as successor trustee, 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
Annual Report on Form 10-K for the year ended January 31, 1991,
Exhibit 4.2, respectively.
(4.2) Trustee Resignation of First Interstate Bank of Washington, N.A.
dated March 13, 1995 is filed herein as an Exhibit.
(4.3) Trustee Acceptance of First Interstate Bank of Denver, N.A. dated
March 13, 1995 is filed herein as an Exhibit.
(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.
4 of 17
<PAGE>
(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, as amended.
(10.3) Operating Agreement for VISA Accounts and Receivables dated May 1,
1994 between Registrant and Nordstrom National Credit Bank is hereby
incorporated by reference from Registration No. 33-55905, Exhibit
10.1.
(10.4) 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
(10.5) 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 hereby
incorporated by reference from the Registrant's Form 10-K for the
year ended January 31, 1994, Exhibit 10.4.
(10.6) Third Amendment to the Credit Agreement dated June 30, 1992, as
amended January 1, 1993 and June 29, 1993, between Registrant and
Bank of America National Trust and Savings Association dated June 30,
1994 is filed herein as an Exhibit.
(10.7) Fourth Amendment to the Credit Agreement dated June 30, 1992, as
amended January 1, 1993, June 29, 1993 and June 30, 1994, between
Registrant and Bank of America National Trust and Savings Association
dated January 20, 1995 is filed herein as an Exhibit.
(10.8) 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.
(10.9) Loan Agreement dated June 25, 1994, as amended December 1, 1994,
between Registrant and a group of commercial banks is filed herein as
an Exhibit.
(10.10) Loan Agreement dated June 10, 1985, as amended May 19, 1994, between
Registrant and Morgan Guaranty Trust Company of New York is filed
herein as an Exhibit.
(12.1) Computation of Ratio of Earnings Available for Fixed Charges
to Fixed Charges is filed herein as an Exhibit.
(23.1) Independent Auditors' Consent is filed herein as an Exhibit.
(27.1) Financial Data Schedule 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.
5 of 17
<PAGE>
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 31, 1995 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 Treasurer
(Principal Executive Officer) (Principal Accounting and
Financial Officer)
Date March 31, 1995
______________________
6 of 17
<PAGE>
NORDSTROM CREDIT, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Independent Auditors' Report 8
Statements of Earnings 9
Balance Sheets 10
Statements of Investment of Nordstrom, Inc. 11
Statements of Cash Flows 12
Notes to Financial Statements 13
Additional financial information required to be furnished -
Financial Statement Schedule:
II - Valuation and Qualifying Accounts 17
</TABLE>
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.
7 of 17
<PAGE>
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, 1995 and 1994, 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, 1995. Our audits also included the financial
statement schedule listed in Item 14(a)2. These financial statements and the
financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule 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,
1995 and 1994, and the results of its operations and its cash flows for each
of the three years in the period ended January 31, 1995, in conformity with
generally accepted accounting principles. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
Deloitte & Touche LLP
Seattle, Washington
March 10, 1995
8 of 17
<PAGE>
NORDSTROM CREDIT, INC
STATEMENTS OF EARNINGS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended January 31, 1995 1994 1993
---------------------- ------- ------- -------
<S> <C> <C> <C>
Revenue:
Service charge income $92,592 $91,026 $92,553
Rental income from Nordstrom
National Credit Bank 1,044 1,044 1,044
------- ------- -------
Total revenue 93,636 92,070 93,597
Expenses:
Interest, net 31,074 29,465 33,593
Service fees paid to Nordstrom
National Credit Bank 28,056 28,551 28,848
General and administrative 2,461 1,682 1,835
------- ------- -------
Total expenses 61,591 59,698 64,276
------- ------- -------
Earnings before income taxes 32,045 32,372 29,321
Income taxes 11,600 11,700 10,400
------- ------- -------
Net earnings $20,445 $20,672 $18,921
======= ======= =======
Ratio of earnings available for
fixed charges to fixed charges 2.03 2.09 1.87
======= ======= =======
<FN>
See notes to financial statements.
</TABLE>
9 of 17
<PAGE>
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
January 31, 1995 1994
----------- -------- --------
<S> <C> <C> ASSETS
------
Cash and cash equivalents $ 440 $ 1,694
Customer accounts receivable,
net of holdback allowance of
$22,958 and $23,145 656,263 564,495
Other accounts receivable 4,807 3,977
Property and equipment, net 5,685 5,987
Other assets 1,429 1,677
-------- --------
$668,624 $577,830
======== ========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
---------------------------------------------
Notes payable to Nordstrom, Inc. $148,000 $112,500
Notes payable to bank 50,000 25,000
Commercial paper 37,388 15,337
Accrued interest, taxes and other 10,963 9,665
Long-term debt 252,100 265,600
-------- --------
Total liabilities 498,451 428,102
Investment of Nordstrom, Inc. 170,173 149,728
-------- --------
$668,624 $577,830
======== ========
<FN>
See notes to financial statements.
</TABLE>
10 of 17
<PAGE>
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
February 1, 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
Net earnings - - 20,445 20,445
------ ------- ------- --------
Balance at
January 31, 1995 10,000 $55,058 $115,115 $170,173
====== ======= ======== ========
<FN>
See notes to financial statements.
</TABLE>
11 of 17
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended January 31, 1995 1994 1993
---------------------- ------- ------- -------
<S> <C> <C> <C> OPERATING ACTIVITIES:
Net earnings $20,445 $20,672 $18,921
Adjustments to reconcile net earnings
to net cash (used in) provided by
operating activities:
Depreciation and amortization 924 640 664
Change in:
Customer accounts receivable, net (91,768) 18,716 981
Other accounts receivable (830) (269) 3,787
Accrued interest, taxes and other 1,298 (304) (85)
------- ------- -------
Net cash (used in) provided by
operating activities (69,931) 39,455 24,268
------- ------- -------
INVESTING ACTIVITIES:
(Additions to) disposition of property
and equipment, net (30) (167) 4
------- ------- -------
FINANCING ACTIVITIES:
Increase in notes payable
to Nordstrom, Inc. 35,500 - 90,150
Increase (decrease) in notes payable
to banks 25,000 - (25,000)
Increase (decrease) in commercial paper 22,051 2,018 (71,416)
Proceeds from issuance of
long-term debt, net 49,656 - -
Principal payments on long-term debt (63,500) (40,000) (19,400)
------- ------- -------
Net cash provided by (used in)
financing activities 68,707 (37,982) (25,666)
------- ------- -------
Net (decrease) increase in cash and
cash equivalents (1,254) 1,306 (1,394)
Cash and cash equivalents at beginning
of year 1,694 388 1,782
------- ------- -------
Cash and cash equivalents at end of year $ 440 $ 1,694 $ 388
======= ======= =======
<FN>
See notes to financial statements.
</TABLE>
12 of 17
<PAGE>
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
under revolving charge accounts through sales of merchandise in Nordstrom
stores ("Accounts"), and through purchases by customers using the Nordstrom
National Credit Bank (the "Bank") VISA cards ("VISA Accounts"). The Accounts
and the VISA Accounts are originated through the use of credit cards issued by
the Bank, a national banking association organized as a wholly-owned
subsidiary of Nordstrom, effective August 30, 1991. The Bank's VISA card
program commenced in May 1994.
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").
The Company and the Bank are also parties to an Operating Agreement for VISA
Accounts and Receivables (the "VISA Operating Agreement") dated May 1, 1994.
Under this agreement, the Company purchases VISA Accounts from the Bank under
the same terms and conditions as the Operating Agreement, with the exception
of the allowance for amounts to be written off. Amounts written off will be
charged to the Company, except for amounts written off with respect to sales
occurring at Nordstrom stores, for which Nordstrom has agreed to indemnify the
Company. Under the terms of both Operating Agreements, the Bank performs the
servicing functions for the Accounts and the VISA Accounts, and the Company
pays the Bank a servicing fee which may change from time to time but is
currently 1.59% of the amount of such Accounts originated.
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.
13 of 17
<PAGE>
NOTE 3 - INTEREST EXPENSE
The components of net interest expense are as follows:
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
---------------------- ------- ------- -------
<S> <C> <C> <C>
Notes payable to Nordstrom, Inc. $ 2,940 $ 1,696 $ 461
Notes payable to banks 1,766 771 1,694
Commercial paper 3,320 1,590 2,780
Long-term debt 23,161 25,543 28,906
------- ------- -------
Total interest expense 31,187 29,600 33,841
Less: Interest income (113) (135) (248)
------- ------- -------
Interest, net $31,074 $29,465 $33,593
======= ======= =======
</TABLE>
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, 1995
and 1994, amounts due to Nordstrom for income taxes totalled $1,500 and
$1,592. The Company has no significant deferred taxes.
NOTE 5 - OTHER ACCOUNTS RECEIVABLE
Other accounts receivable consists of amounts due from the Bank for net
activity in Accounts and VISA 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
$50,000. Borrowings under the Agreement bear interest at floating rates based
on a published short-term interest rate composite index (6.0% and 3.0% at
January 31, 1995 and 1994) 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 (6.0% and 3.0% at January 31, 1995 and 1994) and
mature up to six months from the date of borrowing or on demand. A summary of
notes payable and commercial paper is as follows:
14 of 17
<PAGE>
NOTE 6 (continued)
<TABLE>
<CAPTION>
Year ended January 31, 1995 1994 1993
---------------------- -------- -------- --------
<S> <C> <C> <C>
Average daily borrowings
outstanding:
Nordstrom $ 60,651 $ 54,643 $ 14,072
Other 104,722 75,300 121,536
Maximum amount outstanding:
Nordstrom 204,000 182,500 138,000
Other 209,605 117,023 186,038
Weighted average interest rate:
During the year:
Nordstrom 4.8% 3.1% 3.3%
Other 4.9% 3.1% 3.7%
At year-end:
Nordstrom 6.0% 3.0% 3.0%
Other 6.0% 3.1% 3.1%
</TABLE>
The Company has $225,000 in unsecured lines of credit which are available as
liquidity support for notes payable to bank and commercial paper issued by the
Company, and expire in June 1995 and January 1998. 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 Agreements between the Company and Nordstrom National Credit
Bank, and maintain a ratio of total debt to tangible net worth no greater than
6 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.
NOTE 7 - LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
January 31, 1995 1994
----------- -------- --------
<S> <C> <C>
Medium-term notes, 7.83% - 9.6%,
due 1995 - 2001 $209,000 $210,000
Sinking fund debentures, 9.375%,
due 2016, payable in
annual installments of $3,750
beginning in 1997 43,100 55,600
-------- --------
Total long-term debt $252,100 $265,600
======== ========
</TABLE>
Aggregate principal payments on long-term debt for the next five fiscal
years are as follows: 1995 - $25,000, 1996 - $73,000, 1997 - $53,750,
1998 - $53,750, and 1999 - $3,750.
15 of 17
<PAGE>
NOTE 7 (continued)
The fair value of long-term debt at January 31, 1995 and 1994, estimated using
quoted market prices of the same or similar issues with the same
remaining maturity, was $257,143 and $292,358.
During the year ended January 31, 1995, the Company filed a shelf registration
statement under Form S-3 for $250 million in debt. Subsequent to year-end,
the Company issued $42 million in medium-term notes under the shelf
registration.
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, 1995 1994 1993
---------------------- ------- ------- -------
<S> <C> <C> <C>
Cash paid during the year for:
Interest $30,005 $30,224 $34,121
Income taxes paid to
Nordstrom, Inc. 11,692 11,568 10,350
</TABLE>
16 of 17
<PAGE>
NORDSTROM CREDIT, INC.
