<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 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 offices) (Zip code)
Registrant's telephone number, including area code: 303-397-4700
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
_____ _____
On September 5, 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
H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the
reduced disclosure format.
page 1 of 7
<PAGE>
NORDSTROM CREDIT, INC.
----------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Statements of Earnings
Three and six months ended July 31, 1995
and 1994 3
Balance Sheets
July 31, 1995 and 1994
and January 31, 1995 4
Statements of Cash Flows
Six months ended July 31, 1995
and 1994 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
</TABLE>
page 2 of 7
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF EARNINGS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended July 31, Ended July 31,
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Service charge income $28,602 $21,763 $55,180 $44,489
Expenses:
Interest, net 9,896 7,040 18,651 13,922
Service fees paid to
Nordstrom National
Credit Bank 9,104 7,798 15,306 13,060
General and
Administrative 3,933 482 4,875 896
-------- -------- -------- --------
Total expenses 22,933 15,320 38,832 27,878
-------- -------- -------- --------
Earnings before
income taxes 5,669 6,443 16,348 16,611
Income taxes 2,050 2,340 5,890 6,000
-------- -------- -------- --------
Net earnings $ 3,619 $ 4,103 $10,458 $10,611
======== ======== ======== ========
Ratio of earnings
available for fixed
charges to fixed charges 1.57 1.91 1.87 2.19
======== ======== ======== ========
<FN>
These statements should be read in conjunction with the Notes to Financial
Statements contained herein and in the Nordstrom Credit, Inc. Annual Report
on Form 10-K for the year ended January 31, 1995.
</TABLE>
page 3 of 7
<PAGE>
NORDSTROM CREDIT, INC.
BALANCE SHEETS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
July 31, January 31, July 31,
1995 1995 1994
-------- ----------- --------
<S> <C> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 2 $ 440 $ 556
Customer accounts receivable
net of holdback allowance
of $24,090, $22,958 and
$24,665 815,143 656,263 610,955
Other accounts receivable 467 4,807 -
Property and equipment, net 5,536 5,685 5,815
Other assets 2,309 1,429 1,538
-------- ----------- --------
$823,457 $668,624 $618,864
======== =========== ========
LIABILITIES AND INVESTMENT OF NORDSTROM, INC.
- ---------------------------------------------
Commercial paper $ 47,207 $ 37,388 $ 75,739
Notes payable to banks 50,000 50,000 40,000
Notes payable to
Nordstrom, Inc. 155,000 148,000 96,000
Accrued interest, taxes
and other 21,518 10,963 22,186
Long-term debt 369,100 252,100 224,600
-------- ----------- --------
Total liabilities 642,825 498,451 458,525
Investment of
Nordstrom, Inc. 180,632 170,173 160,339
-------- ----------- --------
$823,457 $668,624 $618,864
======== =========== ========
<FN>
These statements should be read in conjunction with the Notes to Financial
Statements contained herein and in the Nordstrom Credit, Inc. Annual Report
on Form 10-K for the year ended January 31, 1995.
</TABLE>
page 4 of 7
<PAGE>
NORDSTROM CREDIT, INC.
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months
Ended July 31,
----------------------
1995 1994
-------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 10,458 $10,611
Adjustments to reconcile net earnings
to net cash used in
operating activities:
Depreciation and amortization 360 311
Change in:
Customer accounts receivable (158,880) (46,460)
Other accounts receivable 4,340 3,977
Accrued interest, taxes and other 10,555 12,521
-------- -------
Net cash used in
operating activities (133,167) (19,040)
-------- -------
INVESTING ACTIVITIES:
Additions to property and
equipment, net (9) -
-------- -------
FINANCING ACTIVITIES:
Increase in commercial paper 9,819 60,402
Increase in notes payable to banks - 15,000
Increase (decrease) in notes payable
to Nordstrom, Inc. 7,000 (16,500)
Proceeds from issuance of
long-term debt, net 140,919 -
Principal payments on long-term debt (25,000) (41,000)
-------- -------
Net cash provided by
financing activities 132,738 17,902
-------- -------
Net decrease in cash and
and cash equivalents (438) (1,138)
Cash and cash equivalents
at beginning of period 440 1,694
-------- -------
Cash and cash equivalents at end of period $ 2 $ 556
======== =======
<FN>
These statements should be read in conjunction with the Notes to Financial
Statements contained herein and in the Nordstrom Credit, Inc. Annual Report
on Form 10-K for the year ended January 31, 1995.
</TABLE>
page 5 of 7
<PAGE>
NORDSTROM CREDIT, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Note 1:
The balance sheets of Nordstrom Credit, Inc. as of July 31, 1995 and
1994, and the related statements of earnings and cash flows for the
periods then ended, have been prepared from the accounts without audit.
The financial information is applicable to interim periods and is not
necessarily indicative of the results to be expected for the year ending
January 31, 1996.
It is not considered necessary to include detailed footnote information
as of July 31, 1995 and 1994. The financial statements should be read
in conjunction with the Notes to Financial Statements contained in the
Nordstrom Credit, Inc. Annual Report on Form 10-K for the year ended
January 31, 1995.
In the opinion of management, the financial information includes all
adjustments (consisting only of normal, recurring adjustments) necessary
to present fairly the financial position of Nordstrom Credit, Inc. as of
July 31, 1995 and 1994, and the results of its operations and cash flows
for the periods then ended, in accordance with generally accepted
accounting principles applied on a consistent basis.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Service charge income and Service fees paid to Nordstrom National Credit
Bank (the "Bank") increased for the quarter and the six month period when
compared to the same periods in 1994, due to an increase in receivables
generated by the Bank's VISA card program which commenced in May, 1994.
Interest expense increased for the quarter and the six month period when
compared to the same periods in 1994, due primarily to higher levels of
debt outstanding.
General and Administrative expenses increased for the quarter and the six
month period when compared to the same periods in 1994, due primarily to
bad debt expense related to the VISA card program.
page 6 of 7
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
(10.1) Credit Agreement dated June 23, 1995 between Registrant and a
group of commercial banks is filed herein as an Exhibit.
(27.1) Financial Data Schedule is filed herein as an Exhibit.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORDSTROM CREDIT, INC.
(Registrant)
/s/ John A. Goesling
------------------------------------------
John A. Goesling, Executive Vice President
and Treasurer
(Principal Financial and Accounting Officer)
Date: September 5, 1995
- -----------------------
page 7 of 7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ----------------------------------------- --------------------------------------
<S> <C> <C>
10.1 Credit Agreement dated June 23, 1995 Filed herewith electronically.
between Registrant and a group of
commercial banks.
27.1 Financial Data Schedule Filed herewith electronically.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> JUL-31-1995
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 839233
<ALLOWANCES> 24090
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5536
<DEPRECIATION> 0
<TOTAL-ASSETS> 823457
<CURRENT-LIABILITIES> 0
<BONDS> 369100
<COMMON> 0
0
0
<OTHER-SE> 180632
<TOTAL-LIABILITY-AND-EQUITY> 823457
<SALES> 0
<TOTAL-REVENUES> 55180
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 38832
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18651
<INCOME-PRETAX> 16348
<INCOME-TAX> 5890
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10458
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
CREDIT AGREEMENT Exhibit 10-1
CREDIT AGREEMENT, dated as of June 23, 1995 (as amended from
time to time, the "Agreement"), by and among NORDSTROM CREDIT, INC., a
Colorado corporation (the "Borrower"), the banks and other financial
institutions that either now or in the future are parties hereto
(collectively the "Lenders" and each individually a "Lender"), MORGAN
GUARANTY TRUST COMPANY OF NEW YORK and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Co-Agents (the "Co-Agents"), and FIRST
INTERSTATE BANK OF DENVER, N.A. (the "Agent Bank"), as agent and
representative for the Lenders (in such capacity the Agent Bank or any
successor in such capacity is referred to herein as the "Agent"). The
Lenders, the Agent and the Co-Agents are collectively referred to herein
as the "Lender Parties" and each individually as a "Lender Party".
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1. Definitions. The following terms with initial
capital letters have the following meanings:
"Absolute Rate" is defined in Section 2.2.2.3.
"Affiliate" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
first Person. The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct or cause
the direction of the management or policies of a Person, whether through
the ownership of Capital Stock, by contract or otherwise, and the terms
"controlled" and "common control" have correlative meanings. Unless
otherwise indicated, "Affiliate" refers to an Affiliate of the Borrower.
Notwithstanding the foregoing, in no event shall any Lender Party or any
Affiliate of any Lender Party be deemed to be an Affiliate of the
Borrower.
"Agent" is defined in the Preamble.
"Agent Bank" is defined in the Preamble.
"Agent's Account" means the account of the Agent identified
as such on Schedule 1.1.B, or such other account as the Agent may
hereafter designate by notice to the Borrower and each Lender Party.
"Agent's Office" means the office of the Agent identified as
such on Schedule 1.1.B, or such other office as the Agent may hereafter
designate by notice to the Borrower and each Lender Party.
1
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"Agreement" is defined in the Preamble and includes all
Schedules and Exhibits.
"Applicable Law" means all applicable provisions of all
(i) constitutions, treaties, statutes, laws, rules, regulations and
ordinances of any Governmental Authority, (ii) Governmental Approvals
and (iii) orders, decisions, judgments, awards and decrees of any
Governmental Authority.
"Applicable Lending Office" means, with respect to any
Lender, (i) in the case of any payment with respect to Euro-Dollar Rate
Loans, the Lender's Euro-Dollar Lending Office, and (ii) in the case of
any payment with respect to Base Rate Loans or Bid Loans or any other
payment under the Loan Documents, the Lender's Domestic Lending Office.
"Applicable Margin" means, at any time, with respect to the
Facility Fee, Euro-Dollar Rate Loans and Base Rate Loans, as applicable,
the basis points (1/100%) per annum in respect of the Facility Fee,
Euro-Dollar Rate Loans or Base Rate Loans, as applicable, set forth in
the table below for the Level then in effect (as described below),
provided that the Applicable Margin in respect of Euro-Dollar Rate Loans
shall be increased by five basis points at all times while the Revolving
Commitment Usage of all Lenders is greater than 50% of the total amount
of the Revolving Commitments:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Level I Level II Level III Level IV Level V
Facility Fee 7.00 8.00 9.00 15.00 22.50
Euro-Dollar Rate
Loans 13.00 17.00 21.00 27.50 32.50
Base Rate Loans 0 0 0 0 0
<FN>
For purposes of the foregoing table, except as provided below:
"Level I" exists at any date if, on such date, the
Borrower's long-term debt is rated AA- or higher by S&P and Aa3 or
higher by Moody's.
"Level II" exists at any date if, on such date, (i)
the Borrower's long-term debt is rated A+ or higher by S&P or A1
or higher by Moody's and (ii) Level I does not exist at such date.
"Level III" exists at any date if, on such date, (i)
the Borrower's long-term debt is rated A- or higher by S&P or A3
or higher by Moody's and (ii) neither Level I nor Level II exists
at such date.
</TABLE>
2
<PAGE>
"Level IV" exists at any date if, on such date, (i)
the Borrower's long-term debt is rated BBB or higher (but lower
than A-) by S&P and Baa2 or higher (but lower than A3) by Moody's
and (ii) none of Level I, Level II and Level III exists at such
date.
"Level V" exists at any date if, on such date, (i) the
Borrower's long-term debt is rated lower than BBB by S&P or lower
than Baa2 by Moody's or is rated by neither S&P or Moody's and
(ii) none of Level I, Level II, Level III and Level IV exists at
such date.
The credit ratings to be utilized for purposes of
determining a Level hereunder are those assigned to the senior unsecured
long-term debt of the Borrower without third-party credit enhancement,
and any rating assigned to any other Debt of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at the
close of business on such date.
"Assignment and Acceptance" is defined in Section 9.6.2.
"Bankruptcy Code" means Title 11 of the United States Code
(11 U.S.C. Section 101 et seq.), as amended from time to time.
"Base Rate" means, at any time, a rate per annum equal to
the greater of (i) the per annum rate of interest most recently publicly
announced by the Agent Bank as its prime rate for domestic commercial
loans or (ii) the Federal Funds Rate at such time plus 0.50%.
"Base Rate Loan" means a Revolving Loan, or portion thereof,
that bears interest by reference to the Base Rate.
"Bid Loan" is defined in Section 2.2.1.
"Bid Loan Borrowing" is defined in Section 2.2.1.
"Bid Loan Note" means a Bid Loan Note of the Borrower, in
substantially the form of Exhibit A-3, payable to a Lender, evidencing
the obligation of the Borrower to repay the Bid Loans made by the
Lender, and includes any Note issued in exchange or substitution
therefor.
"Bid Loan Quote" is defined in Section 2.2.2.1.
"Bid Loan Quote Request" is defined in Section 2.2.2.1.
"Borrower" is defined in the Preamble.
"Borrower Account" means the account of the Borrower
identified as such on Schedule 9.5., or such other account as the
Borrower may hereafter designate by notice to the Agent.
3
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"Borrowing" means a contemporaneous borrowing of Loans of
the same Type.
"Business Day" means any day that is not a Saturday, Sunday
or other day on which banks in Denver, Colorado, or New York, New York,
are authorized or obligated to close.
"Capital Stock" means, with respect to any Person, all (i)
shares, interests, participations or other equivalents (howsoever
designated) of capital stock and other equity interests of such Person
and (ii) rights (other than debt securities convertible into capital
stock or other equity interests), warrants or options to acquire any
such capital stock or other equity interests.
"Capitalized Leases" means all leases of the Borrower and
the Subsidiaries of real or personal property that are required to be
capitalized on the balance sheet of such Persons. The amount of any
Capitalized Lease shall be the capitalized amount thereof.
"Closing Date" means June 23, 1995 or such earlier date on
which all conditions set forth in Section 3.1. have been satisfied.
"Co-Agent" is defined in the Preamble.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Compliance Certificate" is defined in Section 5.1.5.
"Contingent Obligation" means, as to any Person, any
obligation, direct or indirect, contingent or otherwise, of such Person
(i) with respect to any Debt or other obligation of another Person,
including any direct or indirect guarantee of such Debt (other than any
endorsement for collection in the ordinary course of business) or any
other direct or indirect obligation, by agreement or otherwise, to
purchase or repurchase any such Debt or obligation or any security
therefor, or to provide funds for the payment or discharge of any such
Debt or obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), (ii) to provide funds to
maintain the financial condition of any other Person, or (iii) otherwise
to assure or hold harmless the holders of Debt or other obligations of
another Person against loss in respect thereof. The amount of any
Contingent Obligation under clause (i) or (ii) shall be the greater of
(a) the amount of the Debt or obligation guaranteed or otherwise
supported thereby, or (b) the maximum amount guarantied or supported by
the Contingent Obligation. The term "Contingent Obligation," as used
with respect to the Borrower, shall not include the obligations of the
Borrower under the Operating Agreements.
"Contractual Obligation" means, as applied to any Person,
any provision of any security issued by that Person or of any indenture,
4
<PAGE>
agreement or other instrument to which that Person is a party or by
which it or any of the properties owned or leased by it is bound or
otherwise subject.
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (irrespective of whether
incorporated) that, together with the Borrower or any Subsidiary, are or
were treated as a single employer under Section 414 of the Code.
"Debt" means, with respect to any Person, the aggregate
amount of, without duplication: (i) all obligations for borrowed money;
(ii) all obligations evidenced by bonds, debentures, notes or other
similar instruments; (iii) all obligations to pay the deferred purchase
price of property or services, except trade accounts payable not overdue
arising in the ordinary course of business; (iv) all Capitalized Leases;
(v) all obligations of others secured by a Lien on any asset owned by
such Person or Persons whether or not such obligation or liability is
assumed; (vi) all obligations of such Person or Persons, contingent or
otherwise, in respect of any letters of credit or bankers' acceptances;
(vii) all Contingent Obligations; and (viii) all obligations of such
Persons under facilities for the discount or sale of receivables.
"Default" means any condition or event that, with the giving
of notice or lapse of time or both, would, unless cured or waived,
become an Event of Default.
"Dollars" and "$" means lawful money of the United States of
America.
"Domestic Lending Office" means the office, branch or
Affiliate of any Lender identified on Schedule 1.1.B as its Domestic
Lending Office or such other office, branch or Affiliate as the Lender
may hereafter designate as its Domestic Lending Office for one or more
Types of Loans by notice to the Borrower and the Agent.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Event" means (i) (a) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA with respect to any
Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC (provided that a reportable event arising from
the disqualification of a Plan or the distress termination of a Plan
under ERISA Section 4041(c) shall be deemed to be an ERISA Event without
regard to the waiver of notice provided by the PBGC by regulation or
otherwise), or (b) the requirements of subsection (1) of Section 4043(b)
of ERISA (without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (ii) an
application is filed with the Internal Revenue Service for a minimum
funding waiver under Section 412 of the Internal Revenue Code with
respect to a Plan; (iii) the provision by the administrator of any Plan
of a notice of intent to terminate such Plan pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a
5
<PAGE>
plan amendment referred to in Section 4041(e) of ERISA); (iv) the
cessation of operations at a facility of the Borrower or any member of
the Controlled Group in the circumstances described in Section 4062(e)
of ERISA; (v) the withdrawal by the Borrower or any member of the
Controlled Group from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (vi) the conditions for the imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan;
(vii) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or (viii) the
institution by the PBGC of proceedings to terminate a Plan pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, a Plan.
"Euro-Dollar Business Day" means any Business Day on which
commercial banks are open for international business (including dealings
in interbank Dollar deposits) in London, England.
