exv4w6



 





Exhibit 4.6



 




NOTE PURCHASE AGREEMENT




among




NORDSTROM CREDIT CARD RECEIVABLES II LLC, as Transferor,




NORDSTROM FSB, as Servicer,




NORDSTROM CREDIT, INC.,




FALCON ASSET SECURITIZATION COMPANY LLC, as the Conduit Purchaser,




JPMORGAN CHASE BANK, N.A., as Agent for the Purchasers,




and




JPMORGAN CHASE BANK, N.A., as a Committed Purchaser




dated as of May 2, 2007



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	SECTION 1.01
	 	Certain Defined Terms	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II PURCHASE AND SALE	 	 	9	 
	SECTION 2.01
	 	Purchase and Sale of the Class A Note	 	 	9	 
	SECTION 2.02
	 	Initial Purchase Price	 	 	10	 
	SECTION 2.03
	 	Incremental Fundings	 	 	10	 
	SECTION 2.04
	 	Extension of Purchase Expiration Date	 	 	10	 
	SECTION 2.05
	 	Reduction or Increase of the Class A Note Maximum Principal Balance	 	 	10	 
	SECTION 2.06
	 	Calculation of Monthly Interest	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE III CLOSING	 	 	12	 
	SECTION 3.01
	 	Closing	 	 	12	 
	SECTION 3.02
	 	Transactions to be Effected at the Closing	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT TO PURCHASE ON THE CLOSING DATE	 	 	12	 
	SECTION 4.01
	 	Performance by the Transferor, Issuer and Servicer	 	 	12	 
	SECTION 4.02
	 	Representations and Warranties	 	 	12	 
	SECTION 4.03
	 	Corporate Documents	 	 	13	 
	SECTION 4.04
	 	Opinions of Counsel to Nordstrom fsb, Nordstrom Credit, Inc. and the Transferor	 	 	13	 
	SECTION 4.05
	 	Opinions of Counsel to the Owner Trustee	 	 	13	 
	SECTION 4.06
	 	Opinions of Counsel to the Indenture Trustee	 	 	13	 
	SECTION 4.07
	 	Financing Statements	 	 	13	 
	SECTION 4.08
	 	Documents	 	 	14	 
	SECTION 4.09
	 	No Actions or Proceedings	 	 	14	 
	SECTION 4.10
	 	Approvals and Consents	 	 	14	 
	SECTION 4.11
	 	Officer's Certificates	 	 	14	 
	SECTION 4.12
	 	Documents Relating to Credit Enhancement	 	 	14	 
	SECTION 4.13
	 	Accounts	 	 	14	 
	SECTION 4.14
	 	Other Documents	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE NORDSTROM PARTIES	 	 	14	 
	SECTION 5.01
	 	Transfer and Servicing Agreement	 	 	14	 
	SECTION 5.02
	 	Corporate Existence and Power	 	 	15	 
	SECTION 5.03
	 	Corporate and Governmental Authorization; Contravention	 	 	15	 
	SECTION 5.04
	 	Binding Effect	 	 	15	 
	SECTION 5.05
	 	No Conflict	 	 	15	 
	SECTION 5.06
	 	No Proceedings	 	 	15	 
	SECTION 5.07
	 	Transferor Amount	 	 	16	 
	SECTION 5.08
	 	No Pay Out Event	 	 	16	 






i









 







	 	 	 	 	 	 	 
	SECTION 5.09
	 	Accuracy of Information	 	 	16	 
	SECTION 5.10
	 	Taxes	 	 	16	 
	SECTION 5.11
	 	Use of Proceeds	 	 	16	 
	SECTION 5.12
	 	Value	 	 	16	 
	SECTION 5.13
	 	ERISA	 	 	17	 
	SECTION 5.14
	 	Place of Business	 	 	17	 
	SECTION 5.15
	 	Investment Company	 	 	17	 
	SECTION 5.16
	 	No Liens	 	 	17	 
	SECTION 5.17
	 	Authorization	 	 	17	 
	SECTION 5.18
	 	No Amendments	 	 	17	 
	SECTION 5.19
	 	No Claims	 	 	17	 
	SECTION 5.20
	 	Agreements Enforced	 	 	17	 
	SECTION 5.21
	 	Class A Note	 	 	17	 
	SECTION 5.22
	 	Issuer Existence and Authorization	 	 	18	 
	SECTION 5.23
	 	Financial Condition of Nordstrom Parties	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE CONDUIT PURCHASER AND COMMITTED PURCHASERS	 	 	18	 
	SECTION 6.01
	 	Organization	 	 	18	 
	SECTION 6.02
	 	Authority, etc	 	 	18	 
	SECTION 6.03
	 	Securities Act	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE VII COVENANTS	 	 	19	 
	SECTION 7.01
	 	Affirmative Covenants of the Nordstrom Parties	 	 	19	 
	SECTION 7.02
	 	Covenants	 	 	23	 
	SECTION 7.03
	 	Negative Covenants of the Nordstrom Parties	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE VIII ADDITIONAL COVENANTS	 	 	24	 
	SECTION 8.01
	 	Legal Conditions to Closing	 	 	24	 
	SECTION 8.02
	 	Expenses	 	 	24	 
	SECTION 8.03
	 	Mutual Obligations	 	 	24	 
	SECTION 8.04
	 	Restrictions on Transfer	 	 	24	 
	SECTION 8.05
	 	Consents, etc	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE IX INDEMNIFICATION	 	 	25	 
	SECTION 9.01
	 	Indemnities by the Nordstrom Parties	 	 	25	 
	SECTION 9.02
	 	Procedure	 	 	27	 
	SECTION 9.03
	 	Defense of Claims	 	 	27	 
	SECTION 9.04
	 	Indemnity for Taxes, Reserves and Expenses	 	 	28	 
	SECTION 9.05
	 	Costs, Expenses, Taxes. Broken Funding Cost and Increased Costs under Note Purchase	 	 	 	 
	 
	 	Agreement and Program Facility	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE X THE AGENT	 	 	30	 
	SECTION 10.01
	 	Delegation of Duties	 	 	30	 
	SECTION 10.02
	 	Exculpatory Provisions	 	 	30	 
	SECTION 10.03
	 	Reliance by Agent	 	 	31	 






ii









 






	 	 	 	 	 	 	 
	SECTION 10.04
	 	Non-Reliance on Agent and Other Purchasers	 	 	31	 
	SECTION 10.05
	 	Reimbursement and Indemnification	 	 	31	 
	SECTION 10.06
	 	Agent in its Individual Capacity	 	 	31	 
	SECTION 10.07
	 	Successor Agent	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	32	 
	SECTION 11.01
	 	Waivers and Amendments	 	 	32	 
	SECTION 11.02
	 	Notices	 	 	32	 
	SECTION 11.03
	 	Binding Effect; Assignability	 	 	32	 
	SECTION 11.04
	 	Provision of Documents and Information	 	 	33	 
	SECTION 11.05
	 	GOVERNING LAW; JURISDICTION	 	 	35	 
	SECTION 11.06
	 	No Proceedings	 	 	35	 
	SECTION 11.07
	 	Execution in Counterparts	 	 	36	 
	SECTION 11.08
	 	No Recourse	 	 	36	 
	SECTION 11.09
	 	Limited Recourse	 	 	36	 
	SECTION 11.10
	 	Survival	 	 	36	 
	SECTION 11.11
	 	Tax Characterization	 	 	36	 
	SECTION 11.12
	 	Limited Obligation of Transferor	 	 	37	 
	 
	 	 	 	 	 	 
	SCHEDULE I
	 	Address for Notices	 	 	 	 






iii









 





     NOTE PURCHASE AGREEMENT (“Note Purchase Agreement”) dated as of May 2, 2007, among
Nordstrom Credit Card Receivables II LLC (the “Transferor”), Nordstrom fsb
(“Servicer”), Nordstrom Credit, Inc., the Conduit Purchaser, the Agent and the Committed
Purchaser named herein.



     The parties hereto agree as follows:



ARTICLE I




DEFINITIONS




          SECTION 1.01 Certain Defined Terms. Capitalized terms used herein without definition
shall have the meanings set forth in the Transfer and Servicing Agreement (as defined below) or the
Indenture Supplement (as defined below), as applicable. If a term used herein is defined both in
the Transfer and Servicing Agreement and the Indenture Supplement, it shall have the meaning set
forth in the Indenture Supplement. Additionally, the following terms shall have the following
meanings:




          “Accrual Period” means a period of time from and including the first day of a calendar
month and ending at the close of business on the last day of such calendar month; provided,
however, that the initial Accrual Period hereunder means the period from (and including)
the Closing Date to (and including) the last day of the calendar month thereafter.




          “Act” means the Securities Act of 1933, as amended.




          “Administrative Agent” means JPMorgan Chase Bank in its capacity as administrative
agent for the Conduit Purchaser or any other RIC.




          “Agent” means JPMorgan Chase Bank in its capacity as agent for the Purchasers, and any
successor thereto appointed pursuant to Article X.




          “Aggregate Reduction” means any reduction to the Class A Note Maximum Principal
Balance pursuant to Section 2.05(a).




          “Alternate Rate” means, for any Tranche Period, with respect to any Funding Tranche,
an interest rate per annum equal to LIBOR; provided, however, that in the case of,





          (i) any Tranche Period on or prior to the first day of which the Agent shall have been
notified by the Committed Purchaser or a Liquidity Purchaser that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful, or any
central bank or other Governmental Authority asserts that it is unlawful, for the Committed
Purchaser or such Liquidity Purchaser to fund any Funding Tranche (based on LIBOR) set forth
above (and the Conduit Purchaser or such Liquidity Purchaser shall not have subsequently
notified the Agent that such circumstances no longer exist),




          (ii) any Tranche Period of one to (and including) 13 days,



 









 






          (iii) any Tranche Period relating to a Funding Tranche which is less than $1,000,000,
and




          (iv) any Tranche Period with respect to which the Alternate Rate, for any reason,
becomes applicable on notice to the Agent of less than three Business Days,


the “Alternate Rate” for each such Tranche Period shall be an interest rate per annum equal to the
Prime Rate in effect on each day of such Tranche Period. The “Alternate Rate” for any day on or
after the occurrence of a Pay Out Event shall be an interest rate equal to the Default Rate.




          “Applicable Indemnifying Party” has the meaning specified in Section 9.02.




          “Asset Purchase Agreement” means the Asset Purchase Agreement dated as of the date
hereof among the Conduit Purchaser, the Agent and each of the Purchasers signatory thereto, as the
same may from time to time be amended, restated, supplemented or otherwise modified.




          “Assignment and Acceptance” means an assignment and acceptance agreement entered into
by a Purchaser, a permitted assignee and the Agent for such Purchaser, pursuant to which such
assignee may become a party to this Note Purchase Agreement.




          “Broken Funding Cost” means for any Funding Tranche which: (i) has its outstanding
balance reduced without compliance by the Transferor with the notice requirements hereunder, (ii)
does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice,
or (iii) is assigned to a Liquidity Purchaser or terminated prior to the date on which it was
originally scheduled to end, an amount equal to the excess, if any, of (A) the CP Costs or Yield
(as applicable) that would have accrued during the remainder of the Tranche Periods or the tranche
periods for Commercial Paper determined by the Agent to relate to such Funding Tranche (as
applicable) subsequent to the date of such reduction, assignment or termination (or in respect of
clause (ii) above, the date such Aggregate Reduction was designated to occur pursuant to
the Reduction Notice) of the outstanding balance of such Funding Tranche if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been delivered, over
(B) the sum of (x) the amount of CP Costs or Yield actually accrued during the remainder of such
period, to the extent such Funding Tranche is allocated to another Tranche Period and (y) to the
extent such Funding Tranche is not allocated to another Tranche Period, the income, if any,
actually received during the remainder of such period by the holder of such Funding Tranche from
investing the portion of such Funding Tranche not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Transferor the amount of such excess. The Agent
will use reasonable efforts to allocate the Class A Note Principal Balance to tranche periods for
Commercial Paper in a manner that will minimize Broken Funding Costs (provided,
however, that the selection of such tranche periods shall at all times remain in the
control of such Agent).




          “Class A Additional Amounts” means all amounts owed by a Nordstrom Party pursuant to
Article IX plus any Broken Funding Cost owed to the Purchasers pursuant to Section




2









 







4.03 of the Indenture Supplement plus any other amounts due and owing to the Purchasers under
the Series Documents.