SCHEDULE II - VALUATION AND
QUALIFYING ACCOUNTS
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions Deductions
----------- ---------- -------------------- -------------------- -------
Account
Balance Charged to Charged write-offs Balance
beginning costs and to other net of Other end of
Description of period expenses accounts recoveries deductions period
----------- ----------- --------- -------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Holdback allowance -
customer accounts
receivable
Year ended
January 31, 1995 $23,145 $940 $19,279* $20,406 $ - $22,958
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
<FN>
* 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 for Accounts and VISA Accounts generated through sales
at Nordstrom stores.
</TABLE>
17 of 17
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
------------------------------------------ -------------------------------
<S> <C> <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 January
31, 1991, Exhibit 3.2.
4.1 Indenture between Registrant and Incorporated by reference from
First Interstate Bank of Denver, Registration No. 33-3765, Exhibit
N.A., as successor trustee, dated 4.2; Registration No. 33-19743,
November 15, 1984, the First Sup- Exhibit 4.2; Registration No.
plement thereto dated January 15, 33-29193, Exhibit 4.3, and
1988, the Second Supplement thereto Registrant's Annual Report on Form
dated June 1, 1989, and the Third 10-K for the year ended January 31,
Supplement thereto dated October 1991, Exhibit 4.2, respectively.
19, 1990
4.2 Trustee Resignation of First Inter- Filed herewith electronically.
state Bank of Washington, N.A.
dated March 13, 1995.
4.3 Trustee Acceptance of First Inter- Filed herewith electronically.
state Bank of Denver, N.A. dated
March 13, 1995
10.1 Investment Agreement dated October Incorporated by reference from
8, 1984 between Registrant and Registrant's Form 10, Exhibit 10.1.
Nordstrom, Inc.
10.2 Operating Agreement dated August Incorporated by reference from
30, 1991 between Registrant and Registrant's Form 10-Q for the
Nordstrom National Credit Bank quarter ended July 31, 1991,
Exhibit 10.1, as amended.
10.3 Operating Agreement for VISA Incorporated by reference from
Accounts and Receivables Registration No. 33-55905, Exhibit
dated May 1, 1994 between 10.1.
Registrant and Nordstrom
National Credit Bank
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
10.4 Credit Agreement dated June 30, Incorporated by reference from
1992, as amended January 1, 1993, Registrant's Form 10-K for the
between Registrant and Seattle- year ended January 31, 1993,
First National Bank of Washington Exhibit 10.5.
10.5 Second Amendment to the Credit Incorporated by reference from
Agreement dated June 30, 1992, as Registrant's Form 10-K for the
amended January 1, 1993 between year ended January 31, 1994,
Registrant and Seattle-First Exhibit 10.4.
National Bank of Washington dated
June 29, 1993
10.6 Third Amendment to the Credit Filed herewith electronically.
Agreement dated June 30, 1992, as
amended January 1, 1993 and June 29,
1993, between Registrant and Bank of
America National Trust and Savings
Association dated June 30, 1994
10.7 Fourth Amendment to the Credit Filed herewith electronically.
Agreement dated June 30, 1992, as
amended January 1, 1993, June 29,
1993 and June 30, 1994, between
Registrant and Bank of America
National Trust and Savings
Association dated January 20, 1995
10.8 Loan Agreement dated November 24, Incorporated by reference from
1992 between Registrant and Registrant's Form 10-K for the
Nordstrom, Inc. year ended January 31, 1993,
Exhibit 10.6.
10.9 Loan Agreement dated June 25, 1994, Filed herewith electronically.
as amended December 1, 1994, between
Registrant and a group of commercial
banks.
10.10 Loan Agreement dated June 10, 1985, Filed herewith electronically.
as amended May 16, 1994, between
Registrant and Morgan Guaranty
Trust Company of New York
12.1 Computation of Ratio of Earnings Filed herewith electronically.
Available for Fixed Charges to
Fixed Charges
23.1 Independent Auditors' Consent Filed herewith electronically.
27.1 Financial Data Schedule Filed herewith electronically.
</TABLE>
<PAGE>
Exhibit 4.2
TRUSTEE RESIGNATION
TO: Nordstrom Credit, Inc.
In connection with the appointment of First Interstate Bank of Denver,
N.A. as successor trustee under the Indenture (defined below), First
Interstate Bank of Washington, N.A. (the "Resigning Trustee"), hereby resigns
as trustee under that certain indenture by and between the Company and the
Resigning Trustee dated as of November 15, 1984, as supplemented by the First
Supplemental Indenture dated as of January 15, 1988, the Second Supplemental
Indenture dated as of June 1, 1989 and the Third Supplemental Indenture dated
as of October 19, 1990 (as supplemented, the "Indenture"), providing for the
issuance from time to time of unsecured debentures, notes or other evidences
of indebtedness of the Company (the "Securities") to be issued in one or more
series under such Indenture.
This resignation is provided pursuant to Section 610(b) of the Indenture,
and shall be applicable with respect to all series of Securities heretofore
issued under the Indenture.
DATED: March 13, 1995
FIRST INTERSTATE BANK OF
WASHINGTON, N.A.
By /s/Perry R. Tobe
----------------
Perry R. Tobe,
Trust Officer
<PAGE>
Exhibit 4.3
TRUSTEE ACCEPTANCE
TO: First Interstate Bank of Washington, N.A.
Nordstrom Credit, Inc.
First Interstate Bank of Denver, N.A. (the "Successor Trustee"), hereby
accepts its appointment by Nordstrom Credit, Inc. (the "Company") as successor
trustee under that certain indenture by and between the Company and First
Interstate Bank of Washington, N.A. (the "Resigning Trustee"), dated as of
November 15, 1984, as supplemented by the First Supplemental Indenture dated
as of January 15, 1988, the Second Supplemental Indenture dated as of June 1,
1989 and the Third Supplemental Indenture dated as of October 19, 1990 (as
supplemented, the "Indenture"), providing for the issuance from time to time
of unsecured debentures, notes or other evidences of indebtedness of the
Company (the "Securities") to be issued in one or more series under such
Indenture.
This acceptance is given pursuant to Section 611 of the Indenture, and
shall be applicable with respect to all series of Securities heretofore issued
under the Indenture.
DATED: March 13, 1995.
FIRST INTERSTATE BANK OF
DENVER, N.A.
By /s/ Laura Rivera
----------------
Laura Rivera, Banking Officer
The Company hereby confirms that First Interstate Bank of Denver, N.A. is
vested with all the rights, powers, trusts and duties of the Resigning Trustee
under the Indenture.
DATED: March 13, 1995
NORDSTROM CREDIT, INC.
By /s/ John C. Walgamott
----------------------
John C. Walgamott, President
<PAGE>
STATE OF COLORADO )
)ss.
COUNTY OF DENVER )
I certify that I know or have satisfactory evidence that Laura Rivera is
the person who appeared before me, and she acknowledged that she signed this
instrument, on oath stated that she was authorized to execute the instrument
and acknowledged it as a Banking Officer of First Interstate Bank of Denver,
N.A., to be the free and voluntary act of such parties for the uses and
purposes mentioned in this instrument.
DATED: March 13, 1995 /s/Lynn E. Taylor
---------------------
(Notary Signature)
Lynn E. Taylor
Notary Public for the State of
Colorado
My commission expires: 8/2/97
<PAGE>
Exhibit 10.6
AMENDMENT NO. 3
TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT dated as of June 30, 1994 (the
"Amendment") is entered into by and between NORDSTROM CREDIT, INC. (the
"Borrower") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the
"Bank").
RECITALS
A. The Borrower and Seattle-First National Bank ("Seafirst") are parties
to a Credit Agreement dated as of June 30, 1992, as amended by that certain
Amendment No. 1 to Credit Agreement dated as of January 1, 1993 and that
certain Amendment No. 2 to Credit Agreement dated as of June 29, 1993 (as
amended, the "Credit Agreement"), pursuant to which Seafirst has extended
certain credit facilities to the Borrower.
B. Seafirst has assigned all of its rights and obligations to the Borrower
under the Credit Agreement to the Bank pursuant to an Assignment and
Assumption Agreement dated as of June 30, 1994.
C. The Borrower has requested that the Bank agree to certain amendments of
the Credit Agreement.
D. The Bank is willing to amend the Credit Agreement, subject to the terms
and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Amendments to Credit Agreement.
(a) The introductory paragraph of the Credit Agreement is hereby
amended by deleting the definition of "Prime Rate" therein and by inserting
the following new definition in lieu thereof:
"`Reference Rate' shall mean on any day
the rate of interest in effect for such day
as publicly announced from time to time by
the Bank in San Francisco, California, as its
"reference rate." The "reference rate" is a
rate set by the Bank based upon various
factors including Bank's costs and desired
return, general economic conditions and other
factors, and is used as a reference point for
pricing some loans, which may be priced at,
above, or below such announced rate. Any
change in the reference rate announced by the
Bank shall take effect at the opening of
<PAGE>
business on the day specified in the public
announcement of such change."
(b) The Credit Agreement shall be amended by deleting each reference
to the "Prime Rate" therein and by inserting in lieu thereof the phrase
"Reference Rate".
(c) Section 1.1 of the Credit Agreement is hereby amended by deleting
the date "June 30, 1994" and inserting in lieu thereof "June 30, 1995".
(d) The Credit Agreement shall be amended by deleting each reference
to "Seattle-First National Bank" therein, and in any other loan documents
executed in connection therewith, and inserting in lieu thereof "Bank of
America National Trust and Savings Association".
(e) The Bank's address set forth on the signature page of the Credit
Agreement shall be amended by deleting the address of Seattle-First National
Bank therein and by inserting in lieu thereof the following:
"Bank of America National Trust and
Savings Association
Credit Products #3838
555 California Street, 41st Floor
San Francisco, CA 94104
Attention: Stephen J. DeMarti
Vice President"
(f) Exhibit A to the Credit Agreement is hereby amended and restated
in its entirety so that, as amended, it shall read as set forth on Exhibit A
to this Amendment, which Exhibit A is incorporated herein by this reference.
3. Representations and Warranties. The Borrower hereby represents and
warrants to the Bank as follows:
(a) No Default, or event which with the passage of time, the giving
of notice or both would constitute a Default, has occurred and is continuing.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the Replacement Note (as defined below) have been duly
authorized by all necessary corporate and other action and do not and will
not require any registration with, consent or approval of, notice to or action
by, any person (including any governmental authority) in order to be effective
and enforceable. The Credit Agreement, as amended by this Amendment, and the
Replacement Note constitute the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms,
without defense, counterclaim or offset.
(c) All representations and warranties of the Borrower contained in
the Credit Agreement are true and correct.
(d) The Borrower is entering into this Amendment and is executing
the Replacement Note on the basis of its own investigation and for its own
reasons, without reliance upon the Bank or any other person.
<PAGE>
4. Effective Date. This Amendment will become effective as of June 30,
1994 (the "Effective Date"), provided that each of the following conditions
precedent has been satisfied:
(a) The Bank has received from the Borrower a duly executed original
of this Amendment.
(b) The Bank has received from the Borrower a duly executed Revolving
Note, in the form and substance of Exhibit A attached hereto (the "Replacement
Note").
(c) The Bank has received from the Borrower a copy of a resolution
passed by the board of directors of the Borrower, certified by the Secretary
or an Assistant Secretary of the Borrower as being in full force and effect on
the date hereof, authorizing the execution, delivery and performance of this
Amendment and the Replacement Note.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and
effect and all references therein to such Credit Agreement shall henceforth
refer to the Credit Agreement as amended by this Amendment. This Amendment
shall be deemed incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit
of the parties hereto and thereto and their respective successors and assigns.
No third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
(e) This Amendment, together with the Credit Agreement and the
Replacement Note, contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein. This
Amendment supersedes all prior drafts and communications with respect thereto.
This Amendment may not be amended except in accordance with the provisions
of Section 5.4 of the Credit Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this
Amendment or the Credit Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
<PAGE>
NORDSTROM CREDIT, INC.