"Euro-Dollar Lending Office" means the office, branch or
Affiliate of any Lender identified on Schedule 1.1.B as its Euro-Dollar
Lending Office or such other office, branch or Affiliate as the Lender
may hereafter designate as its Euro-Dollar Lending Office by notice to
the Borrower and the Agent.
"Euro-Dollar Rate" means, with respect to any Interest
Period, a rate per annum (rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to (i) the applicable London Interbank Offered
Rate, divided by (ii) 1.00 minus the Euro-Dollar Reserve Requirement for
such period (expressed as a decimal). The Euro-Dollar Rate shall be
adjusted automatically on and as of the effective date of any change in
the Euro-Dollar Reserve Requirement.
"Euro-Dollar Rate Loan" means a Revolving Loan, or portion
thereof, that bears interest at a rate determined by reference to a
Euro-Dollar Rate (and as to which a single Interest Period is
applicable).
"Euro-Dollar Reserve Requirement" means, with respect to any
Euro-Dollar Rate Loan and for any Interest Period, the maximum rate at
which reserves (including any marginal, supplemental, special or
emergency reserve) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding $5 billion against "Euro-
Currency Liabilities," as that term is used in Regulation D (or in
respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Euro-Dollar Rate Loans is
determined or any category of extensions of credit or other assets that
includes loans by a non-United States office of any bank to United
States residents).
"Event of Default" means any of the events specified in
Section 7.1.
6
<PAGE>
"Excluded Tax" means, with respect to any payment to any
Lender Party, (i) any taxes imposed on or measured by the overall net
income (including a franchise tax based on net income) of such Lender
Party by the United States of America or any political subdivision or
taxing authority thereof or therein, and (ii) any taxes imposed on or
measured by the overall net income (including a franchise tax based on
net income) of such Lender Party or its Agent's Office or Applicable
Lending Office in respect of which the payment is made, by the
jurisdiction in which it is incorporated, maintains its principal
executive office or in which such Agent's Office or Applicable Lending
Office is located.
"Existing Liens" means the Liens described on Schedule 1.1.D.
"FDIC" means the Federal Deposit Insurance Corporation or
any successor.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that if such rate is not so published for any day
that is a Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Agent Bank on such day on such transactions
as determined by the Agent Bank.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Fee Letter" means that certain letter dated June 5, 1995
between the Borrower and the Agent regarding certain fees relating to
this Agreement.
"Fees" means, collectively, the fees described or referenced
in Section 2.6.
"Fiscal Year" means the fiscal year of the Borrower, which
shall be the 12 month-period ending on January 31 in each year or such
other period as the Borrower may designate and the Agent may approve in
writing. "Fiscal Quarter" or "fiscal quarter" means any quarter of a
Fiscal Year.
"Funding Date" means any date on which a Loan is (or is
requested to be) made.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America (as such principles are in effect
on the date hereof).
7
<PAGE>
"Governmental Approval" means an authorization, consent,
approval, permit or license issued by, or a registration or filing with,
any Governmental Authority.
"Governmental Authority" means any nation and any state or
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any tribunal or arbitrator of competent
jurisdiction.
"Indemnified Liabilities" is defined in Section 9.2.1.
"Interest Period" means, subject to the next sentence:
(i)with respect to each Euro-Dollar Rate Loan, the period
commencing on the date specified in the related Notice of Borrowing or
Notice of Conversion/Continuation (or telephonic notice in lieu thereof)
and ending one, two, three or six months thereafter, as the Borrower may
elect, as applicable; and
(ii)with respect to any Bid Loan, the period commencing on
the Funding Date specified in the related Bid Loan Quote Request and
ending on any Business Day not less than seven and not more than 30 days
thereafter, as the Borrower may request as provided in Section 2.2.2.1.
Notwithstanding the foregoing: (a) if a Euro-Dollar Rate
Loan is continued, the Interest Period applicable to the continued Loan
shall commence on the day on which the Interest Period applicable to
such Euro-Dollar Rate Loan ends; (b) any Interest Period applicable to a
Euro-Dollar Rate Loan (i) that would otherwise end on a day that is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day, unless such succeeding Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day or (ii) that
begins on the last Euro-Dollar 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 Euro-
Dollar Business Day of the calendar month; and (c) no Interest Period
shall end after June 30, 2000.
"Investment" means, with respect to any Person, (i) any
direct or indirect purchase or other acquisition by that Person of stock
or securities, or any beneficial interest in stock or other securities,
of any other Person, any partnership interest (whether general or
limited) in any other Person, or all or any substantial part of the
business or assets of any other Person, (ii) any direct or indirect
loan, advance or capital contribution by that Person to any other
Person, including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect
to such Investment.
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"Investment Agreement" means the Investment Agreement, dated
as of October 8, 1984, between Nordstrom and the Borrower, without
regard to any amendments thereto.
"Lender" is defined in the Preamble. For purposes of the
Sections referred to in (and subject to) the last sentence of
Section 9.6.3., "Lender" includes a holder of a Participation.
"Lender Party" is defined in the Preamble. For purposes of
the Sections referred to in (and subject to) the last sentence of
Section 9.6.3., "Lender Party" includes a holder of a Participation.
"Lien" means any lien, mortgage, pledge, security interest,
charge, or encumbrance of any kind (including any conditional sale or
other title retention agreement or any lease in the nature thereof) and
any agreement to give or refrain from giving any lien, mortgage, pledge,
security interest, charge, or other encumbrance of any kind.
"Loan" means a Base Rate Loan, Euro-Dollar Rate Loan or Bid
Loan, each of which constitutes a "Type" of Loan.
"Loan Documents" means, collectively, this Agreement, the
Notes, and any other agreement, instrument or other writing executed or
delivered by the Borrower or any Subsidiary in connection herewith, and
all amendments, exhibits and schedules to any of the foregoing.
"London Interbank Offered Rate" means, with respect to any
Interest Period, the rate per annum calculated by the Agent as the
arithmetic mean (rounded upwards, if necessary, to the next higher
1/16th of 1%) of the offered rates for deposits in Dollars that appear
on page 5 of the Telerate System (or any successor page or system) for
amounts comparable to the Borrowing of Euro-Dollar Rate Loans to which
such Interest Period is to apply and for a period equal to such Interest
Period, at approximately 11:00 a.m. (London time) two Euro-Dollar
Business Days before the first day of such Interest Period.
"Margin Regulations" means Regulations G, T, U and X of the
Federal Reserve Board, as amended from time to time.
"Margin Stock" means "margin stock" as defined in the Margin
Regulations.
"Material," "Material Adverse Effect" or "Material Adverse
Change" means (i) a condition or event material to, (ii) a material
adverse effect on or (iii) a material adverse change in, as the case may
be, any one or more of the following: (A) the business, assets, results
of operations, financial condition or prospects of the Borrower and its
Subsidiaries taken as a whole or (B) the ability of the Borrower to
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perform its obligations under any Loan Document to which it is a party.
"Materially" has a correlative meaning. For purposes of Section 4.5.
only, any claims, liabilities, payments or other amounts in excess of
$10,000,000 in the aggregate shall be "Material" and constitute a
"Material Adverse Effect."
"Maturity Date" means June 30, 2000.
"Moody's" means Moody's Investors Service, Inc. and any
successor.
"Multiemployer Plan" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA.
"NNCB" means Nordstrom National Credit Bank, a national
banking association, and any successor.
"Nordstrom Merchant Agreement" means the Nordstrom National
Credit Bank Merchant Agreement & Operating Procedures, dated as of
August 30, 1991, between Nordstrom and NNCB, without regard to any
amendments thereto.
"Nordstrom" means Nordstrom, Inc., a Washington corporation,
and any successor.
"Note" means a Revolving Loan Note or Bid Loan Note.
"Notice of Borrowing" is defined in Section 2.1.3.
"Notice of Conversion/Continuation" is defined in
Section 2.4.2.2.
"Notice of Responsible Officer" is defined in
Section 2.1.3.3.
"Obligations" means all present and future obligations and
liabilities of the Borrower of every type and description arising under
or in connection with the Loan Documents due or to become due to the
Lender Parties or any Person entitled to indemnification, or any of
their respective successors, transferees or assigns, whether for
principal, interest, Fees, expenses, indemnities or other amounts
(including attorneys' fees and expenses) and whether due or not due,
direct or indirect, joint and/or several, absolute or contingent,
voluntary or involuntary, liquidated or unliquidated, determined or
undetermined, and whether now or hereafter existing, renewed or
restructured.
"Operating Agreements" means, collectively, (i) the
Operating Agreement, dated as of August 30, 1991, between NNCB and the
Borrower, (ii) the Operating Agreement for Visa Accounts and
Receivables, dated as of May 1, 1994, between NNCB and the Borrower, and
(iii) the Agreement, dated as of May 1, 1994, between Nordstrom and the
Borrower, without regard to any amendments thereto.
"Participation" is defined in Section 9.6.3.
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"PBGC" means the Pension Benefit Guaranty Corporation, as
defined in Title IV of ERISA, or any successor.
"Periodic Payment Date" means the last Business Day of each
month commencing June 30, 1995.
"Permitted Liens" means, with respect to any asset, the
Liens (if any) permitted to exist on such asset under Section 6.1.
"Person" means an individual, a corporation, a partnership,
a limited liability company, a trust, an unincorporated organization or
any other entity or organization, including a government or any agency
or political subdivision thereof.
"Plan" means, at any time, any employee pension benefit plan
that is covered by Title IV or ERISA or subject to the minimum funding
standards under Section 412 of the Code and that is either (i)
maintained by the Borrower or any member of a Controlled Group for
employees of the Borrower or such Controlled Group or was formerly so
maintained and in respect of which the Borrower or any member of the
Controlled Group could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated or (ii) maintained for
employees of the Borrower or any member of the Controlled Group and at
least one Person other than the Borrower and the members of the
Controlled Group or was formerly so maintained and in respect of which
the Borrower or any member of the Controlled Group could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
"Post-Default Rate" means, at any time, a rate per annum
equal to the Base Rate in effect at such time plus 1%.
"RAP" means regulatory accounting principles as applicable
to national banks.
"Regulation D" means Regulation D of the Federal Reserve
Board, as amended from time to time.
"Regulatory Change" means (i) the adoption or becoming
effective after the date hereof of any treaty, law, rule or regulation,
(ii) any change in any such treaty, law, rule or regulation (including
Regulation D), or any change in the administration or enforcement
thereof, by any Governmental Authority, central bank or other monetary
authority charged with the interpretation or administration thereof, in
each case after the date hereof, or (iii) compliance after the date
hereof by any Lender Party (or its Applicable Lending Office or, in the
case of capital adequacy requirements, any holding company of any Lender
Party) with, any interpretation, directive, request, order or decree
(whether or not having the force of law) of any such Governmental
Authority, central bank or other monetary authority.
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"Required Lenders" means Lenders having at least 66-2/3% of
the Revolving Commitments or, if the Revolving Commitments have
terminated, Lenders holding at least 66-2/3% of the aggregate unpaid
principal amount of the Loans.
"Responsible Officer" is defined in Section 2.1.3.3.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any Capital Stock of the
Borrower or any Subsidiary now or hereafter outstanding, except (a) a
dividend or other distribution payable solely in shares or equivalents
of Capital Stock of the same class as the Capital Stock on account of
which the dividend or distribution is being paid or made, and (b) the
issuance of equity interests upon the exercise of outstanding warrants,
options or other rights, or (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Capital Stock of the Borrower or any Subsidiary now
or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender,
the amount set forth for such Lender on Schedule 1.1.A, as reduced or
terminated from time to time pursuant to the terms hereof. "Revolving
Commitments" means the aggregate amount of the Revolving Commitments of
all Lenders.
"Revolving Commitment Termination Date" is defined in
Section 2.7.1.
"Revolving Commitment Usage" means, at any time, (i) with
respect to any Lender, the sum of (a) the aggregate unpaid principal
amount of all Revolving Loans made by such Lender plus (b) such Lender's
pro rata share (in accordance with the respective Revolving Commitments
of the Lenders) of the aggregate unpaid principal amount of all Bid
Loans, and (ii) with respect to all Lenders, the aggregate unpaid
principal amount of all Revolving Loans and Bid Loans, in each case at
such time and giving effect to Borrowings then requested.
"Revolving Loan Note" means a Revolving Loan Note made by
the Borrower payable to the order of any Lender, in the amount of the
lesser of (i) such Lender's Revolving Commitment and (ii) the aggregate
principal amount of Revolving Loans made by such Lender, which note is
substantially in the form of Exhibit A-1, as amended from time to time.
"Revolving Loans" is defined in Section 2.1.1.1.
"S&P" means Standard & Poor's Ratings Group and any
successor.
"SEC" means the United States Securities and Exchange
Commission, and any successor.
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"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Senior Officer" means the Chairman of the Board of
Directors, the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer or any
Vice President in charge of a principal business unit or division of the
Borrower.
"Subsidiary" means, with respect to any Person, any other
Person of which more than 50% of the total voting power of the Capital
Stock entitled to vote in the election of the board of directors (or
other Persons performing similar functions) are at the time directly or
indirectly owned by such first Person. Unless otherwise indicated,
"Subsidiary" refers to a Subsidiary of the Borrower.
"Taxes" means any present or future income, stamp and other
taxes, charges, fees, levies, duties, imposts, withholdings or other
assessments, together with any interest and penalties, additions to tax
and additional amounts imposed by any federal, state, local or foreign
taxing authority upon any Person.
"Type" is defined in the definition of "Loan."
"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
the Borrower or any member of the Controlled Group to the PBGC or the
Plan under Title IV of ERISA.
"Wholly-Owned" means, with respect to any Subsidiary, that
all the Capital Stock (except for directors' qualifying shares) of such
Subsidiary are directly or indirectly owned by the Borrower.
Section 1.2. Related Matters.
1.2.1. Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the
singular, the singular includes the plural, the part includes the whole,
"including" is not limiting, and "or" has the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole (including the Preamble, the Recitals, the
Schedules and the Exhibits) and not to any particular provision of this
Agreement. Article, section, subsection, exhibit, schedule, recital and
preamble references in this Agreement are to this Agreement unless
otherwise specified. References in this Agreement to any agreement,
other document or law "as amended" or "as amended from time to time," or
to amendments of any document or law, shall include any amendments,
supplements, replacements, renewals, waivers or other modifications.
References in this Agreement to any law (or any part thereof) include
any rules and regulations promulgated thereunder (or with respect to
such part) by the relevant Governmental Authority, as amended from time
to time.
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1.2.2. Determinations. Any determination or calculation
contemplated by this Agreement that is made by any Lender Party in good
faith and reasonably shall be final and conclusive and binding upon the
Borrower and, in the case of determinations by the Agent, also the other
Lender Parties, in the absence of manifest error. All consents and
other actions of any Lender Party contemplated by this Agreement may be
given, taken, withheld or not taken in such Lender Party's discretion
(whether or not so expressed), except as otherwise expressly provided
herein.
1.2.3. Accounting Terms and Determinations. 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 on a consolidated basis (except, in the case of the Borrower,
if it has no Subsidiaries) in accordance with GAAP (or, in the case of
NNCB, RAP) applied on a basis consistent (except for changes concurred
in by the relevant independent public accountants and the Agent) with
the audited financial statements of the Borrower, Nordstrom or NNCB, as
the case may be, referred to in Section 4.3.
1.2.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (OTHER THAN THE RULES
REGARDING CONFLICTS OF LAWS) OF THE STATE OF COLORADO.
1.2.5. Headings. The Article and Section headings used in
this Agreement are for convenience of reference only and shall not
affect the construction hereof.
1.2.6. Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable under Applicable
Law in any jurisdiction, such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability, which shall
not affect any other provisions hereof or the validity, legality or
enforceability of such provision in any other jurisdiction.
1.2.7. Independence of Covenants. All covenants under this
Agreement shall each be given independent effect so that if a particular
action or condition is not permitted by any such covenant, the fact that
it would be permitted by another covenant, by an exception thereto, or
be otherwise within the limitations thereof, shall not avoid the
occurrence of a Default or an Event of Default if such action is taken
or condition exists.
ARTICLE 2.
AMOUNTS AND TERMS OF THE CREDIT FACILITIES
Section 2.1. Revolving Loans.
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2.1.1. General Terms.
2.1.1.1. Each Lender severally agrees, upon the terms
and subject to the conditions set forth in this Agreement, at any time
from and after the Closing Date until the Business Day next preceding
the Revolving Commitment Termination Date, to make revolving loans (each
a "Revolving Loan") to the Borrower in an aggregate principal amount not
to exceed at any time outstanding, when added to other Revolving
Commitment Usage of such Lender at such time, the Revolving Commitment
of such Lender, provided that the Revolving Commitment Usage of all
Lenders at any time, in the aggregate, shall not exceed the aggregate
Revolving Commitments of all Lenders.
2.1.1.2. Revolving Loans may be voluntarily prepaid
pursuant to Section 2.8.3. and, subject to the provisions of this
Agreement, any amounts so prepaid may be re-borrowed, up to the amount
available under this Section at the time of such re-borrowing.
2.1.2. Type of Loans and Amounts.
2.1.2.1. Loans made under this Section 2.1. may be
Base Rate Loans or Euro-Dollar Rate Loans (each a "Type" of Loan),
subject, however, to Sections 2.4.3. and 2.11.
2.1.2.2. Each Borrowing of Revolving Loans shall be
in a minimum aggregate amount of $1,000,000 and integral multiples of
$100,000, in the case of a Borrowing of Base Rate Loans, or a minimum
aggregate amount of $5,000,000 and integral multiples of $1,000,000, in
the case of a Borrowing of Euro-Dollar Rate Loans.