          “Class A Monthly Interest” means, for any Accrual Period, the sum of (a) as to the
Conduit Purchaser, the sum of all accrued CP Costs plus all accrued fees specified in the Fee
Letter as payable to the Conduit Purchaser or the Agent as provided for herein and in the Fee
Letter, respectively and (b) as to the Committed Purchaser or the Liquidity Purchaser (as the case
may be) the sum of all accrued Yield plus all accrued fees specified in the Fee Letter as payable
to the Committed Purchaser or the Liquidity Purchaser (as the case may be) as provided for herein
and in the Fee Letter, respectively; in each case, accrued from the first day through the last day
of such Accrual Period as provided for in Section 2.06.




          “Class A Note Initial Principal Balance” means $0.




          “Class A Note Initial Purchase Price” has the meaning specified in Section
2.02.




          “Class A Note Maximum Principal Balance” $300,000,000 as such amount may be increased
or decreased from time to time in accordance with Section 2.05.




          “Class A Note Principal Balance” means, at any time, the Class A Note Principal
Balance outstanding at such time; provided, however, that any reduction of the
Class A Note Principal Balance shall be restored in the amount of any Collections or other payments
received and applied to the Class A Note if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.




          “Class A Note Rate” means, with respect to the Due Period related to any Distribution
Date, as to the Conduit Purchaser and the Committed Purchaser or the Liquidity Purchaser (as the
case may be), respectively, a per annum interest rate which if multiplied by the average daily
Class A Note Principal Balance owing to the Purchasers (as applicable) for such Due Period, would
produce, on the basis of the actual number of days in such Due Period and a 360 day year, an amount
equal to the Class A Monthly Interest owed to the Conduit Purchaser, or the Class A Monthly
Interest owed to the Committed Purchaser or the Liquidity Purchaser (as the case may be),
respectively, for such Due Period.




          “Closing” has the meaning specified in Section 3.01.




          “Closing Date” has the meaning specified in Section 3.01.




          “Commercial Paper Notes” means short-term promissory notes issued or to be issued by
the Conduit Purchaser to fund its investments in accounts receivable or other financial assets.




          “Committed Purchaser” means JPMorgan Chase Bank and each of its assigns (with respect
to its commitment to make Incremental Fundings) that shall become a party to this Note Purchase
Agreement pursuant to Section 11.03.




          “Conduit Information” means information provided by the Agent in connection with the
transactions described herein and which is confidential or proprietary information,

3









 








including, without limitation, information regarding Agents’ multi-seller commercial paper
conduit and forms of transaction documents together with the pricing, and other economic terms
applicable under this Note Purchase Agreement.




          “Conduit Purchaser” means Falcon Asset Securitization Company LLC and any of its
permitted assigns that is a RIC.




          “CP Costs” means, for each day, the sum of (i) discount or yield accrued on Pooled
Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement
agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such
Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such
day from investment of collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of
expenses in respect of Broken Funding Costs related to the prepayment of any invested amount of the
Conduit Purchaser pursuant to the terms of any receivable purchase facilities funded substantially
with Pooled Commercial Paper. In addition to the foregoing costs, if Transferor shall request any
Incremental Funding during any period of time determined by the Agent in its sole discretion to
result in incrementally higher CP Costs applicable to such Incremental Funding, the increase to the
Class A Note Principal Balance associated with any such Incremental Funding shall, during such
period, be deemed to be funded by the Conduit Purchaser in a special pool (which may include
capital associated with other receivable purchase facilities) for purposes of determining such
additional CP Costs applicable only to such special pool and charged each day during such period
against such incremental increase.




          “Default Rate” means a rate of interest per annum equal to the sum of (i) the Prime
Rate plus (ii) 2.00% per annum.




          “Due Period” means, with respect to a Distribution Date (i) as to the Conduit
Purchaser, the Accrual Period immediately preceding such Distribution Date and (ii) as to a
Committed Purchaser or a Liquidity Purchaser, the entire Tranche Period in which such Distribution
Date occurs.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.




          “ERISA Affiliate” means, with respect to any Person, (i) any corporation which is a
member of the same controlled group of corporations (within the meaning of Section 414(b) of the
Code) as such Person; (ii) a trade or business (whether or not incorporated) under common control
(within the meaning of Section 414(c) of the Code) with such Person; or (iii) a member of the same
affiliated service group (within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in clause
(ii) above.




4









 








          “Federal Bankruptcy Code” means the bankruptcy code of the United States of America
codified in Title 11 of the United States Code.




          “Fee Letter” means the agreement dated as of May 2, 2007 among the Transferor and the
Agent setting forth certain fees payable by the Transferor in connection with the purchase of the
Class A Note by the Agent for the benefit of the Purchasers.




          “Funding Tranche” means all or a portion of the outstanding principal balance of the
Class A Note (i) designated by the Agent as a Funding Tranche for funding purposes by the Committed
Purchaser or the Liquidity Purchaser (as the case may be) as provided for herein or in the Asset
Purchase Agreement or (ii) funded by the Conduit Purchaser with Pooled Commercial Paper.




          “Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations,
declarations or filings with, any Governmental Authority required under any Governmental Rules.




          “Governmental Authority” means the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and having jurisdiction over
the applicable Person.




          “Governmental Rules” means any and all laws, statutes, codes, rules, regulations,
ordinances, orders, writs, decrees and injunctions, of any Governmental Authority and any and all
legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental
Authority.




          “Incremental Funding” means an increase in the Class A Note Principal Balance in
accordance with a Principal Balance Increase under Section 4.09 of the Indenture Supplement and the
provisions of Section 2.03.




          “Incremental Funding Date” means the date on which each Incremental Funding occurs.




          “Indemnified Amounts” has the meaning specified in Section 9.01.




          “Indemnified Party” has the meaning specified in Section 9.01.




          “Indenture” means the Master Indenture as supplemented by the Indenture Supplement
thereto.




          “Indenture Supplement” means the Series 2007-A Indenture Supplement dated as of May 2,
2007 among the Issuer and the Indenture Trustee, supplementing the Master Indenture and relating to
the Series 2007-A Notes, as the same may be amended, modified or supplemented.




          “Indenture Trustee” means Wells Fargo Bank, National Association.




5









 








          “Investment Letter” means a letter in the form of Exhibit C to the Indenture
Supplement.




          “Issuer” means Nordstrom Credit Card Master Note Trust II.




          “JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A., a national banking association.




          “LIBOR” means the rate per annum equal to the sum of (i)(a) the applicable British
Bankers’ Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first day of the relevant
Tranche Period, and having a maturity equal to such Tranche Period; provided,
however, that, (i) if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable LIBOR for the relevant Tranche Period shall instead be the applicable British Bankers’
Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other
generally recognized financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Tranche Period, and having a maturity equal to such Tranche Period
and (ii) if no such British Bankers’ Association Interest Settlement Rate is available to the
Agent, the applicable LIBOR for the relevant Tranche Period shall instead be the rate determined by
the Agent to be the rate at which JPMorgan Chase Bank offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Tranche Period, in the approximate amount to be funded
at LIBOR and having a maturity equal to such Tranche Period, divided by (b) one minus the maximum
aggregate reserve requirement (including all basic, supplemental, marginal or other reserves) which
is imposed against the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to time (expressed as a
decimal), applicable to such Tranche Period plus (ii) 1.0% per annum. LIBOR shall be rounded, if
necessary, to the next higher 1/16 of 1%.




          “Liquidity Purchasers” means each of the purchasers party to the Asset Purchase
Agreement.




          “Master Indenture” means the Amended and Restated Master Indenture, dated as of May 1,
2007, between the Trust, as Issuer, and the Indenture Trustee, as the same may be amended,
supplemented, restated or otherwise modified from time to time including, with respect to any
Series or Class, the related Indenture Supplement.




          “Material Adverse Effect” means a material adverse effect on (i) the financial
condition or operations of any of Nordstrom, Inc., Nordstrom Credit, Inc., Nordstrom fsb, or the
Transferor, (ii) the ability of any Nordstrom Party to perform its obligations under this Note
Purchase Agreement, (iii) the legality, validity or enforceability of this Note Purchase Agreement
or any other Series Document, or (iv) the collectibility of the Receivables generally or of any
material portion of the Receivables.




          “Nordstrom Information” means information provided by any Nordstrom Party to the
Conduit Purchaser, the Committed Purchaser or Agent in connection with the transactions

6









 








described herein and which is non-public, confidential or proprietary information that may
include proprietary and confidential information regarding credit card portfolios, cardholders,
customers, financial information, processes, strategies and business methods of Nordstrom, Inc.
and/or any other subsidiary of Nordstrom, Inc.




          “Nordstrom Parties” means Nordstrom fsb, Nordstrom Credit, Inc. and the Transferor.




          “Operating Agreement” means the Operating Agreement, dated as of August 30, 1991,
between the Bank and the Seller, as amended, supplemented, restated or otherwise modified from time
to time.




          “Participant” has the meaning specified in Section 11.03(c).




          “Participation” has the meaning specified in the Receivables Purchase Agreement.




          “Participation Agreement” means the Participation Agreement, dated as of May 1, 2007,
by and between Nordstrom Credit, Inc. and Nordstrom fsb.




          “Pay Out Event” has the meaning specified in the Master Indenture.




          “PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle
A of ERISA (or any successor).




          “Potential Pay Out Event” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Pay Out Event.




          “Pooled Commercial Paper” means Commercial Paper notes of the Conduit Purchaser
subject to any particular pooling arrangement by Conduit Purchaser, but excluding Commercial Paper
issued by the Conduit Purchaser for a tenor and in an amount specifically requested by any Person
in connection with any agreement effected by the Conduit Purchaser.




          “Prime Rate” means a rate per annum equal to the prime rate of interest announced from
time to time by JPMorgan Chase Bank or its parent (which is not necessarily the lowest rate charged
to any customer), changing when and as said prime rate changes.




          “Provider” means Nordstrom, Inc.




          “Purchase Expiration Date” means April 30, 2008.




          “Purchaser Percentage” of any Committed Purchaser means (a) with respect to JPMorgan
Chase Bank, the percentage set forth on the signature page to this Note Purchase Agreement as such
Committed Purchaser’s Purchaser Percentage, or such percentage as reduced by any Assignment and
Acceptance entered into with an assignee or (b) with respect to a Committed Purchaser that has
entered into an Assignment and Acceptance, the percentage set forth therein as such Purchaser’s
Purchaser Percentage, or such percentage as reduced by any Assignment and Acceptance entered into
between such Committed Purchaser and an assignee.




7









 








          “Purchasers” means, the Conduit Purchaser, the Liquidity Purchasers and the Committed
Purchasers.




          “Receivables” has the meaning specified in the Receivables Purchase Agreement.




          “Receivables Purchase Agreement” means the Amended and Restated Receivables Purchase
Agreement, dated as of May 1, 2007 by and between Nordstrom Credit, Inc. and the Transferor.




          “Reduction Notice” means the written notice delivered by the Transferor to the Agent
under Section 2.05 with respect to an Aggregate Reduction.




          “RIC” means a receivables investment company administered by the Administrative Agent
or an Affiliate thereof which obtains funding from the issuance of commercial paper or other notes.




          “Series Documents” means the Transfer and Servicing Agreement, the Indenture
Supplement, the Master Indenture, the Receivables Purchase Agreement, the Participation Agreement,
the Fee Letter, the Operating Agreement, the Notes and this Note Purchase Agreement.




          “Servicer” means Nordstrom fsb, or any Successor Servicer appointed in accordance with
the terms of the Transfer and Servicing Agreement and Indenture Supplement.




          “Terminating Tranche” has the meaning specified in Section 2.06(b).




          “Third Party Claim” has the meaning specified in Section 9.02.




          “Tranche Period” means, with respect to any Funding Tranche owing to a Liquidity
Purchaser or a Committed Purchaser:




          (b) if Yield for such Funding Tranche is calculated on the basis of LIBOR, a period of one,
two, three or six months, or such other period as may be mutually agreeable to the Agent and
Transferor, commencing on a Business Day selected by Transferor or the Agent pursuant to this Note
Purchase Agreement. Such Tranche Period shall end on the day in the applicable succeeding calendar
month which corresponds numerically to the beginning day of such Tranche Period, provided,
however, that if there is no such numerically corresponding day in such succeeding month,
such Tranche Period shall end on the last Business Day of such succeeding month; or




          (c) if Yield for such Funding Tranche is calculated on the basis of the Prime Rate, a period
commencing on a Business Day selected by Transferor and agreed to by the Agent, provided,
however, that no such period shall exceed one month.