By:/s/John C. Walgamott
--------------------
Title: President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/Stephen J. DeMarti
---------------------
Title: Vice President
<PAGE>
EXHIBIT A
REVOLVING NOTE
$60,000,000 As of June 30, 1994
FOR VALUE RECEIVED, the undersigned, NORDSTROM CREDIT, INC., promises
to pay to BANK OF AMERICAN NATIONAL TRUST AND SAVINGS ASSOCIATION (the
"Bank"), or order, at the Bank's office located at 1850 Gateway Boulevard,
Concord, California 94520, or such other place as the holder of this Revolving
Note may from time to time designate, the principal amount of SIXTY MILLION
DOLLARS ($60,000,000) or so much thereof as may be borrowed hereunder, which
amount shall be due and payable in lawful money of the United States of
America, and the undersigned further promises to pay interest at said office
in like money.
If not sooner paid, the principal of this Revolving Note shall be due and
payable on the Maturity Date. Principal with respect to each fixed rate
Revolving Loan shall be due and payable also on the maturity date for each
such loan.
The undersigned further promises to pay interest on the unpaid principal
balance with respect to each Revolving Loan made hereunder from the date
thereof until paid, at the rate or rates per annum set forth in the Credit
Agreement (defined below). Interest shall be due and payable in consecutive
quarterly installments on the first day of each calendar quarter, commencing
September 30, 1994, and continuing of the first day of each successive
calendar quarter thereafter and on the maturity date of each fixed rate
Revolving Loan. If not sooner paid, all interest remaining unpaid shall be
due and payable on the Maturity Date. Any change in the interest rate
resulting from a change in the Reference Rate shall be effective as of the day
on which said change in the Reference Rate shall become effective, without
notice or demand of any kind. All calculations of interest with respect to
any Reference Rate Revolving Loan shall be on a basis of a year of 365 or 366
days as appropriate, and an actual-day month, and all calculations of interest
with respect to any fixed rate Revolving Loan shall be on a basis of a year of
360 days and an actual-day month.
All Revolving Loans made by the Bank to the undersigned pursuant to the
Credit Agreement (defined below) and all payments and prepayments made on
account of the principal balance hereof shall be recorded by the Bank on the
appropriate schedule annexed hereto or in the Bank's other records.
The undersigned promises to pay costs of collection and attorneys' fees
(including allocated costs of in-house counsel) if default is made in the
payment of this Revolving Note. This Revolving Note shall be governed by and
construed in accordance with the laws of the State of California. The Bank
reserves all of its rights under federal law including those relating to the
charging of interest rates.
<PAGE>
This Revolving Note is the Revolving Note referred to in the Credit
Agreement dated as of June 30, 1992 between the undersigned and the Bank, as
amended by that certain Amendment No. 1 to Credit Agreement dated as of
January 1, 1993, that certain Amendment No. 2 to Credit Agreement dated as of
June 29, 1993, and that certain Amendment No. 3 to Credit Agreement dated as
of June 30, 1994 (as amended, the "Credit Agreement"). All terms defined in
the Credit Agreement shall have the same definitions when used herein. Upon
the occurrence of a Default, the principal hereof with interest accrued
thereon may become, or may be declared to be, at the option of Bank, forthwith
due and payable, as provided in said Credit Agreement.
This Revolving Note replaces, but does not extinguish the indebtedness
under, the Master Noted dated as of June 30, 1992 executed by the undersigned
in favor of Seattle-First National Bank ("Seafirst"), which Master Note was
subsequently assigned to the Bank pursuant to an Assignment and Acceptance
Agreement dated as of June 30, 1994 between Seafirst and the Bank.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Revolving Note as of the date first above written.
NORDSTROM CREDIT, INC.
By:___________________
Title:________________
<PAGE>
Exhibit 10.7
AMENDMENT NO. 4
TO CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO CREDIT AGREEMENT dated as of January 20, 1995
(the "Amendment") is entered into by and between NORDSTROM CREDIT, INC., a
Colorado corporation (the "Borrower") and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION (the "Bank").
RECITALS
A. Borrower and Bank (as successor in interest to Seattle-First
National Bank ("Seafirst") pursuant to an Assignment and Assumption
Agreement dated as of June 30, 1994 by and between Seafirst, as Assignor,
and Bank, as Assignee) are parties to a Credit Agreement dated as of June
30, 1992, as amended by that certain Amendment No. 1 to Credit Agreement
dated as of January 1, 1993, that certain Amendment No. 2 to Credit
Agreement dated as of June 29, 1993 and that certain Amendment No. 3 to
Credit Agreement dated as of June 30, 1994 (as amended, the "Credit
Agreement"), pursuant to which Bank has extended certain credit facilities
to Borrower.
B. Borrower has requested that Bank agree to certain amendments of
the Credit Agreement.
C. Bank is willing to amend the Credit Agreement, subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to them in the
Credit Agreement.
2. Amendments to Credit Agreement.
(a) The second and third sentences of the Credit Agreement
shall be deleted.
(b) Article 1 of the Credit Agreement shall be amended and
restated in its entirety as follows:
"1.1 Revolving Loan Facility. Bank agrees, on the terms and
conditions set forth herein, to make loans to Borrower from time to time on
any Business Day until the Maturity Date, in an aggregate amount not to
exceed at any time outstanding $90,000,000 (such amount, as the same may be
reduced under Section 1.5, the "Commitment"). Within the limits of the
Commitment, and subject to the other terms and conditions hereof, Borrower
may borrow under this Section 1.1, prepay under Section 1.6 and reborrow
under this Section 1.1.
<PAGE>
1.2 Revolving Note. The Loans made by Bank shall be evidenced by a
promissory note ("Revolving Note") made by Borrower to the order of Bank in
substantially the form of Exhibit A attached hereto. Bank shall endorse on
the schedules annexed to the Revolving Note or in Bank's other records the
date, amount and maturity of each Loan made by it and the amount of each
payment of principal made by Borrower with respect thereto. Bank is
irrevocably authorized by Borrower to endorse its Revolving Note and Bank's
records shall be conclusive absent manifest error of the amount of the
Loans made by Bank to Borrower and the interest and payments thereon. Any
failure so to endorse or record or any error in doing so shall not,
however, limit or otherwise affect the obligations of Borrower hereunder or
under the Revolving Note.
1.3 Procedure for Borrowing. Each Borrowing shall be made upon
Borrower's irrevocable written notice delivered to Bank in the form of a
Notice of Borrowing (which notice must be received by Bank prior to 9:00
a.m. (San Francisco time) (a) three Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans; (b) two Business Days
prior to the requested Borrowing Date, in the case of CD Rate Loans; and
(c) on the requested Borrowing Date, in the case of Base Rate Loans,
specifying: (i) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $1,000,000 or any multiple of $1,000,000 in
excess thereof; (ii) the requested Borrowing Date, which shall be a
Business Day; (iii) the Type of Loans comprising the Borrowing; and (iv)
the duration of the Interest Period applicable to such Loans included in
such notice. If the Notice of Borrowing fails to specify the duration of
the Interest Period for any Borrowing comprised of CD Rate Loans or
Offshore Rate Loans, such Interest Period shall be 90 days or three months,
respectively.
1.4 Conversion and Continuation Elections. (a) Borrower may, upon
irrevocable written notice to Bank in accordance with subsection 1.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans, or as of
the last day of the applicable Interest Period, in the case of CD Rate
Loans or Offshore Rate Loans, to convert any such Loans (or any part
thereof in an amount not less than $1,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loan having an Interest Period expiring on such day (or any
part thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof); provided, that if at
any time the aggregate amount of any CD Rate Loan or Offshore Rate Loan is
reduced, by payment, prepayment, or conversion of part thereof to be less
than $1,000,000, such CD Rate Loan or Offshore Rate Loan shall
automatically convert into a Base Rate Loan, and on and after such date the
right of Borrower to continue such Loan as, and convert such Loan into, a
CD Rate Loan or an Offshore Rate Loan, as the case may be, shall terminate.
(b) Borrower shall deliver a Notice of Conversion/Continuation
to be received by Bank not later than 9:00 a.m. (San Francisco time) at
least (i) three Business Days in advance of the Conversion/Continuation
Date, if any Loan is to be converted into or continued as an Offshore Rate
Loan; (ii) two Business Days in advance of the Conversion/Continuation
Date, if any Loan is to be converted into or continued as a CD Rate Loan;
and (iii) on the Conversion/Continuation Date, if any Loan is to be
converted into a Base Rate Loan, specifying: (A) the proposed
<PAGE>
Conversion/Continuation Date; (B) the amount of the Loan to be converted or
continued; (C) the Type of Loan resulting from the proposed conversion or
continuation; and (D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to any CD Rate Loan or Offshore Rate Loan Borrower has failed to select
timely a new Interest Period to be applicable to such Loan, or if any
Default or event that with the giving of notice or lapse of time or both
would become a Default then exists, Borrower shall be deemed to have
elected to convert such Loan into a Base Rate Loan effective as of the
expiration date of such Interest Period.
(d) Unless Bank otherwise agrees in writing, during the
existence of a Default or event that with the giving of notice or lapse of
time or both would become a Default Borrower may not elect to have a Loan
converted into or continued as an Offshore Rate Loan or a CD Rate Loan.
1.5 Voluntary Termination or Reduction of Commitment. Borrower may,
upon not less than five Business Days' prior notice to Bank, terminate the
Commitment, or permanently reduce the Commitment by an aggregate minimum
amount of $1,000,000; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the
then-outstanding principal amount of the Loans would exceed the amount of
the Commitment then in effect. Once reduced in accordance with this
Section, the Commitment may not be increased. All accrued commitment fees
to, but not including the effective date of any reduction or termination of
Commitment, shall be paid on the effective date of such reduction or
termination.
1.6 Optional Prepayments. Subject to Section 5.4, Borrower may, at
any time or from time to time, upon not less than three Business Days'
irrevocable notice to Bank, prepay Loans in whole or in part in an amount not
less than $1,000,000. Such notice of prepayment shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. If such
notice is given by Borrower, Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 5.4.
1.7 Repayment. Borrower shall repay to Bank on the Maturity Date the
principal amount of Loans outstanding on such date.
1.8 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per
annum equal to the Offshore Rate, CD Rate or the Base Rate, as the case may be
(and subject to Borrower's right to convert to other Types of Loans under
Section 1.4), plus the Applicable Margin.
<PAGE>
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 1.6 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full thereof and, during
the existence of any Default, interest shall be paid on demand of Bank.
(c) Anything herein to the contrary notwithstanding, the
obligations of Borrower to Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period
for which interest is computed hereunder, to the extent (but only to the
extent) that contracting for or receiving such payment by Bank would be
contrary to the provisions of any law applicable to Bank limiting the
highest rate of interest that may be lawfully contracted for, charged or
received by Bank, and in such event Borrower shall pay Bank interest at the
highest rate permitted by applicable law.
1.9 Facility Fee. Borrower will pay to Bank quarterly in advance a
facility fee equal to the amount of the Commitment (without regard to usage)
times the Applicable Fee Percentage.
1.10 Computation of Fees and Interest. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank's "reference
rate" shall be made on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day
thereof to the last day thereof. Each determination of an interest rate by
Bank shall be conclusive and binding on Borrower in the absence of manifest
error.
1.11 Payments by Borrower. All payments to be made by Borrower shall
be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by Borrower shall be made to Bank at
the address from time to time specified by Bank for such purpose, and shall be
made in dollars and in immediately available funds, no later than 3:00 p.m.
(San Francisco time) on the date specified herein. Any payment received by
Bank later than 3:00 p.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue. Subject to the provisions set forth in the
definition of "Interest Period" herein, whenever any payment is due on a day
other than a Business Day, such payment shall be made on the following
Business Day, and such extension of time shall in such case be included in
the computation of interest or fees, as the case may be.