2.1.3. Notice of Borrowing.
2.1.3.1. When the Borrower desires to borrow
Revolving Loans pursuant to Section 2.1., it shall deliver to the Agent
a Notice of Borrowing substantially in the form of Exhibit E-1, duly
completed and executed by a Responsible Officer (a "Notice of
Borrowing"), (a) no later than 9:00 a.m. (Denver time) on the proposed
Funding Date, in the case of a Borrowing of Base Rate Loans, or (b) no
later than 10:00 a.m. (Denver time) at least three Euro-Dollar Business
Days before the proposed Funding Date, in the case of a Borrowing of
Euro-Dollar Rate Loans.
2.1.3.2. In lieu of delivering a Notice of Borrowing,
the Borrower, through a Responsible Officer, may give the Agent
telephonic notice of any proposed Borrowing of Revolving Loans by the
time a Notice of Borrowing would be required to be delivered and
containing all information required for a Notice of Borrowing; provided,
however, that such notice shall be confirmed in writing by delivery of a
Notice of Borrowing to the Agent on or before the proposed Funding Date
(or, in the case of a Base Rate Borrowing, no later than one Business
Day after the Funding Date). No Lender Party shall incur any liability
to the Borrower or the other Lender Parties in acting upon any
telephonic notice that such Lender Party believes to have been given by
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a Responsible Officer or for otherwise acting in good faith under this
Section 2.1. and in making any Loan in accordance with this Agreement
pursuant to any telephonic notice.
2.1.3.3. The Borrower shall notify the Agent of the
names of its officers and employees authorized to request and take other
actions with respect to Loans on behalf of the Borrower (each a
"Responsible Officer") by providing the Agent with a Notice of
Responsible Officers substantially in the form of Exhibit E-7, duly
completed and executed by a Senior Officer (a "Notice of Responsible
Officer"). The Agent shall be entitled to rely conclusively on a
Responsible Officer's authority to request and take other actions with
respect to Loans on behalf of the Borrower until the Agent receives a
new Notice of Responsible Officer that no longer designates such Person
as a Responsible Officer. The Agent shall have no duty to verify the
authenticity of the signature appearing on any Notice of Borrowing,
Notice of Responsible Officer or any other notice given under the Loan
Documents.
2.1.3.4. Any Notice of Borrowing (or telephone notice
in lieu thereof) delivered pursuant to this Section shall be irrevocable
and the Borrower shall be bound to make a Borrowing in accordance
therewith.
2.1.3.5. The Agent shall notify each Lender of the
contents of any Notice of Borrowing (or telephonic notice in lieu
thereof) received by it, and such Lender's pro rata portion of the
Borrowing requested. Not later than 9:00 a.m. (Denver time) on the date
specified in such notice as the Funding Date (or, in the case of Base
Rate Loans, 10:00 a.m., Denver time, on such date), each Lender, subject
to the terms and conditions hereof, shall make its pro rata portion of
the Borrowing available, in immediately available funds, to the Agent at
the Agent's Account.
2.1.4. Funding. Not later than 11:00 a.m. (Denver time)
(or, in the case of a Borrowing of Base Rate Loans, 12:00 noon, Denver
time) or such later time as may be agreed to by the Borrower and the
Agent, and subject to and upon satisfaction of the applicable conditions
set forth in Article 3. as determined by the Agent, the Agent shall make
the proceeds of the requested Loans available to the Borrower in Dollars
in immediately available funds in the Borrower Account.
Section 2.2. Bid Loans.
2.2.1. General Terms. At any time prior to the Business
Day immediately preceding the Revolving Commitment Termination Date, the
Borrower may request the Lenders to make offers to make bid loans to the
Borrower (each a "Bid Loan"), provided that (a) the aggregate unpaid
principal amount of all Bid Loans, together with all other Revolving
Commitment Usage of all Lenders at any time, shall not exceed the
aggregate Revolving Commitments of all Lenders; (b) the aggregate amount
of Bid Loans requested for any Funding Date and with the same Interest
Period (each a "Bid Loan Borrowing") shall be at least $10,000,000 and a
multiple of $1,000,000; and (c) all Interest Periods applicable to Bid
Loans shall be subject to Section 2.4.3. The Lenders may, but shall
have no obligation to, make such offers, and the Borrower may, but shall
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have no obligation to, accept any such offers in the manner set forth in
this Section 2.2.
2.2.2. Bid Loan Procedures.
2.2.2.1. When the Borrower wishes to request offers
to make Bid Loans, it shall give the Agent (which shall promptly notify
the Lenders) notice substantially in the form of Exhibit E-4, duly
completed and executed by a Responsible Officer (a "Bid Loan Quote
Request"), so as to be received no later than 10:00 a.m. (Denver time)
on the second Business Day before the proposed Funding Date (or such
other time and date as the Borrower and the Agent, with the consent of
the Required Lenders, may agree). Subject to Section 2.4.3., the
Borrower may request offers for up to three different Bid Loan
Borrowings in a single Bid Loan Quote Request, in which case such Bid
Loan Quote Request shall constitute a separate Bid Loan Quote Request
for each such Borrowing. Except as otherwise provided in this
Section 2.2., no Bid Loan Quote Request shall be given within five
Business Days (or such other number of days as the Borrower and the
Agent, with the consent of the Required Lenders, may agree) of any other
Bid Loan Quote Request.
2.2.2.2. Each Lender may, but shall not be obligated
to, in response to any Bid Quote Request submit one or more written
quotes substantially in the form of Exhibit E-5, duly completed (each a
"Bid Loan Quote"), each containing an offer to make a Bid Loan for the
Interest Period requested and setting forth the Absolute Rate to be
applicable to the Bid Loan; provided that (a) a Lender may make a single
submission containing one or more Bid Loan Quotes in response to several
Bid Loan Quote Requests given at the same time; (b) the principal amount
of the Bid Loan for which each such offer is being made shall be at
least $2,000,000 and a multiple of $1,000,000; provided that the
aggregate principal amount of all Bid Loans for which a Lender submits
Bid Loan Quotes (i) may be greater or less than the Revolving Commitment
of such Lender but (ii) may not exceed the principal amount of the Bid
Loan Borrowing for which offers were requested. Each Bid Loan Quote
must be submitted to the Agent by fax not later than 10:00 a.m. (Denver
time) on the Funding Date (or such other time and date as the Borrower
and the Agent, with the consent of the Required Lenders, may agree);
provided that any Bid Loan Quote may be submitted by the Agent Bank (or
its Applicable Lending Office) only if the Agent Bank (or such
Applicable Lending Office) notifies the Borrower of the terms of the
offer contained therein not later than 9:45 a.m. (Denver time) on the
Funding Date. Subject to Sections 3. and 7.2., any Bid Loan Quote so
made shall be irrevocable except with the consent of the Agent given on
the instructions of the Borrower. Unless otherwise agreed by the Agent
and the Borrower, no Bid Loan Quote shall contain qualifying,
conditional or similar language or propose terms other than or in
addition to those set forth in the applicable Bid Loan Quote Request
and, in particular, no Bid Quote may be conditioned upon acceptance by
the Borrower of all (or some specified minimum) of the principal amount
of the Bid Loan for which such Bid Loan Quote is being made.
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2.2.2.3. The Agent shall, as promptly as practicable
after any Bid Loan Quote is submitted (but in any event not later than
10:15 a.m. (Denver time) on the Funding Date), notify the Borrower of
the terms (a) of any Bid Loan Quote submitted by a Lender that is in
accordance with Section 2.2.2.2. and (b) of any Bid Loan Quote that
amends, modifies or is otherwise inconsistent with a previous Bid Loan
Quote submitted by such Lender with respect to the same Bid Loan Quote
Request. Any subsequent Bid Loan Quote shall be disregarded by the
Agent unless the subsequent Bid Loan Quote is submitted solely to
correct a manifest error in a former Bid Loan Quote. The Agent's notice
to the Borrower shall specify (i) the aggregate principal amount of the
Bid Loan Borrowing for which offers have been received, (ii) the
respective principal amounts and (iii) the absolute rates (the "Absolute
Rate") so offered by each Lender (identifying the Lender that made each
such Bid Loan Quote).
2.2.2.4. Not later than 11:00 a.m. (Denver time) on
the Funding Date (or such other time and date as the Borrower and the
Agent, with the consent of the Required Lenders, may agree), the
Borrower shall notify the Agent of its acceptance or nonacceptance of
the offers so notified to it pursuant to Section 2.2.2.3. (and the
failure of the Borrower to give such notice by such time shall
constitute nonacceptance), and the Agent shall promptly notify each
affected Bank. In the case of acceptance, such notice shall specify the
aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Bid Loan Quote in whole or in
part; provided that (a) any Bid Loan Quote accepted in part shall be at
least $2,000,000 and a multiple of $1,000,000; (b) the aggregate
principal amount of each Bid Loan Borrowing may not exceed the
applicable amount set forth in the related Bid Loan Quote Request; (c)
the aggregate principal amount of each Bid Loan Borrowing shall be at
least $10,000,000 and a multiple of $1,000,000 and shall not cause the
limits specified in Section 2.2.1. to be violated; (d) acceptance of
offers may be made only in ascending order of Absolute Rates, beginning
with the lowest rate so offered; and (e) the Borrower may not accept any
offer where the Agent has advised the Borrower that such offer fails to
comply with Section 2.2.2.2. or otherwise fails to comply with the
requirements of this Agreement (including Section 2.2.1.) If offers are
made by two or more Lenders with the same Absolute Rates for a greater
aggregate principal amount than the amount in respect of which offers
are accepted for the related Interest Period, the principal amount of
Bid Loans in respect of which such offers are accepted shall be
allocated by the Borrower among such Lenders as nearly as possible (in
amounts of at least $1,000,000 and multiples of $500,000) in proportion
to the aggregate principal amount of such offers. Determinations by the
Borrower of the amounts of Bid Loans shall be conclusive in the absence
of manifest error.
2.2.2.5. Subject to the terms set forth in this
Agreement, any Lender whose offer to make any Bid Loan has been accepted
shall, not later than 1:00 p.m. (Denver time) on the date specified for
the making of such Loan, make the amount of such Loan available to the
Agent at the Agent's Account in immediately available funds, for the
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account of the Borrower. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available
to the Borrower on such date by depositing the same, in immediately
available funds, in the Borrower Account.
Section 2.3. Use of Proceeds. The proceeds of the Loans
shall be used by the Borrower only for general corporate purposes,
including the payment of commercial paper. No part of the proceeds of
the Loans shall be used directly or indirectly for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock or maintaining or extending credit to others for such purpose or
for any other purpose that otherwise violates the Margin Regulations.
Section 2.4. Interest; Interest Periods;
Conversion/Continuation.
2.4.1. Interest Rate and Payment.
2.4.1.1. Each Loan shall bear interest on the unpaid
principal amount thereof, from and including the date of the making of
such Loan to and excluding the due date or the date of any repayment
thereof, at the following rates per annum: (a) for so long as and to
the extent that such Loan is a Base Rate Loan, at the Base Rate (as in
effect from time to time) plus the Applicable Margin; (b) for so long as
and to the extent that such Loan is a Euro-Dollar Rate Loan, at the
Euro-Dollar Rate for each Interest Period applicable thereto plus the
Applicable Margin; and (c) if such Loan is a Bid Loan, at the Absolute
Rate quoted by the Lender making such Loan pursuant to Section 2.2.2.2.
2.4.1.2. Notwithstanding the foregoing provisions of
this Section 2.4.1., while a Default or Event of Default exists, any
principal, overdue interest or other amount payable under this Agreement
and the other Loan Documents shall bear interest at a rate per annum
equal to the Post-Default Rate, without notice or demand of any kind.
2.4.1.3. Accrued interest shall be payable in arrears
(a) in the case of a Base Rate Loan, on each Periodic Payment Date; (b)
in the case of a Euro-Dollar Rate Loan, on the last day of each Interest
Period applicable thereto; provided that if the Interest Period
applicable to a Euro-Dollar Rate Loan is longer than three months,
interest also shall be payable on the last day of the third month of
such Interest Period; (c) in the case of a Bid Loan, on the last day of
the Interest Period applicable thereto; and (d) in the case of any Loan,
when the Loan shall become due (whether at maturity, by reason of
prepayment, acceleration or otherwise).
2.4.2. Conversion or Continuation of Revolving Loans.
2.4.2.1. Subject to this Section 2.4.2. and
Sections 2.4.3. and 2.11., the Borrower shall have the option (a) at any
time, to convert all or any part of its outstanding Base Rate Loans to
Euro-Dollar Rate Loans, (b) on the last day of the Interest Period
applicable thereto, to (i) convert all or any part of its outstanding
Euro-Dollar Rate Loans to a Base Rate Loan, or (ii) to continue all or
any part of its Euro-Dollar Rate Loans as Loans of the same Type;
provided that, in the case of clause (a) or (b) (ii), there does not
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exist a Default or an Event of Default at such time. If a Default or an
Event of Default shall exist upon the expiration of the Interest Period
applicable to any Euro-Dollar Rate Loan, such Loan automatically shall
be converted into a Base Rate Loan.
2.4.2.2. If the Borrower elects to convert or
continue a Revolving Loan under this Section 2.4.2., it shall deliver to
the Agent a Notice of Conversion/Continuation substantially in the form
of Exhibit E-3, duly completed and executed by a Responsible Officer (a
"Notice of Continuation/Conversion"), (a) not later than 10:00 a.m.
(Denver time) at least three Euro-Dollar Business Days before the
proposed conversion or continuation date, if the Borrower proposes to
convert into, or to continue, a Euro-Dollar Rate Loan, and (c) otherwise
not later than 10:00 a.m. (Denver time) on the Business Day next
preceding the proposed conversion or continuation date.
2.4.2.3. In lieu of delivering a Notice of
Continuation/Conversion, the Borrower, through a Responsible Officer,
may give the Agent telephonic notice of any proposed continuation or
conversion by the time a Notice of Continuation/Conversion would be
required to be delivered and containing all information required
therefor; provided, however, that such notice shall be confirmed in
writing by delivery of a Notice of Continuation/Conversion to the Agent
on or before the proposed continuation or conversion date. No Lender
Party shall incur any liability to the Borrower or any other Lender
Party in acting upon any telephonic notice that such Lender Party
believes to have been given by a Responsible Officer or for otherwise
acting in good faith under this Section 2.4.2. and in converting or
continuing any Loan (or a part thereof) pursuant to any telephonic
notice.
2.4.2.4. Any Notice of Conversion/Continuation (or
telephonic notice in lieu thereof) shall be irrevocable and the Borrower
shall be bound to convert or continue in accordance therewith. If any
request for the conversion or continuation of a Loan is not made in
accordance with this Section 2.4.2., or if no notice is so given with
respect to a Euro-Dollar Rate Loan as to which the Interest Period
expires, then such Loan automatically shall be converted into a Base
Rate Loan.
2.4.3. Interest Periods & Minimum Amounts. Notwithstanding
anything herein to the contrary, (a) all Interest Periods applicable to
Euro-Dollar Rate Loans and Bid Loans shall comply with the definition of
"Interest Period," (b) there may be no more than five different Interest
Periods for all Euro-Dollar Rate Loans and Bid Loans outstanding at the
same time, and (c) Euro-Dollar Rate Loans with the same Interest Period
outstanding at any time shall be in an aggregate amount at least equal
to $5,000,000 and in an integral multiple of $1,000,000. For purposes
of the foregoing clause (a), Interest Periods applicable to Loans of
different Types shall constitute different Interest Periods even if they
are coterminous.
2.4.4. Computations. Interest on each Loan and all Fees
and other amounts payable hereunder or the other Loan Documents shall be
computed on the basis of a 360-day year or, in the case of interest on
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Base Rate Loans, a 365 or 366-day year and the actual number of days
elapsed. Any change in the interest rate on any Loan or other amount
resulting from a change in the rate applicable thereto (or any component
thereof, including the Applicable Margin) pursuant to the terms hereof
shall become effective as of the opening of business on the day on which
such change in the applicable rate (or component) shall become
effective. Each determination of an interest rate by the Agent pursuant
to any provision of this Agreement shall be conclusive and binding on
all parties for all purposes, in the absence of manifest error.
2.4.5. Maximum Lawful Rate of Interest. The rate of
interest payable on any Loan or other amount shall in no event exceed
the maximum rate permissible under Applicable Law. If the rate of
interest payable on any Loan or other amount is ever reduced as a result
of this Section and at any time thereafter the maximum rate permitted by
Applicable Law shall exceed the rate of interest provided for in this
Agreement, then the rate provided for in this Agreement shall be
increased to the maximum rate provided by Applicable Law for such period
as is required so that the total amount of interest received by the
Lenders is that which would have been received by the Lenders but for
the operation of the first sentence of this Section.
Section 2.5. Notes, Etc.
2.5.1. Loans Evidenced by Notes. The Revolving Loans made
by each Lender shall be evidenced by a single Revolving Loan Note. The
Bid Loans made by each Lender shall be evidenced by a single Bid Loan
Note. Each Note shall be dated the Closing Date and stated to mature in
accordance with the provisions of this Agreement applicable to the
relevant Loans.
2.5.2. Notation of Amounts and Maturities, Etc. Each
Lender is hereby irrevocably authorized to record on the schedule
attached to its Notes (or a continuation thereof) the information
contemplated by such schedule. The failure to record, or any error in
recording, any such information shall not, however, affect the
obligations of the Borrower hereunder or under any Note to repay the
principal amount of the Loans evidenced thereby, together with all
interest accrued thereon. All such notations shall constitute
conclusive evidence of the accuracy of the information so recorded, in
the absence of manifest error.
Section 2.6. Fees.