          If any Tranche Period would end on a day which is not a Business Day, such Tranche Period
shall end on the next succeeding Business Day; provided, however, that in the case
of Tranche Periods corresponding to LIBOR, if such next succeeding Business Day falls in a new
month, such Tranche Period shall end on the immediately preceding Business Day. In the

8









 








case of any Tranche Period for any Funding Tranche which commences before the Series 2007-A
Final Maturity Date and would otherwise end on a date occurring after the Series 2007-A Final
Maturity Date, such Tranche Period shall end on such Series 2007-A Final Maturity Date and the
duration of each Tranche Period which commences on or after the Series 2007-A Final Maturity Date
shall be of such duration as shall be selected by the Agent.




          “Transfer and Servicing Agreement” means the Amended and Restated Transfer and
Servicing Agreement dated as of May 1, 2007 among the Transferor, the Servicer, and the Indenture
Trustee, as the same may be amended, modified or supplemented.




          “Transferor” means Nordstrom Credit Card Receivables II LLC.




          “Yield” means for each respective Tranche Period, an amount equal to the product of
the applicable Alternate Rate multiplied by the Class A Note Principal Balance owing, if any, to
the Committed Purchasers or the Liquidity Purchasers (as the case may be) for each day elapsed
during such Tranche Period, annualized on a 360 day basis.




          Other Definitional Provisions.




          (a) All terms defined in this Note Purchase Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.




          (b) As used herein and in any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in Section 1.01, and accounting terms partially
defined in Section 1.01 to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained herein shall control.




          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Note Purchase Agreement shall refer to this Note Purchase Agreement as a whole and not to any
particular provision of this Note Purchase Agreement; and Section, subsection, Schedule and Exhibit
references contained in this Note Purchase Agreement are references to Sections, subsections, the
Schedules and Exhibits in or to this Note Purchase Agreement unless otherwise specified.




ARTICLE II




PURCHASE AND SALE




          SECTION 2.01 Purchase and Sale of the Class A Note. On the terms and subject to the
conditions set forth in this Note Purchase Agreement, and in reliance on the covenants,
representations, warranties and agreements herein set forth, the Transferor shall offer to sell to
the Agent, on behalf of the Purchasers, and the Agent, on behalf of the Purchasers, shall purchase
at the Closing, a Class A Note in an initial outstanding principal amount equal to the Class A Note
Initial Principal Balance.




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          SECTION 2.02 Initial Purchase Price. The Class A Note is to be purchased at a price
(the “Class A Note Initial Purchase Price”) of 100% of its Class A Note Initial Principal
Balance.




          SECTION 2.03 Incremental Fundings. Subject to the terms and conditions of this Note
Purchase Agreement and the Indenture Supplement, from time to time, pursuant to Section 4.09 of the
Indenture Supplement, (i) the Agent, on behalf of the Conduit Purchaser, and in the sole and
absolute discretion of the Conduit Purchaser, may make Incremental Fundings and (ii) if, the
Conduit Purchaser elects not to make an Incremental Funding, the Committed Purchaser and its
permitted assigns severally agree to make their respective Purchaser Percentages of such
Incremental Funding; provided, however, that no Committed Purchaser shall be
required to make a portion of any Incremental Funding if, after giving effect thereto, (A) its
Purchaser Percentage of the Class A Note Principal Balance would exceed its Purchaser Percentage of
the Class A Note Maximum Principal Balance or (B) its Purchaser Percentage of the Class A Note
Principal Balance hereunder plus its Purchase Amount (as defined in the Asset Purchase Agreement)
as a Liquidity Purchaser under the Asset Purchase Agreement would exceed its Purchaser Percentage
of the Class A Note Maximum Principal Balance.




          SECTION 2.04 Extension of Purchase Expiration Date. The parties to this Note Purchase
Agreement may mutually agree in writing to the extension of the Purchase Expiration Date to a date
no later than 364 days following the date of such extension; provided, however,
that no agreement to any such extension shall be effective unless, the available commitments of the
Liquidity Purchasers under the Asset Purchase Agreement and the credit and/or liquidity coverage
committed under the program-wide credit and/or liquidity facilities for the commercial paper
program of the Conduit Purchaser will continue to be in effect after such extension in the
aggregate amounts, and for the period of the time, necessary to maintain the then-current ratings
of the Conduit Purchaser’s Commercial Paper Notes. The Transferor may request such an extension no
earlier than 90 days prior to the then applicable Purchase Expiration Date and the Agent will
respond to such request no later than the later of thirty (30) days following such request or the
date which is thirty (30) days prior to the then applicable Purchase Expiration Date.




          SECTION 2.05 Reduction or Increase of the Class A Note Maximum Principal Balance.




          (a) The Transferor may reduce in whole or in part the Class A Note Maximum Principal Balance
(but not below the Class A Note Principal Balance) by giving the Agent written notice thereof at
least ten Business Days before such reduction is to take place; provided, however,
that any partial reduction shall be in an aggregate amount of $2,000,000, or any integral multiples
of $500,000 in excess thereof. Any such reduction in the Class A Note Maximum Principal Balance
shall be permanent unless a subsequent increase in the Class A Note Maximum Principal Balance is
made in accordance with Section 2.05(b).




          (b) The Transferor may request an increase in the Class A Note Maximum Principal Balance by
written notice to the Agent at least 30 days before the date on which such increase is requested to
become effective. No such increase will take effect with respect to any Note unless (i) the Conduit
Purchaser and Agent agree thereto and (ii) the available

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commitments of the Purchasers (other than the Conduit Purchaser) hereunder or under the Asset
Purchase Agreement and the credit and/or liquidity coverage committed under the program-wide credit
and/or liquidity facilities for the commercial paper program of the Conduit Purchaser are increased
as necessary to maintain the then-current ratings of the Conduit Purchaser’s Commercial Paper
Notes.




          SECTION 2.06 Calculation of Monthly Interest.




          (a) Prior to the occurrence of a Series 2007-A Pay Out Event, the Class A Notes shall accrue
CP Costs with respect to the outstanding balance of the Class A Note Principal Balance of the
Conduit Purchaser for each day that such amount is outstanding. The Class A Note Principal Balance
funded with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon
the percentage share that such amount represents in relation to all assets held by Conduit
Purchaser and funded substantially with related Pooled Commercial Paper. On the Determination Date,
the Conduit Purchaser shall calculate the aggregate amount of CP Costs allocated to its Class A
Note Principal Balance for the applicable Due Period and shall notify the Servicer of such
aggregate amount.




          (b) Prior to the occurrence of a Series 2007-A Pay Out Event, the Class A Notes shall accrue
Yield with respect to the outstanding balance of the Class A Note Principal Balance of the
Committed Purchasers or the Liquidity Purchasers (as the case may be) for each day during the
Tranche Period at either LIBOR or the Prime Rate in accordance with the terms and conditions
hereof. Until the Transferor gives notice to the Funding Agent of another Alternate Rate in
accordance with Section 2.06(c), the initial Alternate Rate for any Funding Tranche
transferred to the Committed Purchaser or the Liquidity Purchasers by the Conduit Purchaser as
provided for herein or pursuant to the Asset Purchase Agreement (as the case may be), shall be the
Prime Rate. If the Committed Purchaser or the Liquidity Purchasers acquire by assignment from the
Conduit Purchaser any Funding Tranche as provided for herein or pursuant to the Asset Purchase
Agreement (as the case may be), each Funding Tranche so assigned shall each be deemed to have a new
Tranche Period commencing on the date of any such assignment. The Transferor or the Agent, upon
notice to and consent by the other, which notice or consent shall have been received at least three
(3) Business Days prior to the end of a Tranche Period (the “Terminating Tranche”) for any
Funding Tranche, may, effective on the last day of the Terminating Tranche: (i) divide any such
Funding Tranche into multiple Funding Tranches, (ii) combine any such Funding Tranche with one or
more other Funding Tranches that have a Terminating Tranche ending on the same day as such
Terminating Tranche or (iii) combine any such Funding Tranche with a new Funding Tranche to be
purchased on the day such Terminating Tranche ends; provided, however, that in no
event may the Class A Note Principal Balance of the Conduit Purchaser be combined with a Funding
Tranche of the Committed Purchaser or the Liquidity Purchasers.




          (c) The Transferor may select LIBOR or the Prime Rate for each Funding Tranche of the
Committed Purchaser or the Liquidity Purchaser (as the case may be). The Transferor shall by 1:00
p.m. (New York time): (i) at least three (3) Business Days prior to the expiration of any
Terminating Tranche with respect to which LIBOR is being requested as a new Alternate Rate and (ii)
at least one (1) Business Day prior to the expiration of any Terminating Tranche with respect to
which the Prime Rate is being requested as a new Alternate Rate, give

11









 








the Funding Agent irrevocable notice of the new Alternate Rate for the Funding Tranche
associated with such Terminating Tranche. Until the Transferor gives notice to the Funding Agent of
another Alternate Rate, the initial Alternate Rate for any Funding Tranche transferred to the
Committed Purchaser or the Liquidity Purchasers pursuant to the terms and conditions hereof shall
be the Prime Rate.




          (d) After the occurrence of a Series 2007-A Pay Out Event, the Class A Notes held by the
Purchasers shall accrue CP Costs at the Default Rate.




          (e) The Transferor agrees to pay and to instruct the Servicer and the Indenture Trustee to pay
all amounts payable by each with respect to the Class A Note to the account designated by the Agent
in the Fee Letter.




ARTICLE III




CLOSING




          SECTION 3.01 Closing. The closing (the “Closing”) of the purchase and sale of
the Class A Note shall take place at 10:00 a.m. at the offices of Sidley Austin Brown & Wood LLP,
555 California Street, 19th Floor, San Francisco, California 94104, on May 2, 2007, or if the
conditions to closing set forth in Article IV shall not have been satisfied or waived by
such date, as soon as practicable after such conditions shall have been satisfied or waived, or at
such other time, date and place as the parties shall agree upon (the date of the Closing being
referred to herein as the “Closing Date”).




          SECTION 3.02 Transactions to be Effected at the Closing. At the Closing (a) the Class
A Note Initial Purchase Price will be zero and (b) the Transferor shall deliver the Class A Note to
the Agent in satisfaction of the Transferor’s obligation to the Agent hereunder.




ARTICLE IV




CONDITIONS PRECEDENT TO PURCHASE ON THE CLOSING DATE




     The purchase by the Agent on behalf of the Purchasers of the Class A Note is subject to the
satisfaction at the time of the Closing of the following conditions (any or all of which may be
waived by the Agent in its sole discretion):



          SECTION 4.01 Performance by the Transferor, Issuer and Servicer. All the terms,
covenants, agreements and conditions of the Series Documents to be complied with and performed by
the Transferor, the Issuer, Nordstrom fsb and Nordstrom Credit, Inc. at or before the Closing shall
have been complied with and performed in all material respects.




          SECTION 4.02 Representations and Warranties. Each of the representations and
warranties of the Transferor, the Issuer, Nordstrom fsb and Nordstrom Credit, Inc. made in the
Series Documents shall be true and correct in all material respects as of the time of the Closing
(except to the extent they expressly relate to an earlier or later time).




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          SECTION 4.03 Corporate Documents. The Agent shall have received copies of (a) the (i)
Charter documents and By-Laws of Nordstrom fsb, (ii) Board of Directors resolutions of Nordstrom
fsb with respect to the Series Documents, and (iii) incumbency certificate of Nordstrom fsb, each
certified by appropriate corporate authorities; (b) the (i) Certificate of formation and good
standing certificate of the Transferor (ii) a copy of the operating agreement of the Transferor,
(iii) Board of Directors resolutions of the Transferor with respect to the Series Documents and
(iv) incumbency of the Transferor, each certified by appropriate authorities; and (c) the (i)
Articles of Incorporation and By-Laws of Nordstrom Credit, Inc., (ii) Board of Directors
resolutions of Nordstrom Credit, Inc. with respect to the Series Documents, and (iii) incumbency
certificate of Nordstrom Credit, Inc., each certified by appropriate corporate authorities




          SECTION 4.04 Opinions of Counsel to Nordstrom fsb, Nordstrom Credit, Inc. and the
Transferor. Counsel to Nordstrom fsb, Nordstrom Credit, Inc. and the Transferor shall have
delivered to the Agent favorable opinions, dated as of the Closing Date and reasonably satisfactory
in form and substance to the Agent and its counsel and addressed to the Agent.