1.12 Conditions to Lending. The obligation of Bank to
make any Loan or to continue or convert any Loan under Section 2.04 is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date or Conversion/Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation. Bank shall
have received a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
<PAGE>
(b) Continuation of Representations and Warranties.
The representations and warranties in Article 2 shall be true and correct on
and as of such Borrowing Date or Conversion/Continuation Date with the same
effect as if made on and as of such Borrowing Date or
Conversion/Continuation Date; and
(c) No Existing Default.
No Default or event that with the giving of notice or lapse of time or both
would become a Default shall exist or shall result from such Borrowing or
continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by
Borrower hereunder shall constitute a representation and warranty by
Borrower hereunder, as of the date of each such notice and as of each
Borrowing Date or Conversion/Continuation Date, as applicable, that the
conditions in Section 1.12 are satisfied."
(c) Each reference in the Credit Agreement to "advance" or
"advances" and "Revolving Loan" or "Revolving Loans" shall be deleted and
"Loan" or "Loans, as applicable, shall be inserted in lieu thereof.
(d) Article 2 shall be amended by adding the following prior
to Section 2.1 thereof: "Borrower represents and warrants to Bank that:"
(e) Section 2.1 shall be amended by deleting the following:
"The Borrower represents and warrants to Bank that, as of the date of this
Agreement and as of each request by Borrower for an advance hereunder, the"
and inserting "The" in lieu thereof.
(f) The following shall be added as new Sections 2.2, 2.3, 2.4
and 2.5 to the Credit Agreement, immediately following Section 2.1 thereof:
"2.2 Borrower:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under this
Agreement and the Revolving Note;
(c) is duly qualified as a foreign corporation and is licensed
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that the
failure to do so could not reasonably be expected to cause (i) a material
adverse change in, or a have material adverse effect upon, the operations,
business, properties or condition (financial or otherwise) of Borrower or
Borrower and its subsidiaries, if any taken as a whole; (ii) a material
impairment of the ability of Borrower to perform under this Agreement or
the Revolving Note and to avoid any Default; or (iii) a material adverse
<PAGE>
effect upon the legality, validity, binding effect or enforceability
against Borrower of this Agreement or the Revolving Note.
2.3 The execution, delivery and performance by Borrower of this
Agreement and the Revolving Note and all documents given in connection
herewith or therewith have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of Borrower's certificate or
articles of incorporation, bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of Borrower,
any shareholder rights agreement related to Borrower, or any applicable
resolutions of the board of directors (or any committee thereof) of
Borrower;
(b) conflict with or result in any breach or contravention of,
or the creation of any lien under, any document evidencing any contractual
obligation to which Borrower is a party or any order, injunction, writ or
decree of any Governmental Authority to which Borrower or its property is
subject; or
(c) violate any Requirement of Law.
2.4 No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority is necessary
or required in connection with the execution, delivery or performance by,
or enforcement against, Borrower this Agreement or the Revolving Note.
2.5 This Agreement and the Revolving Note constitute the legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability."
(g) The word "written" shall be added to the third line of
Article 3 of the Credit Agreement after the word "prior" in such line.
(h) The following shall be added to the Credit Agreement after
subsection 3.4(d) thereof as new subsection (e):
"(e) promptly after learning thereof, notice of any change in
the Applicable Rating by S&P or Moody's that would change the Applicable
Fee Percentage."
(i) The following shall be added after the phrase "immediately
due and payable" in the fifth line of Section 4.1 of the Credit Agreement:
"without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by Borrower; and exercise all
rights and remedies available to it under the Revolving Note, this
Agreement, or applicable law; provided, however, that upon the occurrence
of any event specified in subsection (f) or (g) of Section 4.1 (in the case
of an involuntary proceeding against Borrower as described in clause (i) of
such subsection (g) upon the expiration of the 60-day period mentioned
<PAGE>
therein), the obligation of Bank to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable without further act of Bank"
(j) Subsection 4.1(f) of the Agreement shall be amended and
restated in its entirety as follows:
"(f) Insolvency; Voluntary Proceedings. Borrower or
Nordstrom, Inc. (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding with respect
to itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or"
(k) The following shall be added as new Subsection 4.1(g) of
the Agreement, immediately following subsection 4.1(f), and the remaining
subsections of 4.1 shall be relettered accordingly:
"(g)Involuntary Proceedings Proceedings"}. (i) Any
involuntary Insolvency Proceeding is commenced or filed against Borrower or
Nordstrom, Inc., or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of
Borrower's or Nordstrom, Inc's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii)
Borrower or Nordstrom, Inc. admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
Borrower or Nordstrom, Inc. acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or
agent therefor), or other similar person for itself or a substantial
portion of its property or business; or"
(l) Subsection 4.1(h) (after giving effect to the relettering
described in subsection (k) above) of the Credit Agreement by inserting "or
Nordstrom, Inc." after "Borrower" in the first line thereof, and by
inserting "or Nordstrom, Inc.'s" after "Borrower's" in the sixth line
thereof.
(m) The following shall be added to the Credit Agreement
immediately after Section 4.2 thereof as new Section 4.3:
"4.3 Rights Not Exclusive. The rights provided for in this
Agreement and the Revolving Note are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing
or hereafter arising."
(n) The following shall be added as Article 5 of the Credit
Agreement, immediately following Article 4 thereof, and Article 5 of the
Credit Agreement shall be renumbered as Article 6 and the sections of such
Article shall be renumbered accordingly:
<PAGE>
"ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. If any payments to Bank under this Agreement are made
from outside the United States, Borrower will not deduct any foreign taxes
from any payments it makes to Bank. If any such taxes are imposed on any
payments made by Borrower (including payments under this Section), Borrower
will pay the taxes and will also pay to Bank, at the time interest is paid,
any additional amount which Bank specifies as necessary to preserve the
after-tax yield Bank would have received if such taxes had not been
imposed. Borrower will confirm that it has paid the taxes by giving Bank
official tax receipts (or notarized copies) within 30 days after the due
date.
5.2 Illegality. (a) If Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for Bank or any applicable lending office of
Bank to make Offshore Rate Loans, then, on written notice thereof by Bank
to Borrower, any obligation of Bank to make Offshore Rate Loans shall be
suspended until Bank notifies Borrower that the circumstances giving rise
to such determination no longer exist.
(b) If Bank determines that it is unlawful to maintain
Offshore Rate Loans, Borrower shall, upon its receipt of notice of such
fact and demand from Bank, prepay in full all Offshore Rate Loans then
outstanding, together with interest accrued thereon and amounts required
under Section 5.4, either on the last day of the Interest Period thereof,
if Bank may lawfully continue to maintain Offshore Rate Loans to such day,
or immediately, if Bank may not lawfully continue to maintain Offshore Rate
Loans. If Borrower is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, Borrower shall borrow from Bank, in the
amount of such repayment, a Base Rate Loan.
5.3 Increased Costs and Reduction of Return. (a) If Bank
determines that, due to either (i) the introduction of or any change in or
in the interpretation of any law or regulation or (ii) the compliance by
Bank with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to Bank of agreeing to make or making,
funding or maintaining any CD Rate Loan or Offshore Rate Loan, then
Borrower shall be liable for, and shall from time to time, upon demand, pay
to Bank, additional amounts as are sufficient to compensate Bank for such
increased costs.
(b) If Bank shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
(iv) compliance by Bank (or any applicable lending office of Bank) or any
corporation controlling Bank with any Capital Adequacy Regulation, affects
<PAGE>
or would affect the amount of capital required or expected to be maintained
by Bank or any corporation controlling Bank and (taking into consideration
Bank's or such corporation's policies with respect to capital adequacy and
Bank's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment, loans, credits or
obligations under this Agreement, then, upon demand of Bank to Borrower,
Borrower shall pay to Bank, from time to time as specified by Bank,
additional amounts sufficient to compensate Bank for such increase.
5.4 Funding Losses. Borrower shall reimburse Bank and hold Bank
harmless from any loss or expense which Bank may sustain or incur as a
consequence of: (a) the failure of Borrower to make on a timely basis any
payment of principal of any CD Rate Loan or Offshore Rate Loan; (b) the
failure of Borrower to borrow, continue or convert a Loan after Borrower
has given (or is deemed to have given) a Notice of Borrowing or a Notice of
Conversion/Continuation; (c) the failure of Borrower to make any
prepayment in accordance with any notice delivered under Section 1.6; (d)
the prepayment or other payment (including after acceleration thereof) of
an Offshore Rate Loan on a day that is not the last day of the relevant
Interest Period; or (e) the automatic conversion under Section 1.4 of any
Offshore Rate Loan or CD Rate Loan to a Base Rate Loan on a day that is not
the last day of the relevant Interest Period; including any such loss or
expense arising from the liquidation or reemployment of funds obtained by
it to maintain its Offshore Rate Loans or CD Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained.
5.5 Inability to Determine Rates. If Bank determines that for any
reason adequate and reasonable means do not exist for determining the CD
Rate or Offshore Rate for any requested Interest Period with respect to a
proposed CD Rate Loan or Offshore Rate Loan, or that the CD Rate or
Offshore Rate applicable pursuant to subsection 1.8(a) for any requested
Interest Period with respect to a proposed CD Rate Loan or Offshore Rate
Loan does not adequately and fairly reflect the cost to Bank of funding
such Loan, Bank will promptly so notify Borrower. Thereafter, the
obligation of Bank to make or maintain CD Rate Loans or Offshore Rate
Loans, as the case may be, hereunder shall be suspended until Bank revokes
such notice in writing. Upon receipt of such notice, Borrower may revoke
any Notice of Borrowing or Notice of Conversion/Continuation then submitted
by it. If Borrower does not revoke such Notice, Bank shall make, convert
or continue the Loans, as proposed by Borrower, in the amount specified in
the applicable notice submitted by Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of CD Rate Loans or
Offshore Rate Loans.
5.6 Survival. The agreements and obligations of Borrower in this
Article 5 shall survive the payment of all other obligations under this
Agreement and the Revolving Note."
(o) Section 6.1 (as renumbered after giving effect to this
Amendment) of the Credit Agreement shall be amended and restated in its
entirety as follows:
"6.1 Notices. (a) All notices, requests and other communications
shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted
by Borrower by facsimile (i) shall be immediately confirmed by a telephone
<PAGE>
call to the recipient at the number specified on the signature page hereof
with respect to such person, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, telecopied or
delivered, to the address or facsimile number specified for notices on the
signature page hereof with respect to such person; or, as directed to
Borrower or Bank, to such other address as shall be designated by such
party in a written notice to the other party.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the U.S. mail, or if delivered, upon
delivery; except that notices pursuant to Article 1 shall not be effective
until actually received by Bank.
(c) Any agreement of Bank herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of
Borrower. Bank shall be entitled to rely on the authority of any person
purporting to be a person authorized by Borrower to give such notice and
Bank shall not have any liability to Borrower or other person on account of
any action taken or not taken by the Bank in reliance upon such telephonic
or facsimile notice. The obligation of Borrower to repay the Loans shall
not be affected in any way or to any extent by any failure by Bank to
receive written confirmation of any telephonic or facsimile notice or the
receipt by Bank of a confirmation which is at variance with the terms
understood by the Bank to be contained in the telephonic or facsimile
notice."
(p) Section 6.2 (as renumbered after giving effect to this
Amendment) of the Credit Agreement shall be amended by inserting after the
phrase "attorneys' fees" the phrase "including allocated costs of internal
counsel".
(q) Section 6.5 (as renumbered after giving effect to this
Amendment) of the Credit Agreement shall be amended by deleting the word
"Washington" and inserting the word "California" in lieu thereof.
