PARTICIPATION AGREEMENT
This Participation Agreement dated as of August 14, 1996 is between
Nordstrom National Credit Bank ("NNCB"), a national banking association
with its charter address in Colorado, and Nordstrom Credit, Inc., a
corporation organized and existing under the laws of the State of
Colorado ("NCI").
WITNESSETH
WHEREAS, NNCB, as Transferor, NNCB, as Servicer, and Norwest Bank
Colorado, N.A., as Trustee (the "Trustee") have or will enter into a
Master Pooling and Servicing Agreement, dated as of August 14, 1996, and
related documents, including any certificate series supplement,
(collectively, the "Pooling and Servicing Agreement"), pursuant to which
certain Receivables will be conveyed to the Nordstrom Credit Card Master
Trust in exchange for (i) certain investor certificates that will be
either sold to investors or held by NCI and (ii) an exchangeable
transferor certificate (the "Exchangeable Transferor Certificate") that
will be held by NNCB, and
WHEREAS, NNCB wishes to sell, and NCI wishes to purchase, an undivided
participation interest in the Exchangeable Transferor Certificate on the
terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1. Definitions
(a)The following terms, when capitalized in this Agreement and used
either in the singular or the plural, shall have the following meanings:
"Net Investment" means, as of any day, in respect of the Participation
acquired by NCI, an amount equal to the sum of (i) the initial purchase
price paid by NCI for its Participation hereunder, less (ii) any
payments by NNCB to NCI pursuant to Section 2(c) or (d) with respect to
any decrease in the Transferor Amount or NCI's Participation, plus (iii)
any payments by NCI to NNCB pursuant to Section 2(b) or credits by NNCB
to NCI pursuant to Section 2(c) with respect to any increase in NCI's
Participation Percentage.
"Participation" means the undivided ownership interest in the
Exchangeable Transferor Certificate purchased from time to time by NCI
pursuant to Section 2(a) hereof.
"Participation Percentage" means, as of any day, in respect of the
Participation acquired by NCI in the Exchangeable Transferor
Certificate, the percentage interest in the Exchangeable Transferor
Certificate then held by NCI which shall equal the percentage equivalent
of a fraction, the numerator of which is equal to NCI's Net Investment
on such day and the denominator of which is equal to the Transferor
Amount on such day.
"Purchase Date" shall mean August 14, 1996.
"Transferor Interest" shall mean the interest in the Trust represented
by the Exchangeable Transferor Certificate, including the right to
receive Collections and other amounts to be paid to the Transferor at
the times and in the amounts specified from time to time in the Pooling
and Servicing Agreement.
(b)Capitalized terms used but not otherwise defined in this Agreement
shall have the same meanings as used in the Pooling and Servicing
Agreement.
Section 2. Sale of Participation
(a)NNCB hereby agrees to sell to NCI without recourse, representation or
warranty whatsoever except as expressly provided herein, and NCI hereby
agrees to purchase from NNCB on the Purchase Date, or such other date or
dates as the parties may agree, an undivided ownership interest in the
Exchangeable Transferor Certificate and the Transferor Interest equal to
the Participation Percentage thereof, including all amounts allocated to
the holder of the Exchangeable Transferor Certificate pursuant to the
Pooling and Servicing Agreement and the benefit of all representations
and warranties and agreements made for the benefit of the holder of the
Exchangeable Transferor Certificate therein.
(b)The initial price to be paid by NCI shall be an amount agreed between
the parties at the time such sale occurs pursuant to this Agreement.
NCI may from time to time pay to NNCB additional amounts to be
determined by the parties in consideration for increasing NCI's
Participation Percentage.