          SECTION 4.05 Opinions of Counsel to the Owner Trustee. Counsel to the Owner Trustee
shall have delivered to the Agent a favorable opinion, dated as of the Closing Date and reasonably
satisfactory in form and substance to the Agent and its counsel and addressed to the Agent.




          SECTION 4.06 Opinions of Counsel to the Indenture Trustee. Counsel to the Indenture
Trustee shall have delivered to the Agent a favorable opinion, dated as of the Closing Date and
reasonably satisfactory in form and substance to the Agent and its counsel and addressed to the
Agent.




          SECTION 4.07 Financing Statements. The Agent shall have received evidence satisfactory
to it of the completion of all recordings, registrations, and filings as may be necessary or, in
the opinion of the Agent, desirable to perfect or evidence (i) the assignments by Nordstrom fsb to
Nordstrom Credit, Inc., by Nordstrom Credit, Inc. to the Transferor and by the Transferor to the
Issuer of their respective ownership interests in the Receivables and the proceeds thereof and (ii)
the security interest granted by the Issuer to the Indenture Trustee in the Receivables and the
proceeds thereof, including:




          (a) Acknowledgment copies of all UCC financing statements and assignments that have been filed
in the offices of the Secretary of State of the applicable states and in the appropriate office or
offices of such other locations as may be specified in the opinions of counsel delivered pursuant
to Section 4.04; and




          (b) Certified copies of requests for information (Form UCC-11) (or a similar search report
certified by parties acceptable to the Agent and its counsel) dated a date reasonably near the
Closing Date and listing all effective financing statements which name Nordstrom fsb, the
Transferor or the Issuer, as seller, assignor or debtor and which are filed in all jurisdictions in
which the filings were or will be made, together with copies of such financing statements.




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          SECTION 4.08 Documents. The Agent shall have received a duly executed counterpart of
each of the Series Documents (other than the Master Indenture) and each and every document or
certification delivered by any party in connection with any of such agreements, and each such
document shall be in full force and effect.




          SECTION 4.09 No Actions or Proceedings. No action, suit, proceeding or investigation
by or before any Governmental Authority shall have been instituted to restrain or prohibit the
consummation of, or to invalidate, the transactions contemplated by the Series Documents and the
documents related thereto in any material respect.




          SECTION 4.10 Approvals and Consents. All Governmental Actions of all Governmental
Authorities required with respect to the transactions contemplated by the Series Documents and the
other documents related thereto shall have been obtained or made.




          SECTION 4.11 Officer’s Certificates. The Agent shall have received Officer’s
Certificates from the Transferor, the Issuer, Nordstrom fsb and Nordstrom Credit, Inc. in form and
substance reasonably satisfactory to the Agent and its counsel, dated as of the Closing Date,
certifying as to the satisfaction of the conditions set forth in Sections 4.01 and
4.02 with respect to the Transferor, the Issuer, Nordstrom fsb and Nordstrom Credit, Inc.,
respectively.




          SECTION 4.12 Documents Relating to Credit Enhancement. The Agent shall have received a
specimen Class B Note.




          SECTION 4.13 Accounts. The Agent shall have received evidence that the Collection
Account and Special Funding Account have been established in accordance with the terms of the
Indenture.




          SECTION 4.14 Other Documents. The Transferor shall have furnished to the Agent such
other information, certificates and documents as the Agent may reasonably request.




ARTICLE V




REPRESENTATIONS AND WARRANTIES OF THE NORDSTROM PARTIES




          Each Nordstrom Party hereby makes the following representations and warranties to the
Purchasers and the Agent, as to itself, as of the Closing Date and as of each Incremental Funding
Date, and the Purchasers and the Agent shall be deemed to have relied on such representations and
warranties in purchasing the Class A Note on the Closing Date and in making (or committing to make)
each Incremental Funding on each Incremental Funding Date.




          SECTION 5.01 Transfer and Servicing Agreement. Each Nordstrom Party repeats and
reaffirms to the Purchasers and the Agent its applicable representations, warranties and covenants
set forth in the Series Documents and represents and warrants that all such representations and
warranties are true and correct.




14









 








          SECTION 5.02 Corporate Existence and Power. Nordstrom Credit, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of the State of Colorado. The
Transferor is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware. Nordstrom fsb is a federal savings bank duly organized,
validly existing and in good standing under the laws of the United States. Each Nordstrom Party has
all power, authority and legal right and all material governmental licenses, authorizations,
consents and approvals required to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted in each jurisdiction in which it
presently owns properties and presently conducts its business, and to execute and deliver this Note
Purchase Agreement and the Series Documents to which it is a party and perform its obligations
under this Note Purchase Agreement and the other Series Documents. Each Nordstrom Party is duly
qualified to do business and is in good standing (or is exempt from such requirements) in any
jurisdiction in which the nature of its business requires it to be so qualified.




          SECTION 5.03 Corporate and Governmental Authorization; Contravention. The execution
and delivery by each Nordstrom Party of this Note Purchase Agreement and the other Series Documents
to which such Nordstrom Party is a party and the performance by each Nordstrom Party thereof are
within its corporate powers, have been duly authorized by all necessary corporate or limited
liability company action, require no action by or in respect of, or filing with, any Governmental
Authority or official thereof, and do not contravene, or constitute a default under, any provision
of applicable law, rule or regulation or of the Charter or Bylaws of Nordstrom fsb, Bylaws and
Articles of Incorporation of Nordstrom Credit, Inc., limited liability agreement of the Transferor
or of any agreement, judgment, injunction, order, writ, decree or other instrument binding upon
such Nordstrom Party or result in the creation or imposition of any Lien on the assets of such
Nordstrom Party, other than pursuant to the Series Documents.




          SECTION 5.04 Binding Effect. Each of this Note Purchase Agreement, the Indenture
Supplement, the Fee Letter and the other Series Documents to which each Nordstrom Party is a party
constitutes the legal, valid and binding obligation of such Nordstrom Party, enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally.




          SECTION 5.05 No Conflict. The execution and delivery of this Note Purchase Agreement,
the Indenture Supplement, the Fee Letter and the other Series Documents to which each Nordstrom
Party is a party, the performance of the transactions contemplated by this Note Purchase Agreement,
the Indenture Supplement, the Fee Letter and the other Series Documents to which such Nordstrom
Party is a party and the fulfillment of the terms hereof and thereof will not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any Requirement of Law applicable to such Nordstrom Party or any
indenture, contract, agreement, mortgage, deed of trust, or other material instrument to which
Nordstrom fsb is a party or by which it or any of its properties are bound.




          SECTION 5.06 No Proceedings. There are no actions, suits, proceedings or
investigations pending or, to the best knowledge of each Nordstrom Party, threatened, against or
affecting such Nordstrom Party or any Affiliate of such Nordstrom Party or their respective

15









 








properties, in or before any court, regulatory body, administrative agency, arbitrator or
other tribunal or governmental instrumentality (i) asserting the invalidity of this Note Purchase
Agreement or any other Series Document to which such Nordstrom Party is a party, (ii) seeking to
prevent the issuance of the Notes or the consummation of any of the transactions contemplated by
this Note Purchase Agreement or any other Series Document to which such Nordstrom Party is a party,
(iii) seeking any determination or ruling that, individually or in the aggregate, in the reasonable
judgment of such Nordstrom Party, would materially and adversely affect the performance by such
Nordstrom Party of its obligations under this Note Purchase Agreement or any other Series Document
to which such Nordstrom Party is a party or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this Note Purchase Agreement or
any other Series Document to which such Nordstrom Party is a party.




          SECTION 5.07 Transferor Amount. As of the Closing Date and each Incremental Funding
Date, the Transferor Interest is not less than the Minimum Transferor Interest and the aggregate
amount of Principal Receivables is not less than the Required Minimum Principal Balance.




          SECTION 5.08 No Pay Out Event. After giving effect to the issuance of, and the
acquisition by the Agent, on behalf of the Class A Noteholder and of any occurrence of any
Incremental Funding pursuant to Section 4.09 of the Indenture Supplement and in accordance with
Section 2.03 hereunder, no event shall have occurred and not been waived or be continuing
and no condition shall exist which would constitute a Pay Out Event or Potential Pay Out Event.




          SECTION 5.09 Accuracy of Information. Each document, book, record, report, exhibit,
schedule or other information furnished or to be furnished at any time by each Nordstrom Party to
the Purchasers or the Agent for purposes of or in connection with this Note Purchase Agreement, the
Indenture Supplement or any transaction contemplated hereby or thereby is or will be true and
accurate in all material respects on the date such information is stated or certified.




          SECTION 5.10 Taxes. Each Nordstrom Party has filed all tax returns (Federal, state and
local) required to be filed and has paid or made adequate provision for the payment of all its
taxes, assessments and other governmental charges.




          SECTION 5.11 Use of Proceeds. No proceeds of the acquisition of the Class A Note or
any Incremental Funding will be used by the Transferor to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.




          SECTION 5.12 Value. Nordstrom fsb has received or will receive reasonably equivalent
value in return for the transfer of the Participation to Nordstrom Credit, Inc. Nordstrom Credit,
Inc. has received or will receive reasonably equivalent value in return for the transfer of the
Receivables and the other property transferred to the Transferor. The Transferor has received or
will receive reasonably equivalent value in return for the transfer of the Receivables and other
property transferred to the Trust.




16









 








          SECTION 5.13 ERISA. Each Nordstrom Party and its ERISA Affiliates is in compliance in
all material respects with ERISA and no lien exists in favor of the PBGC on any of the Receivables.




          SECTION 5.14 Place of Business. The principal executive offices of Nordstrom fsb are
in Scottsdale, Arizona. Electronic records concerning the Receivables and related contracts are
maintained by Nordstrom fsb’s service provider located in Columbus, Georgia. The principal
executive offices of the Transferor and Nordstrom Credit, Inc. are in Centennial, Colorado.




          SECTION 5.15 Investment Company. Neither the Transferor nor the Trust is an
“investment company” or is controlled by an “investment company” within the meaning of the
Investment Company Act, or is exempt from all provisions of such Act.




          SECTION 5.16 No Liens. The sale, assignment and conveyance of the Class A Note and the
consummation of the transactions herein contemplated will not result in the creation or imposition
of any Lien, charge or encumbrance upon any of the property or assets of any Nordstrom Party or any
of its Affiliates pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement
or other agreement (including this Note Purchase Agreement) or instrument to which it or any of its
Affiliates is bound or to which any of its property or assets is subject.




          SECTION 5.17 Authorization. The Transferor has authorized the Trust to issue and sell
the Class A Note.




          SECTION 5.18 No Amendments. Since May 1, 2007, there have been no amendments (other
than the amendments listed in the recitals hereto), modifications or waivers of the terms of the
Master Indenture or Transfer and Servicing Agreement.




          SECTION 5.19 No Claims. No Person party to the Master Indenture or Transfer and
Servicing Agreement has any defenses, counterclaims or right of set-off with respect to either
agreement.




          SECTION 5.20 Agreements Enforced. Except as otherwise agreed by the parties thereto,
each of the Master Indenture and the Transfer and Servicing Agreement have been strictly enforced
in accordance with their terms by each party thereto.




          The representations and warranties set forth in this Section shall survive the sale of the
Class A Note to the Agent on behalf of the Purchasers. Upon discovery by either Nordstrom Party or
the Agent, on behalf of the Purchasers, of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice to the other. Any
document, instrument, certificate or notice delivered to the Conduit Purchaser, the Agent or any
Purchaser hereunder shall be deemed to be a representation and warranty by such Nordstrom Party.




          SECTION 5.21 Class A Note. The Class A Note has been duly and validly authorized, and,
when executed and authenticated in accordance with the terms of the Indenture and the Indenture
Supplement, and delivered to and paid for in accordance with this Note

17









 








Purchase Agreement, will be duly and validly issued and outstanding and will be entitled to
the benefits of the Transfer and Servicing Agreement, the Master Indenture and the Indenture
Supplement.




          SECTION 5.22 Issuer Existence and Authorization. The Issuer has been duly created and
is validly existing under the laws of the State of Delaware.




          SECTION 5.23 Financial Condition of Nordstrom Parties. On the date hereof and on each
Incremental Funding Date, none of the Nordstrom Parties is insolvent nor the subject of any
insolvency proceeding.




ARTICLE VI




REPRESENTATIONS AND WARRANTIES



WITH RESPECT TO THE CONDUIT PURCHASER AND COMMITTED PURCHASERS




          The Agent, on behalf of the Conduit Purchaser and Committed Purchasers, hereby makes the
following representations and warranties to the Transferor and Nordstrom fsb on which the
Transferor and Nordstrom fsb shall rely in entering into this Note Purchase Agreement.