(r) The following shall be added as new Article 7 of the
Credit Agreement, immediately after Article 6 thereof:
"ARTICLE 7
DEFINITIONS
7.1 Certain Defined Terms. The following terms have the following
meanings:
"Applicable Margin" means
(i) with respect to Base Rate Loans, .0000%;
(ii) with respect to CD Rate Loans, .3750%; and
(iii) with respect to Offshore Rate Loans, .3750%.
<PAGE>
"Applicable Fee Percentage means, for any date, the per annum
percentage amount set forth below opposite the Applicable Rating:
<TABLE>
<CAPTION>
Applicable Rating Applicable Fee
Percentage
-----------------------------------------------------
S&P Moody's
------------------------------
<S> <C> <C>
A- or more A3 or more 0.1250%
favorable favorable
BBB or more Baa2 or more 0.1500%
favorable favorable
BBB- or less Baa3 or less
favorable or favorable or
not rated not rated 0.2000%
</TABLE>
"Applicable Rating" means the most favorable ratings issued
from time to time by S&P or Moody's as applicable to Borrower's senior
unsecured long-term debt; provided that (a) if the most favorable ratings
established by such rating agencies indicate two different pricing levels,
the level corresponding to the more favorable of such ratings shall apply,
(b) if only one such rating agency shall provide a rating as to Borrower's
senior unsecured long-term debt, the pricing level shall be determined
based upon such rating, (c) if the ratings system of either such rating
agency shall change, the pricing level shall be determined based upon the
rating from the agency whose ratings system is unchanged, (d) if the
ratings system of both such rating agencies shall change, Borrower and Bank
shall negotiate in good faith to amend the references to specific ratings
in the definition of "Applicable Fee Percentage" to reflect such changed
rating systems, and pending such amendment, if no pricing level is
otherwise determinable based upon the foregoing, the last pricing level in
effect shall apply, and (e) if neither S&P nor Moody's rates Borrower's
long term senior unsecured debt, the Applicable Fee Percentage shown in the
last row of the definition thereof will apply.
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank in San
<PAGE>
Francisco, California, as its "reference rate." (The reference rate is a
rate set by Bank based upon various factors including Bank's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.) Any change in the reference rate announced
by Bank shall take effect at the opening of business on the day specified
in the public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"Borrowing" means a borrowing hereunder consisting of a Loan of
a single Type made to Borrower on a given day by Bank under Article 1, and,
other than in the case of Base Rate Loans, having a single Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of Bank or of any corporation controlling
Bank.
"CD Rate" means, for any Interest Period with respect to CD
Rate Loans comprising part of the same Borrowing, the rate of interest
(rounded upward to the next 1/100th of 1%) determined as follows:
CD Rate = Certificate of Deposit Rate + Assessment
___________________________ Rate
1.00 - Reserve Percentage
Where:
"Assessment Rate" means, for any day of such Interest
Period, the rate determined by Bank as equal to the annual assessment rate
in effect on such day payable to the FDIC by a member of Bank Insurance
Fund that is classified as adequately capitalized and within supervisory
subgroup "A" (or a comparable successor assessment risk classification
within the meaning of 12 C.F.R. S327.3) for insuring time deposits at
offices of such member in the United States; or, in the event that the FDIC
shall at any time hereafter cease to assess time deposits based upon such
classifications or successor classifications, equal to the maximum annual
assessment rate in effect on such day that is payable to the FDIC by
commercial banks (whether or not applicable to Bank) for insuring time
deposits at offices of such banks in the United States.
<PAGE>
"Certificate of Deposit Rate" means the rate of interest
per annum determined by Bank to be the arithmetic mean (rounded upward to
the next 1/100th of 1%) of the rates notified to Bank as the rates of
interest bid by two or more certificate of deposit dealers of recognized
standing selected by Bank for the purchase at face value of dollar
certificates of deposit issued by major United States banks, for a maturity
comparable to such Interest Period and in the approximate amount of the CD
Rate Loan to be made, at the time selected by Bank on the first day of such
Interest Period.
"Reserve Percentage" means, for any day of such Interest
Period, the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%), as determined by Bank, in effect on such
day (including any ordinary, marginal, emergency, supplemental, special and
other reserve percentages), prescribed by the FRB for determining the
maximum reserves to be maintained by member banks of the Federal Reserve
System with deposits exceeding $1,000,000,000 for new non-personal time
deposits for a period comparable to such Interest Period and in an amount
of $100,000 or more.
The CD Rate shall be adjusted, as to all CD Rate Loans then
outstanding, automatically as of the effective date of any change in the
Assessment Rate or the Reserve Percentage.
"CD Rate Loan" means a Loan that bears interest based on the CD
Rate.
"Commitment", as to Bank, has the meaning specified in Section
1.1.
"Conversion/Continuation Date" means any date on which, under
Section 1.4, Borrower (a) converts a Loan of one Type to another Type, or
(b) continues as a Loan of the same Type, but with a new Interest Period, a
Loan having an Interest Period expiring on such date.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if such rate is not so published
on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by Bank of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time)
on that day by each of three leading brokers of Federal funds transactions
in New York City selected by Bank.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
<PAGE>
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession).
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment
for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under
U.S. Federal, state or foreign law, including the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. S101, et seq.), as in effect from time to time.
"Interest Payment Date" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Loan and, as to any
Base Rate Loan, the last Business Day of each calendar quarter and each
date such Loan is converted into another Type of Loan, provided, however,
that if any Interest Period for a CD Rate Loan or an Offshore Rate Loan
exceeds 90 days or three months, respectively, the date that falls 90 days
or three months (as the case may be) after the beginning of such Interest
Period and after each Interest Payment Date thereafter is also an Interest
Payment Date.
"Interest Period" means, (a) as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by Borrower in its Notice of Borrowing
or Notice of Conversion/
Continuation; and (b) as to any CD Rate Loan, the period commencing
on the Borrowing Date of such Loan or on the Conversion/Continuation Date
on which the Loan is converted into or continued as a CD Rate Loan, and
ending 30, 60, 90 or 180 days thereafter, as selected by Borrower in its
Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan, the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the preceding Business Day;
<PAGE>
(ii) any Interest Period pertaining to an Offshore Rate
Loan that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond January 20, 1998.
"Loan" means an extension of credit by Bank to Borrower under
Article 1, or any portion thereof remaining after or resulting from any
conversion of Loans under Section 1.4, and may be a Base Rate Loan, a CD
Rate Loan or an Offshore Rate Loan (each, a "Type" of Loan).
"Maturity Date" means the earlier to occur of:
(a) January 20, 1998; and
(b) the date on which the Commitment terminates in
accordance with the provisions of this Agreement.
"Moody's means Moody's Investors Service, Inc. and any
successor thereto that is a nationally recognized rating agency.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit B.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit C.
"Offshore Rate" means, for any Interest Period, with respect to
any Offshore Rate Loan comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined by
Bank as follows:
Offshore Rate = IBOR
____________________________________
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether or
not applicable to Bank) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by
Bank as the rate at which dollar deposits in the approximate amount of
Bank's Offshore Rate Loan for such Interest Period would be offered by
Bank's Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as
may be designated
<PAGE>
for such purpose by Bank), to major banks in the offshore dollar interbank
market at their request at approximately 11:00 a.m. (New York City time)
two Business Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to
all Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Requirement of Law" means, as to any person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or
binding upon the person or any of its property or to which the person or
any of its property is subject.
"S&P means Standard & Poor's Ratings Group and any successor
thereto that is a nationally recognized rating agency.
"Type" has the meaning specified in the definition of "Loan."
"United States" and "U.S." each mean the United States of
America.
7.2 Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the
defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and subsection, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified. The term
"documents" includes any and all instruments, documents, agreements,
certificates, indentures, notices and other writings, however evidenced.
The term "including" is not limiting and means "including without
limitation." In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including." The term "person" means an individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
(c) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of
this Agreement. This Agreement and the other Loan Documents are the result
of negotiations among and has been reviewed by counsel to Bank and
<PAGE>
Borrower, and are the products of both parties. Accordingly, they shall
not be construed against Bank merely because of Bank's involvement in their
preparation.
7.3 Accounting Principles and Periods. Unless the context
otherwise clearly requires, all accounting terms not expressly defined
herein shall be construed, and all financial computations required under
this Agreement shall be made, in accordance with GAAP, consistently
applied. References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of Borrower."
(s) Bank's address as set forth on the signature page of the
Credit Agreement shall be amended by deleting the name and title "Stephen
J. DeMarti Vice President" and inserting the name and title "Maria
Vickroy-Peralta Assistant Vice President" in lieu thereof; and by adding
the following immediately after such name and title: "Telephone: (415)
622-7198
Facsimile: (415) 622-4585".
(t) Exhibit A to the Credit Agreement is hereby amended and
restated in its entirety so that, as amended, it shall read as set forth on
Exhibit A to this Amendment, which Exhibit A is incorporated herein by this
reference.
(u) Exhibit B to this Amendment, which is incorporated herein
by this reference, is hereby added as Exhibit B to the Agreement.
(v) Exhibit C to this Amendment, which is incorporated herein
by this reference, is hereby added as Exhibit C to the Agreement.
3. Representations and Warranties. Borrower hereby represents and
warrants to Bank as follows:
(a) No Default or event which with notice or lapse of time or
both would become a Default has occurred and is continuing.
(b) The execution, delivery and performance by Borrower of
this Amendment and the Replacement Note (as defined below) have been duly
authorized by all necessary corporate and other action and do not and will
not require any registration with, consent or approval of, notice to or
action by, any person (including any Governmental Authority) in order to be
effective and enforceable. The Credit Agreement, as amended by this
Amendment, and the Replacement Note constitute the legal, valid and binding
obligations of Borrower, enforceable against it in accordance with their
respective terms, without defense, counterclaim or offset.
(c) All representations and warranties of Borrower contained
in the Credit Agreement are true and correct.
(d) Borrower is entering into this Amendment and is executing
the Replacement Note on the basis of its own investigation and for its own
reasons, without reliance upon Bank or any other person.
4. Effective Date. This Amendment will become effective as of
January 20, 1995 (the "Effective Date"), provided that each of the
following conditions precedent has been satisfied:
<PAGE>
(a) Bank has received from Borrower a duly executed original
of this Amendment.
(b) Bank has received from Borrower a duly executed Revolving
Note, in the form and substance of Exhibit A attached hereto (the
"Replacement Note").
(c) Bank has received from Borrower a copy of a resolution
passed by the board of directors of Borrower, certified by the Secretary or
an Assistant Secretary of Borrower as being in full force and effect on the
date hereof, authorizing the execution, delivery and performance of this
Amendment and the Replacement Note.
(d) an opinion of Lane Powell Spears Lubersky and Davis,
Graham & Stubbs, counsel to Borrower and addressed to Bank, substantially
in the form of Exhibit D.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants
and provisions of the Credit Agreement are and shall remain in full force
and effect and all references therein to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this Amendment.
This Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.
(b) This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors
and assigns. No third party beneficiaries are intended in connection with
this Amendment.
(c) This Amendment shall be governed by and construed in
accordance with the law of the State of California.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
(e) This Amendment, together with the Credit Agreement and the
Replacement Note, contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein and therein.
This Amendment supersedes all prior drafts and communications with respect
thereto. This Amendment may not be amended except in accordance with the
provisions of Section 6.4 of the Credit Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or
the Credit Agreement, respectively.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.
<PAGE>
NORDSTROM CREDIT, INC.