(c)In consideration of the acquisition by NCI of the Participation
hereunder, NNCB agrees to pay or credit to NCI on each day on which NNCB
receives a payment in respect of the Exchangeable Transferor Certificate
(each such day a "Settlement Date"), an amount equal to the product of
(i) NCI's Participation Percentage as of such date and (ii) the amount
of any decrease in the Transferor Amount occurring as a result of
payments received by NNCB, as the holder of the Exchangeable Transferor
Certificate, from the Servicer, the Trustee or any other person in
respect of the Exchangeable Transferor Certificate (including any
proceeds from the sale of Investor Certificates of any Series issued
following the tender of the Exchangeable Transferor Certificate and the
reissue thereof as part of any Exchange pursuant to the Pooling and
Servicing Agreement) during the period since the immediately preceding
Settlement Date. NNCB shall be permitted to engage in any Exchange
without obtaining the permission of NCI.
(d)NNCB may, from time to time, pay to NCI amounts to be determined by
the parties in consideration for decreasing NCI's Participation
Percentage; provided, however, that NNCB shall be under no obligation to
repurchase any portion of NCI's Participation.
(e)NNCB agrees to pay or credit to NCI, on each Settlement Date, an
amount equal to the product of NCI's Participation Percentage and the
net amount of all Collections and other distributions received by NNCB
as the holder of the Exchangeable Transferor Certificate during the
period since the immediately preceding Settlement Date.
(f)Notwithstanding the foregoing, the parties may agree to settle
monthly on each Distribution Date under the Pooling and Servicing
Agreement or another date, provided that amounts owed pursuant to
Section 2(c) above shall be paid or credited on the day on which NNCB
receives such payments referred to in Section 2(c).
Section 3. Delivery of Documents. NNCB shall deliver to NCI a
Participation Certificate in the form set forth in Annex I hereto, dated
as of the Purchase Date, representing an undivided interest, to the
extent of the Participation Percentage, in all of NNCB's right, title
and interest in and to the Exchangeable Transferor Certificate and the
Transferor Interest. On each Settlement Date, NNCB shall deliver a
statement (the "Settlement Statement") in the form of Annex II hereof,
setting forth the net amount of funds owing by NCI to NNCB or by NNCB to
NCI. Such statement shall be appropriately modified if there are
settlements occurring more frequently than monthly on Distribution Dates
under the Pooling and Servicing Agreement.
Section 4. NNCB Required to Furnish Certain Information. NNCB shall
submit to NCI upon request a copy of the Pooling and Servicing Agreement
and all other documents relating to the transactions contemplated
therein. NCI shall have the right from time to time at reasonable
intervals to require NNCB to supply such information as NCI may
reasonably request respecting the Exchangeable Transferor Certificate
and NCI's participation interest therein. NNCB shall deliver to NCI
copies of all reports, notices, certificates, or other materials
received or delivered by it pursuant to the Pooling and Servicing
Agreement. NNCB hereby agrees to consult with NCI prior to exercising
any rights as the holder of the Exchangeable Transferor Certificate or
as Transferor under the Pooling and Servicing Agreement.
Section 5. Termination. This Agreement shall automatically terminate
following the surrender of the Exchangeable Transferor Certificate and
termination of the Trust pursuant to the Pooling and Servicing
Agreement. Either party may terminate this Agreement at any time upon
30 days prior written notice thereof to the other. Following such
termination, settlement between the parties shall occur by the payment
of any amounts due to NCI on each following Distribution Date until the
Participation Percentage shall be equal to zero, or in such other manner
as the parties may agree.
Section 6. Representation and Warranties of and Agreement By NCI.
(a)NCI is a corporation duly organized and validly existing in good
standing under the laws of the State of Colorado, and has full corporate
power, authority and legal right to execute, deliver and perform its
obligations under this Agreement and the transactions contemplated under
this Agreement and, in all material respects, to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted.
(b)The execution and delivery of this Agreement and the consummation of
the transactions provided for in this Agreement have been duly
authorized by NCI by all necessary corporate action on the part of NCI.
(c)This Agreement constitutes a legal, valid and binding obligation of
NCI, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(d)NCI represents and warrants that it is acquiring the Participation
for its own accounts and not with a view toward, or for sale in
connection with, any distribution thereof.