2.6.1. Facility Fee. The Borrower shall pay to the Agent,
for the pro rata benefit of the Lenders, a facility fee accruing at the
rate per annum equal to the Applicable Margin in effect from time to
time upon the Revolving Commitments of the Lenders, whether or not used,
for each day from and after the Closing Date until the Revolving
Commitment Termination Date. Such Fee shall be payable quarterly in
arrears on the last day of each quarter and on the Revolving Commitment
Termination Date.
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2.6.2. Other Fees. On the Closing Date and from time to
time thereafter as specified in the Fee Letter, the Borrower shall pay
to the Agent the fees specified in the Fee Letter.
2.6.3. Fees Non-Refundable. All Fees shall be fully earned
when payable hereunder and shall be non-refundable.
Section 2.7. Termination, Reduction and Extension of
Revolving Commitments.
2.7.1. Each Lender's Revolving Commitment shall terminate
without further action on the part of such Lender on the earlier to
occur of (a) June 30, 2000, and (b) the date of termination of the
Revolving Commitment pursuant to Section 2.7.2. or 7.2. (such earlier
date being referred to herein as the "Revolving Commitment Termination
Date").
2.7.2. The Borrower shall have the right, at any time or
from time to time after the Closing Date, to terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving
Commitments of the Lenders on a pro rata basis to an amount not less
than the Revolving Commitment Usage of all Lenders at such time by
giving the Agent not less than three Business Days' prior written notice
of such termination or reduction and the amount of any partial
reduction. Any such termination or partial reduction shall be effective
on the date specified in the Borrower's notice and shall be in a minimum
amount of $10,000,000 and an integral multiple thereof.
Section 2.8. Repayments and Prepayments.
2.8.1. Repayment. The unpaid principal amount of all
Revolving Loans shall be paid in full on the Revolving Commitment
Termination Date. The unpaid principal amount of each Bid Loan shall be
paid in full on the last day of the Interest Period applicable thereto.
2.8.2. Excess Revolving Loans. If at any time the
aggregate Revolving Commitment Usage of all Lenders exceeds the
aggregate amount of the Revolving Commitments, the Borrower shall, on
the Business Day on which the Borrower learns or is notified of the
excess, make mandatory prepayments of the Revolving Loans as may be
necessary so that, after such prepayment, such excess is eliminated.
2.8.3. Optional Prepayments
2.8.3.1. Subject to this Section 2.8.3., the Borrower
may, at its option, at any time or from time to time, prepay Revolving
Loans in whole or in part, without premium or penalty, provided that
(a) any prepayment shall be in an aggregate principal amount of at least
$5,000,000 and in integral multiples of $1,000,000 (or, alternatively,
the whole amount of Loans then outstanding) and (b) any prepayment of a
Euro-Dollar Rate Loan on a day other than the last day of the Interest
Period applicable thereto shall be made together with the amounts
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payable pursuant to Section 2.13.. Bid Loans may not be voluntarily
prepaid at any time.
2.8.3.2. If the Borrower elects to prepay a Loan
under this Section 2.8.3., it shall deliver to the Agent a notice of
optional prepayment (a) not later than 10:00 a.m. (Denver time) at least
three Euro-Dollar Business Days before the proposed prepayment, if the
Borrower proposes to prepay a Euro-Dollar Rate Loan, and (b) otherwise
not later than 9:30 a.m. (Denver time) on the proposed prepayment date.
Any notice of optional prepayment shall be irrevocable, and the payment
amount specified in such notice shall be due and payable on the date
specified in such notice, together with interest accrued thereon to such
date.
2.8.4. Payments Set Aside. To the extent the Agent or any
Lender receives payment of any amount under the Loan Documents, whether
by way of payment by the Borrower, set-off or otherwise, which payment
is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, other law or equitable cause, in whole
or in part, then, to the extent of such payment received, the
Obligations or part thereof intended to be satisfied thereby shall be
revived and continue in full force and effect, together with all
collateral security therefor.
Section 2.9. Manner of Payment.
2.9.1. Except as otherwise expressly provided, the Borrower
shall make each payment under the Loan Documents to the Agent in Dollars
and in immediately available funds, without any deduction whatsoever,
including any deduction for any set-off, recoupment, counterclaim or
Taxes (other than Excluded Taxes), at the Agent's Office, for the
account of the Applicable Lending Offices of the Lenders entitled to
such payment, by depositing such payment in the Agent's Account not
later than 10:00 a.m. (Denver time) on the due date thereof. Any
payments received after 10:00 a.m. (Denver time) on any Business Day
shall be deemed received on the next succeeding Business Day. Not later
than 1:00 p.m. (Denver time) on the day such payment is made, the Agent
shall deliver to each Lender, for the account of the Lender's Applicable
Lending Office, in Dollars and in immediately available funds, such
Lender's share of the payment so made, determined pursuant to
Section 2.10. Delivery shall be made in accordance with the written
instructions satisfactory to the Agent from time to time given to the
Agent by each Lender. With respect to Borrower's payment of fees only,
Borrower may make payment therefor by check delivered to Agent by the
time set forth above.
2.9.2. Whenever any payment to be made hereunder shall be
due on a day that is not a Business Day (or, in the case of any payment
with respect to any Euro-Dollar Rate Loan, not a Euro-Dollar Business
Day), such payment shall instead by made on the next succeeding Business
Day (or, in the case of any payment with respect to any Euro-Dollar Rate
Loan, the next succeeding Euro-Dollar Business Day).
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Section 2.10. Pro Rata Treatment; Application of
Payments. Except to the extent otherwise expressly provided herein,
2.10.1. Revolving Loans shall be requested from the Lenders
pro rata according to their respective Revolving Commitments.
2.10.2. Each reduction of the Revolving Commitments of the
Lenders shall be applied to the respective Revolving Commitments of the
Lenders pro rata according to their respective Revolving Commitments
before such reduction.
2.10.3. Each payment or prepayment by the Borrower of
principal of the Revolving Loans shall be made and applied for the
account of the Lenders pro rata according to the respective unpaid
principal amount of the Revolving Loans owed to the Lenders, and each
payment by the Borrower of interest on the Revolving Loans shall be made
and applied for the account of the Lenders pro rata according to the
respective accrued but unpaid interest on the Revolving Loans owed to
such Lenders. Each payment by the Borrower of Fees payable to the
Lenders pursuant to Section 2.6.1. shall be made and applied for the
account of the Lenders pro rata according to the respective amounts of
their Revolving Commitments.
2.10.4. Each payment or prepayment by the Borrower of
principal of Bid Loans made as part of the same Borrowing shall be made
and applied for the account of the Lenders holding such Bid Loans pro
rata according to the respective unpaid principal amount of such Bid
Loans owed to such Lenders and each payment by the Borrower of interest
on Bid Loans shall be made and applied for the account of the Lenders
holding such Bid Loans pro rata according to the respective accrued but
unpaid interest on the Bid Loans owed to such Lenders.
2.10.5. While no Default or Event of Default exists, all
payments made by the Borrower under the Loan Documents shall be applied
to the Obligations as the Borrower may direct. While a Default or Event
of Default exists, or if the Borrower does not provide any such
direction to the Agent, all amounts paid or received with respect to the
Obligations shall be applied in the following order: (a) First, to
costs, expenses and other amounts then otherwise due for the account of
the Agent pursuant to Section 9.1., (b) second, to costs, expenses and
other amounts then otherwise due for the account of the Lenders pursuant
to Section 9.1. and Indemnified Liabilities, pro rata according the
respective amounts payable, (c) third, to accrued interest on the Loans,
pro rata according to the respective accrued but unpaid interest on the
Loans then due to the Lenders, (d) fourth, to principal of the Loans,
pro rata according to the respective principal amounts then due to the
Lenders, and (e) to the other Obligations, if any, in the order directed
by the Required Lenders.
Section 2.11. Mandatory Suspension and Conversion of Euro-
Dollar Rate Loans. Each Lender's obligation to make, continue or
convert Loans into Euro-Dollar Rate Loans shall be suspended, all
outstanding Euro-Dollar Rate Loans shall be converted into Base Rate
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Loans on the last day of the respective Interest Periods applicable
thereto (or, if earlier, in the case of Section 2.11.1. below, on the
last day that such Lender can lawfully continue to maintain Euro-Dollar
Rate Loans) and all pending requests for the making or continuation of,
or conversion into, Euro-Dollar Rate Loans shall be considered requests
for the making or conversion into Base Rate Loans (or, in the case of
requests for conversion, disregarded) on the same Funding Date or the
end of the currently applicable Interest Period, as applicable, if:
2.11.1. on or prior to the determination of the interest
rate for a Euro-Dollar Rate Loan for any Interest Period, the Agent
determines that for any reason appropriate quotations are not available
to the Agent in the relevant interbank market for purposes of
determining the Euro-Dollar Rate or a Lender advises the Agent (which
shall thereupon notify the Borrower and the other Lenders) that such
rate would not accurately reflect the cost to such Lender of making,
continuing, or converting a Loan into, a Euro-Dollar Rate Loan for such
Interest Period; or
2.11.2. after the date hereof a Lender notifies the Agent
(which shall thereupon notify the Borrower and the other Lenders) of its
determination that any Regulatory Change makes it unlawful or impossible
for such Lender or its Euro-Dollar Lending Office to make or maintain
any Euro-Dollar Rate Loan, or to comply with its obligations hereunder
in respect thereof.
Section 2.12. Regulatory Changes.
2.12.1. Increased Costs. If, on or after the date hereof,
any Regulatory Change
2.12.1.1. shall subject any Lender Party (or its
Applicable Lending Office) to any Taxes with respect to its Euro-Dollar
Rate Loans or any Loan Document, or its obligations under or with
respect to any of the foregoing, or changes the basis of taxation of
payments to any Lender Party of principal, interest, Fees or any other
amount payable under the Loan Documents (except for any Excluded Tax or
any changes in the rate of any Excluded Tax); or
2.12.1.2. shall impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance or similar
requirement (other than any such requirement with respect to any Euro-
Dollar Rate Loan to the extent included in the Euro-Dollar Reserve
Requirement), against, or any fees or charges in respect of, assets held
by, deposits with or other liabilities for the account of, commitments
of, advances or Loans by or other credit extended by, any Lender Party
(or its Applicable Lending Office) or shall impose on any Lender Party
(or its Applicable Lending Office) or on the relevant interbank market
any other condition affecting any Euro-Dollar Rate Loan, or any
obligation to make Euro-Dollar Rate Loans,
and the effect of the foregoing is (a) to increase the cost
to such Lender Party (or its Applicable Lending Office) of making,
issuing, renewing or maintaining any Euro-Dollar Rate Loan or its
Revolving Commitment in respect thereof or (b) to reduce the amount of
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any sum received or receivable by such Lender Party (or its Applicable
Lending Office) hereunder or under any other Loan Document with respect
thereto, then, the Borrower shall from time to time pay to such Lender
Party, within 15 days after request by such Lender Party, such
additional amounts as are necessary in such Lender Party's reasonable
determination to compensate such Lender Party for such increased cost or
reduction.
2.12.2. Capital Costs. If a Regulatory Change after the
date hereof regarding capital adequacy (including the adoption or
becoming effective of any treaty, law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards") has or would have the effect of reducing the rate of return
on the capital of or maintained by any Lender Party or any company
controlling such Lender Party as a consequence of such Lender Party's
Loans or obligations hereunder and other commitments of this type to a
level below that which such Lender Party or company could have achieved
but for such Regulatory Change (taking into account such Lender Party's
or company's policies with respect to capital adequacy), then, the
Borrower shall from time to time pay to such Lender Party, within 15
days after request by such Lender Party, such additional amounts as are
necessary in such Lender Party's reasonable determination to compensate
such Lender Party or company for such reduction in return, to the extent
such Lender Party or company determines such reduction to be
attributable to the existence or obligations for the account of the
Borrower.
Section 2.13. Compensation for Funding Losses. The
Borrower shall pay to any Lender, upon demand by such Lender, such
amount or amounts as such Lender reasonably determines is or are
necessary to compensate it for any loss, cost, expense or liabilities
incurred (including any loss, cost, expense or liability incurred by
reason of the liquidation or redeployment of deposits but excluding loss
of future margin) by it as a result of (a) any payment, prepayment or
conversion of any Euro-Dollar Rate Loan for any reason (including by
reason of a prepayment pursuant to Section 2.8.2. or an acceleration
pursuant to Section 7.2.) on a date other than the last day of an
Interest Period applicable to such Euro-Dollar Rate Loan, or (b) any
Euro-Dollar Rate Loan for any reason not being made (other than a
wrongful failure to fund by such Lender), converted or continued, or any
payment of principal of or interest thereon not being made, on the date
therefor determined in accordance with the applicable provisions of this
Agreement. Notwithstanding the foregoing, the Borrower shall not be
responsible for any costs hereunder that result from the application of
Section 2.11. or from any wrongful actions or omissions or default of a
Lender.
Section 2.14. Certificates Regarding Yield Protection,
Etc.Any request by any Lender for payment of additional amounts pursuant
to Sections 2.12. and 2.13. shall be accompanied by a certificate of
such Lender Party setting forth the basis and amount of such request.
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In determining the amount of such payment, such Lender Party may use
such reasonable attribution or averaging methods as it deems appropriate
and practical.
Section 2.15. Applicable Lending Office; Discretion of
Lenders as to Manner of Funding. Each Lender may make, carry or
transfer Euro-Dollar Rate Loans at, to, or for the account of an
Affiliate of the Lender, provided that such Lender shall not be entitled
to receive any greater amount under Section 2.12. as a result of the
transfer of any such Loan than such Lender would be entitled to
immediately prior thereto unless (a) such transfer occurred at a time
when circumstances giving rise to the claim for such greater amount did
not exist or (b) such claim would have arisen even if such transfer had
not occurred. Notwithstanding any other provision of this Agreement,
each Lender shall be entitled to fund and maintain its funding of all or
any part of its Euro-Dollar Rate Loans in any manner it sees fit, it
being understood, however, that for purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually
funded and maintained each Euro-Dollar Rate Loan through the purchase of
deposits in the relevant interbank market having a maturity
corresponding to such Loan's Interest Period and bearing interest at the
applicable rate.
ARTICLE 3.
CONDITIONS TO LOANS
Section 3.1. Closing Conditions. The occurrence of the
Closing Date shall be subject to satisfaction of the following
conditions:
3.1.1. Closing Date. The Closing Date shall occur on or
before June 23, 1995.
3.1.2. Certain Documents. The Agent shall have received
the documents listed on Schedule 3.1.2., all of which shall be in form
and substance satisfactory to the Agent:
3.1.3. Fees and Expenses Paid. The Borrower shall have
paid all Fees and expenses for which the Borrower shall have been billed
on or before the Closing Date.
3.1.4. General. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall
have been delivered or executed or recorded in form and substance
satisfactory to the Agent and the Agent shall have received all such
counterpart originals or certified copies thereof as Agent may request.
Section 3.2. Conditions Precedent to Loans. The obligation
of the Lenders to make any Loan on any Funding Date shall be subject to
the following conditions precedent:
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3.2.1. Closing Date. The conditions precedent set forth in
Section 3.1. shall have been satisfied or waived in writing by the
Agent.
3.2.2. Notice of Borrowing. The Borrower shall have
delivered to the Agent, after the time the conditions set forth in
Section 3.1. shall have been satisfied or waived and otherwise in
accordance with the applicable provisions of this Agreement, a Notice of
Borrowing (or telephonic notice in lieu thereof), in the case of a
Revolving Loan, or notification of acceptance of a related Bid Loan
Quote (in the case of a Bid Loan).
3.2.3. Representations and Warranties. All of the
representations and warranties of the Borrower contained in the Loan
Documents shall be true and correct in all material respects on and as
of the Funding Date as though made on and as of that date.
3.2.4. No Default. No Default or Event of Default shall
exist or result from the making of the Loan.
3.2.5. Satisfaction of Conditions. Each borrowing of a
Loan shall constitute a representation and warranty by the Borrower as
of the Funding Date that the conditions contained in Sections 3.2.3.
and 3.2.4. have been satisfied.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender Parties
as follows:
Section 4.1. Organization, Powers and Good Standing. Each
of the Borrower and its Subsidiaries (a) is duly organized as a
corporation, and validly existing and in good standing under the laws of
its jurisdiction of organization, as shown on Schedule 4.1., and (b) has
all requisite corporate power and authority and the legal right to own
and operate its properties, to carry on its business as heretofore
conducted and as proposed to be conducted, to enter into the Loan
Documents to which it is a party and to carry out the transactions
contemplated thereby. Each of the Borrower and the Subsidiaries
possesses all Governmental Approvals, in full force and effect, free
from burdensome restrictions, that are necessary in all Material
respects for the ownership, maintenance and operation of its properties
and conduct of its business as now conducted and proposed to be
conducted, and is not in Material violation thereof. Each of the
Borrower and the Subsidiaries is duly qualified and in good standing
authorized to do business in each state or other jurisdiction where the
nature of its business activities conducted or proposed to be conducted
or properties owned or leased requires it to be so qualified and where
any failure to be so qualified, individually or in the aggregate, could
have a Material Adverse Effect.
Section 4.2. Authorization, Binding Effect, No Conflict,
Etc.
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4.2.1. Authorization, Binding Effect, Etc. As of the
Closing Date or any date thereafter, (a) the execution, delivery and
performance by the Borrower of each Loan Document have been duly
authorized by all necessary corporate action on the part of the
Borrower; and (b) each such Loan Document has been duly executed and
delivered by the Borrower and is the legal, valid and binding obligation
of the Borrower, enforceable against it in accordance with its terms,
except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to creditors' rights generally.
4.2.2. No Conflict. The execution, delivery and
performance by the Borrower of each Loan Document, and the consummation
of the transactions contemplated thereby, do not and will not
(a) violate any provision of the charter or other organizational
documents of the Borrower, (b) except for consents that have been
obtained and are in full force and effect, conflict with, result in a
breach of, or constitute (or, with the giving of notice or lapse of time
or both, would constitute) a default under, or require the approval or
consent of any Person pursuant to, any Contractual Obligation of the
Borrower (including the Investment Agreement), or violate any Applicable
Law binding on the Borrower.
4.2.3. Governmental Approvals. No Governmental Approval is
or will be required in connection with the execution, delivery and
performance by the Borrower of any Loan Document or the transactions
contemplated thereby.
Section 4.3. Financial Information.
4.3.1. The balance sheets of the Borrower as of January 31,
1995 and January 31, 1994 and the statements of earnings, investment of
Nordstrom, Inc. and cash flow of the Borrower for the Fiscal Years then
ended, certified by the Borrower's independent certified public
accountants, which are included in the Borrower's Annual Report on Form
10-K for the Fiscal Year ended January 31, 1995, were prepared in
accordance with GAAP consistently applied and fairly present the
financial position of the Borrower, as of the respective dates thereof
and the results of operations and cash flow of the Borrower for the
periods then ended. The Borrower on such dates had no Contingent
Obligations, liabilities for Taxes or long-term leases, forward or long-
term commitments or unrealized losses from any unfavorable commitments
that are not reflected in the foregoing statements or in the notes
thereto and that, individually or in the aggregate, are Material.
4.3.2. The unaudited balance sheet of the Borrower as of
April 30, 1995 and the related statements of earnings and cash flow for
the periods then ended, certified by the Chief Financial Officer of the
Borrower, which are included in the Borrower's Quarterly Report on Form
10-Q for the Fiscal Quarter ended April 30, 1995, were prepared in
accordance with GAAP consistently applied (except to the extent noted
therein) and fairly present the financial position of the Borrower as of
such date and the results of operations and cash flow for the periods
covered thereby, subject to normal year-end audit adjustments. The
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Borrower on such date had no Contingent Obligations, liabilities for
Taxes or long-term leases, forward or long-term commitments or
unrealized losses from any unfavorable commitments that are not
reflected in the foregoing statements or in the notes thereto and that,
individually or in the aggregate, are Material.
4.3.3. (a) The balance sheets of Nordstrom as of January
31, 1995 and January 31, 1994 and the statements of earnings,
stockholders' equity and cash flow of Nordstrom for its fiscal years
then ended, certified by their independent certified public accountants,
which are included in Nordstrom's Annual Report on Form 10-K for the
Fiscal Year ended January 31,1995, and (b) the "call report" of NNCB for
the December 31, 1993 and December 31, 1994 calendar years, copies of
which have been delivered to the Lender Parties, were prepared in
accordance with GAAP (or, in the case of NNCB, RAP)consistently applied
and fairly present the financial position of such Persons, as of the
respective dates thereof and the results of operations and, in the case
of Nordstrom, cash flow of such Persons for the periods then ended.
Such Persons on such dates had no Contingent Obligations, liabilities
for Taxes or long-term leases, forward or long-term commitments or
unrealized losses from any unfavorable commitments that are not
reflected in the foregoing statements or in the notes thereto and that,
individually or in the aggregate, are material to the business, assets,
results of operations, financial condition or prospects of such Persons
and their Subsidiaries, taken as a whole.
4.3.4. (a) The unaudited balance sheets of Nordstrom as of
April 30, 1995 and the statements of earnings, stockholders' equity and
cash flow of Nordstrom for its fiscal quarters then ended, certified by
its chief financial officer, which are included in Nordstrom's Quarterly
Report on Form 10-Q for the Fiscal Quarter ended April 30, 1995, and (b)
the "call report" of NNCB for the March 31, 1995 calendar quarter,
copies of which have been delivered to the Lender Parties, were prepared
in accordance with GAAP (or, in the case of NNCB, RAP) consistently
applied and fairly present the financial position of such Persons, as of
the respective dates thereof and the results of operations and (if
contained therein) cash flow of such Persons for the periods then ended,
subject to normal year-end audit adjustments. Such Persons on such
dates had no Contingent Obligations, liabilities for Taxes or long-term
leases, forward or long-term commitments or unrealized losses from any
unfavorable commitments that are not reflected in the foregoing
statements or in the notes thereto and that, individually or in the
aggregate, are material to the business, assets, results of operations,
financial condition or prospects of such Persons and their Subsidiaries,
taken as a whole.
4.3.5. The projections of the Borrower's receivables and
Debt, copies of which have been furnished to the Lender Parties, were
prepared by or under the supervision of the Chief Financial Officer of
the Borrower, are complete and have been prepared on the basis of
reasonable assumptions and in good faith utilizing historical financial
information that was prepared in accordance with GAAP.
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Section 4.4. No Material Adverse Changes. Since April 30,
1995, there has been no Material Adverse Change. As of the Closing
Date, there has been no material adverse change in the business, assets,
results of operations, financial condition or prospects of Nordstrom or
NNCB and their respective Subsidiaries, taken as a whole.
Section 4.5. Litigation. Except as disclosed in
Schedule 4.5. or pursuant to Section 5.1.9., there are no actions, suits
or proceedings pending or, to the best knowledge of the Borrower,
threatened against or affecting the Borrower, any Subsidiary or any of
its properties before any Governmental Authority (a) in which there is a
reasonable possibility of an adverse determination that could result in
a Material liability or have a Material Adverse Effect or (b) that in
any manner draws into question the validity, legality or enforceability
of any Loan Document or any transaction contemplated thereby.
Section 4.6. Agreements; Applicable Law. Neither the
Borrower nor any Subsidiary is in violation of any Applicable Law, or in
default under its charter documents, bylaws or any of its Contractual
Obligations (including the Investment Agreement and the Operating
Agreements) except for such violations or defaults as do not result in a
Material Adverse Effect. Each of the Investment Agreement, the
Operating Agreements and the Nordstrom Merchant Agreement is in full
force and effect and has not been amended.
Section 4.7. Taxes. All United States Federal income tax
returns and all other material tax returns required to be filed by the
Borrower or any Subsidiary have been filed and all Taxes due pursuant to
such returns have been paid, except such Taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
established in accordance with GAAP. To the best knowledge of the
Borrower, there have not been asserted or proposed to be asserted any
Tax deficiency against the Borrower or any Subsidiary that would be
Material and that is not reserved against on the financial books of the
Borrower.
Section 4.8. Governmental Regulation. The Borrower is
neither an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, or a company
controlled by such a company, nor subject to any Federal or state,
statute or regulation limiting its ability to incur Debt for money
borrowed (other than the Margin Regulations).
Section 4.9. Margin Regulations. Neither the Borrower nor
any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purposes of
purchasing or carrying Margin Stock. The value of all Margin Stock
held by the Borrower and the Subsidiaries constitutes less than 25% of
the value, as determined in accordance with the Margin Regulations, of
all assets of the Borrower.
Section 4.10. Employee Benefit Plans.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 they are party and have not incurred any liability to the PBGC in
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connection with any Plan established or maintained by Borrower or any
member of the Controlled Group.
No ERISA Event has occurred and is continuing with respect
to any Plan (whether or not terminated). Neither Borrower nor any
member of the Controlled Group is required to make or accrue a
contribution or has within any of the preceding five plan years made or
accrued an obligation to make contributions to any Multiemployer Plan.
The fair market value of the assets of each Plan is at least equal to
the present value of the "benefit liabilities" (within the meaning of
Section 4001(a)(16) of ERISA) under such Plan determined using the
actuarial assumptions and method used by the actuary to such Plan in its
valuation of such Plan.
Section 4.11. Disclosure. All information in any document,
certificate or written statement (other than information referred to
in Section 4.3.) furnished to the Lender Parties by or on behalf of the
Borrower with respect to the business, assets, prospects, results of
operation or financial condition of the Borrower or any Subsidiary for
use in connection with the transactions contemplated by this Agreement
has been true and correct in all material respects. There is no fact
known to the Borrower (other than matters of a general economic nature)
that has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other
documents, certificates or statements.
ARTICLE 5.
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any portion of the Revolving Commitments shall be
in effect and until all Obligations are paid and performed in full:
Section 5.1. Financial Statements and Other Reports. The
Borrower shall deliver to the Agent, for the benefit of the Lenders:
5.1.1. as soon as practicable and in any event within 120
days after the end of each Fiscal Year, the balance sheet of the
Borrower as of the end of such year and the related statements of
earnings, the investment of Nordstrom, Inc. and cash flow of the
Borrower for such Fiscal Year, setting forth in each case in comparative
form the figures for the previous Fiscal Year, all in reasonable detail
and, accompanied by an unqualified report thereon of Deloitte & Touche
LLP or other independent certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory
to the Required Lenders, which report shall state that such financial
statements fairly present the financial position of the Borrower as of
the date indicated and its results of operations and cash flows for the
periods indicated in conformity with GAAP (except as otherwise stated
therein) and that the examination by such accountants in connection with
such financial statements has been made in accordance with generally
accepted auditing standards;
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5.1.2. as soon as practicable and in any event within 120
days after the end of each fiscal year of Nordstrom and NNCB, (a) the
consolidated balance sheet of Nordstrom and its consolidated
Subsidiaries as of the end of each such year and the related
consolidated statements of earnings, stockholders' equity and cash flow
for such fiscal year, setting forth in each case in comparative form the
consolidated figures for the previous fiscal year, all in reasonable
detail and accompanied by an unqualified report thereon of Deloitte &
Touche LLP or other independent certified public accountants of
recognized national standing selected by Nordstrom and reasonably
satisfactory to the Required Lenders, which report shall state that such
consolidated financial statements fairly present the consolidated
financial position of Nordstrom as of the date indicated and its results
of operations and cash flows for the periods indicated in conformity
with GAAP (except as otherwise stated therein), and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards, and (b) the "call report" of NNCB for each such calendar
year, as filed with the FDIC, certified by NNCB's chief financial
officer as fairly presenting the financial condition of NNCB as of the
dates indicated and its results of operations and cash flows for the
periods indicated;
5.1.3. as soon as practicable and in any event within 60
days after the end of each Fiscal Quarter (other than the last Fiscal
Quarter of any Fiscal Year) a balance sheet of the Borrower as of the
end of such quarter and the related statements of earnings, the
investment of Nordstrom, Inc. and cash flow for such quarter and the
portion of the Fiscal Year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the corresponding
periods of the prior Fiscal Year, all in reasonable detail and certified
by the Borrower's Chief Financial Officer as fairly presenting the
financial condition of the Borrower as of the dates indicated and its
results of operations and cash flows for the periods indicated, subject
to normal year-end adjustments;
5.1.4. as soon as practicable and in any event within 60
days after the end of each fiscal quarter of Nordstrom and NNCB (other
than the last fiscal quarter of any fiscal year) (a) the consolidated
balance sheet of Nordstrom and its consolidated Subsidiaries as of the
end of such quarter and the related consolidated statements of earnings,
stockholders' equity and cash flow for such quarter and the portion of
the fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the consolidated figures for the corresponding
periods of the prior fiscal year, all in reasonable detail and certified
by its chief financial officer as fairly presenting the consolidated
financial condition of such Person and its consolidated Subsidiaries as
of the dates indicated and its consolidated results of operations and
cash flows for the periods indicated, subject to normal year-end
adjustments, and (b) the "call report" of NNCB for such calendar
quarter, as filed with the FDIC, certified by NNCB's chief financial
officer as fairly presenting the financial condition of NNCB as of the
dates indicated and its results of operations for the periods indicated;
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5.1.5. together with each delivery of financial statements
pursuant to Sections 5.1.1. and 5.1.3., a certificate of the Chief
Financial Officer or the President of the Borrower substantially in the
form of Exhibit F-6 (a "Compliance Certificate"), duly completed,
setting forth the calculations required to establish compliance with
Section 6.5., on the date of such financial statements;
5.1.6. within three Business Days after the Borrower
becomes aware of the occurrence of any Default or Event of Default, a
certificate of a Senior Officer of the Borrower setting forth the
details thereof and the action that the Borrower is taking or proposes
to take with respect thereto;
5.1.7. promptly upon their becoming available, copies of
all financial statements, reports, notices and proxy statements sent or
made available by the Borrower, Nordstrom or NNCB to its security
holders, and all registration statements (other than the exhibits
thereto) and annual, quarterly or monthly reports, if any, filed by the
Borrower, Nordstrom or NNCB with the SEC;
5.1.8. within three Business Days after Borrower becomes
aware of the occurrence of an ERISA Event, a statement of a Senior
Officer of the Borrower setting forth the details thereof and the action
that the Borrower is taking or proposes to take with respect thereto,
together with a copy of the notice, if any, of such event given or
required to be given to the PBGC; within three days of the date the
Borrower or any member of the Controlled Group becomes obliged to make
or accrue a contribution to a Multiemployer Plan;
5.1.9. within three Business Days after the Borrower
obtains knowledge thereof, notice of all litigation or proceedings
commenced or threatened affecting the Borrower or any Subsidiary
(a) that involves alleged liability (including liability under
Applicable Laws relating to hazardous substances or the environment) in
excess of $1,000,000 (individually) or $5,000,000 (in the aggregate),
(b) in which injunctive or similar relief is sought that, if obtained,
could have a Material Adverse Effect or (c) that questions the validity
or enforceability of any Loan Document, the Investment Agreement, any
Operating Agreement or the Nordstrom Merchant Agreement;
5.1.10. promptly notify the Agent of any move of its
principal executive office from the State of Colorado; and
5.1.11. from time to time such additional information
regarding the Borrower, any Subsidiary, Nordstrom or NNCB or the
business, assets, liabilities, prospects, results of operation or
financial condition of any such Person as the Agent, on behalf of any
Lender Party, may reasonably request.
Section 5.2. Records and Inspection. The Borrower shall,
and cause each Subsidiary to, maintain adequate books, records and
accounts as may be required or necessary to permit the preparation of
financial statements in accordance with sound business practices and
GAAP. The Borrower shall, and cause each Subsidiary to, permit such
Persons as the Agent may designate, at reasonable times and as often as
may be requested, under reasonable circumstances, to (a) visit and
inspect any of its properties, (b) inspect and copy its books and
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records, and (c) discuss with its officers and employees and its
independent accountants, its business, assets, liabilities, prospects,
results of operation or financial condition.
Section 5.3. Corporate Existence, Etc. The Borrower shall,
and cause each Subsidiary to, at all times preserve and keep in full
force and effect its corporate existence and all Material rights and
franchises.
Section 5.4. Payment of Taxes and Claims. The Borrower
shall, and cause each Subsidiary to, pay and discharge (a) all Taxes
imposed upon it or any of its properties or in respect of any of its
franchises, business, income or property before any penalty shall be
incurred with respect to such Taxes, and (b) all claims of any kind
(including claims for labor, material and supplies) that, if unpaid,
might by Applicable Law become a Lien upon its property; provided,
however, that, unless and until foreclosure, distraint, levy, sale or
similar proceedings shall have commenced, the Borrower need not pay or
discharge any such Tax or claim so long as the validity or amount
thereof is being contested in good faith and by appropriate proceedings
and so long as any reserves or other appropriate provisions as may be
required by GAAP shall have been made therefor.
Section 5.5. Maintenance of Properties. The Borrower
shall, and shall cause each Subsidiary to, maintain or cause to be
maintained in good repair, working order and condition (ordinary wear
and tear excepted), all properties and other assets useful or necessary
to its business, and from time to time the Borrower shall make or cause
to be made all appropriate repairs, renewals and replacements thereto.
The Borrower shall, and shall cause each of its Subsidiaries to, prevent
offsets and defenses to of its receivables and other rights to payment.
Section 5.6. Maintenance of Insurance. The Borrower shall,
and shall cause each Subsidiary to, maintain with financially sound and
reputable insurance companies insurance (or adequate self insurance) in
at least such amounts, of such character and against at least such risks
as is usually maintained by companies of established repute engaged in
the same or a similar business in the same general area.
Section 5.7. Conduct of Business; Compliance with Law. The
Borrower shall not 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. The Borrower shall maintain, and cause
each Subsidiary to maintain, 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. The Borrower shall, and shall cause each of
its Subsidiaries to, conduct its business in compliance in all material
respects with all Applicable Law and all its Contractual Obligations
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except where failure to do so does not result in a Material Adverse
Effect.
Section 5.8. Further Assurances. At any time and from time
to time, upon the request of the Agent, the Borrower shall execute and
deliver, and shall cause its Subsidiaries to execute and deliver, such
further documents and do such other acts and things as the Agent may
reasonably request in order to effect fully the purposes of the Loan
Documents and any other agreement contemplated thereby and to provide
for payment and performance of the Obligations in accordance with the
terms of the Loan Documents.
Section 5.9. Future Information. All data, certificates,
reports, statements, documents and other information the Borrower shall
furnish to the Lender Parties in connection with the Loan Documents
shall, at the time the information is furnished, not contain any untrue
statement of a Material fact, shall be complete and correct in all
Material respects to the extent necessary to give the Lender Parties
sufficient and accurate knowledge of the subject matter thereof, and
shall not omit to state a Material fact necessary in order to make the
statements contained therein not misleading in light of the
circumstances under which such information is furnished.
Section 5.10. Subordination of Intercompany Debt. The
Borrower shall cause all Debt of the Borrower to Nordstrom, NNCB or any
other Affiliate to be subordinated to the prior payment in full in cash
of the Obligations on terms of subordination no less favorable to the
Lender Parties than the terms of subordination set forth in the
Investment Agreement.
ARTICLE 6.
NEGATIVE COVENANTS OF THE BORROWER
So long as any portion of the Revolving Commitments shall be
in effect and until all Obligations are paid and performed in full:
Section 6.1. Liens. The Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any asset of the
Borrower or any Subsidiary, whether now owned or hereafter acquired,
except:
6.1.1. Liens securing the Obligations and Existing Liens;
6.1.2. (a) Liens for taxes, assessments or charges of any
Governmental Authority for claims that are not Material and are not yet
due or are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions
are being maintained in accordance with of GAAP; (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics, materialmen,
bankers and other Liens imposed by law and created in the ordinary
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course of business for amounts that are not Material and are not yet due
or being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; (c) Liens incurred and
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance (including by way of
surety bonds or appeal bonds) of tenders, bids, leases, contracts,
statutory obligations or similar obligations or arising as a result of
progress payments under contracts, in each case in the ordinary course
of business and not relating to the repayment of Debt; (d) easements,
rights-of-way, covenants, consents, reservations, encroachments,
variations and other restrictions, charges or encumbrances (whether or
not recorded) that do not Materially interfere with the ordinary conduct
of business, Materially detract from the value of the asset to which
they attach or Materially impair the use thereof; (e) building
restrictions, zoning laws and other statutes, laws, rules, regulations,
ordinances and restrictions; and (f) leases, subleases or easements
granted in the ordinary course of business to others not Materially
interfering with the business of, and consistent with past practices of,
the Borrower or Subsidiary, provided that clauses (a), (b) and (c) shall
not apply to Liens arising under environmental laws or regulations or
Liens imposed under ERISA;
6.1.3. any attachment or judgment Lien, not otherwise
constituting an Event of Default, in existence less than 20 days after
the entry thereof or with respect to which (a) execution has been
stayed, (b) payment is covered in full by insurance, or (c) the Borrower
is in good faith prosecuting an appeal or other appropriate proceedings
for review and has set aside on its books such reserves as may be
required by GAAP with respect to such judgment or award;
6.1.4. Liens securing Debt of the Borrower, including
Capitalized Leases, used to finance the acquisition of fixed assets of
the Borrower, the construction of additional buildings or the expansion
otherwise of its facilities, provided that such Debt (a) does not exceed
the cost to the Borrower of the assets acquired with the proceeds of
such Debt, (b) in the case of new construction or expansion of existing
facilities, is either a construction or permanent loan secured by the
facilities constructed and the real property on which such facilities
are located, and (c) in the case of other asset financing, is incurred
within three months following the date of the acquisition, provided that
any such Lien does not encumber any property other than the assets
acquired with the proceeds of such Debt;
6.1.5. Liens existing on assets of any Person at the time
such Person becomes a Subsidiary, provided such Lien does not encumber
any assets other than the assets subject to such Lien at the time such
Person becomes a Subsidiary;
6.1.6. Liens arising from the securitization of
receivables, to the extent the Debt arising from such securitization is
permitted hereunder;
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6.1.7. any Lien constituting a renewal, extension or
replacement of any Existing Lien or any Lien permitted by Section 6.1.4.
or 6.1.5., provided such Lien is limited to all or a part of the
property subject to the Lien extended, renewed or replaced; and
6.1.8. other Liens incidental to the conduct of the
business or the ownership of the assets of the Borrower or any
Subsidiary that (a) were not incurred in connection with borrowed money,
(b) do not in the aggregate Materially detract from the value of the
assets subject thereto or Materially impair the use thereof in the
operation of such business and (c) do not secure obligations aggregating
in excess of $1,000,000.
Section 6.2. Restricted Payments. The Borrower shall not,
and shall not permit any Subsidiary to, declare, pay or make, or agree
to declare, pay or make, any Restricted Payment, except (a) dividends,
distributions or payments by any Subsidiary to the Borrower, or (b) if
no Default or Event of Default then exists or would result therefrom
(assuming for this purpose that compliance with Section 6.5. is being
measured as of the end of the immediately preceding Fiscal Quarter
giving pro forma effect to the Restricted Payment)
Section 6.3. Prepayment of Debt. The Borrower shall not,
and shall not permit any Subsidiary to, voluntarily purchase, acquire,
redeem or retire, make any payment or distribution on account of, or
reduce any Debt, prior to 30 days before its originally stated maturity
(or its stated maturity on the date hereof, in the case of Debt
outstanding on the date hereof), or in the case of interest its stated
due date, or directly or indirectly become obligated to do any of the
foregoing by amending the terms thereof or otherwise, except for:
6.3.1. Prepayments of the Loans or of other amounts
pursuant to this Agreement and the other Loan Documents; and
6.3.2. Prepayments made when no Default or Event of Default
exists or results therefrom.
Section 6.4. Investments. The Borrower shall not, and
shall not permit any Subsidiary to, make or own any Investment, except:
6.4.1. Investments in Persons that are not Affiliates in
the ordinary course of business;
6.4.2. (a) trade credit extended on usual and customary
terms in the ordinary course of business, and (b) advances to employees
for moving, relocation and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business;
6.4.3. any Investment in Subsidiaries identified on
Schedule 4.1., limited to the amount of such Investment on the date
hereof;
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6.4.4. loans by the Borrower to any Subsidiary, Nordstrom
or NNCB, provided that such loans (a) do not exceed $50,000,000 in the
aggregate at any one time outstanding, (b) do not remain outstanding in
excess of 60 days, (c) are for general corporate purposes only, and (d)
are on terms and conditions complying with Section 6.8.; and
6.4.5. Investments pursuant to the Operating Agreements.
Section 6.5. Financial Covenants.
6.5.1. Coverage Ratio. The Coverage Ratio shall not be
less than 1.25 to 1.00 at the end of any Fiscal Quarter. "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:
CR =IAFC
FC
CR =Coverage Ratio
IAFC =Income Available for Fixed Charges
FC =Fixed Charges
"Income Available for Fixed Charges" means the net earnings
of the Borrower and its Subsidiaries, before any deduction for Fixed
Charges or provision for Taxes in respect of income. "Fixed Charges"
means total interest expense of the Borrower and the Subsidiaries with
respect to Liabilities, whether paid or accrued. "Liabilities" means
all liabilities of the Borrower and the Subsidiaries that have been or
would properly be classified as liabilities on the balance sheet of the
Borrower and the Subsidiaries.
6.5.2. Debt to Tangible Net Worth. At the end of each
Fiscal Quarter, the ratio of (a) Debt of the Borrower and the
Subsidiaries minus Subordinated Debt to (b) Tangible Net Worth plus
Subordinated Debt shall be 7.0 to 1.0 or less. "Subordinated Debt"
means, at any time, all Debt of the Borrower and the Subsidiaries for
borrowed money outstanding at such time that, by its terms, is
subordinated both in time and right of payment to the prior payment in
full in cash of all trade credit and the Obligations. "Tangible Net
Worth" means, at any time, the stockholder's equity of the Borrower and
the Subsidiaries, minus Intangible Assets at such time. "Intangible
Assets" means, to the extent reflected in stockholder's equity all
unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or development expenses and other intangible assets of the
Borrower and the Subsidiaries.
Section 6.6. Restriction on Fundamental Changes. The
Borrower shall not, and shall not permit any Subsidiary to, enter into
any merger, consolidation, reorganization or recapitalization,
liquidate, wind up or dissolve or sell, lease, transfer or otherwise
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dispose of, in one transaction or a series of transactions, all or
substantially all of its or their business or assets, whether now owned
or hereafter acquired, provided that as long as the Borrower is the
surviving entity and no Default or Event of Default shall exist after
giving effect to such merger, consolidation or sale, (a) any Subsidiary
or other Person may be merged or consolidated with or into the Borrower,
(b) any Subsidiary be liquidated, wound up or dissolved, or (c) all or
substantially all of any Subsidiary's business or assets may be sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to the Borrower.
Section 6.7. Asset Dispositions. The Borrower shall not,
and shall not permit any Subsidiary to, sell, lease or otherwise dispose
of during any Fiscal Year property or other assets constituting, in the
aggregate, 10% or more of the Borrower's and its Subsidiaries' assets,
taken as a whole, in terms of either book value or fair market value,
whichever is lower. Notwithstanding the foregoing limitation, Borrower
shall be permitted to sell its receivables in a transaction to
securitize such receivables.
Section 6.8. Transactions with Affiliates. The Borrower
shall not, and shall not permit any Subsidiary to, directly or
indirectly, enter into any transaction (including the purchase, sale,
lease, or exchange of any property or the rendering of any service) with
any Affiliate of the Borrower, unless (a) such transaction is not
otherwise prohibited by this Agreement, (b) such transaction is in the
ordinary course of business and (c) if such transaction is other than
with a Wholly-Owned Subsidiary, such transaction is on fair and
reasonable terms no less favorable to the Borrower or its Subsidiary, as
the case may be, than those terms which might be obtained at the time in
a comparable arm's length transaction with a Person who is not an
Affiliate or, if such transaction is not one which by its nature could
be obtained from such other Person, is on fair and reasonable terms and
was negotiated in good faith, provided that this Section shall not
restrict (i) dividends, distributions and other payments and transfers
on account of any shares of capital stock of the Borrower or any
Subsidiary otherwise permissible hereunder, and (ii) transactions
pursuant to the Operating Agreements and the Investment Agreement.
Section 6.9. Amendments of Certain Agreements. The
Borrower will not amend any Operating Agreement or the Investment
Agreement, or waive or otherwise relinquish any of its rights or causes
of action under or arising out of any such agreement, if such amendment,
waiver or relinquishment would have a Material Adverse Effect. For
purposes of this Section, "Material Adverse Effect" shall include any
waiver or relinquishment of the Borrower's rights or causes of action in
respect of (a) Nordstrom's obligation to ensure that Nordstrom holds a
positive investment in the Borrower, as required by Section 5 of the
Investment Agreement, (b) Nordstrom's obligation to ensure that
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Borrower's Fixed Charges Ratio (as defined in the Investment Agreement)
is no less than 1.25 to 1, as required by Section 4 of the Investment
Agreement, (c) NNCB's obligation to repurchase certain defaulted
receivables, as required by Section 2.01(f) of the Operating Agreement
dated as of August 30, 1991, or (d) Nordstrom's obligation to repurchase
certain defaulted receivables, as required by the Agreement dated as of
May 1, 1994 between Nordstrom and the Borrower.
ARTICLE 7.
EVENTS OF DEFAULT, ETC.
Section 7.1. Events of Default. The occurrence of any one
or more of the following events, acts or occurrences shall constitute an
event of default (each an "Event of Default"):
7.1.1. Failure to Make Payments. The Borrower (a) shall
fail to pay as and when due (whether at stated maturity, upon
acceleration, upon required prepayment or otherwise) any principal of
any Loan, or (b) shall fail to pay any interest, Fees or other amounts
payable under the Loan Documents within five days of the date when due
under the Loan Documents; or
7.1.2. Default in Other Debt. (a) The Borrower or any
Subsidiary shall default in the payment (whether at stated maturity,
upon acceleration, upon required prepayment or otherwise), beyond any
period of grace provided therefor, of any principal of or interest on
any other Debt with a principal amount in excess of $10,000,000, or
(b) any other breach or default (or other event or condition), beyond
any period of grace provided therefor, shall occur under any agreement,
indenture or instrument relating to any such other Debt, if the effect
of such breach or default (or such other event or condition) is to
cause, or to permit the holder or holders of the other Debt (or a Person
on behalf of such holder or holders) to cause (upon the giving of notice
or otherwise), such other Debt to become or be declared due and payable,
or required to be prepaid, redeemed, purchased or defeased (or an offer
of prepayment, redemption, purchase or defeasance be made), prior to its
stated maturity (other than by a scheduled mandatory prepayment); or
7.1.3. Breach of Certain Covenants. The Borrower shall
fail to perform, comply with or observe any agreement, covenant or
obligation under Section 5.1.6. or 5.3. (insofar as it requires the
preservation of the corporate existence of the Borrower) or any other
provision of this Agreement, other than Sections 5.1. through 5.6.; or
7.1.4. Other Defaults Under Loan Documents. The Borrower
shall fail to perform, comply with or observe any agreement, covenant or
obligation under any provision of any Loan Document (other than those
provisions referred to in Sections 7.1.1., 7.1.2. and 7.1.3.) and such
failure shall not have been remedied within 30 days after written notice
thereof by the Agent, at the request of the Required Lenders, to the
Borrower; or
7.1.5. Breach of Warranty. Any representation or warranty
or certification made or furnished by the Borrower under any Loan
Document shall prove to have been false or incorrect in any material
respect when made (or deemed made); or
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7.1.6. Involuntary Bankruptcy; Appointment of Receiver,
Etc. There shall be commenced against the Borrower, Nordstrom, NNCB or
any Subsidiary of any such Person, an involuntary case seeking the
liquidation or reorganization of the Borrower, Nordstrom, NNCB or any
Subsidiary of any such Person under Chapter 7 or Chapter 11,
respectively, of the Bankruptcy Code or any similar proceeding under any
other Applicable Law or an involuntary case or proceeding seeking the
appointment of a receiver, liquidator, sequestrator, custodian, trustee
or other officer having similar powers of the Borrower, Nordstrom, NNCB
or any Subsidiary of any such Person or to take possession of all or a
substantial portion of its property or to operate all or a substantial
portion of its business, and any of the following events occur: (a) the
Borrower, Nordstrom, NNCB or such Subsidiary consents to the institution
of the involuntary case or proceeding; (b) the petition commencing the
involuntary case or proceeding is not timely controverted; (c) the
petition commencing the involuntary case or proceeding remains
undismissed and unstayed for a period of 60 days; or (d) an order for
relief shall have been issued or entered therein; or
7.1.7. Voluntary Bankruptcy; Appointment of Receiver,
Etc. The Borrower, Nordstrom, NNCB or any Subsidiary of any such Person
shall institute a voluntary case seeking liquidation or reorganization
under Chapter 7 or Chapter 11, respectively, of the Bankruptcy Code or
any similar proceeding under any other Applicable Law, or shall consent
thereto; or shall consent to the conversion of an involuntary case to a
voluntary case; or shall file a petition, answer a complaint or
otherwise institute any proceeding seeking, or shall consent to or
acquiesce in the appointment of, a receiver, liquidator, sequestrator,
custodian, trustee or other officer with similar powers of it or to take
possession of all or a substantial portion of its property or to operate
all or a substantial portion of its business; or shall make a general
assignment for the benefit of creditors; or shall generally not pay its
debts as they become due; or the Board of Directors of the Borrower,
Nordstrom, NNCB or any such Subsidiary (or any committee thereof) adopts
any resolution or otherwise authorizes action to approve any of the
foregoing; or
7.1.8. Judgments and Attachments. The Borrower or any
Subsidiary shall suffer any money judgments, writs or warrants of
attachment or similar processes that, individually or in the aggregate,
involve an amount or value in excess of $1,000,000 and such judgments,
writs, warrants or other orders shall continue unsatisfied and unstayed
for a period of 20 days; or
7.1.9. ERISA. The Borrower or any member of the Controlled
Group shall fail to pay when due an amount or amounts that it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans against the Borrower or any member of the Controlled Group to
enforce Section 515 of ERISA; or any ERISA Event shall occur; or the
Borrower or any member of the Controlled Group shall partially or
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completely withdraw from any Multiemployer Plan; or any Multiemployer
Plan to which Borrower or any member of its Controlled Group becomes
obliged to make or accrue a contribution is placed in reorganization or
terminates;
7.1.10. Change of Control. Nordstrom shall at any time
cease to own and hold, directly or indirectly, beneficial ownership of
all outstanding shares of Capital Stock of the Borrower or any such
shares shall become subject to any Lien; or
7.1.11. Subsidiaries. Borrower shall create or acquire any
Subsidiary (other than those existing at the date of this Agreement and
described on Schedule 4.1.), except if (a) such Subsidiary executes and
delivers to the Agent an unconditional and irrevocable guaranty of the
Obligations on terms and conditions satisfactory to the Agent and the
Required Lenders, and (b) all representations, covenants and other
provisions of the Loan Documents are amended to the extent requested by
the Agent or the Required Lenders, in each case within 30 days of the
creation or acquisition of such Subsidiary by the Borrower; or
7.1.12. Termination of Loan Documents, Etc. Any Loan
Document, or any material provision thereof, shall cease to be in full
force and effect for any reason; or the Borrower shall contest or
purport to repudiate or disavow any of its obligations under or the
validity of enforceability of any Loan Document or any material
provision thereof; or
7.1.13. Termination, Etc. of Certain Documents. The
Nordstrom Merchant Agreement shall be amended, or NNCB shall waive or
otherwise relinquish any of its rights or causes of action under or
arising out of such agreement, if such amendment, waiver or
relinquishment would have a Material Adverse Effect (which shall include
any waiver or relinquishment of NNCB's rights or causes of action in
respect of Nordstrom's obligation to repurchase defaulted receivables
from NNCB pursuant to Section 18 of the Nordstrom Merchant Agreement).
7.1.14. Fundamental Change. The dissolution, liquidation,
merger, consolidation or sale of all or substantially all assets of
Nordstrom, except a merger or consolidation of Nordstrom (a) where
Nordstrom is the surviving entity, (b) such transaction does not
otherwise constitute a Default or an Event of Default or (c) violate any
material provision in any Contractual Obligation (including any Debt
agreement or indenture) of Nordstrom.
Section 7.2. Remedies. Upon the occurrence of an Event of
Default:
7.2.1. If an Event of Default occurs under Section 7.1.6.
or 7.1.7., then the Revolving Commitments shall automatically and
immediately terminate, and the obligation of the Lenders to make any
Loan hereunder shall cease, and the unpaid principal amount of the Loans
and all other Obligations shall automatically become immediately due and
payable, without presentment, demand, protest, notice or other
requirements of any kind, all of which are hereby expressly waived by
the Borrower.