By: /s/John C. Walgamott
--------------------
Name: John C. Walgamott
Title: President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/James C. Deichen
-------------------
James C. Deichen
Senior Vice President
By: /s/Maria Vickroy-Peralta
------------------------
Maria Vickroy-Peralta
Assistant Vice President
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
REVOLVING NOTE
$90,000,000 As of January 20, 1995
FOR VALUE RECEIVED, the undersigned, NORDSTROM CREDIT, INC., a
Colorado corporation ("Borrower"), hereby promises to pay to the order of
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("Bank") the
principal sum of Ninety Million Dollars ($90,000,000) or, if less, the
aggregate unpaid principal amount of all Loans made by Bank to Borrower
pursuant to the Credit Agreement, dated as of June 30, 1992 (such Credit
Agreement, as amended by that certain Amendment No.1 to Credit Agreement
dated as of January 1, 1993, that certain Amendment No. 2 to Credit
Agreement dated as of June 29, 1993, that certain Amendment No. 3 to Credit
Agreement dated as of June 30, 1994 and that certain Amendment No. 4 to
Credit Agreement dated as of even date herewith, and as it may be further
amended, restated, supplemented or otherwise modified from time to time,
being hereinafter called the "Credit Agreement"), between Borrower and
Seattle-First National Bank, which has assigned its rights and obligations
thereunder to Bank, on the dates and in the amounts provided in the Credit
Agreement. Borrower further promises to pay interest on the unpaid
principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
Bank is authorized to endorse the amount and the date on which
each Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part
hereof, or on continuations thereof which shall be attached hereto and made
a part hereof; provided, that any failure to endorse such information on
such schedule or continuation thereof shall not in any manner affect any
obligation of Borrower under the Credit Agreement and this Amended and
Restated Revolving Note (this "Revolving Note").
This Revolving Note is the Revolving Note referred to in, and
is entitled to the benefits of, the Credit Agreement, which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.
The undersigned promises to pay costs of collection and attorneys'
fees (including allocated costs of internal counsel) if default is made in
the payment of this Revolving Note.
Terms defined in the Credit Agreement are used herein with
their defined meanings therein unless otherwise defined herein. THIS
REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED
THAT BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
<PAGE>
This Revolving Note amends and restates in its entirety, but
does not extinguish the indebtedness under, the Revolving Note dated as of
June 30, 1994 executed by the undersigned in favor of Bank.
NORDSTROM CREDIT, INC.
By: ________________________
Title: _____________________
<PAGE>
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
<TABLE>
<CAPTION>
(2) (3) (4)
Amount Maturity Amount of
of Date of Base (5)
(1) Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
<S> <C> <C> <C> <C>
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
__________ _____________ ____________ ____________ ___________
</TABLE>
<PAGE>
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
<TABLE>
<CAPTION>
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Notation
Date Rate Loan Rate Loan Loan Repaid Made By
<S> <C> <C> <C> <C>
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
_________ _____________ ____________ ______________ __________
</TABLE>
<PAGE>
Schedule C to Note
CD RATE LOANS AND REPAYMENT OF CD RATE LOANS
<TABLE>
<CAPTION>
(2) (3) (4)
Amount Maturity Amount of (5)
(1) of CD Date of CD CD Rate Notation
Date Rate Loan Rate Loan Loan Repaid Made By
<S> <C> <C> <C> <C>
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
_________ _____________ _____________ _______________ __________
</TABLE>
<PAGE>
EXHIBIT B
NOTICE OF BORROWING
Date:________________, 199_
To: Bank of America National Trust and Savings Association, party to the
Credit Agreement dated as of June 30, 1992 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") among
Nordstrom Credit, Inc. and Bank of America National Trust and Savings
Association
Ladies and Gentlemen:
The undersigned Nordstrom Credit, Inc. ("Borrower"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.3
of the Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
_________________, 19 .
2. The aggregate amount of the proposed Borrowing is
$_______________________.
3. The Borrowing is to be comprised of $____________ of [Base
Rate] [CD Rate] [Offshore Rate] Loans.
4. The duration of the Interest Period for the [CD Rate Loans]
[Offshore Rate Loans] included in the Borrowing shall be [_____ days]
[_____ months].
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Borrowing, before and after giving effect thereto and to the application of
the proceeds therefrom:
(a) the representations and warranties of Borrower contained in
Article 2 of the Credit Agreement are true and correct as though made on
and as of such date;
(b) no Default or event that with the giving of notice or lapse
of time or both would become a Default has occurred and is continuing,
or would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Loans to exceed the Commitment.
<PAGE>
NORDSTROM CREDIT, INC.
By:________________________
Title:_____________________
By:________________________
Title:_____________________
<PAGE>
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
Date:__________________,199_
To: Bank of America National Trust and Savings Association, party to the
Credit Agreement dated as of June 30, 1992 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") among
Nordstrom Credit, Inc. and Bank of America National Trust and Savings
Association
Ladies and Gentlemen:
The undersigned, Nordstrom Credit, Inc. (the "Borrower"), refers to
the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to
Section 1.4 of the Credit Agreement, of the [conversion] [continuation] of
the Loans specified herein, that:
1. The Conversion/Continuation Date is ______________, 19__.
2. The aggregate amount of the Loans to be [converted]
[continued] is $ .
3. The Loans are to be [converted into] [continued as]
[CD Rate] [Offshore Rate] [Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the
Loans included in the [conversion] [continuation] shall be [days]
[ months].
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed
Conversion/Continuation Date, before and after giving effect thereto and to
the application of the proceeds therefrom:
(a) the representations and warranties of Borrower contained in
Article 2 of the Credit Agreement are true and correct as though made on
and as of such date;
(b) no Default or event that with the giving of notice or lapse
of time or both would become a Default has occurred and is continuing,
or would result from such proposed Borrowing; and
(c) the proposed [conversion][continuation] will not cause the
aggregate principal amount of all outstanding Loans to exceed the
Commitment.
<PAGE>
NORDSTROM CREDIT, INC.
By:_________________________
Title:______________________
By:_________________________
Title:______________________
<PAGE>
EXHIBIT D
FORM OF LEGAL OPINION
[Date]
Bank of America National Savings
and Trust Association
United States Division--Credit
Products--San Francisco #3838
555 California Street, 41st Floor
San Francisco, CA 94104
Ladies and Gentlemen:
We have acted as counsel for Nordstrom Credit, Inc. ("Borrower") in
connection with Amendment No. 4 to Credit Agreement dated as of January
___, 1995, between Borrower and Bank of America National Trust and Savings
Association ("Bank") (the "Amendment"). The Amendment sets forth certain
amendments to the Credit Agreement dated as of June 30, 1992 (as amended by
that certain Amendment No. 1 to Credit Agreement dated as of January 1,
1993, that certain Amendment No. 2 to Credit Agreement dated as of June 29,
1993 and that certain Amendment No. 3 to Credit Agreement dated as of June
30, 1994, the "Credit Agreement"), between Borrower and Bank. Capitalized
terms used herein have the respective meanings assigned in the Credit
Agreement or the Amendment.
In connection with this opinion we have examined: (i) copies of the
Credit Agreement, the Amendment and the Amended and Restated Revolving Note
dated as of January ___, 1995 (the "Revolving Note") executed by Borrower;
(ii) resolutions adopted by the board of directors of Borrower at a meeting
held on _______________________; (iii) good standing certificates with
respect to Borrower issued by the Colorado Secretary of State on January
___, 1995; and (iv) originals or copies of such other documents, corporate
records, certificates and other statements of government officials and
corporate officers and other representatives of the persons referred to
herein and of such other instruments as we have considered necessary or
appropriate for purposes of this opinion. For purposes of this opinion we
have assumed your due execution and delivery of the Credit Agreement and
the Amendment.
On the basis of the foregoing and subject to the qualifications
hereinafter stated, we advise you that it is our opinion:
1. Corporate Existence and Power. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of
Colorado and is qualified to do business in each other jurisdiction where
the conduct of its business or the ownership of its properties requires
such qualification and where failure to qualify could have a material
adverse effect on the financial condition or operations of Borrower, and
has full corporate power, authority and legal right to carry on its
business as presently conducted, to own and operate its properties and
assets, and to execute and deliver the Amendment and perform its
obligations under the Credit Agreement, as amended by the Amendment, and
the Revolving Note.
<PAGE>
2. Corporate Authorization. The execution, delivery and
performance by Borrower of the Amendment and Revolving Note and any
borrowing hereunder have been duly authorized by all necessary corporate
action of Borrower, do not require any shareholder approval or to the best
of our knowledge the approval or consent of any trustee or the holders of
any Indebtedness of Borrower, do not contravene any law, regulation, rule
or order binding on it or its articles of incorporation or bylaws and to
the best of our knowledge to not contravene the provisions of or constitute
a default under an indenture, mortgage, contract or other agreement or
instrument to which Borrower is a party or by which Borrower or any of its
properties may be bound or affected.
3. Government Approvals, Etc. No government approval or filing or
registration with any governmental authority is required for the making and
performance by Borrower of the Credit Agreement, as amended by the
Amendment, or the Revolving Note or in connection with Borrower's
performance of its obligations under the Credit Agreement, as amended by
the Amendment, or the Revolving Note.
4. Binding Obligations, Etc. The Amendment and the Revolving Note
have been duly executed and delivered by Borrower and the Credit Agreement,
as amended by the Amendment, and the Revolving Note constitute, the legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms.
5. Litigation. To the best of our knowledge there are no actions,
proceedings, investigations, or claims against or affecting Borrower now
pending before any court, arbitrator or governmental authority (nor to the
best of our knowledge has any thereof been threatened nor does any basis
exist therefor) which if determined adversely to Borrower would be likely
to have a material adverse effect on the financial condition or operations
of Borrower, or to result in a judgment or order against Borrower (in
excess of insurance coverage) for more than $1,000,000 in any one case of
$5,000,000 in the aggregate, except as set forth on the attached schedule.
6. Agreements. To the best of our knowledge Borrower is not in
material breach of or material default under any material agreement to
which it is a party or which is binding on it or any material part of its
assets.
7. Investment Company Status. None of the Borrower or any person
controlling the Borrower is (a) an "Investment Company" within the meaning
of the Investment Company Act of 1940; or (b) to our knowledge, subject to
regulation under any other Federal or state statute or regulation limiting
its ability to incur indebtedness.
8. Regulation U, Etc.. The execution and delivery of the Credit
Agreement, the Amendment and the Revolving Note, and the performance of the
Credit Agreement, as amended by the Amendment, and the Revolving Note, will
not conflict with or contravene any of Regulations G, T, U and X
promulgated by the Federal Reserve Board.
The opinions expressed above are subject to the following
qualifications:
<PAGE>
(a) The enforceability of the obligations of Borrower under the
Credit Agreement, as amended by the Amendment, and the Revolving Note is
subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally and to general principles of equity
(whether asserted in an action in equity or at law).
(b) We have assumed the genuineness of all signatures, the
authenticity of all documents certified and submitted to us as originals
and the conformity with the original documents of all documents certified
and submitted to us as copies.
(c) We express no opinion as to the laws of any jurisdiction other
than the laws of the State of Colorado, the State of California, and the
federal laws of the United States.
This opinion may be relied on by you and by your participant,
Seattle-First National Bank.
Very truly yours,
[attach schedule listing pending litigation]
<PAGE>
Exhibit 10.9
LOAN AGREEMENT
THIS AGREEMENT is entered into as of this 25th day of June, 1994,
by and among NORDSTROM CREDIT, INC., the BANKS listed on the signature
pages hereof and FIRST INTERSTATE BANK OF DENVER, 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 Denver, 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 Colorado are authorized by law to close.
1.1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1
<PAGE>
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 of this
Agreement.
2
<PAGE>
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.
3
<PAGE>
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.
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 23, 1995.
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 Denver, 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.
4
<PAGE>
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 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.
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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
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. Denver 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. Denver 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 Denver, Colorado, to Agent at its
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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
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 and on the last day of such Interest Period;
provided that in any event, all accrued interest shall be fully due and
payable on Maturity of the Notes.
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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. Denver time on the day such notice is
given), repay only 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.
(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.
