EXHIBIT 10.17
FIRST AMENDMENT TO BUSINESS ACCOUNT OPERATING AGREEMENT
This First Amendment to Business Account Operating Agreement, dated as
of October 1, 2001 (the "Amendment"), between Nordstrom, Inc., a Washington
corporation ("Nordstrom") and Nordstrom Credit, Inc., a Colorado corporation
("Credit"), amends and supplements that certain Business Account Operating
Agreement, dated as of February 1, 1997 (the "Agreement"). Capitalized terms
used herein but not defined herein shall have the meanings ascribed to such
terms in the Agreement.
Nordstrom and Credit wish to amend the Agreement, as set forth in this
Amendment.
Therefore, in consideration of the mutual covenants and conditions
contained herein, the parties hereby amend and supplement the Agreement as
follows:
1. The third recital on the first page is deleted in its entirety.
2. Article I "Definitions" of the Agreement is hereby amended by
deleting in its entirety the second sentence from the definition of
"Receivable".
3. Section 2.01(f) of the Agreement is amended by deleting the
existing provision in its entirety and replacing it with the following new
provision:
"(f) Credit shall purchase all Receivables without any
recourse to Nordstrom with respect to any Receivable which is
uncollectible or is accounted for as a bad debt."
4. The following new provisions are added immediately following
Section 2.01(f):
"(g) The parties hereto intend that the conveyance of
Nordstrom's right, title and interest in and to the Receivables shall
constitute an absolute sale, conveying good title free and clear of
any Liens (other than the Lien relating to a consignment of product
sold in certain Nordstrom retail locations (the "Consignment") which
Xxxx Xxxxxxxxx undertakes to have released or Nordstrom will make
other arrangements satisfactory to Credit), claims, encumbrances or
rights of others from Nordstrom to Credit. It is the intention of the
parties hereto that the arrangements with respect to the Receivables
shall constitute a purchase and sale of such Receivables and not a
loan. In the event, however, that it were to be determined that the
transactions evidenced hereby constitute a loan and not a purchase
and sale, it is the intention of the parties hereto that this
Agreement shall constitute a security agreement under applicable law,
and that Nordstrom shall be deemed to have granted and does hereby
grant to Credit a first priority perfected security interest, in all
of Nordstrom's right, title and interest, whether owned on the
Closing Date or thereafter acquired, in, to and under the Receivables
and all money, accounts, payment intangibles, chattel paper,
instruments, documents, goods, investment property, deposit accounts,
certificates of deposit, letters of credit and advices of credit
consisting of, arising from or related to the Receivables and all
proceeds (including "proceeds" as defined in the Uniform Commercial
Code (the "UCC") thereof to secure the obligations of Nordstrom
hereunder.
(h) Nordstrom makes the following representations and
warranties to Credit. The representations and warranties speak as of
the date of this Amendment and as of each subsequent date Receivables
are transferred. Such representations and warranties shall survive
the sale, transfer and assignment of the Receivables to Nordstrom
Private Label Credit Card Master Note Trust (the "Trust"), the pledge
thereof to Xxxxx Fargo Bank Minnesota, N.A., as Indenture Trustee
(the "Indenture Trustee") and the termination of this Agreement and
shall not be waived by any party hereto unless the Rating Agency
Condition (as defined in the Indenture, dated a of October 1, 2001
(the "Indenture") between the Trust and the Indenture Trustee) is
satisfied.
(i) This Agreement creates a valid and
continuing security interest (as defined in the applicable
UCC) in the Receivables in favor of Credit, which security
interest is prior to all other Liens other than the Lien
of the Indenture, and is enforceable as such as against
creditors of and purchasers from Nordstrom.
(ii) The Receivables constitute "accounts"
within the meaning of the applicable UCC.
(iii) Nordstrom owns and has good and
marketable title to the Receivables free and clear of any
Lien (other than the Lien relating to the Consignment),
claim or encumbrance of any Person.
(iv) Nordstrom has caused or will have caused,
on or before November 10, 2001, the filing of all
appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in the
Receivables granted to Credit hereunder.
(v) Other than the security interest granted to
Credit pursuant to this Agreement, Nordstrom has not
pledged, assigned, sold, granted a security interest in,
or otherwise conveyed any of the Receivables. Nordstrom
has not authorized the filing of and is not aware of any
financing statements against Nordstrom that include a
description of collateral covering the Receivables other
than the Lien relating to the Consignment and any
financing statement relating to the security interest
granted to Credit hereunder or that has been terminated.
Nordstrom is not aware of any judgment or tax lien filings
against Nordstrom."
5. Article III is amended by deleting in its entirety and replacing
it with the following new provision:
"Section 3.01 Servicing of Receivables. Nordstrom fsb will service
the Receivables, and Nordstrom will compensate Nordstrom fsb for
servicing such Receivables, on the same terms as those governing the
servicing of receivables in that certain Operating Agreement for
Proprietary Accounts and Receivables, dated as of August 30, 1991,
between Nordstrom fsb and Nordstrom Credit, Inc., as amended by a
First Amendment dated March 1, 2000 and a Second Amendment dated
October 1, 2001 (collectively, the "Operating Agreement"); provided,
however, that the provisions of Article II and the daily settlement
provisions of Article IV of the Operating Agreement will not apply to
the
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Receivables; and, further provided that Nordstrom fsb's rights and
obligations to service the Receivables will only exist so long as the
Receivables are owned by Nordstrom Credit, Inc."
6. The following provision is added immediately following Section
7.08:
"Section 7.09 Nonpetition Covenant. Notwithstanding any
prior termination of this Agreement, Nordstrom shall not, prior to
the date which is one year and one day after the termination of this
Agreement, acquiesce, petition or otherwise invoke or cause Credit or
Nordstrom Credit Card Master Note Trust to invoke the process of any
bankruptcy reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under the United States federal or
state bankruptcy or similar law.
7. Except as specifically amended hereby, the original terms and
conditions of the Agreement are unchanged and in full force and effect.
8. This Agreement shall be governed and construed in accordance with
the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
NORDSTROM, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: President
NORDSTROM CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
Acknowledged and Agreed
NORDSTROM fsb
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
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