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7.2.2. If an Event of Default occurs, other than under
Section 7.1.6. or 7.1.7., the Agent shall (a) upon written request of
the Required Lenders, by written notice to the Borrower, declare that
the Revolving Commitments and all pending Bid Loan Quotes (whether or
not accepted) are terminated, whereupon the obligation of the Lender
Parties to make any Loan hereunder shall cease, and/or (b) upon written
request of Lenders holding at least 66-2/3% of the outstanding Loans,
declare the unpaid principal amount of the Loans and all other
Obligations to be, and the same shall thereupon become, due and payable,
without presentment, demand, protest, any additional notice or other
requirements of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE 8.
THE AGENT AND THE LENDERS
Section 8.1. Authorization and Action.
8.1.1. Each Lender hereby irrevocably appoints and
authorizes the Agent Lender to act as its agent hereunder and under the
other Loan Documents, to execute and deliver or accept, on its behalf,
the other Loan Documents and any other documents, instruments and
agreements related thereto or hereto to take such action on its behalf
under the provisions hereof and thereof and to exercise such rights,
remedies, powers and privileges hereunder and thereunder as are
delegated to the Agent by the terms hereof and thereof, together with
such rights, remedies, powers and privileges as are reasonably
incidental thereto.
8.1.2. Except for any matters expressly subject to the
consent or approval of the Agent under the Loan Documents, the Agent
shall not, without the prior approval of the Required Lenders (or, as
provided in Section 9.3., all of the Lenders), consent to any departure
by the Borrower from the terms of, waive any default or otherwise amend
this Agreement or any other Loan Documents. The Agent will, to the
extent practicable under the circumstances, consult with the other
Lender Parties prior to taking action on their behalf under the Loan
Documents and in acting as their Agent thereunder. The Agent will not
take any action contrary to the written direction of Required Lenders,
will take any lawful action not contrary to the provisions of the Loan
Documents prescribed in written instructions of the Required Lenders
(or, as provided in Section 9.3., all the Lenders) and, as to any
matters not expressly provided for by the Loan Documents (including
enforcement or collection), may decline to take any action, except upon
the written instructions of the Required Lenders (or, as provided in
Section 9.3., all the Lenders). If such instructions are requested
reasonably promptly, the Agent shall be absolutely entitled to refrain
from taking any action and shall not have any liability to the Borrower
or any Lender for refraining from taking any action until it shall have
received such instructions; provided, however, that the Agent shall in
no event be required to take or refrain from taking any action that
would, in the Agent's opinion, be inconsistent with the Agent's practice
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in similar situations when acting solely for its own account or be
contrary to the provisions of any Loan Document or Applicable Law.
8.1.3. The Agent shall not have any duties or
responsibilities except those expressly set forth in the Loan Documents.
No duty to act, or refrain from acting, and no other obligation
whatsoever, shall be implied on the basis of any right, power or
authority granted to the Agent or shall become effective in the event of
any temporary or partial exercise of such rights, power or authority.
The Agent shall not be required to exercise any right, power, remedy or
privilege granted to it in any Loan Document, to ascertain or inquire
whether any Default or Event of Default has occurred and is continuing,
or to inspect the property (including the books and records) of the
Borrower or to take any other affirmative action, except as provided in
Section 7.2., or unless requested or directed to do so in accordance
with the provisions of Section 8.1.2.
8.1.4. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any other Lender Party.
Except for notices, reports and other documents and information
expressly required to be furnished to the Lender Parties by the Agent
hereunder, the Agent shall not have any duty or responsibility to
provide any Lender Party with any credit or other information concerning
the affairs, financial condition or business of the Borrower that may
come into the possession of the Agent or any of its Affiliates.
Section 8.2. Exculpation; Agent's Reliance; Etc. Neither
the Agent nor any of its directors, officers, agents, attorneys or
employees shall be liable to the Borrower or any other Lender Party for
any action taken or omitted to be taken by it or them under or in
connection with any Loan Document (a) with the consent or at the request
of the Required Lenders (or, as provided in Section 9.3., all the
Lenders), or (b) in any other circumstances, except for its or their own
gross negligence or willful misconduct as determined by a final judgment
of a court of competent jurisdiction. The Agent makes no warranty or
representation to any other Lender Party and shall not be responsible to
any other Lender Party for any recitals, statements, warranties or
representations made in, or in connection with, any Loan Document or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of any Loan Document or any financial
information, opinions of counsel or other documents executed and
delivered pursuant thereto, or for the financial condition of the
Borrower. The Agent shall not be responsible to any Lender for the
satisfaction of any condition specified in Article 3., except receipt of
items required to be delivered to the Agent. The Agent may treat the
payee of any Note as the holder thereof until the Agent receives the
related Assignment and Assumption signed by such holder and the assignee
and in form satisfactory to the Agent. The Agent shall be entitled to
rely upon any notice, certificate or other writing believed by the Agent
to be genuine and correct and to have been signed or sent by the proper
Person or Persons. The Agent shall be entitled to consult with legal
counsel, independent public accountants and other experts selected by
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the Agent and to act in reliance upon the advice of such counsel and
other experts concerning its actions and duties hereunder.
Section 8.3. Agent and Affiliates. In its capacity as a
Lender, the Agent Lender shall have the same rights, powers and
obligations under this Agreement and the other Loan Documents as any
other Lender and may exercise or refrain from exercising the same as
though it were not the Agent, including the right to give or deny
consent to any action requiring consent or direction of the Required
Lenders or all the Lenders. The Agent and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower, any
Subsidiary and any Affiliate of the Borrower, all as if the Agent were
not the Agent and without any duty to account therefor to the Lenders.
The Agent shall be entitled to receive from the Borrower its fees or
portions thereof in connection with this transaction without any
liability to account therefor to any other Lender, except as the Agent
may have expressly agreed.
Section 8.4. Lender Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Agent or any other Party Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Lender Party also
acknowledges that it will, independently and without reliance upon the
Agent or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Loan
Documents.
Section 8.5. Indemnification. The Agent shall in no event
be required to take any action under the Loan Documents or in relation
thereto unless it shall first be indemnified to its satisfaction by the
other Lender Parties against any and all liability and expense that it
may incur by reason of taking any such action. Each Lender agrees to
indemnify and hold the Agent harmless (to the extent not promptly paid
or reimbursed by the Borrower), ratably according to their respective
Revolving Commitments, from and against any and all (a) costs, expenses
and other amounts otherwise payable by the Borrower for the account of
the Agent pursuant to Section 9.1. and (b) Indemnified Liabilities that
may be imposed on, incurred by, or asserted against the Agent, except to
the extent they are finally adjudged by a court of competent
jurisdiction to have directly resulted from the gross negligence or
willful misconduct of the Agent.
Section 8.6. Successor Agent. The Agent may resign at any
time as Agent under the Loan Documents by giving written notice thereof
to the Lenders and the Borrower and the Agent may be removed at any time
with or without cause by written action of all Lenders (other than the
Agent Bank) delivered to the Agent. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within
30 days after the retiring Agent's notice of resignation or the removal
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of the Agent, then the retiring or removed Agent may, on behalf of the
other Lender Parties, appoint a successor Agent, which shall be a
financial institution having a combined capital and surplus of at least
$100,000,000, or a branch or agency of such a financial institution,
organized or licensed to do business under the laws of the United States
of America or any State thereof. Upon the acceptance of any appointment
as the Agent by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged
of its duties and obligations under the Loan Documents. Upon any
retiring Agent's resignation or removal, the provisions of this
Article 8. (as well as other expense reimbursement, indemnification and
exculpatory provisions in the other Loan Documents) shall continue in
effect for its benefit as to any actions taken or omitted by it while it
was Agent.
Section 8.7. Excess Payments. If any Lender shall obtain
any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) on account of any Obligations in
excess of its pro rata share of payments and other recoveries on account
of such Obligations obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in such Obligations held by
them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of the other Lenders;
provided, however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to such
Lender to the extent of such recovery, but without interest. The
Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 8.7. may, to the fullest extent
permitted by Applicable Law and by Section 9.8., exercise all of its
rights of payment (including setoff) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower in
the amount of such participation.
Section 8.8. Lender Parties. The provisions of this
Article 8. are solely for the benefit of the Agent and the other Lender
Parties and the Borrower shall not have any rights to rely on or enforce
any of the provisions hereof (except that the provisions of
Sections 8.6. are also for the benefit of the Borrower). In performing
its functions and duties under the Loan Documents, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency
or trust with or for the Borrower.
Section 8.9. Payments; Availability of Funds; Certain
Notices.
8.9.1. If the Agent shall fail to deliver to any other
Lender Party its share of any payment received from the Borrower as and
when required by Section 2.9., the Agent shall pay to such Lender its
share of such payment together with interest on such amount at the
Federal Funds Rate, for each day from the date such amount was required
to be paid to such Lender until the date the Agent pays such amount to
such Lender, calculated as set forth in Section 2.4.4..
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8.9.2. Unless (a) the Agent shall have been notified by a
Lender prior to the date upon which a Loan is to be made or (b) the
Agent shall have been notified by the Borrower prior to the date on
which the Borrower is required to make any payment hereunder that such
Lender or the Borrower, as the case may be (the "Obligated Party"), does
not intend to make available to the Agent the Obligated Party's portion
of such Loan or such payment, the Agent may assume that the Obligated
Party will make such amount available to the Agent on such date and the
Agent may, in reliance upon such assumption (but shall not be required
to), make available to the Borrower (in the case of a Loan) or the
Lenders (in the case of a payment by the Borrower) a corresponding
amount. If such corresponding amount is not in fact made available to
the Agent by the Obligated Party, the Agent shall be entitled to recover
such amount on demand from the Obligated Party (or, in the case of a
Loan, if the Lender that is the Obligated Party fails to pay such amount
forthwith upon such demand, from the Borrower). Such amount shall be
payable together with interest thereon from the day on which such
corresponding amount was made available by the Agent to the Lender or
the Borrower, as applicable, to the date of payment by the Obligated
Party (or the Borrower, as applicable), at a rate of interest equal to
(i) in the case of any payment by any other Lender Party, the Federal
Funds Rate, and (ii) in the case of any payment by the Borrower, the
interest rate applicable to the Loan.
8.9.3. The Agent shall promptly notify the Lenders by telex
or telecopy of each Interest Period chosen by the Borrower, the Euro-
Dollar Rate for each Interest Period (and the relevant interest rate),
the date of any expected payment and all other material notices
transmitted by the Borrower.
Section 8.10. Obligations of Lender Parties Several;
Enforcement by the Agent.
8.10.1. Each Lender Party's obligations hereunder are
several, and not joint or joint and several. The failure of any Lender
Party to make any Loan or otherwise to perform its obligations hereunder
will not increase the obligations of any other Lender Party.
Notwithstanding the foregoing, any Lender may assume, but shall have no
obligation to any Person to assume, any non-performing Lender's
obligation to make a Loan. Nothing contained in this Agreement and no
action taken by the Agent or any other Lender Party pursuant to this
Agreement shall be deemed to constitute the Agent and any other Lender
Party to be a partnership, an association, a joint venture or any other
kind of entity.
8.10.2. Each Lender agrees that, except with the prior
written consent of the Agent or as provided in Section 9.8., no Lender
Party shall have any right individually to enforce any Loan Document or
any provision thereof, or make demand thereunder, it being agreed that
such rights and remedies may only be exercised by the Agent for the
ratable benefit of the Lenders upon the terms of this Agreement.
Section 8.11. Co-Agents. No Co-Agent, in such capacity,
shall have any right, power, obligation, liability, duty or
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responsibility whatsoever under the Loan Documents, and no Co-Agent
shall be deemed to have any fiduciary relationship with any Lender.
Each Lender acknowledges that it has not relied, and will not rely, on
any of the Co-Agents in deciding to enter into this Agreement or in
taking or not taking any action hereunder.
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Expenses. The Borrower shall pay on demand:
9.1.1. any and all attorneys' fees and disbursements
(including allocated costs of in-house counsel) and out-of-pocket cost
and expenses incurred by the Agent in connection with the development,
drafting and negotiation of the Loan Documents, any amendments thereto
and the syndication and closing of the transactions contemplated
thereby; and
9.1.2. all costs and expenses (including fees and
disbursements of in-house and other attorneys, appraisers and
consultants) incurred by the Lender Parties in any workout,
restructuring or similar arrangements or, after a Default, in connection
with the protection, preservation, exercise or enforcement of any of the
terms of the Loan Documents or in connection with any foreclosure,
collection or bankruptcy proceedings.
Section 9.2. Indemnity.
9.2.1. Borrower shall indemnify, defend and hold harmless
the each Lender Party and the officers, directors, employees, agents,
attorneys, affiliates, successors and assigns of each Lender Party
(collectively, the "Indemnitees") from and against (a) any and all
transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of the
Loan Documents or the making of the Loans, and (b) any and all
liabilities, losses, damages, penalties, judgments, claims, costs and
expenses of any kind or nature whatsoever (including reasonable
attorneys' fees, including allocated costs of in-house counsel, and
disbursements in connection with any actual or threatened investigative,
administrative or judicial proceeding, whether or not such Indemnitee
shall be designated a party thereto) that may be imposed on, incurred by
or asserted against such Indemnitee, in any manner relating to or
arising out of the Loan Documents, the Loans, or the use or intended use
of the proceeds of the Loans (the "Indemnified Liabilities"); provided
that (i) no Indemnitee shall have the right to be indemnified or held
harmless hereunder for its own gross negligence or willful misconduct,
as determined by a final judgment of a court of competent jurisdiction,
and (ii) Indemnified Liabilities shall include amounts attributable to
the passive or active negligence of any Lender Party.
9.2.2. To the extent that the undertaking to indemnify and
hold harmless set forth in Section 9.2.1. may be unenforceable as
violative of any Applicable Law or public policy, the Borrower shall
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make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities that is permissible under Applicable Law.
All Indemnified Liabilities shall be payable on demand.
Section 9.3. Waivers; Modifications in Writing.
9.3.1. No amendment of any provision of this Agreement or
any other Loan Document (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and
signed by the Agent and the Required Lenders. Notwithstanding the
foregoing,
9.3.1.1. no amendment that has the effect of (a)
reducing the rate or amount, or extending the stated maturity or due
date, of any amount payable by the Borrower to any Lender Party under
the Loan Documents, (b) increasing the amount, or extending the stated
termination or reduction date, of any Lender's Revolving Commitment
hereunder or subjecting any Lender Party to any additional obligation to
extend credit, (c) altering the rights and obligations of the Borrower
to prepay the Loans, or (d) changing this Section 9.3. or the definition
of the term "Required Lenders," shall be effective unless the same shall
be signed by or on behalf of all of the Lenders; and
9.3.1.2. no amendment that has the effect of
(a) increasing the duties or obligations of the Agent, (b) increasing
the standard of care or performance required on the part of the Agent,
or (c) reducing or eliminating the indemnities or immunities to which
the Agent is entitled (including any amendment of this Section), shall
be effective unless the same shall be signed by or on behalf of the
Agent.
9.3.1.3. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment effected in accordance with this
Section 9.3. shall be binding upon each present and future Lender Party
and the Borrower.
Section 9.4. Cumulative Remedies; Failure or Delay. The
rights and remedies provided for under this Agreement are cumulative and
are not exclusive of any rights and remedies that may be available to
the Lender Parties under Applicable Law or otherwise. No failure or
delay on the part of any Lender Party in the exercise of any power,
right or remedy under the Loan Documents shall impair such power, right
or remedy or operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude other or
further exercise thereof or of any other power, right or remedy.
Section 9.5. Notices, Etc. All notices and other
communications under this Agreement shall be in writing and (except for
financial statements, other related informational documents and routine
communications, which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by prepaid courier, by overnight,
registered or certified mail (postage prepaid), or by telex or telecopy,
and shall be deemed given when received by the intended recipient
50
<PAGE>
thereof. Unless otherwise specified in a notice sent or delivered in
accordance with this Section 9.5., all notices and other communications
shall be given to the parties hereto at their respective addresses (or
to their respective telex or telecopier numbers) indicated on
Schedule 1.1.B (in the case of the Lender Parties) or 9.5. (in the case
of the Borrower).
Section 9.6. Successors and Assigns.
9.6.1. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns. The Borrower may not assign or transfer any interest
hereunder without the prior written consent of each Lender Party.
9.6.2. Each Lender shall have the right at any time to
assign (an "Assignment") all or any portion of such Lender's Revolving
Commitment and Loans to one or more banks or other institutions;
provided, however, that (a) each Assignment to any Person that is not
then a Lender shall be of a portion of the Revolving Commitments at
least equal to $10,000,000 and, unless otherwise agreed by the Agent,
shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement and the
other Loan Documents; (b) unless a Default or Event of Default then
exists, no Assignment (other than an Assignment to a Person that is then
a Lender or an Affiliate of a Lender) shall be effective without the
consent of the Borrower and the Agent, which consents shall not be
unreasonably withheld or delayed; (c) the parties to the Assignment
shall execute and deliver to the Agent an Assignment and Assumption
substantially in the form of Exhibit H (an "Assignment and Assumption");
and (d) the assignee shall pay to the Agent a processing and recordation
fee of $2,500. From and after the date on which the conditions in the
foregoing clauses and the Assignment and Assumption have been satisfied,
the assignee shall be a "Lender" hereunder and, to the extent that
rights and obligations hereunder have been assigned to it, shall have
the rights and obligations of the assigning Lender hereunder, and the
assigning Lender shall, to the extent that rights and obligations
hereunder have been assigned by it, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of
an assignment covering all or the remaining portion of the assigning
Lender's rights and obligations under this Agreement, shall cease to be
a party hereto).