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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:
ACDR = [ CDBR ]* + AR
[ 1.00 - RP ]
ACDR = Adjusted Fixed CD Reference Rate
CDBR = Fixed CD Base Reference Rate
RP = Reserve Percentage
AR = Assessment Rate
* 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.
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"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 Denver, 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
Denver, 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 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 Base 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 upward, 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.
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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 ADJUSTMENTS 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 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 to this paragraph, Borrower may borrow a Floating Rate
Loan in an equal 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
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
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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 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
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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.
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
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(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, 1994. 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 COMMITMENT. 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. Denver, Colorado, time
on the date when due, in federal or other Dollar funds immediately available
in Denver, Colorado, 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 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
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day of an Interest Period applicable thereto (whether voluntarily or
otherwise) 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.
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(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.
(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 at or prior to the
Effective Date.
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.
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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 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.
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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.
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, 1994.
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
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in Borrower's financial condition since its financial statements dated
January 31, 1994.
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 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.
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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, if 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 assets; provided
further that such lien attaches to such fixed assets 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 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 specifcally 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
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all debt of Borrower to Nordstrom and its subsidiaries to Borrower's other
debt.
Banks acknowledge that the modification of the Operating Agreement
or the entering into a new Operating Agreement between the Borrower and NNCB,
and/or between Nordstrom and the Borrower which deals with the assignment of
VISA card accounts, the settlement of such accounts, and the servicing of such
accounts and which will not have any of the "material impacts" described above
in this Section 5.9, will not be considered to be amendments of any of the
Operating Agreements or failures to enforce or ensure compliance with the
Operating Agreements which would have a material impact upon the Borrower.
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:
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 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.
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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 statements stating
___________________________
++ To the extent that NNCB is a national banking association and
therefore prepares and/or refers to its reports of financial information
in accordance with certain regulatory requirements not applicable to
other entities, provision of NNCB'S "call reports" in lieu of the
financial information required for NNCB under the provisions of
subparagraphs(i), (ii), and (vii) of this paragraph 6.4 shall be deemed
compliance with those subparagraphs.
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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
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regulations of the federal government and of any state of the United States
and of any foreign jurisdiction in which it transacts business or owns
property, and any of their subdivisions, departments or 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 and provided adequate reserves are set aside.
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,
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.
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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;
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 WAARRANTIES. 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
proveto 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;
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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 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 JUDGEMENTS. 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
26
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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 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
27
<PAGE>
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, 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 JUDGEMENTS. 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 Denver, 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 Denver, 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.
28
<PAGE>
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 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
29
<PAGE>
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) 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,
30
<PAGE>
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 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
hall 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
31
<PAGE>
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 COLORADO LAW; JURISDICTION. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Colorado;
and each party hereto irrevocably agrees that the proper jurisdiction and
venue for any cause of action hereunder or relating hereto shall be the City
and County of Denver, Colorado.
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 COLORADO 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.
NORDSTROM CREDIT, INC.
By /s/ John Walgamott
--------------------
Its President
--------------------
Nordstrom Credit, Inc.
Attention: John Walgamott
13531 E. Caley
Englewood, Colorado 80111
Telecopy No: (303) 397-4775
32
<PAGE>
Commitments
FIRST INTERSTATE BANK OF
$30,000,000 DENVER, N.A.
By /s/ Carol A. Ward
----------------------
Its Vice President
----------------------
First Interstate Bank of Denver, N.A.
Attention: Carol A. Ward, 4N/010
633 Seventeenth Street
Denver, Colorado 80270
Telecopy No:(303)293-5467
$18,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By /s/ Carl J. Mehldau JR.
-----------------------
Its Associate
-----------------------
Morgan Guaranty Trust Company
of New York
Attention: David Ellis
60 Wall Street, 22nd Floor
New York, New York 10260
Telecopy No.: (212) 648-5014
$12,000,000 ABN AMRO BANK N.V.
By /s/ Lee-Lee Miao
-----------------------
Its Vice President
-----------------------
By /s/ Jeff H. Olson
-----------------------
Its Vice President
-----------------------
ABN AMRO Bank N.V.
Attention: Lee-Lee Miao
1 Union Square, Suite 2323
Seattle, WA 98101
Telecopy No.: (206) 682-5641
33
<PAGE>
$18,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ William B. Guffey
-----------------------
Its Vice President
-----------------------
NationsBank of Texas, N.A.
Attention: William B. Guffey
444 S. Flower St., Suite 1500
Los Angeles, CA 90071
Telecopy No.: (213) 624-5815
$12,000,000 SWISS BANK CORPORATION
By /s/ Colin Taylor
-----------------------
Its Director
Merchant Banking
---------------------
By /s/ David L. Parrot
-----------------------
Its Associate Director
Merchant Banking
-----------------------
Swiss Bank Corporation
San Francisco Branch
Attention: Colin Taylor
101 California Street
San Francisco, CA 94111
Telecopy No.: (415) 989-7570
34
<PAGE>
AMENDMENT NO. 1 TO LOAN AGREEMENT
THIS AMENDMENT NO. 1, dated as of December 1, 1994, ("Amendment No. 1")
to that certain Loan Agreement, dated as of June 25, 1994, (the "Agreement")
by and between NORDSTROM CREDIT, INC., a Colorado corporation, with principal
offices at 13531 E. Caley, Englewood, Colorado 80111 (the "Borrower"), the
Banks listed on the signature pages hereof, and FIRST INTERSTATE BANK OF
DENVER, N.A., a national banking association, whose address is 633 Seventeenth
Street, Denver, Colorado 80270, as Agent.
RECITALS:
WHEREAS, the Banks and the Borrower desire to increase the aggregate
amount of the Commitment from a total of $90,000,000.00 to a total of
$135,000,000.00 and to amend the Agreement;
WHEREAS, the parties desire to enter into this Amendment No. 1 to the
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, the parties hereto agree as follows:
1. Section 2.7, Commitment Fee, Page 15 of the Agreement is hereby
amended by deleting the first sentence of the section and inserting the
following sentence in its place:
"Borrower shall pay to Agent for the account of each Bank a
commitment fee at the rate of one eighth of one percent (1/8 %) per annum
on the total of each Bank's Commitment."
2. Section 6.2, Consolidated Total Debt to Consolidated Tangible Net
Worth, Page 23 of the Agreement is hereby amended by deleting the
first sentence of the section and inserting the following sentence in its
place:
"Maintain as of 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 six to one (6.0 : 1.0) or less."
3. The Commitment amounts with respect to each Bank as set forth
opposite the name of each Bank on the signature pages of the Agreement,
are hereby deleted and are replaced with the amounts set forth opposite
the name of each Bank on the signature pages to this Amendment No. 1.
4. Miscellaneous Provisions.
<PAGE>
(a) This Amendment No. 1 shall be considered as an amendment
to the Agreement and, except as herein expressly amended and
supplemented, the Agreement is hereby ratified, approved and confirmed in
each and every respect. To the extent of any inconsistency therewith,
this Amendment No. 1 shall supersede the provisions of any prior
document. All references to the Agreement in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to
the Agreement as amended hereby.
(b) This Amendment No. 1 may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
are identical, and all such counterparts shall together constitute but
one and the same Amendment No. 1.
(c) The Borrower hereby represents and warrants to the Banks
as follows:
(i) The representations and warranties to the Banks
contained in Section 4 Representations and Warranties of the
Agreement are true and correct and are again made as of the date
hereof.
(ii) The execution and delivery of this Amendment No.
1, and the performance by the Borrower of its obligations
hereunder, are within the Borrower's powers, have been duly
authorized by all necessary corporate action, have received all
necessary governmental approval (if any shall be required) and do
not and will not contravene or conflict with any provision of law
or of the charter or bylaws of the Borrower or of any agreement
binding upon the Borrower.
(d) Terms used herein if not specifically defined shall have
the same meaning as used in the Agreement.
(e) This Amendment No. 1 is accepted and entered into in the
State of Colorado and shall be governed and construed in accordance with
the substantive laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Amendment No. 1 as of the date, month and year first above
written.
BORROWER:
NORDSTROM CREDIT, INC.
By: /s/John C. Walgamott
--------------------
Title: President
--------------------
<PAGE>
Commitments
$45,000,000.00 FIRST INTERSTATE BANK OF DENVER, N.A.
By: /s/ Carol A. Ward
---------------------
Title: Vice President
---------------------
$27,000,000.00 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Robert Bottamedi
--------------------
Title: Vice President
--------------------
$18,000,000.00 ABN AMRO BANK N.V.
By: /s/Carol A. Marquess
--------------------
Title: Asst. Vice President
--------------------
$27,000,000.00 NATIONSBANK OF TEXAS, N.A.
By: /s/William B. Guffey
--------------------
Title: Vice President
--------------------
$18,000,000.00 SWISS BANK CORPORATION
By: /s/ David L. Parrot
--------------------
Title: Associate Director
Merchant Banking
--------------------
By: /s/ Hans-Ueli Surber
--------------------
Title: Executive Director
Merchant Banking
--------------------
<PAGE>
Exhibit 10.10
June 10, 1985
Morgan Guaranty Trust Company
of New York
9 West 57th Street
New York, New York 10019
Attention: John F. Goydas
Vice President
Gentlemen:
We hereby confirm borrowing arrangements made with you as follows, to be
effective as of the opening of business on July 10, 1985.
You agree to lend to us for our general business purposes certain sums not
to exceed $25,000,000 at any one time outstanding, as hereinafter
specified, which you represent will be available for this purpose from time
to time in the Private Banking Division of your Bank in various accounts of
which you are custodian, fiduciary or advisor, against our prior issuance
and delivery to you from time to time as hereinafter specified of
our promissory note, payable upon demand (which if given verbally shall be
promptly confirmed in writing), in the form of Exhibit "A" to this letter
and duly executed by an authorized offier of this Company.
The principal amount of each such note shall be specified from time to time
in the manner hereinafter provided. Each such note shall be dated as of
the date of its issue and shall bear interest from said date, payable on
the first day of each month on the daily principal amount from time to time
outstanding during the accrual period, at a rate or rates equivalent to the
highest annual simple interest yield currently quoted on General Motors
Acceptance Corporation ordinary commercial paper borrowings of 30 to 59
days inclusive. Each change in such rate shall be effective with respect
to all loans outstanding hereunder on the same date as the change is
effective with respect to said rate for commercial paper of General Motors
Acceptance Corporation. For purposes of computing interest, principal
amounts loaned hereunder shall be deemed to be outstanding on the date
loaned but not on the date repaid.
Upon request, we shall issue and deliver to you, without cost to you, in
exchange for the promissory note then held by you, a new promissory note in
a principal amount of said note being surrendered in exchange, and dated
and bearing interest from the date to which interest has been paid on said
note being surrendered in exchange.
A duly authorized officer or duly authorized employee of your Private
Banking Division, designated by you in writing for such purpose, will from
time to time notify our Treasurer (or such person as may be designated by
the Treasurer in writing) of the total amount to be lent us hereunder and,
on the authority of our Treasurer (or such person as may be designated by
the Treasurer in writing), shall enter said amount under the column headed
1
<PAGE>
"Principal Amount Outstanding" on our promissory note which you are then
holding and such and such amount shall be deemed to be the amount then due
on said note. Any entries so made on said promissory note shall constitute
conclusive evidence of the principal amount of said note then outstanding
when you shall have received written confirmation thereof from our
Treasurer (or such person as may be designated by the Treasurer in writing)
in the manner hereinafter described. In the event such notification to us
results in an increase in the total amount to be lent to us hereunder, you
shall forthwith transfer the amount to be lent to us hereunder, you shall
forthwith transfer the amount of said increase to our Account at your Bank
numbered 046-30-619. In the event such notification to us results in a
decrease in the total amount to be lent us hereunder, you shall forthwith
charge the amount of said decrease to our said Account at your Bank.