          SECTION 6.01 Organization. Each of the Conduit Purchaser and the Committed Purchasers
has been duly organized and is validly existing and in good standing as a limited liability company
or national banking association under the laws of the jurisdiction of its organization, with power
and authority to own its properties and to transact the business in which it is now engaged and
each of the Conduit Purchaser and the Committed Purchasers is duly qualified to do business and is
in good standing (or is exempt from such requirements) in each State of the United States where the
nature of its business requires it to be so qualified and the failure to be so qualified and in
good standing would have a material adverse effect on the interests of the Transferor.




          SECTION 6.02 Authority, etc. Each of the Conduit Purchaser and the Committed
Purchasers has all requisite power and authority to enter into and perform its obligations under
this Note Purchase Agreement and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by each of the Conduit Purchaser and the Committed Purchasers of this
Note Purchase Agreement and the consummation by each of the Conduit Purchaser and each Committed
Purchaser of the transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of each of the Conduit Purchaser and the Committed
Purchasers. This Note Purchase Agreement has been duly and validly executed and delivered by each
of the Conduit Purchaser and the Committed Purchasers and constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its terms, subject as
to enforcement to bankruptcy, reorganization, insolvency, moratorium and other similar laws of
general applicability relating to or affecting creditors’ rights and to general principles of
equity. Neither the execution and delivery by any of the Conduit Purchaser or the Committed
Purchasers of this Note Purchase Agreement nor the consummation by any such party of any of the
transactions contemplated hereby, nor the fulfillment by such party of the terms hereof, will
conflict with, or violate, result in a breach of or

18









 








constitute a default under any term or provision of the Charter, By-laws, certificate of
formation, or limited liability company agreement of such party or any Governmental Rule applicable
to such party.




          SECTION 6.03 Securities Act. The Class A Note purchased by the Agent on behalf of the
Purchasers pursuant to this Note Purchase Agreement will be acquired for investment only and not
with a view to any public distribution thereof, and no Purchaser will offer to sell or otherwise
dispose of its interest in the Class A Note so acquired by it (or any interest therein) in
violation of any of the registration requirements of the Act or any applicable state or other
securities laws. The Agent and each Purchaser acknowledges that it has no right to require the
Transferor to register under the Act or any other securities law any Note to be acquired by the
Agent on behalf of such Purchaser pursuant to this Note Purchase Agreement.




          The Conduit Purchaser, Committed Purchaser and Agent have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and risks of an investment
in the Class A Note and the Conduit Purchaser and Committed Purchaser are able to bear the economic
risk of such investment. The Conduit Purchaser, Committed Purchaser and Agent have reviewed the
Transfer and Servicing Agreement, the Indenture and the Indenture Supplement (including the
schedule and exhibits thereto) and have had the opportunity to perform due diligence with respect
thereto and to ask questions of and receive answers from the Transferor and its representatives
concerning the Transferor, the Trust and the Class A Note. Each of the Conduit Purchaser, the
Committed Purchaser and Agent is an “accredited investor” as defined in Rule 501, promulgated by
the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933,
as amended.




ARTICLE VII




COVENANTS




          SECTION 7.01 Affirmative Covenants of the Nordstrom Parties. So long as the Class A
Note remains outstanding, each Nordstrom Party hereby covenants, as to itself, as set forth below:




          (a) Financial Reporting. Such Nordstrom Party will maintain a system of accounting
established and administered in accordance with GAAP, and furnish to the Agent:





          (i) Annual Reporting. Within one hundred twenty (120) days after the close of
each fiscal year of (x) Nordstrom fsb, the most recent annual thrift financial report of
Nordstrom fsb, certified by its president or any vice president, and (y) Nordstrom, Inc.,
audited financial statements, prepared in accordance with GAAP on a consolidated basis for
Nordstrom, Inc., including balance sheets as of the end of such period, related statements
of operations, shareholder’s equity and cash flows, accompanied by an unqualified audit
report certified by independent certified public accountants, acceptable to the Agent,
prepared in accordance with generally accepted auditing standards and by a certificate of
said accountants that, in the course of performing such audit, they found no material
weaknesses in the systems of internal control of Nordstrom, Inc. and its Subsidiaries.



19









 






          (ii) Quarterly Reporting. Within sixty (60) days after the close of the first
three quarterly periods of each fiscal year of (x) Nordstrom fsb, the most recent quarterly
call report of Nordstrom fsb, certified by its president or any vice president, and (y)
Nordstrom, Inc., consolidated unaudited balance sheets for Nordstrom, Inc. and its
Subsidiaries as at the close of each such period and consolidated related statements of
operations, shareholder’s equity and cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its chief financial officer.




          (iii) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate signed by the chief financial officer of Nordstrom, Inc.
stating that (x) the attached financial statements have been prepared in accordance with
GAAP and accurately reflect the financial condition of each of the Nordstrom Parties and (y)
to the best of such Person’s knowledge, no Pay Out Event or Potential Pay Out Event exists,
or if any Pay Out Event or Potential Pay Out Event exists, stating the nature and status
thereof.




          (iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of Nordstrom, Inc., copies of all financial statements, reports and
proxy statements so furnished.




          (v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports which
Nordstrom, Inc. files with the Securities and Exchange Commission.




          (vi) Notice of Pay Out Events or Potential Pay Out Events. As soon as possible
and in any event within two (2) days after the occurrence of each Pay Out Event or each
Potential Pay Out Event, a statement of the president or any vice president of such
Nordstrom Party setting forth details of such Pay Out Event or Potential Pay Out Event and
the action which such Nordstrom Party proposes to take with respect thereto.




          (vii) Change in Credit Card Guidelines and Debt Ratings. Within ten (10) days
after the date any material change in or material amendment to the Credit Card Guidelines
occurs, a copy of the Credit Card Guidelines then in effect indicating such change or
amendment; provided; however, that if such change or amendment would be
reasonably likely to materially and adversely affect the collectibility of the Receivables
or generally decrease the credit quality of the Receivables overall, such change or
amendment will be provided to the Agent at least thirty (30) days in advance of such change
or amendment and require the Agent’s prior written consent thereto.




          (viii) Credit Card Guidelines. Within ninety (90) days after the close of such
Nordstrom Party’s fiscal year, a complete copy of the Credit Card Guidelines then in effect.




          (ix) ERISA. Promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event (as defined in Article IV of ERISA)
which such Nordstrom Party or any ERISA Affiliate of such Nordstrom Party files under ERISA
with the Internal Revenue Service, the PBGC or the U.S. Department



20









 







of Labor or which such Nordstrom Party or any ERISA Affiliate of such Nordstrom Party
receives from the Internal Revenue Service, the PBGC or the U.S. Department of Labor.




          (x) Other Information. Such other information (including non-financial
information) as the Agent or the Agent may from time to time reasonably request with respect
to the Transferor or any of its Subsidiaries.



          (b) Corporate Existence; Conduct of Business. The Transferor will preserve and
maintain its existence as a limited liability company duly organized and existing under the laws of
the State of Delaware. Nordstrom fsb will preserve and maintain its existence as a federal savings
bank duly organized and existing under the laws of the United States. Nordstrom Credit, Inc. will
preserve and maintain its existence as a corporation duly organized and existing under the laws of
the State of Colorado. Each Nordstrom Party will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly organized, validly existing and in good
standing under its jurisdiction of formation or organization, as applicable, and maintain all
requisite authority to conduct its business in each jurisdiction in which its business is
conducted.




          (c) Compliance with Laws. Each Nordstrom Party will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards applicable to it, its
properties, the Accounts or any part thereof, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.




          (d) Furnishing of Information and Inspection of Records. Each Nordstrom Party will
furnish to the Agent, from time to time, such information with respect to the Receivables as the
Agent may reasonably request, including, without limitation, listings identifying the Obligor and
the outstanding balance for each Receivable. Each Nordstrom Party will, at any time and from time
to time during regular business hours, permit the Agent, or its agents or representatives, (i) to
examine and make copies of and abstracts from all records and (ii) to visit the offices and
properties of such Person for the purpose of examining such records, and to discuss matters
relating to Receivables or such Person’s performance hereunder and under the other Series Documents
to which such Person is a party with any of the officers, directors, employees or independent
public accountants of such Nordstrom Party having knowledge of such matters.




          (e) Keeping of Records and Books of Account. The Servicer will maintain and implement
administrative and operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals thereof), and keep
and maintain, all documents, books, records and other information reasonably necessary or advisable
for the collection of all Receivables (including, without limitation, records adequate to permit
the daily identification of each new Receivable and all Collections of and adjustments to each
existing Receivable). The Servicer will give the Agent notice of any material change in the
administrative and operating procedures of the Servicer referred to in the previous sentence.




          (f) Transfer and Servicing Agreement. The Transferor will comply with the covenants
set forth in Sections 2.07 and 2.08 of the Transfer and Servicing Agreement. The

21









 








Servicer will comply with the covenants set forth in Section 3.03 of the Transfer and
Servicing Agreement.




          (g) Notice of Adverse Claims. Each Nordstrom Party will advise the Agent promptly, in
reasonable detail, (i) of any Lien asserted or a claim by a Person that is not an Obligor made
against any of the Receivables, (ii) of the occurrence of any breach by such Nordstrom Party of any
of its representations, warranties and covenants contained herein or in the Series Documents and
(iii) of the occurrence of any other event which would have a material adverse effect on the
Indenture Trustee’s interest in the Receivables or the collectability thereof.




          (h) Protection of Interest in Receivables. Each Nordstrom Party shall execute (if
applicable) and file such continuation statements and any other documents reasonably requested by
the Indenture Trustee or the Agent or which may be required by law to fully preserve and protect
the interest of the Indenture Trustee in and to the Receivables. The Transferor shall deliver to
the Agent a copy of any legal opinion delivered pursuant to Section 9.02(d) of the Transfer and
Servicing Agreement concurrently with the delivery thereof to any party as required by said
Section.




          (i) Each Nordstrom Party will notify the Agent in writing of any of the following promptly
upon learning of the occurrence thereof, describing the same, and if applicable, the steps being
taken with respect thereto:





          (i) (A)(1) The entry of any judgment or decree against the Servicer if such judgment or
decree exceeds $10,000,000 or the aggregate amount of all judgments and decrees then
outstanding against the Servicer exceeds $50,000,000 and (2) the institution of any
litigation, arbitration proceeding or governmental proceeding against the Servicer which,
individually or in the aggregate, could reasonably be expected to have a Material Adverse
Effect; and (B) the entry of any judgment or decree of the institution of any litigation,
arbitration proceeding or governmental proceeding against Transferor or any of its
Affiliates.




          (ii) The occurrence of any event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.




          (iii) The occurrence of a default or an event of default under any other financing
arrangement to which such Nordstrom Party is a debtor or an obligor.



          (j) Compliance with Credit Card Agreements and Credit Card Guidelines. Each Nordstrom
Party will and will cause any Account Originator to timely and fully (i) perform and comply with
all provisions, covenants and other promises required to be observed by it under the Credit Card
Agreements related to the Receivables and the “Receivables” (as defined in the Participation
Agreement), and (ii) comply in all respects with the Credit Card Guidelines in regard to each
Receivable and the “Receivables” (as defined in the Participation Agreement) and the related Credit
Card Agreement, except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.




          (k) Transfers of Receivables. With respect to (i) the transfer of the Participation
from Nordstrom fsb to Nordstrom Credit, Inc. under the Participation Agreement

22









 








and (ii) the transfer of the Receivables from Nordstrom Credit, Inc. to the Transferor under
the Receivables Purchase Agreement, each such transfer shall be effected under, and in strict
compliance with the terms of the applicable transfer agreement, including, without limitation, the
terms relating to the amount and timing of payments to be made with respect to the purchase price
for the Participation or related Receivables, as applicable.




          SECTION 7.02 Covenants. Each Nordstrom Party will duly observe and perform each of its
covenants set forth in the other Series Documents.




          SECTION 7.03 Negative Covenants of the Nordstrom Parties. So long as the Class A Note
remains outstanding, each Nordstrom Party hereby covenants as to itself, as set forth below:




          (a) Amendments. No Nordstrom Party will make, nor will it permit any Person to make,
any amendment, modification or change to, or provide any waiver under any Series Document without
the prior written consent of the Agent.