9.6.3. Each Lender shall have the right at any time to
grant or sell participations (each a "Participation") in all or any
portion of such Lender's Revolving Commitment and Loans to one or more
banks or other institutions without the consent of the Borrower or any
other Lender Party, subject to the terms and conditions set forth in
this Section 9.6.3. If any Lender sells or grants a Participation,
(a) such Lender shall make and receive all payments for the account of
its participant, (b) such Lender's obligations under this Agreement
shall remain unchanged, (c) such Lender shall continue to be the sole
51
<PAGE>
holder of its Notes and other Loan Documents subject to the
Participation and shall have the sole right to enforce its rights and
remedies under the Loan Documents, (d) the Borrower and the other Lender
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents, and (e) the Participation agreement shall not restrict such
Lender's ability to agree to any amendment of the terms of the Loan
Documents, or to exercise or refrain from exercising any powers or
rights that such Lender may have under or in respect of the Loan
Documents, except that the participant may be granted the right to
consent to (i) any reduction of the rate or amount, or any extension of
the stated maturity or due date, of any principal, interest or Fees
payable by the Borrower and subject to the Participation, or (ii) any
increase in the amount or extension of the stated termination or
reduction date of the affected Revolving Commitment. A participant
shall have the rights of the Lenders under Sections 2.11.,
2.12. and 9.8., subject to the obligations imposed by such Sections;
provided that amounts payable to any participant shall not exceed the
amounts that would have been payable under such Sections to the Lender
granting the Participation, had such Participation not been granted,
unless the Participation is made with the prior written consent of the
Borrower.
9.6.4. Each Lender may at any time assign or pledge any
portion of its rights under the Loan Documents to a Federal Reserve
Bank. No such assignment or pledge shall be subject to the provisions
of Sections 9.6.2. or 9.6.3.
9.6.5. Each Lender shall have the right at any time to
furnish one or more potential assignees or participants with any
information concerning the Borrower, Nordstrom, NNCB and their
respective Subsidiaries that has been supplied by the Borrower,
Nordstrom, NNCB or any such Subsidiary to any Lender Party. The
Borrower shall supply all reasonably requested information and execute
and deliver all such instruments and take all such further action
(including, in the case of an Assignment, the execution and delivery of
replacement Notes) as the Agent may reasonably request in connection
with any Assignment or Participation arrangement.
Section 9.7. Choice of Forum.
9.7.1. All actions or proceedings arising in connection
with this Agreement shall be tried and litigated in state or Federal
courts located in Denver, Colorado, unless such actions or proceedings
are required to be brought in another court to obtain subject matter
jurisdiction over the matter in controversy. EACH OF THE BORROWER AND
THE LENDER PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE
JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
9.7.2. Nothing contained in this Section shall preclude the
Lender Parties from bringing any action or proceeding arising out of or
relating to this Agreement in the courts of any place where the Borrower
or any of its assets may be found or located.
52
<PAGE>
Section 9.8. Set Off. In addition to any rights now or
hereafter granted under Applicable Law, during the existence of any
Event of Default, each Lender Party is hereby irrevocably authorized by
the Borrower, at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits
(general or special, including certificates of deposit, whether matured
or unmatured, but not including trust accounts) and any other
indebtedness, in each case whether direct or indirect or contingent or
matured or unmatured at any time held or owing by such Lender Party to
or for the credit or the account of the Borrower, against and on account
of the Obligations, irrespective of whether or not such Lender Party
shall have made any demand for payment, provided that such Lender Party
shall, promptly following such set off or application, give notice to
the Borrower thereof, which notice shall contain an explanation of the
basis for the set off or application.
Section 9.9. Changes in Accounting Principles. If any
changes in generally accepted accounting principles from those used in
the preparation of the financial statements referred to in this
Agreement hereafter result from by the promulgation of rules,
regulations, pronouncements, or opinions of or required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions),
or there shall occur any change in the Borrower's fiscal or tax years
and, as a result of any such changes, there shall result a change in the
method of calculating any of the financial covenants, negative
covenants, standards or other terms or conditions found in this
Agreement, then the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes
with the desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such changes as if such
changes had not been made.
Section 9.10. Survival of Agreements, Representations and
Warranties. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement, the closing
and the extensions of credit hereunder and shall continue until payment
and performance of any and all Obligations. Any investigation at any
time made by or on behalf of the Lender Parties shall not diminish the
right of the Lender Parties to rely thereon. Without limitation, the
agreements and obligations of the Borrower contained in Sections 2.11.,
2.12., 9.1., and 9.2. and the obligations of the Lenders under
Section 8.5. shall survive the payment in full of all other Obligations.
Section 9.11. Execution in Counterparts. This Agreement
may be executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute
but one and the same Agreement. Faxed signatures to this Agreement
shall be binding for all purposes.
53
<PAGE>
Section 9.12. Complete Agreement. This Agreement, together
with the other Loan Documents, is intended by the parties as the final
expression of their agreement regarding the subject matter hereof and as
a complete and exclusive statement of the terms and conditions of such
agreement.
Section 9.13. Limitation of Liability. No claim shall be
made by the Borrower against any Lender Party or the Affiliates,
directors, officers, employees or agents of any Lender Party for any
special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or under any other theory of liability
arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection
therewith; and the Borrower waives, releases and agrees not to sue upon
any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
[Space Intentionally Left Blank]
54
<PAGE>
Section 9.14. WAIVER OF TRIAL BY JURY. THE BORROWER AND
THE LENDER PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION
UNDER THIS AGREEMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR
ACTIONS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first set forth above.
Borrower:
NORDSTROM CREDIT, INC.
a Colorado corporation
By: /s/ John C. Walgamott
-------------------------------
Name: John C. Walgamott
-----------------------------
Title: President
----------------------------
Agent:
FIRST INTERSTATE BANK OF DENVER,
N.A., as Agent
By: /s/ Carol A. Ward
-------------------------------
Name: Carol A. Ward
-----------------------------
Title: Vice President
----------------------------
Lenders and Co-Agents:
FIRST INTERSTATE BANK OF DENVER,
N.A., as Lender
By: /s/ Carol A. Ward
-------------------------------
Name: Carol A. Ward
-----------------------------
Title: Vice President
----------------------------
55
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Lender and Co-Agent
By: /s/ Carl J. Jehldau, Jr.
-------------------------------
Name: Carl J. Jehldau, Jr.
-----------------------------
Title: Associate
----------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Lender and
Co-Agent
By: /s/ Richard E. Bryson
--------------------------------
Name: Richard E. Bryson
------------------------------
Title: Vice President
-----------------------------
ABN AMRO BANK N.V., as Lender
By: /s/ Lee-Lee Miao /s/ Leif H. Olsson
--------------------------------
Name: Lee-Lee Miao Leif H. Olsson
------------------------------
Title: Vice President Group Vice President
-----------------------------
NATIONSBANK OF TEXAS, N.A., as
Lender
By: /s/ William Guffey
--------------------------------
Name: William Guffey
------------------------------
Title: Vice President
-----------------------------
SWISS BANK CORPORATION, as Lender
By: /s/ Hans-Ueli Surber /s/ David L. Parrot
--------------------------------
Name: Hans-Ueli Surber David L. Parrot
------------------------------
Title: Executive Director David L. Parrot
-----------------------------
Merchant Banking Merchant Banking
56
<PAGE>
SCHEDULE 1.1.A
REVOLVING COMMITMENTS
<TABLE>
<CAPTION>
<S> <C>
Lender Revolving Commitment
First Interstate Bank of Denver, N.A. $ 75,000,000
Morgan Guaranty Trust Company of New York 60,000,000
Bank of America National Trust and Savings Association 60,000,000
ABN AMRO Bank N.V. 42,500,000
NationsBank of Texas, N.A. 42,500,000
Swiss Bank Corporation 20,000,000
Total $300,000,000
</TABLE>
57
<PAGE>
SCHEDULE 1.1.B
LENDER INFORMATION
Agent's Office:
FIRST INTERSTATE BANK OF DENVER, N.V., as Agent
633 Seventeenth Street
Mail Code (010)
Denver, Colorado 80270
Fax: (303) 293-5467
Phone: (303) 293-5398
Attention: Carol Ward
Agent's Account: First Interstate Bank of Denver, N.A.
Account # 012-0562-6560
ABA # 102000018
Lenders:
<TABLE>
<S> <C> <C>
Lender Domestic Lending Office Euro-Dollar Lending Office
First Interstate Bank
of Denver, N.A. 633 Seventeenth Street 633 Seventeenth Street
Mail Code (010) Mail code (010)
Denver, Colorado 80270 Denver, Colorado 80270
Fax: (303) 293-5467 Fax: (303) 293-5398
Telex: Telex:
Phone: (303) 293-5398 Phone: (303) 293-5398
Attention: Carol Ward Attention: Carol Ward
Morgan Guaranty Trust
Company of New York 60 Wall Street, 22nd Floor Nassau Bahamas Office
New York, New York c/o J.P. Morgan
10260-0060 Euro-Loan Servicing Unit
Fax: (212) 648-5014 500 Stanton Christiana Rd.
Telex: 177615 MGT UT or Newark, DE 19713-2107
620106 MGT UW Fax: (302) 634-
Phone: (212) 648-7638 Telex: 177425 MBDEL UT
Attention: David Ellis Phone: (302) 634-
Attention: David Ellis
Bank of America National Trust
and Savings Association Account Administration 5693 Account Administration 5693
1850 Gateway Blvd., 4th Floor 1850 Gateway Blvd., 4th Floor
Concord, CA 94520 Concord, CA 94520
Fax: (510) 675-7531 or -7532 Fax: (510) 675-7531 or -7532
Telex: Telex:
Phone: (510) 675-7347 Phone: (510) 675-7347
Attention: Paula Steeves Attention: Paula Steeves
58
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ABN AMRO Bank N.V.
Seattle Branch One Union Square One Union Square
600 University Street, 600 University Street,
Suite 2323 Suite 2323
Seattle, Washington Seattle, Washington
98101 98101
Fax: (206) 682-5641 Fax: (206) 682-5641
Telex: Telex:
Phone: (206) 654-0362 Phone: (206) 654-0362
Attention: Lee-Lee Miao Attention: Lee-Lee Miao
NationsBank of Texas, N.A. 444 S. Flower Street, 444 S. Flower Street,
Suite 1500 Suite 1500
Los Angeles, Los Angeles,
California 90071 California 90071
Fax: (213) 236-5815 Fax: (213) 236-5815
Telex: Telex:
Phone: (213) 236-4918 Phone: (213) 236-4918
Attention: William B.Guffey Attention: William B. Guffey
Swiss Bank Corporation
San Francisco Branch San Francisco Branch San Francisco Branch
101 California Street, 101 California Street
Suite 1700 Suite 1700
San Francisco, CA San Francisco, CA
94111-5884 94111-5884
Fax: (415) 989-7570 Fax: (415) 774-3425
Telex: Telex:
Phone: (415) 774-3425 Phone: (415) 774-3425
Attention: David Parrot Attention: David Parrot
</TABLE>
59
<PAGE>
SCHEDULE 1.1.D
EXISTING LIENS
None.
60
<PAGE>
SCHEDULE 3.1.2.
CLOSING DOCUMENTS
61
<PAGE>
SCHEDULE 4.1.
ORGANIZATION OF BORROWER AND SUBSIDIARIES
Borrower/Subsidiary Form and State of Organization
Nordstrom Credit, Inc. a Colorado corporation
(no subsidiaries) --
62
<PAGE>
SCHEDULE 4.5.
MATERIAL LITIGATION
None.
63
<PAGE>
SCHEDULE 9.5.
BORROWER INFORMATION
Address for Notices:
Nordstrom Credit, Inc.
13531 E. Caley
Englewood, CO 80111
Fax: (303)397-4775
Phone: (303)397-4700
Attention: Ms. Carol R. Simonson
Borrower Account (for the funding of Loans): Account # 1051299, First
Interstate Bank of Denver, N.A
64
<PAGE>
CREDIT AGREEMENT
among
NORDSTROM CREDIT, INC.,
THE LENDERS LISTED HEREIN,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Co-Agents,
and
FIRST INTERSTATE BANK OF DENVER, N.A.,
as Agent
June 23, 1995
$300,000,000
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
Exhibit A-1 Form of Revolving Loan Note
Exhibit A-3 Form of Bid Loan Note
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-3 Form of Notice of Conversion/Continuation
Exhibit E-4 Form of Bid Loan Quote Request
Exhibit E-5 Form of Bid Loan Quote
Exhibit E-7 Form of Notice of Responsible Officers
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-3 Form of Closing Officer's Certificate
Exhibit F-6 Form of Compliance Certificate
Exhibit G-1 Form of Opinion of Borrower's Counsel
Exhibit G-2 Form of Opinion of Agent's Counsel
Exhibit H Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1A Revolving Commitments
Schedule 1.1B Lender Information
Schedule 1.1D Existing Liens
Schedule 3.1.2. Closing Documents
Schedule 4.1. Organization of Borrower and Subsidiaries
Schedule 4.5. Material Litigation
Schedule 9.5. Borrower Information
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1 DEFINITIONS AND RELATED MATTERS 1
Section 1.1 Definitions 1
Section 1.2 Related Matters 13
ARTICLE 2 AMOUNTS AND TERMS OF THE CREDIT
FACILITIES 14
Section 2.1 Revolving Loans 14
Section 2.2 Bid Loans 16
Section 2.3 Use of Proceeds 18
Section 2.4 Interest; Interest Periods;
Conversion/Continuation 18
Section 2.5 Notes, Etc 21
Section 2.6 Fees 21
Section 2.7 Termination, Reduction and
Extension of Revolving Commitments 21
Section 2.8 Repayments and Prepayments 22
Section 2.9 Manner of Payment 23
Section 2.10 Pro Rata Treatment; Application of
Payments 23
Section 2.11 Mandatory Suspension and Conversion
of Euro-Dollar Rate Loans 24
Section 2.12 Regulatory Changes 25
Section 2.13 Compensation for Funding Losses 26
Section 2.14 Certificates Regarding Yield
Protection, Etc. 26
Section 2.15 Applicable Lending Office; Discretion
of Lenders as to Manner of Funding 26
ARTICLE 3 CONDITIONS TO LOANS 27
Section 3.1 Closing Conditions 27
Section 3.2 Conditions Precedent to Loans 27
ARTICLE 4 REPRESENTATIONS AND WARRANTIES 28
Section 4.1 Organization, Powers and Good
Standing 28
Section 4.2 Authorization, Binding Effect, No
Conflict, Etc 28
Section 4.3 Financial Information 29
Section 4.4 No Material Adverse Changes 30
Section 4.5 Litigation 30
Section 4.6 Agreements; Applicable Law 30
Section 4.7 Taxes 31
Section 4.8 Governmental Regulation 31
Section 4.9 Margin Regulations 31
Section 4.10 Employee Benefit Plans. 31
Section 4.11 Disclosure 31
ARTICLE 5 AFFIRMATIVE COVENANTS OF THE BORROWER 32
Section 5.1 Financial Statements and Other
Reports 32
Section 5.2 Records and Inspection 34
Section 5.3 Corporate Existence, Etc 34
Section 5.4 Payment of Taxes and Claims 34
Section 5.5 Maintenance of Properties 34
Section 5.6 Maintenance of Insurance 35
Section 5.7 Conduct of Business; Compliance
with Law 35
Section 5.8 Further Assurances 35
Section 5.9 Future Information 35
Section 5.10 Subordination of Intercompany Debt 35
ARTICLE 6 NEGATIVE COVENANTS OF THE BORROWER 36
Section 6.1 Liens 36
Section 6.2 Restricted Payments 37
Section 6.3 Prepayment of Debt 37
Section 6.4 Investments 38
Section 6.5 Financial Covenants. 38
Section 6.6 Restriction on Fundamental
Changes 39
Section 6.7 Asset Dispositions 39
Section 6.8 Transactions with Affiliates 39
Section 6.9 Amendments of Certain Agreements 40
ARTICLE 7 EVENTS OF DEFAULT, ETC. 40
Section 7.1 Events of Default 40
Section 7.2 Remedies 43
ARTICLE 8 THE AGENT AND THE LENDERS 43
Section 8.1 Authorization and Action 43
Section 8.2 Exculpation; Agent's Reliance; Etc 44
Section 8.3 Agent and Affiliates 45
Section 8.4 Lender Credit Decision 45
Section 8.5 Indemnification 45
Section 8.6 Successor Agent 45
Section 8.7 Excess Payments 46
Section 8.8 Lender Parties 46
Section 8.9 Payments; Availability of Funds;
Certain Notices. 46
Section 8.10 Obligations of Lender Parties Several;
Enforcement by the Agent 47
Section 8.11 Co-Agents 48
ARTICLE 9 MISCELLANEOUS 48
Section 9.1 Expenses 48
Section 9.2 Indemnity 48
Section 9.3 Waivers; Modifications in Writing 49
Section 9.4 Cumulative Remedies; Failure or
Delay 49
Section 9.5 Notices, Etc 49
Section 9.6 Successors and Assigns 50
Section 9.7 Choice of Forum 51
Section 9.8 Set Off 52
Section 9.9 Changes in Accounting Principles 52
Section 9.10 Survival of Agreements, Representations
and Warranties 52
Section 9.11 Execution in Counterparts 52
Section 9.12 Complete Agreement 52
Section 9.13 Limitation of Liability 53
Section 9.14 WAIVER OF TRIAL BY JURY 54
</TABLE>