After the close of each week during which you have made any loan to us
hereunder or we have made any repayment on the principal balance of any
loan made hereunder or during which the interest rate on any loan shall
have changed, we shall send you a written confirmation of the transaction
which took place during such week dated the last business day of such week
in substantially the form attached hereto as Exhibit "B" with appropriate
insertions in the blank spaces therein.
It is understood and agreed that you shall have the right at any time to
demand payment of all or any part of the principal amount then outstanding
on the promissory note then held by you, together with interest to the date
of payment. We shall have the right at any time, upon advice to you by
letter or telephone, to pay all or any part of the principal amount then
outstanding on the promissory note then held by you, together with interest
to the date of payment, notwithstanding that you have not theretofore
demanded such payment in accordance with the foregoing and with the note.
It is further understood and agreed that you shall not sell, pledge, or
assign nor otherwise transfer any promissory note held by you pursuant to
this agreement without first having notified us at least ten days prior to
the intended sale of such sale, pledge, assignment or transfer of your
intention so to do, and in no event shall any such sale, pledge, assignment
or transfer be effected except upon compliance with all applicable Federal
and state securities laws and regulations.
This agreement may be terminated by you or by us upon not less than ten
day's written notice to the other party.
If the foregoing satisfactorily sets forth the terms and conditions of the
borrowing arrangements made with you, we request that you indicate your
acceptance thereof by the signature of your duly authorized officer in the
space provided below on the duplicate original of this letter which is
enclosed.
2
<PAGE>
Very truly yours,
Nordstrom Credit, Inc.
By /s/John A. Goesling
-------------------
John A. Goesling
Treasurer
ACCEPTED:
Morgan Guaranty Trust Company of New York
By /s/John F. Goydas
------------------
John F. Goydas
Vice President
3
<PAGE>
Exhibit "A" July 10, 1985
Note No. 1 New York, New York
NORDSTROM CREDIT, INC.
For value received, Nordstrom Credit, Inc. a corporation organized under
the laws of the State of Washington, promises to pay to the order of Morgan
Guaranty Trust Company of New York, on its demand (which if given verbally
shall be promptly confirmed in writing), or on or before (six months from
above date), the principal sum set forth below as "Principal Amount
Outstanding", on the date of such demand, at the office of Morgan Guaranty
Trust Company of New York, New York and will likewise pay to the order of
said payee interest at the rate or rates per annum provided for in the
agreement mentioned below. Said interest will be due and payable on the
first day of each month after the date of this note or upon payment in full
of the principal amount from time to time outstanding as indicated below.
Interest will be calculated on the daily principal amount outstanding as
indicated below.
This note is issued pursuant to and is subject to the terms and conditions of
a certain letter agreement dated June 10, 1985, by and between Nordstrom
Credit, Inc. and Morgan Guaranty Trust Company of New York.
By /s/John A. Goesling
-------------------
John A. Goesling
<TABLE>
<CAPTION>
Principal Effective
Amount Amount Amount Interest Authorized
Date Loaned Paid Outstanding Rate Initials
<S> <C> <C> <C> <C> <C>
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
____ _______ _____ __________ _________ ________
</TABLE>
<PAGE>
Exhibit B
Nordstrom Credit, Inc.
1321 Second Avenue
Seattle, Washington 98101
June 10, 1985
Attention:
Re: Master Note of Nordstrom Credit, Inc.
Gentlemen:
We confirm to you the following changes occured in the loans outstanding
under the terms of the Agreement with you dated June 10, 1985, for the
week ended this date.
Prior Current
Principal Principal Current
Amount Loan Amount Interest
Date Outstanding (Repayment) Outstanding Rate
____ ___________ ___________ ___________ _________
Please arrange with your Private Banking Division to make the appropriate
entries to our account on the dates indicated.
Nordstrom Credit, Inc.
By________________
John A. Goesling
Treasurer
<PAGE>
EXHIBIT A
May 16, 1994
Amendment to Master Note Agreement dated June 10, 1985 (the "Agreement"),
by and between Nordstrom Credit, Inc. ("Nordstrom") and Morgan Guaranty Trust
Company of New York, as custodian, fiduciary and advisor ("Morgan").
WHEREAS, the parties hereto wish to amend the Agreement so as to change
the rate at which interest under the Agreement is computed and to increase the
maximum amount to be loaned under the Agreement;
Now, Therefore, the parties hereto agree as follows:
1. The second paragraph of the Agreement is hereby amended by
deleting "25,000,000" from the second line of such paragraph and inserting
"50,000,000" in lieu thereof:
2. The third paragraph of the Agreement is deleted in its entirety
and the following is inserted in lieu thereof:
"The principal amount of each such note shall be specified
from time to time in the manner hereinafter provided. Each
such note shall be dated as of the date of its issue and
shall bear interest from said date, payable on the first
date of each month on the daily principal amount from time
to time outstanding during the accrual period, at a rate or
rates equivalent to the money market yield (computed on the
basis of a 360-day year) of the Commercial Paper Rate (as
hereinafter defined), as such rate changes from time to
time, minus thirteen (13) basis points. Each change in the
Commercial Paper Rate shall be effective with respect to
loans outstanding hereunder on the same date as the change
is effective. For purposes of computing interest,
principal amounts loaned hereunder shall be deemed to be
outstanding on the date loaned but not on the date repaid.
For purposes of this Agreement the "Commercial Paper
1-Month" and the "H.15(519)" means the weekly statistical
release designated as such, or any successor publication,
published by the Board of Governors of the Federal Reserve
System."
3. Except as hereby expressly amended, the Agreement and all the
terms, conditions and provisions thereof shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties have hereto set their names as at the date
first above written.
MORGAN GUARANTY TRUST COMPANY NORDSTROM CREDIT, INC.
OF NEW YORK
By:/s/Robert R. Johnson By:/s/John Walgamott
-------------------- -----------------
Title:Vice President Title:President
<PAGE>
NORDSTROM CREDIT, INC.
SECRETARY'S CERTIFICATE
1. I, Karen E. Purpur, the undersigned Secretary of Nordstrom Credit,
Inc., a corporation organized and existing under the laws of the State of
Colorado, hereby certify that I am the Secretary of said corporation and that
attached to this Certificate as Exhibit B is a true and correct copy of
resolutions adopted by unanimous written consent by the Board of Directors on
May 16, 1994 and said resolutions have not been revoked, rescinded, or set
aside, and are now in full force and effect.
2. I FURTHER CERTIFY, that there is no provision in the Charter or By-
Laws of the Company limiting the power of the Board of Directors to pass the
aforesaid resolutions and that the same are in conformity with the provisions
of said Charter and By-Laws.
3. I FURTHER CERTIFY, that the following persons are duly elected and
acting officers of the Company, holding the offices set forth next to their
names below, and the signature appearing opposite the name of each such
officer is his genuine signature:
John C. Walgamott
President /s/John C. Walgomott
--------------------
John A. Goesling
Executive Vice-President
and Treasurer /s/John A. Goesling
-------------------
In WITNESS WHEREOF, I have hereunto set my hand as Secretary of the
Company and affixed the corporate seal this 16th day of May, 1994. (CORPORATE
SEAL)
/s/Karen E. Purpur
------------------
Secretary
The undersigned, John A. Goesling, being the duly elected and acting
Executive Vice President and Treasurer of the Company, hereby certifies that
the signature appearing above is her genuine signature.
/s/John A. Goesling
-------------------
Executive Vice President and Treasurer
<PAGE>
EXHIBIT B
UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
NORDSTROM CREDIT, INC.
The undersigned, being all of the directors of Nordstrom Credit, Inc., a
Colorado corporation, consent to and adopt the following resolutions in lieu
of holding a meeting of the Board of Directors of the corporation:
RESOLVED, that the proposed Amendment to the Master Note
Agreement dated June 10, 1985 between the Company's
predecessor, Nordstrom Credit, Inc., a Washington
corporation and Morgan Guaranty Trust Company of New York
is hereby adopted and approved substantially in the form
Exhibit A attached hereto, and the President or any Vice
President are, and each of them hereby is, authorized and
directed to execute and deliver such amendment on behalf of the
Company, with such changes as may be approved as necessary
or desirable by the officer or officers executing the same,
such execution to be conclusive evidence of such approval.
RESOLVED, that the proper officers of the Company are
hereby authorized and directed to take any and all such
actions as may be necessary to carry out the intent and
purpose of the foregoing resolution.
This Consent may be executed in more than one counter-
part, which together shall constitute an original.
DATED this 16th day of May, 1994.
/s/Bruce A. Nordstrom
-----------------------------
Bruce A. Nordstrom, Director
/s/James F. Nordstrom
-----------------------------
James F. Nordstrom, Director
/s/John N. Nordstrom
-----------------------------
John N. Nordstrom, Director
/s/John A. McMillan
----------------------------
John A. McMillan, Director
<PAGE>
Exhibit "C" (formerly Exhibit "A") July 15, 1994
Note No. 18 New York, New York
NORDSTROM CREDIT, INC.
For value received, Nordstrom Credit, Inc. a corporation organized under the
laws of the State of Colorado, promises to pay to the order of Morgan Guaranty
Trust Company of New York, on its demand (which if given verbally shall be
promptly confirmed in writing), or on or before (six months from above date),
the principal sum set forth below as "Principal Amount Outstanding," on the
date of such demand, at the office of Morgan Guaranty Trust Company of New
York, New York and will likewise pay to the order of said payee interest at
the rate or rates per annum provided for in the agreement mentioned below.
Said interest will be due an payable on the first day of each month after the
date of this note or upon payment in full of the principal amount from time to
time outstanding as indicated below. Interest will be calculated on the daily
principal amount outstanding as indicated below.
This note is issued pursuant to and is subject to the terms and conditions of
a certain letter agreement dated June 10, 1985 and November 19, 1992, amended
May 16, 1994, by and between Nordstrom Credit, Inc. and Morgan Guaranty Trust
company of New York.
By /s/John Walgamott
-----------------
<TABLE>
<CAPTION>
Principal Effective
Amount Amount Amount Interest Authorized
Date Loaned Paid Outstanding Rate Initials
<S> <C> <C> <C> <C> <C>
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
____ _________ _______ ___________ __________ __________
</TABLE>
<PAGE>
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, 1995 1994 1993 1992 1991
---------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Earnings before
income taxes $32,045 $32,372 $29,321 $24,023 $16,389
Fixed charges
(gross interest expense) 31,187 29,600 33,841 35,037 36,816
------- ------- ------- ------- -------
Earnings available for
fixed charges $63,232 $61,972 $63,162 $59,060 $53,205
======= ======= ======= ======= =======
Ratio of earnings available
for fixed charges to fixed
charges 2.03 2.09 1.87 1.69 1.45
======= ======= ======= ======= =======
</TABLE>
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to
Registration Statement No. 33-55905 of Nordstrom Credit, Inc. on Form S-3 of
our report dated March 10, 1995, appearing in this Annual Report on Form 10-K
of Nordstrom Credit, Inc. for the year ended January 31, 1995.
DELOITTE & TOUCHE LLP
Seattle, Washington
March 31, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 440
<SECURITIES> 0
<RECEIVABLES> 679,221
<ALLOWANCES> 22,958
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,685
<DEPRECIATION> 0
<TOTAL-ASSETS> 668,624
<CURRENT-LIABILITIES> 0
<BONDS> 252,100
<COMMON> 0
0
0
<OTHER-SE> 170,173
<TOTAL-LIABILITY-AND-EQUITY> 668,624
<SALES> 0
<TOTAL-REVENUES> 93,636
<CGS> 0
<TOTAL-COSTS> 61,591
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 940
<INTEREST-EXPENSE> 31,074
<INCOME-PRETAX> 32,045
<INCOME-TAX> 11,600
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,445
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