          (b) No Sales, Liens, Etc. Except as otherwise provided herein and in the Series
Documents, such Nordstrom Party will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien upon (or the filing of any financing
statement) or with respect to any of the Receivables.




          (c) No Extension or Amendment of Receivables. Except as otherwise permitted by the
Series Documents, the Servicer will not extend, amend or otherwise modify the terms of any
Receivable.




          (d) No Change in Business or Account Guidelines. Neither Nordstrom Party will make any
change in the character of its business or in the Credit Card Guidelines, which change would, in
either case, delay the timing of recognition of the charge-off or write-off of any delinquent or
fraudulent Receivable or any Receivable or “Receivable” (as defined in the Participation Agreement)
with respect to which the related Obligor has declared bankruptcy, impair the collectability of any
Receivable or otherwise have a material adverse effect on the Indenture Trustee’s interest in the
Receivables, including any change which would have the effect of diminishing the creditworthiness
of Obligors with respect to Additional Accounts or Supplemental Accounts.




          (e) Change of Name, Etc. Neither Nordstrom Party will without providing 30 days’
notice to the Conduit Purchaser and the Agent and without filing such amendments to any previously
filed financing statements as the Conduit Purchaser and the Agent may require, (A) change the
location of its principal executive office or the location of the offices where the records
relating to the accounts are kept or the jurisdiction of its organization, or (B) change its name,
identity or corporate structure in any manner which would, could or might make any financing
statement or continuation statement filed by such Nordstrom Party in accordance with the Series
Documents seriously misleading within the meaning of Sections 9-506 and 9-507 of the UCC as in
effect in the relevant UCC States or any applicable enactment of the UCC.




          (f) ERISA Matters. Such Nordstrom Party will not (i) engage or permit any of its
respective ERISA Affiliates to engage in any prohibited transaction (as defined in Section




23









 







4975 of the Code and Section 406 of ERISA) for which an exemption is not available or has not
previously been obtained from the U.S. Department of Labor; (ii) permit to exist any accumulated
funding deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of the Code) or
funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail to
make any payments to any Multiemployer Plan that such Nordstrom Party or any ERISA Affiliate of
such Nordstrom Party is required to make under the agreement relating to such Multiemployer Plan or
any law pertaining thereto; (iv) terminate any Benefit Plan so as to result in any liability; or
(v) permit to exist any occurrence of any reportable event described in Title IV of ERISA which
represents a material risk of a liability to the Transferor, or any ERISA Affiliate of such
Nordstrom Party under ERISA or the Code, if such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events occurring within any fiscal year of such
Nordstrom Party, in the aggregate, involve a payment of money or an incurrence of liability by such
Nordstrom Party or any ERISA Affiliate of such Nordstrom Party in an amount in excess of $100,000.




          (g) Transfer of Transferor Interest. Except as permitted by the Series Documents, the
Transferor shall not assign, transfer or otherwise convey to any Person other than Nordstrom fsb
any interest in the Transferor Interest.




ARTICLE VIII




ADDITIONAL COVENANTS




          SECTION 8.01 Legal Conditions to Closing. The parties hereto will take all reasonable
action necessary to obtain (and will cooperate with one another in obtaining) any consent,
authorization, permit, license, franchise, order or approval of, or any exemption by, any
Governmental Authority or any other Person, required to be obtained or made by it in connection
with any of the transactions contemplated by this Note Purchase Agreement.




          SECTION 8.02 Expenses. Whether or not the Closing takes place, except as otherwise
expressly provided herein or in the Fee Letter, all reasonable costs and expenses incurred in
connection with this Note Purchase Agreement and the transactions contemplated hereby shall (as
between the Transferor and the Conduit Purchaser) be paid by the Transferor.




          SECTION 8.03 Mutual Obligations. On and after the Closing, each party hereto will do,
execute and perform all such other acts, deeds and documents as the other party may from time to
time reasonably require in order to carry out the intent of this Note Purchase Agreement.




          SECTION 8.04 Restrictions on Transfer. The Agent agrees that it will comply with the
restrictions on transfer of the Class A Note set forth in the Indenture and the Indenture
Supplement and that it will resell the Class A Note only in compliance with such restrictions;
provided, however, that the Transferor acknowledges that in the event of the
purchase of the Class A Note by any Purchaser no such Purchaser will be required to execute and
deliver the Investment Letter.




24









 








          SECTION 8.05 Consents, etc. The Agent and each Purchaser agrees not to unreasonably
withhold or delay its consent to any amendment or other matter requiring consent of the Series
2007-A Noteholders under a provision of any Series Document to the extent that such provision
specifies that such consent is not to be unreasonably withheld or delayed.




ARTICLE IX




INDEMNIFICATION




          SECTION 9.01 Indemnities by the Nordstrom Parties. Without limiting any other rights
which the Agent or the Purchasers may have hereunder or under applicable law, (A) the Transferor
hereby agrees to indemnify the Agent, the Purchasers and the Liquidity Providers and any successors
and permitted assigns and any of their respective officers, directors and employees (collectively,
“Indemnified Parties”) from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable attorneys’ fees (which such attorneys
may be employees of the Agent or the Purchasers or Liquidity Providers, as applicable) and
disbursements (all of the foregoing being collectively referred to as “Indemnified
Amounts”) awarded against or incurred by any of them in any action or proceeding between the
Transferor and any of the Indemnified Parties or between any of the Indemnified Parties and any
third party or otherwise arising out of or as a result of this Note Purchase Agreement, the other
Series Documents, the ownership or maintenance, either directly or indirectly, by the Agent or the
Purchasers of the Class A Note or any of the other transactions contemplated hereby or thereby and
(B) Nordstrom fsb hereby agrees to indemnify each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them in any action or proceeding (including in its capacity as
Servicer) between Nordstrom fsb and any of the Indemnified Parties or between any of the
Indemnified Parties and any third party or otherwise arising out of or as a result of this Note
Purchase Agreement, the other Series Documents, the ownership or maintenance, either directly or
indirectly, of the Class A Note or any of the other transactions contemplated hereby or thereby,
excluding, in all of the foregoing instances under the preceding clauses (A) and
(B): (i) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts result from gross negligence or willful misconduct
on the part of an Indemnified Party seeking indemnification or (ii) Indemnified Amounts to the
extent the same include losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor. Without limiting the
generality of the foregoing, each Nordstrom Party shall indemnify each Indemnified Party for
Indemnified Amounts relating to or resulting from:





          (i) any representation or warranty made by any Nordstrom Party or any officers of such
Person under or in connection with this Note Purchase Agreement, any of the other Series
Documents or any other information or report delivered by such Person pursuant hereto or
thereto, which shall have been false or incorrect in any material respect when made or
deemed made;




          (ii) the failure by the Account Originator, Nordstrom fsb (including in its capacity as
Servicer), Nordstrom Credit, Inc. or the Transferor to comply with any applicable law, rule
or regulation with respect to any Receivable, or the nonconformity of any Receivable with
any such applicable law, rule or regulation;



25









 






          (iii) the failure to vest and maintain vested in the Indenture Trustee, on behalf of
the Trust, first priority, perfected security interest, in the Collateral free and clear of
any Lien;




          (iv) any failure of the Account Originator, Nordstrom fsb (including in its capacity as
Servicer), Nordstrom Credit, Inc. or the Transferor to perform its duties, covenants or
other obligations in accordance with the provisions of this Note Purchase Agreement or any
other Series Document;




          (v) any products liability, personal injury or damage suit, or other similar claim
arising out of or in connection with merchandise, insurance or services that are the subject
of any Receivable;




          (vi) any dispute, claim, offset or defense (other than discharge in bankruptcy) of the
Obligor to the payment of any Receivable (including, without limitation, a defense based on
such Receivable not being a legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim resulting from the sale of
merchandise or services related to such Receivable or the furnishing or failure to furnish
such merchandise or services;




          (vii) the commingling of Collections of Receivables at any time with other funds;




          (viii) any investigation, litigation or proceeding related to or arising from this Note
Purchase Agreement or any other Series Document, the transactions contemplated hereby, the
use of the proceeds of an Incremental Funding, the ownership of the Class A Note or any
other investigation, litigation or proceeding relating to the Account Originator, Nordstrom
fsb (including in its capacity as Servicer), Nordstrom Credit, Inc. or the Transferor in
which any Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;




          (ix) any inability to litigate any claim against any Obligor in respect of any
Receivable as a result of such Obligor being immune from civil and commercial law and suit
on the grounds of sovereignty or otherwise from any legal action, suit or proceeding;




          (x) any failure of Trust to acquire and maintain legal and equitable title to, and
ownership of any Receivable free and clear of any interest (other than as created under the
Series Documents); any failure of Nordstrom Credit, Inc. to give reasonably equivalent value
to Nordstrom fsb under the Participation Agreement in consideration of the transfer by
Nordstrom fsb of the Participation, or any Person successfully voids such transfer under
statutory provisions or common law or equitable action; any failure of the Transferor to
give reasonably equivalent value to Nordstrom Credit, Inc. under the Receivables Purchase
Agreement in consideration of the transfer by Nordstrom Credit, Inc. of any Receivable, or
any Person successfully voids such transfer under statutory provisions or common law or
equitable action;



26









 






          (xi) the failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivable with respect thereto, and the proceeds of any
Receivable thereof; and




          (xii) any action or omission by the Account Originator, Nordstrom fsb (including in its
capacity as Servicer), Nordstrom Credit, Inc. or the Transferor which reduces or impairs the
rights of the Conduit Purchaser, the Agent or the Purchasers with respect to any Receivable
or the value of any such Receivable.



          SECTION 9.02 Procedure. In order for an Indemnified Party to be entitled to any
indemnification provided for under this Note Purchase Agreement in respect of, arising out of, or
involving a claim made by any Person against the Indemnified Party (a “Third Party Claim”),
such Indemnified Party must notify Nordstrom fsb, Nordstrom Credit, Inc. or the Transferor, as
applicable (the “Applicable Indemnifying Party”) in writing of the Third Party Claim within
a reasonable time after receipt by such Indemnified Party of written notice of the Third Party
Claim unless the Applicable Indemnifying Party shall have previously obtained actual knowledge
thereof. Thereafter, the Indemnified Party shall deliver to the Applicable Indemnifying Party,
within a reasonable time after the Indemnified Party’s receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to the Third Party
Claim.




          SECTION 9.03 Defense of Claims. If a Third Party Claim is made against an Indemnified
Party, the Applicable Indemnifying Party will be entitled (a) to participate in the defense thereof
and, (b) if it so chooses, to assume the defense thereof with counsel selected by the Applicable
Indemnifying Party; provided, however, that in connection with such assumption (i)
such counsel is not reasonably objected to by the Indemnified Party and (ii) the Applicable
Indemnifying Party first admits in writing its joint and several liability to indemnify the
Indemnified Party with respect to all elements of such claim in full. If the Applicable
Indemnifying Party elects to assume the defense of a Third Party Claim, the Applicable Indemnifying
Party will (x) not be liable to the Indemnified Party for any legal expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof, (y)(i) cooperate in all reasonable
respects with the Applicable Indemnifying Party in connection with such defense and (ii) not admit
any liability with respect to, or settle, compromise or discharge, such Third Party Claim without
the Applicable Indemnifying Party’s prior written consent, as the case may be and (z) be entitled
to participate in (but not control) such defense with its own counsel at its own expense. If the
Applicable Indemnifying Party does not assume the defense of any such Third Party Claim, the
Indemnified Party may defend the same in such manner as it may deem appropriate, including settling
such claim or litigation after giving notice to the Applicable Indemnifying Party of the terms of
such settlement and the Applicable Indemnifying Party shall promptly reimburse the Indemnified
Party upon written request. Anything contained in this Note Purchase Agreement to the contrary
notwithstanding, the Applicable Indemnifying Party shall not be entitled to assume the defense of
any part of a Third Party Claim that seeks an order, injunction or other equitable relief or relief
for other than money damages against the Indemnified Party.