Section 7. Representations and Warranties of NNCB.
(a)NNCB is a national banking association duly organized and validly
existing in good standing and has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this
Agreement and the transactions contemplated under this Agreement and, in
all material respects, to own its properties and conduct its business as
such properties are presently owned and such business is presently
conducted.
(b)The execution and delivery of this Agreement and the consummation of
the transactions provided for in this Agreement have been duly
authorized by NNCB by all necessary corporate action on the part of
NNCB.
(c)This Agreement constitutes a legal, valid and binding obligation of
NNCB, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(d)NNCB represents that this Agreement together with the Participation
Certificate provided for in Section 3 will vest in NCI an undivided
interest, to the extent of the Participation Percentage, in all of its
right, title and interest in and to, the Exchangeable Transferor
Certificate and in and to the proceeds thereof, including proceeds
resulting from any Exchange, free from liens, encumbrances or claims of
third parties.
Section 8. Maintenance of Records. NNCB agrees to maintain or cause to
be maintained accurate and complete records with respect to the
Exchangeable Transferor Certificate and to deliver to NCI on demand
copies of any records required by NCI in connection with NCI's
enforcement of its rights under this Agreement.
Section 9. Exculpation. Except as otherwise set forth in this
Agreement, NNCB's sole obligation hereunder shall be to distribute, as
aforesaid, to NCI the Participation Percentage of any payment received
by NNCB relating to the Exchangeable Transferor Certificate as and when
received by NNCB. No other obligation or duty is assumed by NNCB beyond
the foregoing, nor shall any other obligation or duty be deemed to be
implied. NNCB shall not have any fiduciary relationship with generality
of the foregoing. Except with respect to representations and warranties
set forth in this Agreement, NNCB does not assume, nor shall NNCB or any
of its officers, directors, employees or agents have any responsibility
or liability, expressed or implied, to NCI for:
(i)Any action taken or omitted, whether by the Trustee, the Servicer, or
by any other person in connection with any Receivable except for NNCB's
own gross negligence or willful misconduct;
(ii)The authorization, execution, effectiveness, enforceability,
genuineness or validity of any Receivable, the Pooling and Servicing
Agreement or any document, instrument or other writing in connection
therewith, except with respect to the authorization, execution,
effectiveness, enforceability, genuineness or validity by or against
NNCB of any such document, instrument or other writing executed by NNCB;
(iii)The genuineness, truthfulness or accuracy of any recitals,
statements, representations or warranties made in or in connection with
any Receivables, or the Pooling and Servicing Agreement or any other
document, instrument or other writing in connection therewith, except
for any representation and warranty of NNCB made in any such document,
instrument or writing executed by NNCB;
(iv)The financial condition of any Obligor or for any credit or other
information regarding any Obligor or card issuer; or
(v)The performance of any of the obligations of any person (including
any Obligor) primarily or secondarily liable with respect to any
Receivable.
Section 10. No Petition. Each party hereto agrees that, prior to the
date which is one year and one day after the payment in full of all
investor certificates issued pursuant to the Pooling and Servicing
Agreement, it shall not institute against, or join any other person in
instituting against, the other party hereto any bankruptcy,
reorganization, insolvency or liquidation proceedings or other similar
proceeding under the laws of the United States or any state thereof.
Section 11. Modification; Successors and Assigns. No amendment or
modification of this Agreement shall be effective unless in writing and
signed by the party against whom enforcement of such amendment or
modification is sought. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. NCI may not assign, transfer or participate any of
its rights or obligations hereunder or the Participation without the
prior written consent of NNCB.
Section 12. Notices. Any notice required or permitted by this
Agreement shall be deemed to have been duly and properly given when
delivered or sent by (i) certified mail, return receipt requested, (ii)
hand delivery, or (iii) telecopier (with oral confirmation of receipt)
and addressed as follows:
If to NCI:
Nordstrom Credit, Inc.
00000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Karmill
with a copy to:
Nordstrom Credit, Inc.
00000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xx Xxxxxx, Esq.