27









 








          SECTION 9.04 Indemnity for Taxes, Reserves and Expenses. (a) If after the date hereof,
the adoption of any Governmental Rule or bank regulatory guideline or any amendment or change in
the interpretation of any existing or future Governmental Rule or bank regulatory guideline by any
Governmental Authority charged with the administration, interpretation or application thereof, or
the compliance with any directive of any Governmental Authority (in the case of any bank regulatory
guideline, whether or not having the force of Governmental Rule):





          (i) shall subject any Indemnified Party to any tax, duty, deduction or other charge
with respect to the Receivables, the Class A Note, this Note Purchase Agreement or the other
Series Documents, or payments of amounts due thereunder, or shall change the basis of
taxation of payments to any Indemnified Party of amounts payable in respect thereof (except
for changes in the rate of general corporate, franchise, net income or other income tax
(including by means of withholding) imposed on such Indemnified Party by the United States
of America, the jurisdiction in which such Indemnified Party’s principal executive office is
located or any other jurisdiction in which the Indemnified Party would be subject to such
tax even if the transactions contemplated by this Note Purchase Agreement had not occurred);
or




          (ii) shall impose, modify or deem applicable any reserve, capital, special deposit or
similar requirement (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the United States market for certificates of deposit or the London
interbank market any other condition affecting the Receivables, the Class A Note, this Note
Purchase Agreement, the other Series Documents or payments of amounts due thereunder
(including with respect to Eurocurrency liability reserves); or




          (iii) imposes upon any Indemnified Party any other cost or expense (including, without
limitation, reasonable attorneys’ fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing if such a contest is requested by
the Applicable Indemnifying Party) with respect to the Receivables, the Class A Note, any
Series Document or payments of amounts due hereunder or thereunder;


and the result of any of the foregoing is to increase the cost or reduce the payments to such
Indemnified Party with respect to the Receivables, the Class A Note, this Note Purchase Agreement,
the other Series Documents or payments of amounts due thereunder or the obligations thereunder or
the funding of any purchases (including Incremental Fundings) with respect thereto by any
Purchaser, by an amount deemed by such Indemnified Party to be material, then the Transferor agrees
to pay such Indemnified Party, within 10 days after demand by such Indemnified Party, such
additional amount or amounts as will compensate such Indemnified Party for such increased cost or
reduced payments.




          (b) If any Indemnified Party shall have determined that, after the date hereof, the adoption
of any applicable Law or bank regulatory guideline regarding capital adequacy, or

28









 








any change therein, or any change in the interpretation thereof by any Governmental Authority,
or any directive regarding capital adequacy (in the case of any bank regulatory guideline, whether
or not having the force of law) of any such Governmental Authority, has or would have the effect of
reducing the rate of return on capital of such Indemnified Party (or its parent) as a consequence
of such Indemnified Party’s obligations hereunder or with respect hereto to a level below that
which such Indemnified Party (or its parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to capital adequacy) by
an amount deemed by such Indemnified Party to be material, then from time to time the Transferor
agrees to pay such Indemnified Party, within 10 days after demand by any such Indemnified Party,
such additional amount or amounts as will compensate such Indemnified Party (or its parent) for
such reduction.




          (c) Any Indemnified Party who makes a demand for payment of increased costs or capital
pursuant to Section 9.04(a) or (b) shall promptly deliver to the Transferor a
certificate setting forth in reasonable detail the computation of such increased costs or capital
and specifying the basis therefor. In the absence of manifest error, such Note shall be conclusive
and binding for all purposes. Each Indemnified Party shall use reasonable efforts to mitigate the
effect upon the Transferor of any such increased costs or capital requirements; provided,
however, that it shall not be obligated to take any action that it determines would be
disadvantageous to it or inconsistent with its policies.




          No Indemnified Party shall be permitted to recover any additional or increased cost or
reduction described in this Section 9.04 on a retroactive basis for a period of time that
is more than ninety (90) days prior to the delivery of a notice to the Transferor that such
additional or increased cost or reduction has commenced accruing or been incurred.




          SECTION 9.05 Costs, Expenses, Taxes. Broken Funding Cost and Increased Costs under Note
Purchase Agreement and Program Facility. (a) The Transferor shall be obligated to pay on demand
to each Purchaser and its Agent (i) all reasonable costs and expenses in connection with the
preparation, execution and delivery of this Note Purchase Agreement, the other documents to be
delivered hereunder or in connection herewith and any requested amendments, waivers or consents or
examination or visit by the Conduit Purchaser or Agent pursuant to Section 7.01(d)
including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Purchasers and the Agent, with respect thereto and with respect to advising the Purchasers and the
Agent as to its respective rights and remedies under this Note Purchase Agreement and the other
documents delivered hereunder or in connection herewith and (ii) all costs and expenses, if any, in
connection with the enforcement of this Note Purchase Agreement and the other documents delivered
hereunder or in connection herewith.




          (a) In addition, the Transferor shall be obligated to pay on demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing and recording of
this Note Purchase Agreement, the Class A Note or the other documents and agreements to be
delivered hereunder, and agrees to hold each Purchaser and its Agent harmless from and against any
liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and
fees.




29









 








          (b) The Transferor shall be obligated to pay to the Purchasers promptly on request by the
Agent, the amount of any Broken Funding Cost or other Class A Additional Amounts and to the extent
not paid when required pursuant to Section 4.04 of the Indenture Supplement.




          (c) If a Conduit Purchaser becomes obligated to compensate any financial institution under its
commercial paper program as a result of any events or circumstances similar to those described in
Sections 9.04 or 9.05, such Conduit Purchaser shall promptly deliver to the
Transferor a certificate setting forth in reasonable detail the computation of such amounts. In the
absence of manifest error, such certificate shall be conclusive and binding for all purposes. The
Transferor shall be obligated to pay to the Conduit Purchaser, promptly after receipt of such
certificate, such additional amounts as may be necessary to reimburse the Conduit Purchaser for any
amounts so paid by the Conduit Purchaser. With respect to amounts to be paid pursuant to this
Section 9.05(c) as a result of any events or circumstances similar to those described in
Section 9.04 or 9.05, the Conduit Purchaser shall request the party to be
compensated to use its reasonable efforts to mitigate the effect upon the Transferor of any such
increased costs or capital requirements; provided, however, that such party shall
not be obligated to take any action that it determines would be disadvantageous to it or
inconsistent with its policies.




ARTICLE X




THE AGENT




          SECTION 10.01 Delegation of Duties. The Agent may delegate any of its duties under
this Note Purchase Agreement and each other Series Document by or through agents or
attorneys-in-fact and shall be entitled to the advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.




          SECTION 10.02 Exculpatory Provisions. Neither the Agent nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Note Purchase Agreement or any other Series
Document (except for its, their or such Person’s own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by any Nordstrom Party contained in this Note Purchase
Agreement, any other Series Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this Note Purchase
Agreement, or any other Series Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Note Purchase Agreement, or any other Series Document or any
other document furnished in connection herewith or therewith, or for any failure of any Nordstrom
Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article II or IV, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall not be under any
obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Note Purchase Agreement or any
other Series Document, or to inspect the properties, books or records of the Nordstrom Parties. The
Agent shall not be deemed to have knowledge of any Pay Out

30









 








Event or Potential Pay Out Event unless the Agent has received notice from a Nordstrom Party
or a Purchaser.




          SECTION 10.03 Reliance by Agent. The Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the Nordstrom Parties),
independent accountants and other experts selected by the Agent. The Agent shall in all cases be
fully justified in failing or refusing to take any action under this Note Purchase Agreement or any
other Series Document unless it shall first receive such advice or concurrence of the Conduit
Purchaser or all of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers; provided, however, that unless
and until the Agent shall have received such advice, the Agent may take or refrain from taking any
action, as the Agent shall deem advisable and in the best interests of the Purchasers. The Agent
shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a
request of the Conduit Purchaser or all of the Purchasers, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the Purchasers.




          SECTION 10.04 Non-Reliance on Agent and Other Purchasers. Each Purchaser expressly
acknowledges that neither the Agent, nor any of its officers, directors, employees, Agents,
attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by
the Agent hereafter taken, including, without limitation, any review of the affairs of any
Nordstrom Party, shall be deemed to constitute any representation or warranty by the Agent. Each
Purchaser represents and warrants to the Agent that it has and will, independently and without
reliance upon the Agent or any other Purchaser and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of each Nordstrom Party
and made its own decision to enter into this Note Purchase Agreement, the other Series Documents
and all other documents related hereto or thereto.




          SECTION 10.05 Reimbursement and Indemnification. Each Purchaser agrees to reimburse
and indemnify the Agent and its officers, directors, employees, representatives and agents ratably
according to their Purchaser Percentages, to the extent not paid or reimbursed by the Nordstrom
Parties (i) for any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Nordstrom Parties hereunder and (ii) for any other expenses incurred by the
Agent, in its capacity as Agent and acting on behalf of the Purchasers, in connection with the
administration and enforcement of this Note Purchase Agreement and the other Series Documents.




          SECTION 10.06 Agent in its Individual Capacity. The Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with Transferor or any
Affiliate of Transferor as though the Agent were not the Agent hereunder. With respect to the
acquisition of the Class A Note pursuant to this Note Purchase Agreement, the Agent shall have the
same rights and powers under this Note Purchase Agreement in its

31









 








individual capacity as any Purchaser and may exercise the same as though it were not the
Agent, and the terms “Purchaser,” and “Purchasers” shall include the Agent in its individual
capacity.




          SECTION 10.07 Successor Agent. The Agent may, upon five days’ notice to the Transferor
and the Purchasers, and the Agent will, upon the direction of all of the Purchasers (other than the
Agent, in its individual capacity) resign as Agent. If the Agent shall resign, then the Purchasers
during such five-day period shall appoint from among the Purchasers a successor Agent. If for any
reason no successor Agent is appointed by the Purchasers during such five-day period, then
effective upon the termination of such five day period, the Purchasers shall perform all of the
duties of the Agent hereunder and under the other Series Documents and Nordstrom Parties (as
applicable) shall make all payments in respect of the Class A Note directly to the applicable
Purchasers and for all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent’s resignation hereunder as Agent, the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Series Documents and the provisions of
this Article X shall continue in effect for its benefit with respect to any actions taken
or omitted to be taken by it while it was Agent under this Note Purchase Agreement and under the
other Series Documents.




ARTICLE XI




MISCELLANEOUS




          SECTION 11.01 Waivers and Amendments. No failure or delay on the part of the Conduit
Purchaser, the Agent or any Purchaser in exercising any power, right or remedy under this Note
Purchase Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other further exercise thereof or the exercise of any
other power, right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any provision of this Note Purchase
Agreement may be amended if, but only if, such amendment is in writing and signed by the parties
hereto. Furthermore, the Transferor shall provide to each Rating Agency (i) ten Business Days prior
written notice of any proposed amendment and (ii) a copy of the executed amendment as soon as
practicable after the execution of such amendment.




          SECTION 11.02 Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including telecopies, telegraphic, telex or
cable communication) and mailed, telecopied, telegraphed, cabled or delivered, as to each party
hereto, at its address set forth in Schedule I hereto or at such other address as shall be
designated by such party in a written notice to the other party hereto. All such notices and
communications shall, when mailed, telecopied, telegraphed or cabled, be effective when deposited
in the mails, confirmed by telephone, delivered to the telegraph company or delivered to the cable
company, respectively.




          SECTION 11.03 Binding Effect; Assignability.




          (a) This Note Purchase Agreement shall be binding upon and inure to the benefit of the
Transferor, Nordstrom fsb, the Agent and the Purchasers party to this Note Purchase Agreement and
their respective successors and assigns (including any subsequent

32









 








holders of the Class A Note); provided, however, that the Transferor shall not
have the right to assign its rights hereunder or any interest herein (by operation of law or
otherwise) without the prior written consent of the Agent. The Agent agrees that it shall not
transfer a Note without the Transferor’s consent, unless such transfer (x) is to a Committed
Purchaser or Liquidity Purchaser, (y) is to a RIC or (z) occurs after the commencement of the Early
Amortization Period.




          (b) Without the consent of the Transferor, each Committed Purchaser party to this Note
Purchase Agreement may assign all or a portion of its rights and obligations under this Note
Purchase Agreement to any financial or other institution acceptable to the Agent. The parties to
each such assignment shall execute and deliver an Assignment and Acceptance to the Agent, and the
Agent shall promptly notify the Transferor of such assignment. from and after the effective date of
such Assignment and Acceptance, the assigning Liquidity Purchaser shall be relieved of its
obligations hereunder to the extent so assigned.




          (c) Any Purchaser may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more Persons (each, a “Participant”)
participating interests in all or a portion of its rights and obligations under this Note Purchase
Agreement. Notwithstanding any such sale by a Purchaser of participating interests to a
Participant, such Purchaser’s rights and obligations under this Note Purchase Agreement shall
remain unchanged, such Purchaser shall remain solely responsible for the performance thereof, and
the Transferor and the Agent shall continue to deal solely and directly with such Purchaser in
connection with such Purchaser’s rights and obligations under this Note Purchase Agreement. The
Transferor also agrees that each Participant shall be entitled to the benefits of Article
IX; provided, however, that all amounts payable by the Transferor to any such
Participant shall be limited to the amounts which would have been payable to the Purchaser selling
such participating interest had such interest not been sold.




          (d) This Note Purchase Agreement shall create and constitute the continuing obligation of the
parties hereto in accordance with its terms, and shall remain in full force and effect until such
time as all amounts payable with respect to the Class A Note shall have been paid in full.




          SECTION 11.04 Provision of Documents and Information.




          (a) Each of the Conduit Purchaser, the Committed Purchaser and the Agent agrees that it will
keep the Nordstrom Information secure and not disclose, without the prior consent of the
Transferor, any Nordstrom Information which is furnished by the Transferor or Nordstrom fsb to the
Conduit Purchaser, the Committed Purchaser or the Agent. Each of the Conduit Purchaser, the
Committed Purchaser and the Agent acknowledges that the Transferor has informed the Agent that part
of the reason for the foregoing obligations is to allow Nordstrom, Inc. to fulfill its obligations
under Regulation FD promulgated under the Securities Exchange Act of 1934, as amended.
Notwithstanding the foregoing, each of the Conduit Purchaser, the Committed Purchaser and the Agent
may disclose any Nordstrom Information:





          (i) to its affiliates, and to directors, employees, auditors or counsel of each of the
Conduit Purchaser, the Committed Purchaser and the Agent or its affiliates to whom it is
necessary to show the Nordstrom Information in connection with this Note



33









 







Purchase Agreement and the transactions contemplated herein, each of which shall be
informed by such party of the confidential nature of the Nordstrom Information, and, with
respect to any such auditor, each of which has entered into an agreement with such party or
its affiliates under which such auditor has agreed to maintain the confidentiality of
information provided to it or its affiliates; provided, however, that none
of the Conduit Purchaser, the Committed Purchaser or the Agent shall disclose any Nordstrom
Information that identifies individual credit card holders or customers to counsel of such
party or its affiliates;




          (ii) in any statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over any of the Conduit Purchaser,
the Committed Purchaser or the Agent, or as may otherwise be required by law;
provided, however, that the Conduit Purchaser, the Committed Purchaser or
the Agent, as applicable, shall give Nordstrom, Inc. prior notice of the disclosure
permitted by this clause (ii) unless such notice is prohibited by the subpoena,
order or law;




          (iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over any of the Conduit Purchaser, the Committed Purchaser or the Agent or its
affiliates;




          (iv) to any rating agency, and to any directors, employees, auditors or counsel of any
of the foregoing, each of which shall be informed by the Conduit Purchaser, the Committed
Purchaser or the Agent, as applicable of the confidential nature of the Nordstrom
Information; provided, however, that the Conduit Purchaser, the Committed
Purchaser or the Agent, as applicable, shall not disclose any Nordstrom Information that
identifies individual credit card holders or customers to any of the foregoing; and




          (v) to any commercial paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to any entity organized for the purpose of purchasing, or making loans
secured by, financial assets for which the Agent acts as the administrative agent, and to
any directors, employees, auditors or counsel of any of the foregoing, each of which shall
be informed by the Agent of the confidential nature of the Nordstrom Information, and, with
respect to any such commercial paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement, each of which has entered into an agreement with the Agent or its
affiliates under which such entity has agreed to maintain the confidentiality of information
provided to it by the Agent or its affiliates.



          (b) Each of the Transferor, Nordstrom Credit, Inc. and Nordstrom fsb agrees that it will keep
the Conduit Information secure and not disclose, without the prior consent of Agent, any Conduit
Information which is furnished by Agent to the Transferor, Nordstrom Credit, Inc. or Nordstrom fsb.
Notwithstanding the foregoing, each of the Transferor, Nordstrom Credit, Inc. and Nordstrom fsb may
disclose any Conduit Information:





          (i) to its affiliates, and to directors, employees, auditors or counsel of or its
affiliates to whom it is necessary to show the Conduit Information in connection



34









 







with the transactions contemplated under this Note Purchase Agreement, each of which
shall be informed of the confidential nature of the Conduit Information;




          (ii) in any statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over either of the Transferor,
Nordstrom Credit, Inc. or Nordstrom fsb, or as may otherwise be required by law;
provided, however, that the Transferor, Nordstrom Credit, Inc. or Nordstrom
fsb, as applicable, shall give the Agent prior notice of the disclosure permitted by this
clause (ii) unless such notice is prohibited by the subpoena, order or law; or




          (iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over the Transferor, Nordstrom fsb, Nordstrom Credit, Inc. or its affiliates.



          (c) The restrictions contained in this Note Purchase Agreement shall not apply to Nordstrom
Information or Conduit Information which (i) is or becomes generally available to the public other
than as a result of a disclosure by recipient of such information or such recipient’s
representatives in breach of the provisions hereunder, (ii) becomes available to the recipient of
such information on a non-confidential basis from a source other than the disclosing party or one
of its agents or (iii) was known to the recipient of such information on a non-confidential basis
prior to its disclosure to such recipient by the disclosing party or one of its agents.




          (d) Notwithstanding anything herein to the contrary, each party hereto (and each employee,
representative, or other agent thereof) may disclose to any and all persons, without limitations of
any kind, information pertaining to the tax treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax analyses) that are provided any such party
relating to such tax treatment and tax structure. For purposes of this paragraph, the terms “tax
treatment” and “tax structure” have the meaning given to such terms under Treasury Regulation
Section 1.6011-4(c).




          SECTION 11.05 GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS (EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
EACH OF THE PARTIES TO THIS NOTE PURCHASE AGREEMENT HEREBY AGREES TO SUBMIT TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT
HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.




          SECTION 11.06 No Proceedings.




35









 








          (a) The Transferor agrees that so long as any senior indebtedness of the Conduit Purchaser
shall be outstanding or there shall not have elapsed one year plus one day since the last day on
which any senior indebtedness of the Conduit Purchaser shall have been outstanding, it shall not
file, or join in the filing of, a petition against such Conduit Purchaser or the Trust under the
Federal Bankruptcy Code, or join in the commencement of any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar proceeding against the Conduit Purchaser or
the Trust.




          (b) Each Purchaser severally agrees that it shall not at any time file, or join in the filing
of, a petition against the Trust under the Federal Bankruptcy Code, or join in the commencement of
any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar proceeding
against the Trust.




          SECTION 11.07 Execution in Counterparts. This Note Purchase Agreement may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.




          SECTION 11.08 No Recourse. The obligations of any Purchaser under this Note Purchase
Agreement, or any other agreement, instrument, document or certificate executed and delivered by or
issued by such Purchaser or any officer thereof are solely the corporate or partnership obligations
of such Purchaser. No recourse shall be had for payment of any fee or other obligation or claim
arising out of or relating to this Note Purchase Agreement or any other agreement, instrument,
document or Note executed and delivered or issued by such Purchaser or any officer thereof in
connection therewith, against any stockholder, limited partner, employee, officer, director or
incorporator of such Purchaser.




          SECTION 11.09 Limited Recourse. The obligations of the Transferor, Nordstrom Credit,
Inc. and Nordstrom fsb under this Note Purchase Agreement are solely the corporate obligations of
each of the Transferor, Nordstrom Credit, Inc. and Nordstrom fsb, respectively. No recourse shall
be had for the payment of any fee or other obligation or claim arising out of or relating to this
Note Purchase Agreement or any other agreement, instrument, document or certificate executed and
delivered or issued by the Transferor, Nordstrom fsb, Nordstrom Credit, Inc. or any officer thereof
in connection therewith, against any stockholder, employee, officer or director of the Transferor.




          SECTION 11.10 Survival. All representations, warranties, covenants, guaranties and
indemnifications contained in this Note Purchase Agreement, including, without limitation,
Article IX and Sections 11.06, 11.08 and 11.09, and in any
document, Note or statement delivered pursuant hereto or in connection herewith shall survive the
sale, transfer or repayment of the Class A Note.




          SECTION 11.11 Tax Characterization. Each party to this Note Purchase Agreement (a)
acknowledges and agrees that it is the intent of the parties to this Note Purchase Agreement that,
for federal, state and local income and franchise tax purposes only, the Class A Note will be
treated as evidence of indebtedness secured by the Receivables and proceeds thereof and the Trust
will not be characterized as an association (or publicly traded partnership) taxable

36









 








as a corporation, (b) agrees to treat the Class A Note for federal, state and local income and
franchise tax purposes as indebtedness and (c) agrees that the provisions of this Note Purchase
Agreement and all related Series Documents shall be construed to further these intentions of the
parties.




          SECTION 11.12 Limited Obligation of Transferor. Notwithstanding anything to the
contrary set forth in this Note Purchase Agreement, the obligation of the Transferor to pay any
amounts in this Note Purchase Agreement shall be limited solely to the application of amounts
available under the Series Documents.




37









 





          IN WITNESS WHEREOF, the parties have caused this Note Purchase Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	NORDSTROM CREDIT CARD

RECEIVABLES II LLC,

as Transferor

 	 
	 	By:  	/s/ Marc A. Anacker
 	 
	 	 	Marc. A. Anacker 	 
	 	 	Treasurer 	 
	 



	 	 	 	 	 
	 	NORDSTROM FSB,

as Servicer

 	 
	 	By:  	/s/ Kevin T. Knight
 	 
	 	 	Kevin T. Knight 	 
	 	 	Chairman and CEO 	 
	 



	 	 	 	 	 
	 	NORDSTROM CREDIT, INC.,

 	 
	 	By:  	/s/ Marc A. Anacker
 	 
	 	 	Marc A. Anacker 	 
	 	 	Assistant Treasurer 	 
	 




S-1









 





	 	 	 	 	 
	 	FALCON ASSET SECURITIZATION

COMPANY LLC,

as Conduit Purchaser

 	 
	 	By:  	     JPMORGAN CHASE BANK, N.A.,
 	 
	 	    as its attorney-in-fact
 	 



	 	 	 	 	 
	 	 	 
	 	By:  	     /s/ Cathleen Dettling
 	 
	 	 	Cathleen Dettling 	 
	 	 	Vice President 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as Agent

 	 
	 	By:  	/s/ Cathleen Dettling
 	 
	 	 	Cathleen Dettling 	 
	 	 	Vice President 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as a Committed Purchaser

 	 
	 	By:  	/s/ Cathleen Dettling
 	 
	 	 	Cathleen Dettling 	 
	 	 	Vice President


Purchaser Percentage: 100% 	 
	 	


 Signature Page to Nordstrom 2007-A Note Purchase Agreement

	 






S-2









 





SCHEDULE I




Addresses for Notices




	 	 	 	 	 
	If to:
	 	 	 	 
	 
	 	 	 	 
	 

	 	Transferor:
	 	Nordstrom Credit Card Receivables LLC
	 

	 	 	 	13531 E. Caley Avenue
	 

	 	 	 	Centennial, Colorado 80111
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	Facsimile No.: (303) 397-4767
	 
	 	 	 	 
	 

	 	Servicer:
	 	Nordstrom fsb
	 

	 	 	 	13531 E. Caley Avenue
	 

	 	 	 	Centennial, Colorado 80111
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	Facsimile No.: (303) 397-4700
	 
	 	 	 	 
	 

	 	Nordstrom

Credit, Inc.
	 	
13531 E. Caley Avenue
	 

	 	 	 	Centennial, Colorado 80111
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	Facsimile No.: (303) 397-4700
	 
	 	 	 	 
	 

	 	Conduit

Purchaser:
	 	
Falcon Asset Securitization Company LLC
	 

	 	 	 	JPMorgan Chase Bank, N.A.
	 

	 	 	 	10 S. Dearborn
	 

	 	 	 	Mail Code IL 1-1729
	 

	 	 	 	Chicago, Illinois 60603
	 

	 	 	 	Attention: Asset Backed Securities
	 

	 	 	 	Facsimile No.: (312) 732-3600
	 
	 	 	 	 
	 

	 	Administrative

Agent:
	 	
JPMorgan Chase Bank, N.A.
	 

	 	 	 	10 S. Dearborn
	 

	 	 	 	Mail Code IL 1-1729
	 

	 	 	 	Chicago, Illinois 60603
	 

	 	 	 	Attention: Asset Backed Securities
	 

	 	 	 	Facsimile No.: (312) 732-3600







1