If to NNCB:
Nordstrom National Credit Bank
00000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Karmill
with a copy to:
Nordstrom National Credit Bank
00000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xx Xxxxxx, Esq.
or to such other address as either party hereto may furnish to the other
in writing at any time.
Section 13. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the law of the State of Colorado.
Section 14. Entire Agreement. There are no restrictions, promises,
warranties, covenants, undertakings or representations other than those
expressly set forth herein. Nothing in this Agreement or otherwise
shall be construed as making NNCB responsible in any way or to any
extent for the payment of any principal, interest or premium on the
Exchangeable Transferor Certificate, the Participation or any Receivable
or for the fulfillment of any obligation or commitment of the Trustee or
the Servicer under the Pooling and Servicing Agreement, or any other
person, except to the extent of NNCB's obligations herein.
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers hereunto
authorized, as of the date and year first above written.
NORDSTROM NATIONAL CREDIT BANK
By:
Name:
Title:
NORDSTROM CREDIT, INC.
By:
Name:
Title:
Annex I to the
Participation Agreement
PARTICIPATION CERTIFICATE
Nordstrom National Credit Bank ("NNCB") has transferred and assigned to
Nordstrom Credit, Inc., pursuant to and on the terms and conditions set
forth in the Participation Agreement dated as of August 14, 1996 (terms
capitalized herein being used as defined in said Agreement), an
undivided interest equal to the Participation Percentage in all of the
right, title and interest of NNCB in and to the Exchangeable Transferor
Certificate and the Transferor Interest, and all representations and
warranties and agreements made for the benefit of the holder of the
Exchangeable Transferor Certificate in the Pooling and Servicing
Agreement, and any proceeds of any of the foregoing, issued pursuant to
the Pooling and Servicing Agreement.
NORDSTROM NATIONAL CREDIT BANK
By:
Name:
Title:
Annex II to the
Participation Agreement
FORM OF SETTLEMENT STATEMENT
For Settlement Period Beginning
and Ending
Settlement Date:
Nordstrom National Credit Bank ("NNCB") pursuant to the Participation
Agreement (the "Participation Agreement"), dated as of August 14, 1996,
between NNCB and Nordstrom Credit, Inc. ("NCI"), hereby states as
follows:
Capitalized terms used in this Settlement Statement have their
respective meanings in the Participation Agreement and, unless otherwise
noted, are as of the current Determination Date. This Settlement
Statement is being delivered pursuant to Section 3 of the Participation
Agreement.
Balances
1.NCI's Net Investment as of the last day of the
preceding settlement period ............ .....$
0.Xxx payments/credits to/from NCI in current
settlement period pursuant to Section 2(b), 2(c) or 2(d) of the
Participation Agreement increasing (decreasing) NCI's Net
Investment $
3.NCI's Net Investment as of the last day of this
settlement period ................$
4.Transferor Amount as of the last day of the
preceding settlement period $
5.Transferor Amount as of the last day of this
settlement period $
6.Participation Percentage as of the last day of the
preceding settlement period $
7.Participation Percentage as of the last day of this
settlement period $
0.Xxx Collections and other distributions in respect
of the Exchangeable Transferor Certificate since the end of the
preceding settlement period $
Settlement
9.Payment/credit due to (from) NCI for settlement
period for decreasing (increasing) in NCI's Net Investment
pursuant to Sections 2(b), 2(c) and 2(d) of the Participation
Agreement $
10.Payment/credit due to (from) NCI pursuant to
Section 2(c) of the Participation Agreement with respect to
Collections and other distributions in respect of the
Exchangeable Transferor Certificate $
00.Xxx payment/credit due to (from) NCI $
IN WITNESS WHEREOF, NNCB has caused this Settlement Statement to be
executed by its duly authorized officers this day of 19___.
NORDSTROM NATIONAL CREDIT BANK
By:
Name:
Title:
Approved:
NORDSTROM CREDIT, INC.
By:
Name:
Title:
