<PAGE>





                              UNITED STATES          
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC 20549

                               FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934

For the transition period from _______ to _______
                    Commission File Number 0-6074

                         Nordstrom, Inc.
       ______________________________________________________
       (Exact name of Registrant as specified in its charter)

              Washington                             91-0515058
      _______________________________            ___________________
      (State or other jurisdiction of              (IRS Employer
      incorporation or organization)              Identification No.)

             1501 Fifth Avenue, Seattle, Washington  98101
         ____________________________________________________
         (Address of principal executive offices)  (Zip code)

Registrant's telephone number, including area code: (206) 628-2111


     Indicate by check mark whether the Registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period that the Registrant was required to file such reports), and (2) 
has been subject to such filing requirements for the past 90 days.





                          YES   X       NO
                              _____        _____

Common stock outstanding as of August 26, 1997:  77,216,093 shares of 
common stock.








                                 1 of 9

<PAGE>



                     NORDSTROM, INC. AND SUBSIDIARIES
                     --------------------------------
                                 INDEX
                                 -----

<TABLE>
<CAPTION>

                                                                   Page
                                                                  Number
<S>                                                               <C>

PART I.  FINANCIAL INFORMATION


    Item 1.  Financial Statements (unaudited)

        Consolidated Statements of Earnings
           Three and six months ended
           July 31, 1997 and 1996                                    3

        Consolidated Balance Sheets
           July 31, 1997 and 1996 and 
           January 31, 1997                                          4

        Consolidated Statements of Cash Flows
           Six months ended July 31, 1997 and 1996                   5

        Notes to Consolidated Financial Statements                   6


    Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations                     7


PART II.  OTHER INFORMATION


    Item 1.  Legal Proceedings                                       8


    Item 6.  Exhibits and Reports on Form 8-K                        9
</TABLE>


























                                 2 of 9

<PAGE>



                     NORDSTROM, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF EARNINGS
             (dollars in thousands except per share amounts)
                              (unaudited)

<TABLE>
<CAPTION>
                                      Three Months           Six Months
                                     Ended July 31,        Ended July 31,
                                 --------------------- ---------------------
                                    1997       1996       1997       1996
                                 ---------- ---------- ---------- ----------
<S>                              <C>        <C>        <C>        <C>
Net sales                        $1,353,345 $1,241,464 $2,307,092 $2,147,426

Costs and expenses:
  Cost of sales and related
    buying and occupancy            924,354    861,888  1,570,865  1,479,000
  Selling, general and
    administrative                  350,363    328,836    624,650    597,623
  Interest, net                       8,403     10,333     15,913     19,727
  Service charge income
    and other, net                  (26,461)   (33,674)   (54,371)   (68,254)
                                 ---------- ---------- ---------- ----------
  Total costs and expenses        1,256,659  1,167,383  2,157,057  2,028,096
                                 ---------- ---------- ---------- ----------

Earnings before income taxes
  and extraordinary item             96,686     74,081    150,035    119,330
Income taxes                         38,100     29,300     59,100     47,200
                                 ---------- ---------- ---------- ----------
Earnings before
  extraordinary item                 58,586     44,781     90,935     72,130

Extraordinary charge related to
  the early extinguishment of
  debt, net of income taxes
  of $900                                 -          -          -      1,452
                                 ---------- ---------- ---------- ----------
Net earnings                     $   58,586 $   44,781 $   90,935 $   70,678
                                 ========== ========== ========== ==========
Earnings before extraordinary
  item per average share of
  common stock outstanding       $      .76 $      .55 $     1.17 $      .89
                                 ========== ========== ========== ==========
Net earnings per average share
  of common stock outstanding    $      .76 $      .55 $     1.17 $      .87
                                 ========== ========== ========== ==========
Cash dividends paid per share
  of common stock outstanding    $     .125 $     .125 $      .25 $      .25
                                 ========== ========== ========== ==========

<FN>
These statements should be read in conjunction with the Notes to 
Consolidated Financial Statements contained herein and in the Nordstrom 
1996 Annual Report to Shareholders.
</TABLE>






                                 3 of 9

<PAGE>



                     NORDSTROM, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)
                               (unaudited)

<TABLE>
<CAPTION>

                                    July 31,    January 31,   July 31,
                                      1997         1997         1996
                                   ----------   ----------   ----------
<S>                                <C>          <C>          <C>
ASSETS
Current Assets:
  Cash and cash equivalents        $   39,837   $   28,284   $   50,322
  Accounts receivable, net            718,573      714,589      935,859
  Merchandise inventories             845,577      719,919      756,501
  Prepaid income taxes and other       69,800       69,607       66,324
                                   ----------   ----------   ----------
  Total current assets              1,673,787    1,532,399    1,809,006
Property, buildings and 
  equipment, net                    1,212,967    1,152,454    1,124,358
Other assets                           17,924       17,654       16,315
                                   ----------   ----------   ----------
TOTAL ASSETS                       $2,904,678   $2,702,507   $2,949,679
                                   ==========   ==========   ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Notes payable                    $  136,260   $  163,770   $  295,918

  Accounts payable                    461,422      310,430      414,393
  Accrued salaries, wages
    and taxes                         203,634      192,750      177,536
  Accrued expenses                     54,715       56,080       50,596
  Accrued income taxes                 17,784       13,045       13,165
  Current portion
    of long-term debt                 151,342       51,302       74,220
                                   ----------   ----------   ----------
  Total current liabilities         1,025,157      787,377    1,025,828
Long-term debt                        320,913      329,330      321,943
Deferred lease credits and
  other deferred items                106,490      112,608      119,390
Shareholders' equity:
  Common stock, without par value:
    250,000,000 shares authorized;
    77,169,027, 79,634,977 and
    81,365,397 shares issued 
    and outstanding                   193,662      183,398      181,668
  Retained earnings                 1,258,456    1,289,794    1,300,850
                                   ----------   ----------   ----------
  Total shareholders' equity        1,452,118    1,473,192    1,482,518
                                   ----------   ----------   ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
  EQUITY                           $2,904,678   $2,702,507   $2,949,679
                                   ==========   ==========   ==========

<FN>
These statements should be read in conjunction with the Notes to 
Consolidated Financial Statements contained herein and in the Nordstrom 
1996 Annual Report to Shareholders.
</TABLE>



                                  4 of 9

<PAGE>
                     NORDSTROM, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (dollars in thousands)
                               (unaudited)

<TABLE>
<CAPTION>
                                                       Six Months
                                                     Ended July 31,
                                                   ------------------
                                                     1997      1996
                                                   --------  --------
<S>                                                <C>       <C>
OPERATING ACTIVITIES:
  Earnings before extraordinary item               $ 90,935  $ 72,130
  Adjustments to reconcile net earnings
    to net cash provided by
    operating activities:
  Extraordinary charge related to the
    early extinguishment of debt, net
    of income taxes of $900                               -    (1,452)
  Depreciation and amortization                      74,218    76,191
      Change in:
        Accounts receivable, net                     (3,984)  (41,932)
        Merchandise inventories                    (125,658) (130,198)
        Prepaid income taxes and other                 (193)    1,705
        Accounts payable                            150,992   136,809
        Accrued salaries, wages and taxes            10,884    (8,004)
        Accrued expenses                             (1,365)    2,762
        Income tax liabilities                           45    (3,651)
        Deferred lease credits                       (1,424)    9,961
                                                   --------  --------
Net cash provided by operating
  activities                                        194,450   114,321
                                                   --------  --------
INVESTING ACTIVITIES:
  Additions to property, buildings
    and equipment, net                             (134,367)  (96,596)
  Other                                                 (42)     (425)
                                                   --------  -------- 
Net cash used in investing activities              (134,409)  (97,021)
                                                   --------  --------

FINANCING ACTIVITIES:
  (Decrease) increase in notes payable              (27,510)   63,417
  Proceeds from issuance of common stock             10,264    13,228
  Proceeds from issuance of long-term debt, net      91,758         -
  Principal payments on long-term debt                 (727)  (43,780)
  Cash dividends paid                               (19,531)  (20,312)
  Purchase and retirement of common stock          (102,742)   (4,048)
                                                   --------  --------
Net cash (used in) provided by
  financing activities                              (48,488)    8,505
                                                   --------  --------
Net increase in cash and cash equivalents            11,553    25,805

Cash and cash equivalents at 
  beginning of period                                28,284    24,517
                                                   --------  --------
Cash and cash equivalents at end of period         $ 39,837  $ 50,322
                                                   ========  ========

<FN>
These statements should be read in conjunction with the Notes to 
Consolidated Financial Statements contained herein and in the Nordstrom 
1996 Annual Report to Shareholders.
</TABLE>


                                 5 of 9

<PAGE>


                     NORDSTROM, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (dollars in thousands)
                                (unaudited)


Note 1:

The consolidated balance sheets of Nordstrom, Inc. and subsidiaries (the 
"Company") as of July 31, 1997 and 1996, and the related consolidated 
statements of earnings and cash flows for the periods then ended, have been 
prepared from the accounts without audit.

The consolidated financial information is applicable to interim periods 
and is not necessarily indicative of the results to be expected for the 
year ending January 31, 1998.

It is not considered necessary to include detailed footnote information 
as of July 31, 1997 and 1996.  The financial information should be read 
in conjunction with the Notes to Consolidated Financial Statements 
contained in the Nordstrom 1996 Annual Report to Shareholders.

In the opinion of management, the consolidated financial information 
includes all adjustments (consisting only of normal, recurring 
adjustments) necessary to present fairly the financial position of 
Nordstrom, Inc. and subsidiaries as of July 31, 1997 and 1996, and the 
results of their operations and cash flows for the periods then ended, 
in accordance with generally accepted accounting principles applied on a 
consistent basis.

Note 2:

During the first quarter of 1996, the Company elected to prepay $43,100
of Nordstrom Credit, Inc. 9.375% sinking fund debentures in order to take
advantage of lower short-term interest rates.  This resulted in an
extraordinary charge of $1,452, net of applicable income taxes of
$900 ($0.02 per share).

Note 3:  The summarized unaudited combined results of operations of
         Nordstrom Credit, Inc. and Nordstrom National Credit Bank are 
         as follows:

<TABLE>
<CAPTION>
                                     Three Months        Six Months
                                    Ended July 31,     Ended July 31,
                                    1997     1996      1997     1996
                                   -------  -------   -------  -------
    <S>                            <C>      <C>       <C>      <C>
    Total revenue                  $30,615  $39,152   $62,421  $78,364
    Earnings before income taxes
      and extraordinary item         8,030   10,746    19,673   24,278
    Extraordinary charge related
      to the early extinguishment
      of debt, net of income taxes
      of $900                            -        -         -    1,452
    Net earnings                     5,030    6,746    12,403   13,856
</TABLE>





                                 6 of 9

<PAGE>


                     NORDSTROM, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (dollars in thousands)
                                (unaudited)

Note 4:

Statement of Financial Accounting Standards No. 128, which will be effective 
for earnings per share calculations after December 15, 1997, will not 
significantly affect the calculation of the Company's earnings per share.



I
tem 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Management
Discussion and Analysis section of the Nordstrom 1996 Annual Report to
Shareholders.

Results of Operations:
- ----------------------
During the second quarter of 1997, sales increased 9.0% when compared with the 
same quarter in 1996.  For the six-month period, sales increased 7.4% compared 
to the same period in 1996.  Comparable store sales increased by 5.0% for the 
quarter and 3.1% for the six-month period, with the remainder of the increase 
coming from new units and from the Company's Catalog Division.  The positive 
trend in comparable store sales results in the second quarter reflects steady 
improvements in the Company's women's apparel departments.  These areas 
performed very well during the Company's recent Anniversary Sale, which 
started earlier in some of the Company's regions, in 1997.  Management 
estimates that the sales increases attributable to the earlier start date did 
not significantly affect comparability.  Comparable store sales increases have 
remained strong into the third quarter.  

Cost of sales and related buying and occupancy costs decreased as a percentage 
of sales for the quarter and the six-month period as compared to the 
corresponding periods in 1996, due primarily to higher merchandise margins 
resulting from decreased markdowns.  Occupancy costs decreased as a percentage 
of sales for the quarter and six-month period as no new full-line stores were 
opened.

Selling, general and administrative expenses decreased as a percentage of 
sales during the quarter and for the six-month period as compared to the 
corresponding periods in 1996 due to a combination of factors.  First, bad
debt expense decreased as a result of the securitization of the Company's VISA
credit card receivables in August of last year.  Second, expenses at the
Company's more mature stores continued to be well controlled, most notably,
direct selling costs.  Additionally, in 1997 there were no major store
openings during the six-month period, compared to two major store openings
during the six-month period in 1996.  The Company will open three new full-
line stores and a fulfillment center for its Catalog Division in the third
quarter.  As a result, management anticipates that expenses in the third
quarter will increase at a higher rate than in the first six months.

For the quarter and the six-month period, interest expense decreased as a
percentage of sales when compared to the corresponding periods in 1996, due
primarily to lower levels of short-term debt outstanding as a result of the 
securitization of the Company's VISA credit card receivables.


                                 7 of 9

<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)


Service charge income and other, net decreased as a percentage of sales for
the quarter and for the six-month period when compared to the corresponding
periods in 1996 due primarily to a reduction in revenues from the Company's
VISA card program as a result of the securitization of these receivables in
August 1996.


Financial Condition:
- --------------------
During the first quarter of 1997, Nordstrom Credit, Inc. filed a shelf
registration statement on Form S-3 to register up to $250 million in debt
securities, and issued $92.4 million in medium-term notes under the
registration.

On July 24, 1997, the Company entered into a revolving line of credit
agreement with a group of commercial banks which provides for borrowings of up
to $200 million and expires in July 2002.  There are no borrowings on the line 
of credit at July 31, 1997.

The Company's working capital at July 31, 1997 decreased when compared to
July 31, 1996 due primarily to a decrease in accounts receivable resulting 
from the securitization of VISA receivables completed in the third quarter of 
1996.

In April, 1997, the Company completed its second repurchase of $100 million of 
its outstanding common stock as approved by the Board of Directors at its 
November 1996 meeting.  To date, the Company has bought $24.6 million of a 
third $100 million stock repurchase authorized in February, 1997.

On August 15, 1997, the Company opened a full-line store on Long Island, New 
York, and on September 5, 1997 the Company opened a full-line store in West
Hartford, Connecticut.  Construction is progressing as planned on new stores
scheduled to open later this year and in 1998.



 
                      PART II - OTHER INFORMATION




Item 1.  Legal Proceedings
- --------------------------
The Company is not involved in any material pending legal proceedings,
other than routine litigation in the ordinary course of business.










                                 8 of 9

<PAGE>




Item 6.  Exhibits and Reports on Form 8-K
- -----------------------------------------

(a)  Exhibits
     --------
     (10.1)  Credit Agreement dated July 24, 1997 between Registrant and a
             group of commercial banks is filed herein as an Exhibit.

     (10.2)  Credit Agreement dated July 24, 1997 between Nordstrom Credit,
             Inc. and a group of commercial banks is hereby incorporated by
             reference from the Nordstrom Credit, Inc. Quarterly Report on
             Form 10-Q for the quarter ended July 31, 1997, Exhibit 10.1.

     (27.1)  Financial Data Schedule is filed herein as an Exhibit.


(b)  Reports on Form 8-K
     -------------------

     No reports on Form 8-K were filed during the quarter for which this
     report is filed.







                               SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                  
                              NORDSTROM, INC.
                                (Registrant)


                             /s/            John A. Goesling
                             ------------------------------------------
                             John A. Goesling, Executive Vice President
                                             and Treasurer
                            (Principal Financial and Accounting Officer)


Date:  September 9, 1997
- ------------------------









                                 9 of 9

<PAGE>



NORDSTROM, INC. AND SUBSIDIARIES



Exhibit Index

Exhibit                                    Method of Filing
- -------                                    ----------------
10.1  Credit Agreement dated July 24,      Filed herewith electronically
      1997 between Registrant and a                                     
      group of commercial banks                                         

10.2  Credit Agreement dated July 24,      Incorporated by reference    
      between, Nordstrom Credit, Inc.      from the Nordstrom Credit,   
      and a group of commercial banks      Inc. Quarterly Report on Form
                                           10-Q for the quarter ended   
                                           July 31, 1997, Exhibit 10.1.

27.1  Financial Data Schedule              Filed herewith electronically







<PAGE>





$200,000,000


REVOLVING CREDIT FACILITY

Dated as of July 24, 1997

Among

NORDSTROM, INC.

as Borrower,


THE FINANCIAL INSTITUTIONS NAMED HEREIN

as Lenders,

BANK OF AMERICA NATIONAL TRUST AND SAVINGS 
ASSOCIATION

and

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,

as Managing Agents,

and

NATIONSBANK OF TEXAS, N.A.

as Agent






<PAGE>

<TABLE>

      TABLE OF CONTENTS
<CAPTION>
                                                                    Page
<S>                                                                 <C> 
ARTICLE 1.  DEFINITIONS AND RELATED MATTERS                            1
Section 1.1     Definitions                                            1
Section 1.2     Related Matters                                       14

ARTICLE 2.  AMOUNTS AND TERMS OF THE CREDIT FACILITIES                15
Section 2.1     Revolving Loan                                        15
Section 2.2     Bid Loans                                             17
Section 2.3     Use of Proceeds                                       19
Section 2.4     Interest; Interest Periods; Conversion/Continuation   20
Section 2.5     Notes, Etc.                                           22
Section 2.6     Fees                                                  22
Section 2.7     Termination, Reduction and Extension of Revolving       
Commitments                                                           23
Section 2.8     Repayments and Prepayments                            23
Section 2.9     Manner of Payment                                     24
Section 2.10    Pro Rata Treatment; Application of Payments           24
Section 2.11    Mandatory Suspension and Conversion of Euro-Dollar      
Rate Loans                                                            25
Section 2.12    Regulatory Changes                                    26
Section 2.13    Compensation for Funding Losses                       27
Section 2.14    Certificates Regarding Yield Protection, Etc.         27
Section 2.15    Applicable Lending Office; Discretion of Lenders as to  
Manner
 of Funding                                                     27

ARTICLE 3   CONDITIONS TO LOANS                                       28
Section 3.1     Closing Conditions                                    28
Section 3.2     Conditions Precedent to Loans                         28

ARTICLE 4   REPRESENTATIONS AND WARRANTIES                            29
Section 4.1     Organization, Powers and Good Standing                29
Section 4.2     Authorization, Binding Effect, No Conflict, Etc.      29
Section 4.3     Financial Information                                 30
Section 4.4     No Material Adverse Changes                           30
Section 4.5     Litigation                                            30
Section 4.6     Agreements; Applicable Law                            31
Section 4.7     Taxes                                                 31
Section 4.8     Governmental Regulation                               31
Section 4.9     Margin Regulations                                    31
Section 4.10    Employee Benefit Plans                                31
Section 4.11    Disclosure                                            32
Section 4.12    Solvency                                              32
</TABLE>

                                    i

<PAGE>

<TABLE>
<CAPTION>
                                                                     Page
<S>                                                                  <C> 
ARTICLE 5   AFFIRMATIVE COVENANTS OF THE BORROWER                     32
Section 5.1     Financial Statements and Other Reports                32
Section 5.2     Records and Inspection                                34
Section 5.3     Corporate Existence, Etc.                             34
Section 5.4     Payment of Taxes and Claims                           34
Section 5.5     Maintenance of Properties                             34
Section 5.6     Maintenance of Insurance                              34
Section 5.7     Conduct of Business; Compliance with Law              35
Section 5.8     Further Assurances                                    35
Section 5.9     Future Information                                    35
Section 5.10    Subordination of Intercompany Debt                    35

ARTICLE 6   NEGATIVE COVENANTS OF THE BORROWER                        35
Section 6.1     Liens                                                 35
Section 6.2     Restricted Payments                                   37
Section 6.3                                                           37
Financial Covenants                                                   37
Section 6.4     Restriction on Fundamental Changes                    37
Section 6.5     Asset Dispositions                                    38
Section 6.6     Transactions with Affiliates                          38
Section 6.7     Amendments of Investment Agreement                    38

ARTICLE 7   EVENTS OF DEFAULT, ETC.                                   39
Section 7.1     Events of Default                                     39
Section 7.2     Remedies                                              41

ARTICLE 8   THE AGENT AND THE LENDERS                                 41
Section 8.1     Authorization and Action                              41
Section 8.2     Exculpation; Agent's Reliance, Etc.                   42
Section 8.3     Agent and Affiliates                                  43
Section 8.4     Lender Credit Decision                                43
Section 8.5     Indemnification                                       43
Section 8.6     Successor Agent                                       44
Section 8.7     Excess Payments                                       44
Section 8.8     Lender Parties                                        44
Section 8.9     Payments; Availability of Funds; Certain Notices      45
Section 8.10    Obligations of Lender Parties Several; Enforcement by   
the Agent                                                             45
Section 8.11    Managing Agents                                       46

ARTICLE 9   MISCELLANEOUS                                             46
Section 9.1     Expenses                                              46
</TABLE>

                                    ii

<PAGE>

<TABLE>
<CAPTION>
                                                                    Page
<S>                                                                 <C> 
Section 9.2     Indemnity                                             46
Section 9.3     Waivers; Modifications in Writing                     47
Section 9.4     Cumulative Remedies; Failure or Delay                 48
Section 9.5     Notices, Etc.                                         48
Section 9.6     Successors and Assigns                                48
Section 9.7     Choice of Forum                                       51
Section 9.8     Set Off                                               51
Section 9.9     Changes in Accounting Principles                      51
Section 9.10    Survival of Agreements, Representations and             
Warranties                                                            52
Section 9.11    Execution in Counterparts                             52
Section 9.12    Complete Agreement                                    52
Section 9.13    Limitation of Liability                               52
Section 9.14    WAIVER OF TRIAL BY JURY                               52
Section 9.15    NO ORAL AGREEMENT                                     52
</TABLE>

                                    iii

<PAGE>


EXHIBITS

Exhibit A-1     Form of Revolving Loan Note
Exhibit A-3     Form of Bid Loan Note
Exhibit B       Form of Designation Agreement
Exhibit E-1     Form of Notice of Borrowing
Exhibit E-3     Form of Notice of Conversion/Continuation
Exhibit E-4     Form of Bid Loan Quote Request
Exhibit E-5     Form of Bid Loan Quote
Exhibit E-7     Form of Notice of Responsible Officers
Exhibit F-1     Form of Secretary's Certificate
Exhibit F-3     Form of Closing Officer's Certificate
Exhibit F-6     Form of Compliance Certificate
Exhibit G       Form of Opinion of Borrower's Counsel
Exhibit H       Form of Assignment and Acceptance
Exhibit I       Controlling Stockholders 

SCHEDULES

Schedule 1.1A   Revolving Commitments
Schedule 1.1B   Lender Information
Schedule 1.1D   Existing Liens
Schedule 3.1.2. Closing Documents
Schedule 4.1.   Organization of Borrower and Subsidiaries
Schedule 4.5.   Material Litigation
Schedule 9.5.   Borrower Information


<PAGE>
    CREDIT AGREEMENT

        CREDIT AGREEMENT, dated as of July 24, 1997 (as amended, supplemented 
or otherwise modified from time to time, the "Agreement"), by and among 
NORDSTROM, INC., a Washington corporation (the "Borrower"), the banks and 
other financial institutions that either now or in the future are parties 
hereto (collectively the "Lenders" and each individually a "Lender"), BANK OF 
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION and MORGAN GUARANTY TRUST 
COMPANY OF NEW YORK, as Managing Agents (the "Managing Agents"), and 
NATIONSBANK OF TEXAS, N.A. (the "Agent Bank"), as agent and representative for 
the Lenders (in such capacity the Agent Bank and any successor in such 
capacity is referred to herein as the "Agent").  The Lenders, the Agent and 
the Managing Agents are collectively referred to herein as the "Lender 
Parties" and each individually as a "Lender Party".

            ARTICLE 1.

            DEFINITIONS AND RELATED MATTERS

        Section 1.1    Definitions.  The following terms with initial capital 
letters have the following meanings:

                    "Absolute Rate" is defined in Section 2.2.2.3.

                    "Affiliate" means, with respect to any Person, any other 
Person that, directly or indirectly through one or more intermediaries, 
controls, or is controlled by, or is under common control with, such first 
Person.  The term "control" means the possession, directly or indirectly,
of the power, whether or not exercised, to direct or cause the 
direction of the management or policies of a Person, whether through the 
ownership of Capital Stock by contract or otherwise, and the terms 
"controlled" and "common control" have correlative meanings.  Unless otherwise 
indicated, "Affiliate" refers to an Affiliate of the Borrower.  
Notwithstanding the foregoing, in no event shall any Lender Party or any 
Affiliate of any Lender Party be deemed to be an Affiliate of the Borrower.

                    "Agent" is defined in the Preamble.

                    "Agent Bank" is defined in the Preamble.

                    "Agent's Account" means the account of the Agent 
identified as such on Schedule 1.1.B, or such other account as the Agent may 
hereafter designate by notice to the Borrower and each Lender Party.

                    "Agent's Office" means the office of the Agent identified 
as such on Schedule 1.1.B, or such other office as the Agent may hereafter 
designate by notice to the Borrower and each Lender Party.

                                   1

<PAGE>
                    "Agreement" is defined in the Preamble and includes all 
Schedules and Exhibits.

                    "Applicable Law" means all applicable provisions of all 
(i) constitutions, treaties, statutes, laws, rules, regulations and ordinances 
of any Governmental Authority, (ii) Governmental Approvals and (iii) orders, 
decisions, judgments, awards and decrees of any Governmental Authority.

                    "Applicable Lending Office" means, with respect to any 
Lender, (i) in the case of any payment with respect to Euro-Dollar Rate Loans, 
the Lender's Euro-Dollar Lending Office, and (ii) in the case of any payment 
with respect to Base Rate Loans or Bid Loans or any other payment under the 
Loan Documents, the Lender's Domestic Lending Office.

                    "Applicable Margin" means, at any time, with respect to 
the Facility Fee, Euro-Dollar Rate Loans and Base Rate Loans, as applicable, 
the basis points (1/100%) per annum in respect of the Facility Fee, Euro-
Dollar Rate Loans or Base Rate Loans, as applicable, set forth in the table 
below for the Level then in effect (as described below):


<TABLE>
<CAPTION>
               Level I  Level II  Level III  Level IV  Level V  Level VI
<S>            <C>      <C>       <C>        <C>       <C>      <C>     
Facility Fee      5.50     6.25      6.50       7.50      8.50    12.50 

Euro-Dollar
Rate Loans       12.00    12.75     13.50      15.00     16.50    17.50 

Base Rate
Loans               0         0        0          0         0         0 

<FN>
        For purposes of the foregoing table, except as provided below:

            "Level I" exists at any date if, on such date, the Borrower's 
long-term debt is rated AA- or higher by S&P or Aa3 or higher by Moody's.

            "Level II" exists at any date if, on such date, (i) the Borrower's 
long-term debt is rated A+ by S&P or A1 by Moody's and (ii) Level I does not 
exist at such date.

            "Level III" exists at any date if, on such date, (i) the 
Borrower's long-term debt is rated A by S&P or A2 by Moody's and (ii) neither 
Level I nor Level II exists at such date.

            "Level IV" exists at any date if, on such date, (i) the Borrower's 
long-term debt is rated A- by S&P or A3 by Moody's and (ii) none of Level I, 
Level II and Level III exists at such date.
                                   2


<PAGE>
            "Level V" exists at any date if, on such date, (i) the Borrower's 
long-term debt is rated BBB+ by S&P or Baa1 by Moody's and (ii) none of Level 
I, Level II, Level III and Level IV exists at such date.

            "Level VI" exists at any date if, on such date, (i) the Borrower's 
long-term debt is rated BBB or lower by S&P or Baa2 or lower by Moody's or is 
rated by neither S&P nor Moody's and (ii) none of Level I, Level II, Level 
III, Level IV and Level V exists at such date.
</TABLE>


        The credit ratings to be utilized for purposes of determining a Level 
hereunder are those assigned to the senior unsecured long-term debt of the 
Borrower without third-party credit enhancement, and any rating assigned to 
any other Debt of the Borrower shall be disregarded.  The rating in effect at 
any date is that in effect at the close of business on such date.

        "Assignment and Assumption" is defined in Section 9.6.2.

        "Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. 
Section 101 et seq.), as amended from time to time.

        "Base Rate" means a fluctuating interest rate per annum in effect from 
time to time, which rate per annum shall at all times be equal to the higher 
of: (a) the rate of interest announced publicly by the Agent Bank from time to 
time as the Agent Bank's prime rate; and (b) 1/2 of one percent per annum 
above the Federal Funds Rate.

        "Base Rate Loan" means a Revolving Loan, or portion thereof, that 
bears interest by reference to the Base Rate.

        "Bid Loan" is defined in Section 2.2.1.

        "Bid Loan Borrowing" is defined in Section 2.2.1.

        "Bid Loan Note" means a Bid Loan Note of the Borrower, in 
substantially the form of Exhibit A-3, payable to a Lender, evidencing the 
obligation of the Borrower to repay the Bid Loans made by the Lender, and 
includes any Note issued in exchange or substitution therefor.

        "Bid Loan Quote" is defined in Section 2.2.2.2.

        "Bid Loan Quote Request" is defined in Section 2.2.2.1.

        "Borrower" is defined in the Preamble.

        "Borrower Account" means the account of the Borrower identified as 
such on Schedule 9.5., or such other account as the Borrower may hereafter 
designate by notice to the Agent, with the prior consent of the Agent (such 
consent not to be withheld or delayed so

                                    3

<PAGE>
long as the designation of such account would not prevent the Agent from 
satisfying its obligations hereunder in a timely manner).

        "Borrowing" means a contemporaneous borrowing of Loans of the same 
Type.

        "Business Day" means any day that (i) is not a Saturday, Sunday or 
other day on which banks in Seattle, Washington, Los Angeles, California or 
Dallas, Texas, are authorized or obligated to close and (ii) if the applicable 
Business Day relates to any Euro-Dollar Rate Loans, is a Euro-Dollar Business 
Day.

        "Capital Stock" means, with respect to any Person, all (i) shares, 
interests, participations or other equivalents (howsoever designated) of 
capital stock and other equity interests of such Person and (ii) rights (other 
than debt securities convertible into capital stock or other equity 
interests), warrants or options to acquire any such capital stock or other 
equity interests.

        "Capitalized Leases" means, as to any Person, all leases of such 
Person of real or personal property that are required to be capitalized on the 
balance sheet of such Persons.  The amount of any Capitalized Lease shall be 
the capitalized amount thereof.

        "Change of Control" means any Person or two or more Persons acting in 
concert (other than the Controlling Stockholders) shall have acquired 
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and 
Exchange Commission under the Securities Exchange Act of 1934), directly or 
indirectly, of Voting Stock of the Borrower (or other securities convertible 
into such Voting Stock) representing 35% or more of the combined 
voting power of all Voting Stock of the Borrower.

        "Closing Date" means July 31, 1997 or such earlier date on which all 
conditions set forth in Section 3.1. have been satisfied.

        "Code" means the Internal Revenue Code of 1986, as amended from time 
to time.

        "Compliance Certificate" is defined in Section 5.1.3.

        "Contingent Obligation" means, as to any Person, any obligation, 
direct or indirect, contingent or otherwise, of such Person (i) with respect 
to any Debt or other obligation of another Person, including any direct or 
indirect guarantee of such Debt (other than any endorsement for collection in 
the ordinary course of business) or any other direct or indirect obligation, 
by agreement or otherwise, to purchase or repurchase any such Debt or 
obligation or any security therefor, or to provide funds for the payment or 
discharge of any such Debt or obligation (whether in the form of loans, 
advances, stock purchases, capital contributions or otherwise), (ii) to 
provide funds to maintain the financial condition of any other Person, or 
(iii) otherwise to assure or hold harmless the holders of Debt or other 
obligations of another Person against loss in respect thereof.  The amount of 
any Contingent 

                                    4

<PAGE>
Obligation under clause (i) or (ii) shall be the greater of (a) the amount of 
the Debt or obligation guaranteed or otherwise supported thereby, or (b) the 
maximum amount guarantied or supported by the Contingent Obligation.  The term 
"Contingent Obligation," as used with respect to the Borrower, shall not 
include the obligations of the Borrower under the Investment Agreement or any 
other obligation which the Borrower does or may have to sell to, repurchase 
from or indemnify the purchaser with respect to accounts discounted or sold by 
the Borrower in the ordinary course of its business (but any such other 
obligation shall be excluded only to the extent that such other obligation is 
not for the benefit, directly or indirectly, of any Person that is not a 
wholly owned Subsidiary (direct or indirect) of the Borrower).

        "Contractual Obligation" means, as applied to any Person, any 
provision of any security issued by that Person or of any indenture, agreement 
or other instrument to which that Person is a party or by which it or any of 
the properties owned or leased by it is bound or otherwise subject.

        "Controlled Group" means all members of a controlled group of 
corporations and all trades or businesses (irrespective of whether 
incorporated) that, together with the Borrower or any Subsidiary, are or were 
treated as a single employer under Section 414 of the Code.

        "Controlling Stockholders" means the individuals listed on Exhibit I 
hereto and the spouse and lineal descendants of any such individual.

        "Debt" means, with respect to any Person, the aggregate amount of, 
without duplication:  (i) all obligations for borrowed money; (ii) all 
obligations evidenced by bonds, debentures, notes or other similar 
instruments; (iii) all obligations to pay the deferred purchase price of 
property or services, except trade accounts payable not overdue arising in the 
ordinary course of business; (iv) all Capitalized Leases; (v) all obligations 
of others secured by a Lien on any asset owned by such Person or Persons 
whether or not such obligation or liability is assumed; (vi) all obligations 
of such Person or Persons, contingent or otherwise, in respect of any letters 
of credit or bankers' acceptances; and (vii) all Contingent Obligations.

        "Default" means any condition or event that, with the giving of notice 
or lapse of time or both, would, unless cured or waived, become an Event of 
Default.

        "Designated Bidder" means (a) a bank or other financial institution or 
(b) a special purpose corporation that is engaged in making, purchasing or 
otherwise investing in commercial loans in the ordinary course of its business 
and that issues (or the parent of which issues) commercial paper rated at 
least "Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the 
then equivalent grade) by S&P that, in the case of either clause (a) or (b), 
(i) is organized under the laws of the United States or any State thereof, 
(ii) shall have become a party hereto pursuant to Section 9.6 and (iii) is not 
otherwise a Lender.

                                    5

<PAGE>
        "Designation Agreement" means a designation agreement entered into by 
a Lender (other than a Designated Bidder) and a Designated Bidder, and 
accepted by the Agent, in substantially the form of Exhibit B hereto.

        "Dollars" and "$" means lawful money of the United States of America.

        "Domestic Lending Office" means the office, branch or Affiliate of any 
Lender identified on Schedule 1.1.B as its Domestic Lending Office or such 
other office, branch or Affiliate as the Lender may hereafter designate as its 
Domestic Lending Office for one or more Types of Loans by notice to the 
Borrower and the Agent.

        "EBITDAR" means, for any period, net income (or net loss) plus, to the 
extent deducted in determining such net income (or net loss), the sum of (a) 
interest expense, (b) income tax expense, (c) depreciation expense, (d) 
amortization expense and (e) rent expense, in each case determined in 
accordance with GAAP for such period.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended from time to time.

        "ERISA Event" means (i) (a) the occurrence of a reportable event, 
within the meaning of Section 4043 of ERISA with respect to any Plan unless 
the 30-day notice requirement with respect to such event has been waived by 
the PBGC (provided that a reportable event arising from the disqualification 
of a Plan or the distress termination of a Plan under ERISA Section 4041(c) 
shall be deemed to be an ERISA Event without regard to the waiver of notice 
provided by the PBGC by regulation or otherwise), or (b) the requirements of 
subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2) 
of such Section) are met with respect to a contributing sponsor, as defined in 
Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph 
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably 
expected to occur with respect to such Plan within the following 30 days; (ii) 
an application is filed with the Internal Revenue Service for a minimum 
funding waiver under Section 412 of the Internal Revenue Code with respect to 
a Plan; (iii) the provision by the administrator of any Plan of a notice of 
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA 
(including any such notice with respect to a plan amendment referred to in 
Section 4041(e) of ERISA); (iv) the cessation of operations at a facility of 
the Borrower or any member of the Controlled Group in the circumstances 
described in Section 4062(e) of ERISA; (v) the withdrawal by the Borrower or 
any member of the Controlled Group from a Multiple Employer Plan during a plan 
year for which it was a substantial employer, as defined in Section 4001(a)(2) 
of ERISA; (vi) the conditions for the imposition of a lien under Section 
302(f) of ERISA shall have been met with respect to any Plan; (vii) the 
adoption of an amendment to a Plan requiring the provision of security to such 
Plan pursuant to Section 307 of ERISA; or (viii) the institution by the PBGC 
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the 
occurrence of any event or condition described in Section 4042 of ERISA that 
constitutes grounds for the termination of, or the appointment of a trustee to 
administer, a Plan.

                                    6

<PAGE>
        "Euro-Dollar Business Day" means any Business Day on which commercial 
banks are open for international business (including dealings in interbank 
Dollar deposits) in London, England.

        "Euro-Dollar Lending Office" means the office, branch or Affiliate of 
any Lender identified on Schedule 1.1.B as its Euro-Dollar Lending Office or 
such other office, branch or Affiliate as the Lender may hereafter designate 
as its Euro-Dollar Lending Office by notice to the Borrower and the Agent.

        "Euro-Dollar Rate" means, for any Euro-Dollar Rate Loan for any 
Interest Period therefor, an interest rate per annum (rounded upwards, if 
necessary, to the nearest 1/100 of 1%) at all times equal to the rate per 
annum obtained by dividing (a) the rate per annum appearing on Telerate Page 
3750 (or any successor page) as the London interbank offered rate for deposits 
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior 
to the first day of such Interest Period for a term comparable to such 
Interest Period by (b) a percentage equal to 100% minus the Euro-Dollar Rate 
Reserve Requirement in effect from time to time.  If for any reason the rate 
described in the foregoing clause (a) is not available at the time of 
determination of the Euro-Dollar Rate for any Euro-Dollar Rate Loans for any 
Interest Period, the term "Euro-Dollar Rate" shall mean, for any such Euro-
Dollar Rate Loans for any such Interest Period therefor, an interest rate per 
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at all times 
equal to the rate per annum obtained by dividing (i) the rate per annum 
appearing on Reuters Screen LIBO Page as the London interbank offered rate for 
deposits in U.S. dollars at approximately 11:00 a.m. (London time) two 
Business Days prior to the first day of such Interest Period for a term 
comparable to such Interest Period (provided, however, if more than one rate 
is specified on Reuters Screen LIBO Page, the applicable rate shall be the 
arithmetic mean of all such rates) by (ii) a percentage equal to 100% minus 
the Euro-Dollar Rate Reserve Requirement in effect from time to time.  The 
Euro-Dollar Rate shall be adjusted automatically on and as of the effective 
date of any change in the Euro-Dollar Reserve Requirement.

        "Euro-Dollar Rate Loan" means a Revolving Loan, or portion thereof, 
that bears interest at a rate determined by reference to a Euro-Dollar Rate 
(and as to which a single Interest Period is applicable).

        "Euro-Dollar Reserve Requirement" means, with respect to any Euro-
Dollar Rate Loan and at any time of determination, the maximum rate at which 
reserves (including any marginal, supplemental, special or emergency reserve) 
are required to be maintained at such time under Regulation D (or any 
successor statute) by member banks of the Federal Reserve System in New York 
City with deposits exceeding $5 billion against "Euro-Currency Liabilities," 
as that term is used in Regulation D (or any successor statute) (or in respect 
of any other category of liabilities that includes deposits by reference to 
which the interest rate on Euro-Dollar Rate Loans is determined or any 
category of extensions of credit or other assets that includes loans by a non-
United States office of any bank to United States residents).

        "Event of Default" means any of the events specified in Section 7.1.

                                    7

<PAGE>
        "Excluded Tax" means, with respect to any payment to any Lender Party, 
(i) any taxes imposed on or measured by the overall net income (including a 
franchise tax based on net income) of such Lender Party by the United States 
of America or any political subdivision or taxing authority thereof or 
therein, and (ii) any taxes imposed on or measured by the overall net income 
(including a franchise tax based on net income) of such Lender Party or its 
Agent's Office or Applicable Lending Office in respect of which the payment is 
made, by the jurisdiction in which it is incorporated, maintains its principal 
executive office or in which such Agent's Office or Applicable Lending Office 
is located.

        "Existing Liens" means the Liens described on Schedule 1.1.D.

        "FDIC" means the Federal Deposit Insurance Corporation or any 
successor.

        "Federal Funds Rate" means, for any day, the rate per annum (rounded 
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted 
average of the rates on overnight Federal funds transactions with members of 
the Federal Reserve System arranged by Federal funds brokers on such day, as 
published for such day (or, if such day is not a Business Day, for the next 
preceding Business Day) by the Federal Reserve Bank of New York on the 
Business Day next succeeding such day, provided that if such rate is not so 
published for any day that is a Business Day, the Federal Funds Rate for such 
day shall be the average rate charged to the Agent Bank on such day on such 
transactions as determined by the Agent Bank.

        "Federal Reserve Board" means the Board of Governors of the Federal 
Reserve System, or any successor thereto.

        "Fee Letter" means that certain letter dated May 15, 1997 between the 
Borrower and the Agent regarding certain fees relating to this Agreement.

        "Fees" means, collectively, the fees described or referenced in 
Section 2.6.

        "Fiscal Year" means the fiscal year of the Borrower, which shall be 
the 12 month-period ending on January 31 in each year or such other period as 
the Borrower may designate and the Agent may approve in writing.  "Fiscal 
Quarter" or "fiscal quarter" means any quarter of a Fiscal Year.

        "Funding Date" means any date on which a Loan is (or is requested to 
be) made.

        "GAAP" means generally accepted accounting principles as in effect in 
the United States of America (as such principles are in effect on the date 
hereof).

        "Governmental Approval" means an authorization, consent, approval, 
permit or license issued by, or a registration or filing with, any 
Governmental Authority.

                                    8

<PAGE>
        "Governmental Authority" means any nation and any state or political 
subdivision thereof and any entity exercising executive, legislative, 
judicial, regulatory or administrative functions of or pertaining to 
government and any tribunal or arbitrator of competent jurisdiction.

        "Indemnified Liabilities" is defined in Section 9.2.1.

        "Interest Period" means, subject to the next sentence:

        (i)    with respect to each Euro-Dollar Rate Loan, the period 
commencing on the date specified in the related Notice of Borrowing or Notice 
of Conversion/Continuation (or telephonic notice in lieu thereof) and ending 
(subject to availability to all Lenders) one, two, three or six months 
thereafter, as the Borrower may elect, as applicable; and

        (ii)    with respect to any Bid Loan, the period commencing on the 
Funding Date specified in the related Bid Loan Quote Request and ending on any 
Business Day not less than seven and not more than 30 days thereafter, as the 
Borrower may request as provided in Section 2.2.2.1.

        Notwithstanding the foregoing:  (a) if a Euro-Dollar Rate Loan is 
continued, the Interest Period applicable to the continued Loan shall commence 
on the day on which the Interest Period applicable to such Euro-Dollar Rate 
Loan ends; (b) any Interest Period applicable to a Euro-Dollar Rate Loan (i) 
that would otherwise end on a day that is not a Business Day shall be extended 
to the next succeeding Business Day, unless such succeeding Business Day falls 
in another calendar month, in which case such Interest Period shall end on 
the next preceding Business Day or (ii) that begins on the last Business Day 
of a calendar month (or on a day for which there is no numerically 
corresponding day in the calendar month at the end of such Interest Period) 
shall end on the last Business Day of the calendar month; and (c) no Interest 
Period shall end after the Maturity Date. 

        "Investment Agreement" means the Investment Agreement, dated as of 
October 8, 1984, between the Borrower and Nordstrom Credit, as amended from 
time to time. 

        "Lender" is defined in the Preamble and, except when used in reference 
to a Revolving Loan, a Revolving Borrowing, a Revolving Loan Note, a Revolving 
Commitment or a related term, shall include each Designated Bidder.  For 
purposes of the Sections referred to in (and subject to) the last sentence of 
Section 9.6.3., "Lender" includes a holder of a Participation.

        "Lender Party" is defined in the Preamble.  For purposes of the 
Sections referred to in (and subject to) the last sentence of Section 9.6.3., 
"Lender Party" includes a holder of a Participation.

        "Lien" means any lien, mortgage, pledge, security interest, charge, or 
encumbrance of any kind (including any conditional sale or other title 
retention agreement or 

                                    9

<PAGE>
any lease in the nature thereof) and any agreement to give any lien, mortgage, 
pledge, security interest, charge, or other encumbrance of any kind.

        "Loan" means a Base Rate Loan, Euro-Dollar Rate Loan or Bid Loan, each 
of which constitutes a "Type" of Loan.

        "Loan Documents" means, collectively, this Agreement, the Notes, and 
any other agreement, instrument or other writing executed or delivered by the 
Borrower in connection herewith, and all amendments, exhibits and schedules to 
any of the foregoing.

        "Managing Agent" is defined in the Preamble.

        "Margin Regulations" means Regulations G, T, U and X of the Federal 
Reserve Board, as amended from time to time.

        "Margin Stock" means "margin stock" as defined in the Margin 
Regulations.

        "Material Adverse Effect" or "Material Adverse Change" means (i) a 
material adverse effect on or (ii) a material adverse change in, as the case 
may be, any one or more of the following:  (A) the business, assets, results 
of operations or financial condition of the Borrower and its Subsidiaries 
taken as a whole or (B) the ability of the Borrower to perform its obligations 
under any Loan Document to which it is a party or (C) the actual material 
rights and remedies of any Lender Party under any Loan Document.  For purposes 
of Section 4.5. only, any claims, liabilities, payments or other amounts in 
excess of $10,000,000 in the aggregate shall be "material" and constitute a 
"Material Adverse Effect."

        "Maturity Date" means July 23, 2002.

        "Moody's" means Moody's Investors Service, Inc. and any successor.

        "Multiemployer Plan" means a multiemployer plan, as defined in 
Section 4001(a)(3) of ERISA.

        "NCI Credit Agreement" means that certain Revolving Credit Agreement 
dated as of the date hereof by and among Nordstrom Credit, the financial 
institutions party thereto as Lenders thereunder and NationsBank of Texas, 
N.A., as Agent for such Lenders, as the same may be amended, supplemented or 
otherwise modified from time to time.

        "Net Worth" of any Person means, as of any date of determination, the 
excess of Total Assets over Total Liabilities of such Person.

        "Nordstrom Credit" means Nordstrom Credit, Inc., a Colorado 
corporation, and any successor.

        "Note" means a Revolving Loan Note or Bid Loan Note.

                                    10

<PAGE>
        "Notice of Borrowing" is defined in Section 2.1.3.

        "Notice of Conversion/Continuation" is defined in Section 2.4.2.2.

        "Notice of Responsible Officer" is defined in Section 2.1.3.3.

        "Obligations" means all present and future obligations and liabilities 
of the Borrower of every type and description arising under or in connection 
with the Loan Documents due or to become due to the Lender Parties or any 
Person entitled to indemnification, or any of their respective successors, 
transferees or assigns, whether for principal, interest, Fees, expenses, 
indemnities or other amounts (including attorneys' fees and expenses) and 
whether due or not due, direct or indirect, joint and/or several, absolute or 
contingent, voluntary or involuntary, liquidated or unliquidated, determined 
or undetermined, and whether now or hereafter existing, renewed or 
restructured.

        "Participation" is defined in Section 9.6.3.

        "PBGC" means the Pension Benefit Guaranty Corporation, as defined in 
Title IV of ERISA, or any successor.

        "Periodic Payment Date" means the last Business Day of each month 
commencing July 31, 1997.

        "Permitted Liens" means, with respect to any asset, the Liens (if any) 
permitted to exist on such asset under Section 6.1.

        "Person" means an individual, a corporation, a partnership, a limited 
liability company, a trust, an unincorporated organization or any other entity 
or organization, including a government or any agency or political subdivision 
thereof.

        "Plan" means, at any time, any employee pension benefit plan that is 
covered by Title IV of ERISA or subject to the minimum funding standards under 
Section 412 of the Code and that is either (i) maintained by the Borrower or 
any member of a Controlled Group for employees of the Borrower or such 
Controlled Group or was formerly so maintained and in respect of which the 
Borrower or any member of the Controlled Group could have liability under 
Section 4069 of ERISA in the event such plan has been or were to be terminated 
or (ii) maintained for employees of the Borrower or any member of the 
Controlled Group and at least one Person other than the Borrower and the 
members of the Controlled Group or was formerly so maintained and in respect 
of which the Borrower or any member of the Controlled Group could have 
liability under Section 4064 or 4069 of ERISA in the event such plan has been 
or were to be terminated.

        "Post-Default Rate" means (i) with respect to all Base Rate Loans and 
any other amounts owing hereunder not paid when due (other than then 
outstanding Euro-Dollar Rate Loans), a rate per annum equal at all times to 
the rate otherwise applicable to Base Rate Loans plus 2.00% per annum, and 
(ii) with respect each then outstanding Euro-Dollar Rate 

                                    11

<PAGE>
Loan, a rate per annum equal at all times to the rate otherwise applicable to 
such Euro-Dollar Rate Loan plus 2.00% per annum.

        "Regulation D" means Regulation D of the Federal Reserve Board, as 
amended from time to time.

        "Regulatory Change" means (i) the adoption or becoming effective after 
the date hereof of any treaty, law, rule or regulation, (ii) any change in any 
such treaty, law, rule or regulation (including Regulation D), or any change 
in the administration or enforcement thereof, by any Governmental Authority, 
central bank or other monetary authority charged with the interpretation or 
administration thereof, in each case after the date hereof, or (iii) 
compliance after the date hereof by any Lender Party (or its Applicable 
Lending Office or, in the case of capital adequacy requirements, any holding 
company of any Lender Party) with, any interpretation, directive, request, 
order or decree (whether or not having the force of law) of any such 
Governmental Authority, central bank or other monetary authority.

        "Required Lenders" means Lenders having more than 50% of the Revolving 
Commitments or, if the Revolving Commitments have terminated, Lenders holding 
more than 50% of the aggregate unpaid principal amount of the Loans.

        "Responsible Officer" is defined in Section 2.1.3.3.

        "Restricted Payment" means (i) any dividend or other distribution, 
direct or indirect, on account of any Capital Stock of the Borrower or any 
Subsidiary now or hereafter outstanding, except (a) a dividend or other 
distribution payable solely in shares or equivalents of Capital Stock of the 
same class as the Capital Stock on account of which the dividend or 
distribution is being paid or made, and (b) the issuance of equity interests 
upon the exercise of outstanding warrants, options or other rights, or (ii) 
any redemption, retirement, sinking fund or similar payment, purchase or other 
acquisition for value, direct or indirect, of any Capital Stock of the 
Borrower or any Subsidiary now or hereafter outstanding.

        "Revolving Commitment" means, with respect to each Lender, the amount 
set forth for such Lender on Schedule 1.1.A, as reduced or terminated from 
time to time pursuant to the terms hereof.  "Revolving Commitments" means the 
aggregate amount of the Revolving Commitments of all Lenders.

        "Revolving Commitment Termination Date" is defined in Section 2.7.1.

        "Revolving Commitment Usage" means, at any time, (i) with respect to 
any Lender, the sum of (a) the aggregate unpaid principal amount of all 
Revolving Loans made by such Lender plus (b) such Lender's pro rata share (in 
accordance with the respective Revolving Commitments of the Lenders) of the 
aggregate unpaid principal amount of all Bid Loans, and (ii) with respect to 
all Lenders, the aggregate unpaid principal amount of all Revolving Loans and 
Bid Loans, in each case at such time and giving effect to Borrowings then 
requested.

                                    12

<PAGE>
        "Revolving Loan Note" means a Revolving Loan Note made by the Borrower 
payable to the order of any Lender, in the amount of the lesser of (i) such 
Lender's Revolving Commitment and (ii) the aggregate principal amount of 
Revolving Loans made by such Lender, which note is substantially in the form 
of Exhibit A-1, as amended from time to time.

        "Revolving Loans" is defined in Section 2.1.1.1.

        "S&P" means Standard & Poor's Ratings Group and any successor.

        "SEC" means the United States Securities and Exchange Commission, and 
any successor.

        "Securities Act" means the Securities Act of 1933, as amended from 
time to time.

        "Senior Officer" means the Chairman of the Board of Directors, any Co-
President, the Chief Executive Officer, the Chief Operating Officer, the Chief 
Financial Officer, the Treasurer or any Vice President in charge of a 
principal business unit or division of the Borrower.

        "Solvent" and "Solvency" mean, with respect to any Person on a 
particular date, that on such date (a) the property of such Person, at a fair 
valuation, is greater than the total amount of such Person's absolute and 
matured debts, and (b) such Person is generally paying his, her or its debts 
as they become due.

        "Subsidiary" means, with respect to any Person, any other Person of 
which more than 50% of the total voting power of the Capital Stock entitled to 
vote in the election of the board of directors (or other Persons performing 
similar functions) are at the time directly or indirectly owned by such first 
Person.  Unless otherwise indicated, "Subsidiary" refers to a Subsidiary of 
the Borrower.

        "Taxes" means any present or future income, stamp and other taxes, 
charges, fees, levies, duties, imposts, withholdings or other assessments, 
together with any interest and penalties, additions to tax and additional 
amounts imposed by any federal, state, local or foreign taxing authority upon 
any Person.

        "Total Assets" of any Person means all property, whether real, 
personal, tangible, intangible or otherwise, which in accordance with GAAP 
would be included in determining total assets as shown on the assets portion 
of a balance sheet of such Person.

        "Total Liabilities" of any Person means all obligations which in 
accordance with GAAP would be included in determining total liabilities as 
shown on the liabilities portion of a balance sheet of such Person.

        "Type" is defined in the definition of "Loan."

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<PAGE>
        "Unfunded Vested Liabilities" means, with respect to any Plan at any 
time, the amount (if any) by which (i) the present value of all vested 
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of 
all Plan assets allocable to such benefits, all determined as of the then most 
recent valuation date for such Plan, but only to the extent that such excess 
represents a potential liability of the Borrower or any member of the 
Controlled Group to the PBGC or the Plan under Title IV of ERISA.

        "Voting Stock" means capital stock issued by a corporation, or 
equivalent interests in any other Person, the holders of which are ordinarily, 
in the absence of contingencies, entitled to vote for the election of 
directors (or persons performing similar functions) of such Person, even 
though the right to so vote has been suspended by the happening of such a 
contingency.

        "Wholly-Owned" means, with respect to any Subsidiary, that all the 
Capital Stock (except for directors' qualifying shares) of such Subsidiary are 
directly or indirectly owned by the Borrower.

        Section 1.2    Related Matters.

        1.2.1.  Construction.  Unless the context of this Agreement clearly 
requires otherwise, references to the plural include the singular, the 
singular includes the plural, the part includes the whole, "including" is not 
limiting, and "or" has the inclusive meaning represented by the phrase 
"and/or."  The words "hereof," "herein," "hereby," "hereunder" and similar 
terms in this Agreement refer to this Agreement as a whole (including the 
Preamble, the Recitals, the Schedules and the Exhibits) and not to any 
particular provision of this Agreement.  Article, section, subsection, 
exhibit, schedule, recital and preamble references in this Agreement are to 
this Agreement unless otherwise specified.  References in this Agreement to 
any agreement, other document or law "as amended" or "as amended from time to 
time," or to amendments of any document or law, shall include any amendments, 
supplements, replacements, renewals, waivers or other modifications.  
References in this Agreement to any law (or any part thereof) include any 
rules and regulations promulgated thereunder (or with respect to such part) by 
the relevant Governmental Authority, as amended from time to time.

        1.2.2.  Determinations.  Any determination or calculation contemplated 
by this Agreement that is made by any Lender Party in good faith and 
reasonably shall be final and conclusive and binding upon the Borrower and, in 
the case of determinations by the Agent, also the other Lender Parties, in the 
absence of manifest error.  All consents and other actions of any Lender Party 
contemplated by this Agreement may be given, taken, withheld or not taken in 
such Lender Party's discretion (whether or not so expressed), except as 
otherwise expressly provided herein.

        1.2.3.  Accounting Terms and Determinations.  Unless otherwise 
specified herein, all accounting terms used herein shall be interpreted, all 
accounting determinations hereunder shall be made, and all financial 
statements required to be delivered hereunder shall be prepared on a 
consolidated basis in accordance with GAAP applied on a basis consistent

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<PAGE>
(except for changes concurred in by the relevant independent public 
accountants) with the audited financial statements of the Borrower referred to 
in Section 4.3.

        1.2.4.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED 
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (OTHER THAN THE 
RULES REGARDING CONFLICTS OF LAWS) OF THE STATE OF WASHINGTON. 

        1.2.5.  Headings.  The Article and Section headings used in this 
Agreement are for convenience of reference only and shall not affect the 
construction hereof.

        1.2.6.  Severability.  If any provision of this Agreement shall be 
held to be invalid, illegal or unenforceable under Applicable Law in any 
jurisdiction, such provision shall be ineffective only to the extent of such 
invalidity, illegality or unenforceability, which shall not affect any other 
provisions hereof or the validity, legality or enforceability of such 
provision in any other jurisdiction.

        1.2.7.  Independence of Covenants.  All covenants under this Agreement 
shall each be given independent effect so that if a particular action or 
condition is not permitted by any such covenant, the fact that it would be 
permitted by another covenant, by an exception thereto, or be otherwise within 
the limitations thereof, shall not avoid the occurrence of a Default or an 
Event of Default if such action is taken or condition exists.

    ARTICLE 2.

    AMOUNTS AND TERMS OF THE CREDIT FACILITIES

        Section 2.1    Revolving Loans.

        2.1.1.  General Terms.

            2.1.1.1.  Each Lender severally agrees, upon the terms and subject 
to the conditions set forth in this Agreement, at any time from and after the 
Closing Date until the Business Day next preceding the Revolving Commitment 
Termination Date, to make loans (each a "Revolving Loan") to the Borrower in 
an aggregate principal amount not to exceed at any time outstanding, when 
added to other Revolving Commitment Usage of such Lender at such time, the 
Revolving Commitment of such Lender, provided that the Revolving Commitment 
Usage of all Lenders at any time, in the aggregate, shall not exceed the 
aggregate Revolving Commitments of all Lenders.

            2.1.1.2.  Revolving Loans may be voluntarily prepaid pursuant to 
Section 2.8.3. and, subject to the provisions of this Agreement, any amounts 
so prepaid may be re-borrowed, up to the amount available under this Section 
at the time of such reborrowing.

                                    15

<PAGE>
        2.1.2.  Type of Loans and Amounts.

            2.1.2.1.  Loans made under this Section 2.1. may be Base Rate 
Loans or Euro-Dollar Rate Loans (each a "Type" of Loan), subject, however, to 
Sections 2.4.3. and 2.11.

            2.1.2.2.  Each Borrowing of Revolving Loans shall be in a minimum 
aggregate amount of $1,000,000 and integral multiples of $100,000, in the case 
of a Borrowing of Base Rate Loans, or a minimum aggregate amount of $5,000,000 
and integral multiples of $1,000,000, in the case of a Borrowing of Euro-
Dollar Rate Loans.

        2.1.3.  Notice of Borrowing.

            2.1.3.1.  When the Borrower desires to borrow Revolving Loans 
pursuant to Section 2.1., it shall deliver to the Agent a Notice of Borrowing 
substantially in the form of Exhibit E-1, duly completed and executed by a 
Responsible Officer (a "Notice of Borrowing"), (a) no later than 11:00 a.m. 
(Dallas, Texas time) on the proposed Funding Date, in the case of a Borrowing 
of Base Rate Loans, or (b) no later than 11:00 a.m. (Dallas, Texas time) at 
least three Euro-Dollar Business Days before the proposed Funding Date, in the 
case of a Borrowing of Euro-Dollar Rate Loans.

            2.1.3.2.  In lieu of delivering a Notice of Borrowing, the 
Borrower, through a Responsible Officer, may give the Agent telephonic notice 
of any proposed Borrowing of Revolving Loans by the time a Notice of Borrowing 
would be required to be delivered and containing all information required for 
a Notice of Borrowing; provided, however, that such notice shall be confirmed 
in writing by delivery of a Notice of Borrowing to the Agent on or before the 
proposed Funding Date (or, in the case of a Base Rate Borrowing, no later than 
one Business Day after the Funding Date).  No Lender Party shall incur any 
liability to the Borrower or the other Lender Parties in acting upon any 
telephonic notice that such Lender Party believes to have been given by a 
Responsible Officer or for otherwise acting in good faith under this Section 
2.1. and in making any Loan in accordance with this Agreement pursuant to any 
telephonic notice and, upon funding of Revolving Loans by any Lender in 
accordance with this Agreement pursuant to any such telephonic notice, the 
Borrower shall have effected Revolving Loans hereunder.

            2.1.3.3.  The Borrower shall notify the Agent of the names of its 
officers and employees authorized to request and take other actions with 
respect to Loans on behalf of the Borrower (each a "Responsible Officer") by 
providing the Agent with a Notice of Responsible Officers substantially in the 
form of Exhibit E-7, duly completed and executed by a Senior Officer (a 
"Notice of Responsible Officer").  The Agent shall be entitled to rely 
conclusively on a Responsible Officer's authority to request and take other 
actions with respect to Loans on behalf of the Borrower until the Agent 
receives a new Notice of Responsible Officer that no longer designates such 
Person as a Responsible Officer.  The Agent shall have no duty to verify the 
authenticity of the signature appearing on any Notice of Borrowing, Notice of 
Responsible Officer or any other notice given under the Loan Documents.

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<PAGE>
            2.1.3.4.  Any Notice of Borrowing (or telephone notice in lieu 
thereof) delivered pursuant to this Section shall be irrevocable and the 
Borrower shall be bound to make a Borrowing in accordance therewith.

            2.1.3.5.  The Agent shall promptly notify each Lender of the 
contents of any Notice of Borrowing (or telephonic notice in lieu thereof) 
received by it, and such Lender's pro rata portion of the Borrowing requested.  
Prior to 1:00 p.m. (Dallas, Texas time) on the date specified in such notice 
as the Funding Date, each Lender, subject to the terms and conditions hereof, 
shall make its pro rata portion of the Borrowing available, in immediately 
available funds, to the Agent at the Agent's Account.

        2.1.4.  Funding.  Not later than 1:00 p.m. (Dallas, Texas time) on 
such Funding Date or such later time as may be agreed to by the Borrower and 
the Agent, and subject to and upon satisfaction of the applicable conditions 
set forth in Article 3 as determined by the Agent, the Agent shall, upon 
receipt of the proceeds of the requested Loans, make such proceeds available 
to the Borrower in Dollars in immediately available funds in the Borrower 
Account.

        Section 2.2    Bid Loans.

        2.2.1.  General Terms.  At any time prior to the Business Day 
immediately preceding the Revolving Commitment Termination Date, the Borrower 
may request the Lenders to make offers to make bid loans to the Borrower (each 
a "Bid Loan"), provided that (a) the aggregate unpaid principal amount of all 
Bid Loans, together with all other Revolving Commitment Usage of all Lenders 
at any time, shall not exceed the aggregate Revolving Commitments of all 
Lenders; (b) the aggregate amount of Bid Loans requested for any Funding Date 
and with the same Interest Period (each a "Bid Loan Borrowing") shall be at 
least $10,000,000 and a multiple of $1,000,000; and (c) all Interest Periods 
applicable to Bid Loans shall be subject to Section 2.4.3.  The Lenders may, 
but shall have no obligation to, make such offers, and the Borrower may, but 
shall have no obligation to, accept any such offers in the manner set forth in 
this Section 2.2.

        2.2.2.  Bid Loan Procedures.

            2.2.2.1.  When the Borrower wishes to request offers to make Bid 
Loans, it shall give the Agent (which shall promptly notify the Lenders) 
notice substantially in the form of Exhibit E-4, duly completed and executed 
by a Responsible Officer (a "Bid Loan Quote Request"), so as to be received no 
later than 11:00 a.m. (Dallas, Texas time) on the second Business Day before 
the proposed Funding Date (or such other time and date as the Borrower and the 
Agent, with the consent of the Required Lenders, may agree).  Subject to 
Section 2.4.3., the Borrower may request offers for up to three different Bid 
Loan Borrowings in a single Bid Loan Quote Request, in which case such Bid 
Loan Quote Request shall constitute a separate Bid Loan Quote Request for each 
such Borrowing.  Except as otherwise provided in this Section 2.2., no Bid 
Loan Quote Request shall be given within five Business Days (or such other 
number of days as the Borrower and the Agent, with the consent of the Required 
Lenders, may agree) of any other Bid Loan Quote Request.

                                    17

<PAGE>
            2.2.2.2.  Each Lender may, but shall not be obligated to, in 
response to any Bid Quote Request submit one or more written quotes 
substantially in the form of Exhibit E-5, duly completed (each a "Bid Loan 
Quote"), each containing an offer to make a Bid Loan for the Interest Period 
requested and setting forth the Absolute Rate to be applicable to the Bid 
Loan; provided that (a) a Lender may make a single submission containing one 
or more Bid Loan Quotes in response to several Bid Loan Quote Requests given 
at the same time; (b) the principal amount of the Bid Loan for which each such 
offer is being made shall be at least $2,000,000 and a multiple of $1,000,000; 
provided that the aggregate principal amount of all Bid Loans for which a 
Lender submits Bid Loan Quotes (i) may be greater or less than the Revolving 
Commitment of such Lender but (ii) may not exceed the principal amount of the 
Bid Loan Borrowing for which offers were requested.  Each Bid Loan Quote must 
be submitted to the Agent by fax not later than 11:00 a.m. (Dallas, Texas 
time) on the Funding Date (or such other time and date as the Borrower and the 
Agent, with the consent of the Required Lenders, may agree); provided that any 
Bid Loan Quote may be submitted by the Agent (or its Applicable Lending 
Office) only if the Agent (or such Applicable Lending Office) notifies the 
Borrower of the terms of the offer contained therein not later than 10:45 
a.m. (Dallas, Texas time) on the Funding Date.  Subject to Sections 3. and 
7.2., any Bid Loan Quote so made shall be irrevocable except with the consent 
of the Agent given on the instructions of the Borrower.  Unless otherwise 
agreed by the Agent and the Borrower, no Bid Loan Quote shall contain 
qualifying, conditional or similar language or propose terms other than or in 
addition to those set forth in the applicable Bid Loan Quote Request and, in 
particular, no Bid Loan Quote may be conditioned upon acceptance by the 
Borrower of all (or some specified minimum) of the principal amount of the Bid 
Loan for which such Bid Loan Quote is being made.

            2.2.2.3.  The Agent shall, as promptly as practicable after any 
Bid Loan Quote is submitted (but in any event not later than 11:30 a.m. 
(Dallas, Texas time) on the Funding Date), notify the Borrower of the terms 
(a) of any Bid Loan Quote submitted by a Lender that is in accordance with 
Section 2.2.2.2. and (b) of any Bid Loan Quote that amends, modifies or is 
otherwise inconsistent with a previous Bid Loan Quote submitted by such Lender 
with respect to the same Bid Loan Quote Request.  Any subsequent Bid Loan 
Quote shall be disregarded by the Agent unless the subsequent Bid Loan Quote 
is submitted solely to correct a manifest error in a former Bid Loan Quote.  
The Agent's notice to the Borrower shall specify (i) the aggregate principal 
amount of the Bid Loan Borrowing for which offers have been received, (ii) the 
respective principal amounts and (iii) the rates of interest (which shall be 
expressed as an absolute number and not in terms of a specified margin over 
the quoting Lender's cost of funds) (the "Absolute Rate") so offered by each 
Lender (identifying the Lender that made each such Bid Loan Quote).

            2.2.2.4.  Not later than 12:00 noon (Dallas, Texas time) on the 
Funding Date (or such other time and date as the Borrower and the Agent, with 
the consent of each Lender that has submitted a Bid Loan Quote may agree), the 
Borrower shall notify the Agent of its acceptance or nonacceptance of the 
offers so notified to it pursuant to Section 2.2.2.3. (and the failure of the 
Borrower to give such notice by such time shall constitute nonacceptance), and 
the Agent shall promptly notify each affected Bank.  In the case of 
acceptance, such notice shall specify the aggregate principal amount of offers 
for 

                                    18

<PAGE>
each Interest Period that are accepted.  The Borrower may accept any Bid Loan 
Quote in whole or in part; provided that (a) any Bid Loan Quote accepted in 
part shall be at least $2,000,000 and a multiple of $1,000,000; (b) the 
aggregate principal amount of each Bid Loan Borrowing may not exceed the 
applicable amount set forth in the related Bid Loan Quote Request; (c) the 
aggregate principal amount of each Bid Loan Borrowing shall be at least 
$10,000,000 and a multiple of $1,000,000 and shall not cause the limits 
specified in Section 2.2.1. to be violated; (d) acceptance of offers may be 
made only in ascending order of Absolute Rates, beginning with the lowest rate 
so offered; and (e) the Borrower may not accept any offer where the Agent has 
advised the Borrower that such offer fails to comply with Section 2.2.2.2. or 
otherwise fails to comply with the requirements of this Agreement (including 
Section 2.2.1.).  If offers are made by two or more Lenders with the same 
Absolute Rates for a greater aggregate principal amount than the amount in 
respect of which offers are accepted for the related Interest Period, the 
principal amount of Bid Loans in respect of which such offers are accepted 
shall be allocated by the Borrower among such Lenders as nearly as possible 
(in amounts of at least $1,000,000 and multiples of $500,000) in proportion to 
the aggregate principal amount of such offers.  Determinations by the Borrower 
of the amounts of Bid Loans shall be conclusive in the absence of manifest 
error.

            2.2.2.5.  Subject to the terms set forth in this Agreement, any 
Lender whose offer to make any Bid Loan has been accepted shall, prior to 1:00 
p.m. (Dallas, Texas time) on the date specified for the making of such Loan, 
make the amount of such Loan available to the Agent at the Agent's Account in 
immediately available funds, for the account of the Borrower.  The foregoing 
notwithstanding, any such Bid Loan may be funded by such Lender's Designated 
Bidder as provided in Section 9.6.6.  No Lender shall be required to specify 
in its Bid Loan Quote whether such Bid Loan will be funded by such Designated 
Bidder.  No Lender shall be relieved of its obligation to fund a Bid Loan and 
no Designated Bidder shall assume such obligation prior to the time such Bid 
Loan is funded (and upon any such funding by a Designated Bidder, prompt 
written notice of such funding shall be given by such Designated Bidder to the 
Borrower and the Agent but failure to give such notice shall not affect the 
Borrower's obligations in respect of such Loan).  The amount so received by 
the Agent shall, subject to the terms and conditions of this Agreement, be 
made available to the Borrower on such date by depositing the same, in 
immediately available funds, in the Borrower Account.

        Section 2.3    Use of Proceeds.  The proceeds of the Loans shall be 
used by the Borrower only for general corporate purposes, including the 
payment of commercial paper.  No part of the proceeds of the Loans shall be 
used directly or indirectly for the purpose, whether immediate, incidental or 
ultimate, of purchasing or carrying any Margin Stock or maintaining or 
extending credit to others for such purpose or for any other purpose that 
otherwise violates the Margin Regulations.

                                    19

<PAGE>
        Section 2.4    Interest; Interest Periods; Conversion/Continuation.

        2.4.1    Interest Rate and Payment

            2.4.1.1  Each Loan shall bear interest on the unpaid principal 
amount thereof, from and including the date of the making of such Loan to and 
excluding the due date or the date of any repayment thereof, at the following 
rates per annum:  (a) for so long as and to the extent that such Loan is a 
Base Rate Loan, at the Base Rate (as in effect from time to time) plus the 
Applicable Margin; (b) for so long as and to the extent that such Loan is a 
Euro-Dollar Rate Loan, at the Euro-Dollar Rate for each Interest Period 
applicable thereto plus the Applicable Margin; and (c) if such Loan is a Bid 
Loan, at the Absolute Rate quoted by the Lender making such Loan pursuant to 
Section 2.2.2.2.

            2.4.1.2  Notwithstanding the foregoing provisions of this Section 
2.4.1., while an Event of Default exists, any principal, overdue interest or 
other amount payable under this Agreement and the other Loan Documents shall 
bear interest at a rate per annum equal to the Post-Default Rate, without 
notice or demand of any kind.

            2.4.1.3  Accrued interest shall be payable in arrears (a) in the 
case of a Base Rate Loan, on each Periodic Payment Date; (b) in the case of a 
Euro-Dollar Rate Loan, on the last day of each Interest Period applicable 
thereto; provided that if the Interest Period applicable to a Euro-Dollar Rate 
Loan is longer than three months, interest also shall be payable on the last 
day of the third month of such Interest Period; (c) in the case of a Bid Loan, 
on the last day of the Interest Period applicable thereto; and (d) in the case 
of any Loan, when the Loan shall become due (whether at maturity, by reason of 
prepayment, acceleration or otherwise).  The Agent shall provide a billing to 
the Borrower setting forth the amount of interest payable in sufficient time 
for the Borrower to make timely payments of the correct amount without 
incurring any penalty or Post-Default Interest.

        2.4.2    Conversion or Continuation of Revolving Loans.

            2.4.2.1  Subject to this Section 2.4.2. and Sections 2.4.3. and 
2.11., the Borrower shall have the option (a) at any time, to convert all or 
any part of its outstanding Base Rate Loans to Euro-Dollar Rate Loans, (b) on 
the last day of the Interest Period applicable thereto, to (i) convert all or 
any part of its outstanding Euro-Dollar Rate Loans to a Base Rate Loan, or 
(ii) to continue all or any part of its Euro-Dollar Rate Loans as Loans of 
the same Type; provided that, in the case of clause (a) or (b) (ii), there 
does not exist a Default or an Event of Default at such time.  If a Default or 
an Event of Default shall exist upon the expiration of the Interest Period 
applicable to any Euro-Dollar Rate Loan, such Loan automatically shall be 
converted into a Base Rate Loan.

            2.4.2.2  If the Borrower elects to convert or continue a Revolving 
Loan under this Section 2.4.2., it shall deliver to the Agent (which shall 
promptly notify the Lenders) a Notice of Conversion/Continuation substantially 
in the form of Exhibit E-3, duly completed and executed by a Responsible 
Officer (a "Notice of Continuation/Conversion") (a) not later than 11:00 a.m. 
(Dallas, Texas time) at least three Business Days before the

                                    20

<PAGE>
proposed conversion or continuation date, if the Borrower proposes to convert 
into, or to continue, a Euro-Dollar Rate Loan, and (b) otherwise not later 
than 11:00 a.m. (Dallas, Texas time) on the Business Day next preceding the 
proposed conversion or continuation date.

            2.4.2.3  In lieu of delivering a Notice of
Continuation/Conversion, the Borrower, through a Responsible Officer, may give 
the Agent telephonic notice of any proposed continuation or conversion by the 
time a Notice of Continuation/Conversion would be required to be delivered and 
containing all information required therefor; provided, however, that such 
notice shall be confirmed in writing by delivery of a Notice of 
Continuation/Conversion to the Agent on or before the proposed continuation or 
conversion date.  No Lender Party shall incur any liability to the Borrower or 
any other Lender Party in acting upon any telephonic notice that such Lender 
Party believes to have been given by a Responsible Officer or for otherwise 
acting in good faith under this Section 2.4.2. and in converting or continuing 
any Loan (or a part thereof) pursuant to any telephonic notice. 

            2.4.2.4  Any Notice of Conversion/Continuation (or telephonic 
notice in lieu thereof) shall be irrevocable and the Borrower shall be bound 
to convert or continue in accordance therewith.  If any request for the 
conversion or continuation of a Loan is not made in accordance with this 
Section 2.4.2., or if no notice is so given with respect to a Euro-Dollar 
Rate Loan as to which the Interest Period expires, then such Loan 
automatically shall be converted into a Base Rate Loan.

        2.4.3    Interest Periods & Minimum Amounts.  Notwithstanding anything 
herein to the contrary, (a) all Interest Periods applicable to Euro-Dollar 
Rate Loans and Bid Loans shall comply with the definition of "Interest 
Period," (b) there may be no more than five different Interest Periods for all 
Euro-Dollar Rate Loans and Bid Loans outstanding at the same time, and (c) 
Euro-Dollar Rate Loans with the same Interest Period outstanding at any time 
shall be in an aggregate amount at least equal to $5,000,000 and in an 
integral multiple of $1,000,000.  For purposes of the foregoing clause (a), 
Interest Periods applicable to Loans of different Types shall constitute 
different Interest Periods even if they are coterminous.

        2.4.4    Computations.  Interest on each Loan and all Fees and other 
amounts payable hereunder or the other Loan Documents shall be computed on the 
basis of a 360-day year or, in the case of interest on Base Rate Loans, a 365 
or 366-day year and the actual number of days elapsed including the first day 
but excluding the last day on which such Loan is outstanding (it being 
understood and agreed that if a Loan is borrowed and repaid on the same day, 
one day's interest shall be payable with respect to such Loan).  Any change in 
the interest rate on any Loan or other amount resulting from a change in the 
rate applicable thereto (or any component thereof, including the Applicable 
Margin) pursuant to the terms hereof shall become effective as of the opening 
of business on the day on which such change in the applicable rate (or 
component) shall become effective.  Each determination of an interest rate 
by the Agent pursuant to any provision of this Agreement shall be conclusive 
and binding on all parties for all purposes, in the absence of manifest error. 

                                    21

<PAGE>
        2.4.5    Maximum Lawful Rate of Interest.  The rate of interest 
payable on any Loan or other amount shall in no event exceed the maximum rate 
permissible under Applicable Law.  If the rate of interest payable on any Loan 
or other amount is ever reduced as a result of this Section and at any time 
thereafter the maximum rate permitted by Applicable Law shall exceed the rate 
of interest provided for in this Agreement, then the rate provided for in this 
Agreement shall be increased to the maximum rate provided by Applicable Law 
for such period as is required so that the total amount of interest received 
by the Lenders is that which would have been received by the Lenders but for 
the operation of the first sentence of this Section 2.4.5. 

        Section 2.5    Notes, Etc.

        2.5.1    Loans Evidenced by Notes.  The Revolving Loans made by each 
Lender shall be evidenced by a single Revolving Loan Note.  The Bid Loans made 
by each Lender shall be evidenced by a single Bid Loan Note.  Each Note shall 
be dated the Closing Date and stated to mature in accordance with the 
provisions of this Agreement applicable to the relevant Loans. 

        2.5.2    Notation of Amounts and Maturities. Etc.  Each Lender is 
hereby irrevocably authorized to record on the schedule attached to its Notes 
(or a continuation thereof) the information contemplated by such schedule.  
The failure to record, or any error in recording, any such information shall 
not, however, affect the obligations of the Borrower hereunder or under any 
Note to repay the principal amount of the Loans evidenced thereby, together 
with all interest accrued thereon.  All such notations shall constitute 
conclusive evidence of the accuracy of the information so recorded, in the 
absence of manifest error.

        Section 2.6    Fees.

        2.6.1    Facility Fee.  The Borrower shall pay to the Agent, for the 
pro rata benefit of the Lenders, a facility fee accruing at the rate per annum 
equal to the Applicable Margin in effect from time to time upon the Revolving 
Commitments of the Lenders, whether or not used, for each day from and after 
the Closing Date until the Revolving Commitment Termination Date.  Such Fee 
shall be payable quarterly in arrears on the last day of each calendar quarter 
and on the Revolving Commitment Termination Date.  The Agent shall provide a 
billing to the Borrower setting forth the amount of the Fee payable in 
sufficient time for the Borrower to make timely payments of the correct amount 
without incurring any penalty or Post-Default Interest.

        2.6.2    Other Fees.  On the Closing Date and from time to time 
thereafter as specified in the Fee Letter, the Borrower shall pay to the Agent 
the fees specified in the Fee Letter. 

        2.6.3    Fees Non-Refundable.  All Fees shall be fully earned when 
payable hereunder and shall be non-refundable. 

                                    22

<PAGE>
        Section 2.7    Termination, Reduction and Extension of Revolving 
Commitments.

        2.7.1    Each Lender's Revolving Commitment shall terminate without 
further action on the part of such Lender on the earlier to occur of (a) the 
Maturity Date, and (b) the date of termination of the Revolving Commitment 
pursuant to Section 2.7.2. or 7.2. (such earlier date being referred to herein 
as the "Revolving Commitment Termination Date").

        2.7.2    The Borrower shall have the right, at any time or from time 
to time after the Closing Date, to terminate in whole or permanently reduce in 
part, without premium or penalty, the Revolving Commitments of the Lenders on 
a pro rata basis to an amount not less than the Revolving Commitment Usage of 
all Lenders at such time by giving the Agent not less than five Business Days' 
prior written notice of such termination or reduction and the amount of any 
partial reduction.  Any such termination or partial reduction shall be 
effective on the date specified in the Borrower's notice and any such partial 
reduction shall be in a minimum amount of $10,000,000 and an integral multiple 
thereof.

        Section 2.8    Repayments and Prepayments.

        2.8.1    Repayment.  The unpaid principal amount of all Revolving 
Loans shall be paid in full on the Revolving Commitment Termination Date.  The 
unpaid principal amount of each Bid Loan shall be paid in full on the last day 
of the Interest Period applicable thereto.

        2.8.2    Excess Revolving Loans.  If at any time the aggregate 
Revolving Commitment Usage of all Lenders exceeds the aggregate amount of the 
Revolving Commitments, the Borrower shall, on the Business Day on which the 
Borrower learns or is notified of the excess, make mandatory prepayments of 
the Revolving Loans as may be necessary so that, after such prepayment, such 
excess is eliminated. 

        2.8.3    Optional Prepayments.

            2.8.3.1  Subject to this Section 2.8.3., the Borrower may, at its 
option, at any time or from time to time, prepay Revolving Loans in whole or 
in part, without premium or penalty, provided that (a) any prepayment shall be 
in an aggregate principal amount of at least $5,000,000 and in integral 
multiples of $1,000,000 (or, alternatively, the whole amount of Loans then 
outstanding) and (b) any prepayment of a Euro-Dollar Rate Loan on a day other 
than the last day of the Interest Period applicable thereto shall be made 
together with the amounts payable pursuant to Section 2.13.  Bid Loans may not 
be voluntarily prepaid at any time. 

            2.8.3.2  If the Borrower elects to prepay a Loan under this 
Section 2.8.3., it shall deliver to the Agent a notice of optional prepayment 
(a) not later than 11:00 a.m. (Dallas, Texas time) at least three Euro-Dollar 
Business Days before the proposed prepayment, if the Borrower proposes to 
prepay a Euro-Dollar Rate Loan, and (b) otherwise not later than 11:00 a.m. 
(Dallas, Texas on the proposed prepayment date.  Any

                                    23

<PAGE>
notice of optional prepayment shall be irrevocable, and the payment amount 
specified in such notice shall be due and payable on the date specified in 
such notice, together with interest accrued thereon to such date.

        2.8.4    Payments Set Aside.  To the extent the Agent or any Lender 
receives payment of any amount under the Loan Documents, whether by way of 
payment by the Borrower, set-off or otherwise, which payment is subsequently 
invalidated, declared to be fraudulent or preferential, set aside or required 
to be repaid to a trustee, receiver or any other party under any bankruptcy 
law, other law or equitable cause, in whole or in part, then, to the extent of 
such payment received, the Obligations or part thereof intended to be 
satisfied thereby shall be revived and continue in full force and effect, 
together with all collateral security therefor.

        Section 2.9    Manner of Payment.

        2.9.1    Except as otherwise expressly provided, the Borrower shall 
make each payment under the Loan Documents to the Agent in Dollars and in 
immediately available funds, without any deduction whatsoever, including any 
deduction for any setoff, recoupment, counterclaim or Taxes (other than 
Excluded Taxes), at the Agent's Office, for the account of the Applicable 
Lending Offices of the Lenders entitled to such payment, by depositing such 
payment in the Agent's Account not later than 12:00 noon (Dallas, Texas time) 
on the due date thereof.  Any payments received after 12:00 noon (Dallas, 
Texas time) on any Business Day shall be deemed received on the next 
succeeding Business Day.  Not later than 1:00 p.m. (Dallas, Texas time) on the 
day such payment is made, the Agent shall deliver to each Lender, for the 
account of the Lender's Applicable Lending Office, in Dollars and in 
immediately available funds, such Lender's share of the payment so made, 
determined pursuant to Section 2.10.  Delivery shall be made in accordance 
with the written instructions satisfactory to the Agent from time to time 
given to the Agent by each Lender.  With respect to Borrower's payment of fees 
only, Borrower may make payment therefor by check delivered to Agent by the 
time set forth above. 

        2.9.2    Whenever any payment to be made hereunder shall be stated to 
be due on a day that is not a Business Day, such payment shall instead by made 
on the next succeeding Business Day.

        Section 2.10    Pro Rata Treatment; Application of Payments.  Except 
to the extent otherwise expressly provided herein,

        2.10.1  Revolving Loans shall be requested from the Lenders pro rata 
according to their respective Revolving Commitments. 

        2.10.2  Each reduction of the Revolving Commitments of the Lenders 
shall be applied to the respective Revolving Commitments of the Lenders pro 
rata according to their respective Revolving Commitments before such 
reduction. 

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<PAGE>
        2.10.3  Each payment or prepayment by the Borrower of principal of the 
Revolving Loans shall be made and applied for the account of the Lenders pro 
rata according to the respective unpaid principal amount of the Revolving 
Loans owed to the Lenders, and each payment by the Borrower of interest on the 
Revolving Loans shall be made and applied for the account of the Lenders pro 
rata according to the respective accrued but unpaid interest on the Revolving 
Loans owed to such Lenders.  Each payment by the Borrower of Fees payable to 
the Lenders pursuant to Section 2.6.1. shall be made and applied for the 
account of the Lenders pro rata according to the respective amounts of their 
Revolving Commitments.

        2.10.4  Each payment or prepayment by the Borrower of principal of Bid 
Loans made as part of the same Borrowing shall be made and applied for the 
account of the Lenders holding such Bid Loans pro rata according to the 
respective unpaid principal amount of such Bid Loans owed to such Lenders and 
each payment by the Borrower of interest on Bid Loans shall be made and 
applied for the account of the Lenders holding such Bid Loans pro rata 
according to the respective accrued but unpaid interest on the Bid Loans owed 
to such Lenders.

        2.10.5  While no Event of Default exists, all payments made by the 
Borrower under the Loan Documents shall be applied to the Obligations as the 
Borrower may direct.  While an Event of Default exists, or if the Borrower 
does not provide any such direction to the Agent, all amounts paid or received 
with respect to the Obligations shall be applied in the following order: (a) 
First, to costs, expenses and other amounts then otherwise due for the account 
of the Agent pursuant to Section 9.1., (b) second, to costs, expenses and 
other amounts then otherwise due for the account of the Lenders pursuant to 
Section 9.1. and Indemnified Liabilities, pro rata according the respective 
amounts payable, (c) third, to accrued interest on the Loans, pro rata 
according to the respective accrued but unpaid interest on the Loans then due 
to the Lenders, (d) fourth, to principal of the Loans, pro rata according 
to the respective principal amounts then due to the Lenders, and (e) to the 
other Obligations, if any, in the order directed by the Required Lenders. 

        Section 2.11    Mandatory Suspension and Conversion of Euro-Dollar 
Rate Loans.  Each Lender's obligation to make, continue or convert Loans into 
Euro-Dollar Rate Loans shall be suspended, all outstanding Euro-Dollar Rate 
Loans shall be converted into Base Rate Loans on the last day of the 
respective Interest Periods applicable thereto (or, if earlier, in the case of 
Section 2.11.2. below, on the last day that such Lender can lawfully continue 
to maintain Euro-Dollar Rate Loans) and all pending requests for the making or 
continuation of, or conversion into, Euro-Dollar Rate Loans shall be 
considered requests for the making or conversion into Base Rate Loans (or, in 
the case of requests for conversion, disregarded) on the same Funding Date or 
the end of the currently applicable Interest Period, as applicable, if: 

        2.11.1  on or prior to the determination of the interest rate for a 
Euro-Dollar Rate Loan for any Interest Period, the Agent determines that for 
any reason appropriate quotations are not available to the Agent in the 
relevant interbank market for purposes of

                                    25

<PAGE>
determining the Euro-Dollar Rate or a Lender advises the Agent (which shall 
thereupon notify the Borrower and the other Lenders) that such rate would not 
accurately reflect the cost to such Lender of making, continuing, or 
converting a Loan into, a Euro-Dollar Rate Loan for such Interest Period; or 


        2.11.2  after the date hereof a Lender notifies the Agent (which shall 
thereupon notify the Borrower and the other Lenders) of its determination that 
any Regulatory Change makes it unlawful or impossible for such Lender or its 
Euro-Dollar Lending Office to make or maintain any Euro-Dollar Rate Loan, or 
to comply with its obligations hereunder in respect thereof. 

        Section 2.12    Regulatory Changes.

        2.12.1  Increased Costs.  If, on or after the date hereof, any 
Regulatory Change

            2.12.1.1  shall subject any Lender Party (or its Applicable 
Lending Office) to any Taxes with respect to its Euro-Dollar Rate Loans or any 
Loan Document, or its obligations under or with respect to any of the 
foregoing, or changes the basis of taxation of payments to any Lender Party of 
principal, interest, Fees or any other amount payable under the Loan Documents 
(except for any Excluded Tax or any changes in the rate of any Excluded Tax); 
or

            2.12.1.2  shall impose, modify or deem applicable any reserve, 
special deposit, compulsory loan, insurance or similar requirement (other than 
any such requirement with respect to any Euro-Dollar Rate Loan to the extent 
included in the Euro-Dollar Reserve Requirement), against, or any fees or 
charges in respect of, assets held by, deposits with or other liabilities for 
the account of, commitments of, advances or Loans by or other credit extended 
by, any Lender Party (or its Applicable Lending Office) or shall impose on any 
Lender Party (or its Applicable Lending Office) or on the relevant interbank 
market any other condition affecting any Euro-Dollar Rate Loan, or any 
obligation to make Euro-Dollar Rate Loans,

        and the effect of the foregoing is (a) to increase the cost to such 
Lender Party (or its Applicable Lending Office) of making, issuing, renewing 
or maintaining any Euro-Dollar Rate Loan or its Revolving Commitment in 
respect thereof or (b) to reduce the amount of any sum received or receivable 
by such Lender Party (or its Applicable Lending Office) hereunder or under any 
other Loan Document with respect thereto, then, the Borrower shall from time 
to time pay to such Lender Party, within 15 days after request by such Lender 
Party, such additional amounts as are necessary in such Lender Party's 
reasonable determination to compensate such Lender Party for such increased 
cost or reduction; provided, however, that if the Euro-Dollar Lending Office 
of any affected Lender is other than the affected Lender's main office, before 
giving such notice, such affected Lender agrees to use reasonable efforts 
(consistent with its internal policy and legal and regulatory restrictions) to 
designate a different Euro-Dollar Lending Dollar Office if such

                                    26

<PAGE>
designation will avoid the need for giving such notice and will not be 
otherwise disadvantageous to such Lender.

        2.12.2  Capital Costs.  If a Regulatory Change after the date hereof 
regarding capital adequacy (including the adoption or becoming effective of 
any treaty, law, rule, regulation or guideline adopted pursuant to or arising 
out of the July 1988 report of the Basle Committee on Banking Regulations and 
Supervisory Practices entitled "International Convergence of Capital 
Measurement and Capital Standards") has or would have the effect of reducing 
the rate of return on the capital of or maintained by any Lender Party or any 
company controlling such Lender Party as a consequence of such Lender Party's 
Loans or obligations hereunder and other commitments of this type to a level 
below that which such Lender Party or company could have achieved but for such 
Regulatory Change (taking into account such Lender Party's or company's 
policies with respect to capital adequacy), then, the Borrower shall from time 
to time pay to such Lender Party, within 15 days after request by such Lender 
Party, such additional amounts as are necessary in such Lender Party's 
reasonable determination to compensate such Lender Party or company for such 
reduction in return, to the extent such Lender Party or company determines 
such reduction to be attributable to the existence of obligations for the 
account of the Borrower.

        Section 2.13    Compensation for Funding Losses.  The Borrower shall 
pay to any Lender, upon demand by such Lender, such amount or amounts as such 
Lender reasonably determines is or are necessary to compensate it for any 
loss, cost, expense or liabilities incurred (including any loss, cost, expense 
or liability incurred by reason of the liquidation or redeployment of deposits 
but excluding loss of future margin) by it as a result of (a) any payment, 
prepayment or conversion of any Euro-Dollar Rate Loan for any reason 
(including by reason of a prepayment pursuant to Section 2.8.2. or an 
acceleration pursuant to Section 7.2.) on a date other than the last day of an 
Interest Period applicable to such Euro-Dollar Rate Loan, or (b) any Euro-
Dollar Rate Loan for any reason not being made (other than a wrongful failure 
to fund by such Lender), converted or continued, or any payment of principal 
of or interest thereon not being made, on the date therefor determined in 
accordance with the applicable provisions of this Agreement.  Notwithstanding 
the foregoing, the Borrower shall not be responsible to any Lender for any 
costs hereunder that result from the application of Section 2.11. or from any 
wrongful actions or omissions or default (including under Section 8.9.2) of 
such Lender.

        Section 2.14    Certificates Regarding Yield Protection, Etc.  Any 
request by any Lender for payment of additional amounts pursuant to Sections 
2.12. and 2.13. shall be accompanied by a certificate of such Lender Party 
setting forth the basis and amount of such request.  In determining the amount 
of such payment, such Lender Party may use such reasonable attribution or 
averaging methods as it deems appropriate and practical.

        Section 2.15    Applicable Lending Office; Discretion of Lenders as to 
Manner of Funding.  Each Lender may make, carry or transfer Euro-Dollar Rate 
Loans at, to, or for the account of an Affiliate of the Lender, provided that 
such Lender shall not be entitled to receive any greater amount under Section 
2.12. as a result of the transfer of any such Loan than such Lender would be 
entitled to immediately prior thereto unless (a) such

                                    27

<PAGE>
transfer occurred at a time when circumstances giving rise to the claim for 
such greater amount did not exist or (b) such claim would have arisen even if 
such transfer had not occurred.  Notwithstanding any other provision of this 
Agreement, each Lender shall be entitled to fund and maintain its funding of 
all or any part of its Euro-Dollar Rate Loans in any manner it sees fit, it 
being understood, however, that for purposes of this Agreement all 
determinations hereunder shall be made as if each Lender had actually funded 
and maintained each Euro-Dollar Rate Loan through the purchase of deposits in 
the relevant interbank market having a maturity corresponding to such Loan's 
Interest Period and bearing interest at the applicable rate. 

    ARTICLE 3

    CONDITIONS TO LOANS

        Section 3.1    Closing Conditions.  The occurrence of the Closing Date 
shall be subject to satisfaction of the following conditions: 

        3.1.1    Closing Date.  The Closing Date shall occur on or before July 
31, 1997.

        3.1.2    Certain Documents.  The Agent shall have received the 
documents listed on Schedule 3.1.2., all of which shall be in form and 
substance satisfactory to the Agent.

        3.1.3    Fees and Expenses Paid.  The Borrower shall have paid all 
Fees and expenses for which the Borrower shall have been billed on or before 
the Closing Date.

        3.1.4    General.  All other documents and legal matters in connection 
with the transactions contemplated by this Agreement shall have been delivered 
or executed or recorded in form and substance satisfactory to the Agent and 
the Agent shall have received all such counterpart originals or certified 
copies thereof as Agent may reasonably request.

        Section 3.2    Conditions Precedent to Loans.  The obligation of the 
Lenders to make any Loan on any Funding Date shall be subject to the following 
conditions precedent:

        3.2.1    Closing Date.  The conditions precedent set forth in Section 
3.1. shall have been satisfied or waived in writing by the Agent. 

        3.2.2    Notice of Borrowing.  The Borrower shall have delivered to 
the Agent, after the time the conditions set forth in Section 3.1. shall have 
been satisfied or waived and otherwise in accordance with the applicable 
provisions of this Agreement, a Notice of Borrowing (or telephonic notice in 
lieu thereof), in the case of a Revolving Loan, or notification of acceptance 
of a related Bid Loan Quote (in the case of a Bid Loan).

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<PAGE>
        3.2.3    Representations and Warranties.  All of the representations 
and warranties of the Borrower contained in the Loan Documents shall be true 
and correct in all material respects on and as of the Funding Date as though 
made on and as of that date.

        3.2.4    No Default.  No Default or Event of Default shall exist or 
result from the making of the Loan.

        3.2.5    Satisfaction of Conditions.  Each borrowing of a Loan shall 
constitute a representation and warranty by the Borrower as of the Funding 
Date that the conditions contained in Sections 3.2.3. and 3.2.4. have been 
satisfied.

    ARTICLE 4

    REPRESENTATIONS AND WARRANTIES

    The Borrower represents and warrants to the Lender Parties as follows: 

        Section 4.1    Organization, Powers and Good Standing.  Each of the 
Borrower and, except as would not reasonably be expected to have a Material 
Adverse Effect, its Subsidiaries (a) is duly organized as a corporation, and 
validly existing and in good standing under the laws of its jurisdiction of 
organization, as shown on Schedule 4.1., and (b) has all requisite corporate 
power and authority and the legal right to own and operate its properties, to 
carry on its business as heretofore conducted, to enter into the Loan 
Documents to which it is a party and to carry out the transactions 
contemplated thereby.  Except as would not reasonably be expected to have a 
Material Adverse Effect, each of the Borrower and the Subsidiaries possesses 
all Governmental Approvals, in full force and effect, free from burdensome 
restrictions, that are necessary for the ownership, maintenance and operation 
of its properties and conduct of its business as now conducted, and is not in 
violation thereof.  Each of the Borrower and the Subsidiaries is duly 
qualified and in good standing authorized to do business in each state or 
other jurisdiction where the nature of its business activities conducted or 
properties owned or leased requires it to be so qualified and where any 
failure to be so qualified, individually or in the aggregate, could have a 
Material Adverse Effect.

        Section 4.2    Authorization, Binding Effect, No Conflict, Etc.

        4.2.1    Authorization, Binding Effect, Etc.  The execution, delivery 
and performance by the Borrower of each Loan Document have been duly 
authorized by all necessary corporate action on the part of the Borrower; and 
each such Loan Document has been duly executed and delivered by the Borrower 
and is the legal, valid and binding obligation of the Borrower, enforceable 
against it in accordance with its terms, except as enforcement may be limited 
by equitable principles and by bankruptcy, insolvency, reorganization, 
moratorium or similar laws relating to creditors' rights generally.

        4.2.2    No Conflict.  The execution, delivery and performance by the 
Borrower of each Loan Document, and the consummation of the transactions 
contemplated

                                    29

<PAGE>
thereby, do not and will not (a) violate any provision of the charter or other 
organizational documents of the Borrower, (b) except for consents that have 
been obtained and are in full force and effect, conflict with, result in a 
breach of, or constitute (or, with the giving of notice or lapse of time or 
both, would constitute) a default under, or require the approval or consent of 
any Person pursuant to, any Contractual Obligation of the Borrower (including 
the Investment Agreement), (c) violate any Applicable Law binding on the 
Borrower, or (d) result in or require the creation or imposition of any Lien 
on any assets or properties of the Borrower or any of its Subsidiaries.

        4.2.3    Governmental Approvals.  No Governmental Approval is or will 
be required in connection with the execution, delivery and performance by the 
Borrower of any Loan Document or the transactions contemplated thereby.

        Section 4.3    Financial Information.

        4.3.1    The balance sheets of the Borrower as of January 31, 1997 and 
January 31, 1996 and the statements of earnings, stockholder's equity and cash 
flow of the Borrower for the Fiscal Years then ended, certified by the 
Borrower's independent certified public accountants, which are included in the 
Borrower's Annual Report on Form 10-K for the Fiscal Year ended January 31, 
1997, were prepared in accordance with GAAP consistently applied and fairly 
present the financial position of the Borrower, as of the respective dates 
thereof and the results of operations and cash flow of the Borrower for the 
periods then ended.  The Borrower on such dates had no Contingent Obligations, 
liabilities for Taxes or long-term leases, forward or long-term commitments or 
unrealized losses from any unfavorable commitments that are not reflected in 
the foregoing statements or in the notes thereto and that, individually or in 
the aggregate, are material.

        4.3.2    The unaudited balance sheet of the Borrower as of April 30, 
1997 and the related statements of earnings, stockholder's equity and cash 
flow for the periods then ended, certified by the Chief Financial Officer of 
the Borrower, which are included in the Borrower's Quarterly Report on Form 
10-Q for the Fiscal Quarter ended April 30, 1997, were prepared in accordance 
with GAAP consistently applied (except to the extent noted therein) and fairly 
present the financial position of the Borrower as of such date and the results 
of operations and cash flow for the periods covered thereby, subject to normal 
year-end audit adjustments.  The Borrower on such date had no Contingent 
Obligations, liabilities for Taxes or long-term leases, forward or long-term 
commitments or unrealized losses from any unfavorable commitments that are not 
reflected in the foregoing statements or in the notes thereto and that, 
individually or in the aggregate, are material.

        Section 4.4    No Material Adverse Changes.  Since January 31, 1997, 
there has been no Material Adverse Change.

        Section 4.5    Litigation.  Except as disclosed in Schedule 4.5. or 
pursuant to Section 5.1.7., there are no actions, suits or proceedings pending 
or, to the best knowledge of the Borrower, threatened against or affecting the 
Borrower, any Subsidiary or any of its properties before any Governmental 
Authority (a) in which there is a reasonable possibility of

                                   30

<PAGE>
an adverse determination that could result in a material liability or have a 
Material Adverse Effect or (b) that in any manner draws into question the 
validity, legality or enforceability of any Loan Document or any transaction 
contemplated thereby.

        Section 4.6    Agreements; Applicable Law.  Neither the Borrower nor 
any Subsidiary is in violation of any Applicable Law, or in default under its 
charter documents, bylaws or any of its Contractual Obligations except for 
such violations or defaults as do not result in a Material Adverse Effect.  So 
long as any amount shall remain outstanding under, or any Revolving Commitment 
(as defined in the NCI Credit Agreement) shall remain in effect under, the NCI 
Credit Agreement, the Investment Agreement is in full force and effect and has 
not been amended except as permitted under Section 6.7.

        Section 4.7    Taxes.  All United States Federal income tax returns 
and all other material tax returns required to be filed by the Borrower or any 
Subsidiary have been filed and all Taxes due pursuant to such returns have 
been paid, except such Taxes, if any, as are being contested in good faith and 
as to which adequate reserves have been established in accordance with GAAP.  
To the best knowledge of the Borrower, there has not been asserted or proposed 
to be asserted any Tax deficiency against the Borrower or any Subsidiary that 
would be material to the Borrower and its Subsidiaries taken as a whole and 
that is not reserved against on the financial books of the Borrower.

        Section 4.8    Governmental Regulation.  The Borrower is neither an 
"investment company" registered or required to be registered under the 
Investment Company Act of 1940, as amended, or a company controlled by such a 
company, nor subject to any Federal or state, statute or regulation limiting 
its ability to incur Debt for money borrowed (other than the Margin 
Regulations).

        Section 4.9    Margin Regulations.  Neither the Borrower nor any 
Subsidiary is engaged principally, or as one of its important activities, in 
the business of extending credit for the purposes of purchasing or carrying 
Margin Stock.  The value of all Margin Stock held by the Borrower and the 
Subsidiaries constitutes less than 25% of the value, as determined in 
accordance with the Margin Regulations, of all assets of the Borrower.

        Section 4.10    Employee Benefit Plans.  The Borrower and all members 
of the Controlled Group have fulfilled their obligations under the minimum 
funding standards of ERISA with respect to each Plan to which they are party 
and have not incurred any liability to the PBGC in connection with any Plan 
established or maintained by Borrower or any member of the Controlled Group. 

        No ERISA Event has occurred and is continuing with respect to any Plan 
(whether or not terminated).  Neither Borrower nor any member of the 
Controlled Group is required to make or accrue a contribution or has within 
any of the preceding five plan years made or accrued an obligation to make 
contributions to any Multiemployer Plan.  The fair market value of the assets 
of each Plan is at least equal to the present value of the "benefit 
liabilities" (within the meaning of Section 4001(a)(16) of ERISA) under such 
Plan determined

                                    31

<PAGE>
using the actuarial assumptions and method used by the actuary to such Plan in 
its valuation of such Plan.

        Section 4.11    Disclosure.  All information in any document, 
certificate or written statement (other than information referred to in 
Section 4.3.) furnished to the Lender Parties by or on behalf of the Borrower 
with respect to the business, assets, prospects, results of operation or 
financial condition of the Borrower or any Subsidiary for use in connection 
with the transactions contemplated by this Agreement has been true and correct 
in all material respects.  There is no fact known to the Borrower (other than 
matters of a general economic nature) that has had or could reasonably be 
expected to have a Material Adverse Effect and that has not been disclosed 
herein or in such other documents, certificates or statements.

        Section 4.12    Solvency.  The Borrower is, individually and together 
with its Subsidiaries, Solvent.

    ARTICLE 5

    AFFIRMATIVE COVENANTS OF THE BORROWER

        So long as any portion of the Revolving Commitments shall be in effect 
and until all Obligations are paid and performed in full:

        Section 5.1    Financial Statements and Other Reports.  The Borrower 
shall deliver to the Agent (which shall promptly provide copies to each 
Lender), for the benefit of the Lenders:

        5.1.1    as soon as practicable and in any event within 120 days after 
the end of each Fiscal Year, the consolidated balance sheet of the Borrower 
and its consolidated Subsidiaries as of the end of such year and the related 
statements of earnings, stockholder's equity and cash flow of the Borrower for 
such Fiscal Year, setting forth in each case in comparative form the figures 
for the previous Fiscal Year, all in reasonable detail and, accompanied by an 
unqualified report thereon of Deloitte & Touche LLP or other independent 
certified public accountants of recognized national standing selected by the 
Borrower and reasonably satisfactory to the Required Lenders, which report 
shall state that such financial statements fairly present the financial 
position of the Borrower as of the date indicated and its results of 
operations and cash flows for the periods indicated in conformity with GAAP 
(except as otherwise stated therein) and that the examination by such 
accountants in connection with such financial statements has been made in 
accordance with generally accepted auditing standards;

        5.1.2    as soon as practicable and in any event within 60 days after 
the end of each Fiscal Quarter (other than the last Fiscal Quarter of any 
Fiscal Year) a consolidated balance sheet of the Borrower and its consolidated 
Subsidiaries as of the end of such quarter and the related statements of 
earnings, stockholder's equity and cash flow for such quarter and the portion 
of the Fiscal Year ended at the end of such quarter, setting forth in each 
case

                                    32

<PAGE>
in comparative form the figures for the corresponding periods of the prior 
Fiscal Year, all in reasonable detail and certified by the Borrower's Chief 
Financial Officer as fairly presenting the financial condition of the Borrower 
as of the dates indicated and its results of operations and cash flows for the 
periods indicated, subject to normal year-end adjustments;

        5.1.3    together with each delivery of financial statements pursuant 
to Sections 5.1.1. and 5.1.2., a certificate of the Chief Financial Officer or 
the President of the Borrower substantially in the form of Exhibit F-6 (a 
"Compliance Certificate"), duly completed, setting forth the calculations 
required to establish compliance with Section 6.3., on the date of such 
financial statements;

        5.1.4    within five Business Days after the Borrower becomes aware of 
the occurrence of any Default or Event of Default, a certificate of a Senior 
Officer of the Borrower setting forth the details thereof and the action that 
the Borrower is taking or proposes to take with respect thereto;

        5.1.5    promptly upon their becoming available, copies of all 
material reports, notices and proxy statements sent or made available by the 
Borrower to its security holders, and all material registration statements 
(other than the exhibits thereto) and annual, quarterly or monthly reports, if 
any, filed by the Borrower with the SEC;

        5.1.6    within five Business Days after Borrower becomes aware of the 
occurrence of an ERISA Event, a statement of a Senior Officer of the Borrower 
setting forth the details thereof and the action that the Borrower is taking 
or proposes to take with respect thereto, together with a copy of the notice, 
if any, of such event given or required to be given to the PBGC; within five 
days of the date the Borrower or any member of the Controlled Group becomes 
obliged to make or accrue a contribution to a Multiemployer Plan, a statement 
of a Senior Officer of the Borrower setting forth the details thereof and the 
action that the Borrower is taking or proposes to take with respect thereto;

        5.1.7    within five Business Days after the Borrower obtains 
knowledge thereof, notice of all litigation or proceedings commenced or 
threatened affecting the Borrower or any Subsidiary (a) that would reasonably 
be expected to have a Material Adverse Effect or (b) that questions the 
validity or enforceability of any Loan Document or the Investment Agreement; 

        5.1.8  promptly notify the Agent of any move of its principal 
executive office from the State of Washington; and

        5.1.9  from time to time such additional information regarding the 
Borrower and its Subsidiaries or the business, assets, liabilities, prospects, 
results of operation or financial condition of any such Person as the Agent, 
on behalf of any Lender Party, may reasonably request.

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<PAGE>
        Section 5.2    Records and Inspection.  The Borrower shall, and shall 
cause each Subsidiary to, maintain adequate books, records and accounts as may 
be required or necessary to permit the preparation of financial statements 
required to be delivered hereunder in accordance with sound business practices 
and GAAP.  The Borrower shall, and shall cause each Subsidiary to, permit such 
Persons as the Agent may designate, at reasonable times during the Borrower's 
regular office hours as often as may reasonably be requested and under 
reasonable circumstances, to (a) visit and inspect any of its properties, (b) 
inspect and copy its books and records, and (c) discuss with its officers and 
its independent accountants, its business, assets, liabilities, results of 
operation or financial condition.

        Section 5.3    Corporate Existence, Etc.  The Borrower shall, and 
shall (except as otherwise permitted under Section 6.4) cause each Subsidiary 
to, at all times preserve and keep in full force and effect its corporate 
existence and all rights and franchises material to the Borrower and its 
Subsidiaries taken as a whole.

        Section 5.4    Payment of Taxes and Claims.  The Borrower shall, and 
shall cause each Subsidiary to, pay and discharge (a) all Taxes imposed upon 
it or any of its properties or in respect of any of its franchises, business, 
income or property before any material penalty shall be incurred with respect 
to such Taxes, and (b) all claims of any kind (including claims for labor, 
material and supplies) that, if unpaid, might by Applicable Law become a Lien 
upon any material portion of the property of the Borrower and its 
Subsidiaries; provided, however, that, unless and until foreclosure, 
distraint, levy, sale or similar proceedings shall have commenced, the 
Borrower need not pay or discharge any such Tax or claim so long as the 
validity or amount thereof is being contested in good faith and by appropriate 
proceedings and so long as any reserves or other appropriate provisions as may 
be required by GAAP shall have been made therefor.

        Section 5.5    Maintenance of Properties.  The Borrower shall, and 
shall cause each Subsidiary to, maintain or cause to be maintained in good 
repair, working order and condition (ordinary wear and tear excepted), all 
properties and other assets useful or necessary to its business, and from time 
to time the Borrower shall make or cause to be made all appropriate repairs, 
renewals and replacements thereto except, in each case, to the extent the 
failure to do so could not reasonably be expected to have a Material Adverse 
Effect.  The Borrower shall, and shall cause each of its Subsidiaries to, use 
reasonable efforts to prevent offsets of and defenses to its receivables and 
other rights to payment.

        Section 5.6    Maintenance of Insurance.  The Borrower shall, and 
shall cause each Subsidiary to, maintain with financially sound and reputable 
insurance companies insurance (or adequate self insurance) in at least such 
amounts, of such character and against at least such risks as is usually 
maintained by companies of established repute engaged in the same or a similar 
business in the same general area.

        Section 5.7    Conduct of Business; Compliance with Law.  The Borrower 
shall not change the general character of its business as conducted at the 
date hereof or engage, directly or through a Subsidiary, in any type of 
business not reasonably related to its business as normally conducted.  The 
Borrower shall maintain its right to carry on business

                                    34

<PAGE>
in any jurisdiction where it is doing business at such time and remain in and 
continuously operate the same lines of business presently engaged in except 
for periodic shutdown in the ordinary course of business and interruptions 
caused by strike, labor dispute, catastrophe or any other events over which it 
has no control.  The Borrower shall, and shall cause each of its Subsidiaries 
to, conduct its business in compliance in all material respects with all 
Applicable Law and all its Contractual Obligations except where failure to do 
so does not result in a Material Adverse Effect.

        Section 5.8    Further Assurances.  At any time and from time to time, 
upon the request of the Agent, the Borrower shall execute and deliver such 
further documents and do such other acts and things as the Agent may 
reasonably request in order to effect fully the purposes of the Loan Documents 
and any other agreement contemplated thereby and to provide for payment and 
performance of the Obligations in accordance with the terms of the Loan 
Documents.

        Section 5.9    Future Information.  All data, certificates, reports, 
statements, documents and other information the Borrower shall furnish to the 
Lender Parties in connection with the Loan Documents shall, at the time the 
information is furnished, not contain any untrue statement of a material fact, 
shall be complete and correct in all material respects to the extent necessary 
to give the Lender Parties sufficient and accurate knowledge of the subject 
matter thereof, and shall not omit to state a material fact necessary in order 
to make the statements contained therein not misleading in light of the 
circumstances under which such information is furnished.

        Section 5.10    Subordination of Intercompany Debt.  The Borrower 
shall cause all Debt of the Borrower to any of its Affiliates to be 
subordinated to the prior payment in full in cash of the Obligations on terms 
of subordination no less favorable to the Lender Parties than the terms of 
subordination set forth in the Investment Agreement.

    ARTICLE 6

    NEGATIVE COVENANTS OF THE BORROWER

        So long as any portion of the Revolving Commitments shall be in effect 
and until all Obligations are paid and performed in full:

        Section 6.1    Liens.  The Borrower shall not, and shall not permit 
any Subsidiary to, directly or indirectly, create, incur, assume or permit to 
exist any Lien on or with respect to any asset of the Borrower or any 
Subsidiary, whether now owned or hereafter acquired, except:

        6.1.1    Liens securing the Obligations and Existing Liens;

        6.1.2    (a) Liens for Taxes, assessments or charges of any 
Governmental Authority for claims that are not material and are not yet due or 
are being contested in good faith by appropriate proceedings and with respect 
to which adequate reserves or other

                                    35

<PAGE>
appropriate provisions are being maintained in accordance with GAAP; (b) 
statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, 
materialmen, bankers and other Liens imposed by law and created in the 
ordinary course of business for amounts that are not material and are not yet 
due or being contested in good faith by appropriate proceedings and with 
respect to which adequate reserves or other appropriate provisions are being 
maintained in accordance with GAAP; (c) Liens incurred and deposits made in 
the ordinary course of business in connection with workers' compensation, 
unemployment insurance and other types of social security benefits or to 
secure the performance (including by way of surety bonds or appeal bonds) of 
tenders, bids, leases, contracts, statutory obligations or similar obligations 
or arising as a result of progress payments under contracts, in each case in 
the ordinary course of business and not relating to the repayment of Debt; (d) 
easements, rights-of-way, covenants, consents, reservations, encroachments, 
variations and other restrictions, charges or encumbrances (whether or not 
recorded) that do not materially interfere with the ordinary conduct of the 
Borrower's business; (e) building restrictions, zoning laws and other 
statutes, laws, rules, regulations, ordinances and restrictions; and (f) 
leases, subleases or easements granted in the ordinary course of business to 
others not materially interfering with the business of, and consistent with 
past practices of, the Borrower;

        6.1.3    any attachment or judgment Lien, not otherwise constituting 
an Event of Default, in existence less than 30 days after the entry thereof or 
with respect to which (a) execution has been stayed, (b) payment is covered in 
full by insurance, or (c) the Borrower is in good faith prosecuting an appeal 
or other appropriate proceedings for review and has set aside on its books 
such reserves as may be required by GAAP with respect to such judgment or 
award;

        6.1.4    Liens securing Debt of the Borrower or any Subsidiary, 
including Capitalized Leases, used to finance the acquisition of fixed assets 
of the Borrower or such Subsidiary, the construction of additional buildings 
or the expansion otherwise of their respective facilities, provided that such 
Debt (a) does not exceed the cost to the Borrower or such Subsidiary of the 
assets acquired with the proceeds of such Debt, (b) in the case of new 
construction or expansion of existing facilities, is either a construction or 
permanent loan secured by the facilities constructed and the real property on 
which such facilities are located, and (c) in the case of other asset 
financing, is incurred within three months following the date of the 
acquisition, provided that any such Lien does not encumber any property other 
than the assets acquired with the proceeds of such Debt;

        6.1.5    Liens existing on assets of any Person at the time such 
assets are acquired, provided such Lien does not encumber any assets other 
than the assets subject to such Lien at the time such assets are acquired; 

        6.1.6    Liens arising from the securitization of receivables, to the 
extent the Debt arising from such securitization is permitted hereunder;

        6.1.7    any Lien constituting a renewal, extension or replacement of 
any Existing Lien or any Lien permitted by Section 6.1.4 or 6.1.5., provided 
such Lien is limited to all or a part of the property subject to the Lien 
extended, renewed or replaced; and

                                    36

<PAGE>
        6.1.8    other Liens incidental to the conduct of the business or the 
ownership of the assets of the Borrower or any Subsidiary that (a) were not 
incurred in connection with borrowed money, (b) do not in the aggregate 
materially detract from the value of the assets subject thereto or materially 
impair the use thereof in the operation of such business and (c) do not secure 
obligations aggregating in excess of $5,000,000.

        Section 6.2    Restricted Payments.  The Borrower shall not, and shall 
not permit any Subsidiary to, declare, pay or make, or agree to declare, pay 
or make, any Restricted Payment, except (a) dividends, distributions or 
payments by any Subsidiary to the Borrower, or (b) if no Default or Event of 
Default then exists or would result therefrom (assuming for this purpose that 
compliance with Section 6.3. is being measured as of the end of the 
immediately preceding Fiscal Quarter giving pro forma effect to the Restricted 
Payment).

        Section 6.3    Financial Covenants.

        6.3.1    Coverage Ratio.  The Borrower shall not permit the ratio as 
of the last day of any period of four consecutive Fiscal Quarters of EBITDAR 
for such period to the sum of interest expense (including capitalized 
interest) and rent expense for such period to be less than 2.00 to 1.00.

        6.3.2    Minimum Net Worth.  Not permit the consolidated Net Worth of 
the Borrower and its Subsidiaries as of the last day of any Fiscal Quarter, to 
be less than the sum of (A) $1,100,000,000, (B) 50% of the consolidated net 
income of the Borrower and its Subsidiaries for all Fiscal Quarters ended 
after July 31, 1997 with respect to which such consolidated net income is a 
positive number (but without reduction for any net losses for any Fiscal 
Quarter ended after July 31, 1997), and (C) 50% of the amount of any net 
proceeds received by the Borrower or any of its Subsidiaries after the Closing 
Dat in connection with the issuance of capital stock (other than capital stock 
issued to the Borrower or any of its other Subsidiaries and other than capital 
stock issued pursuant to any employee stock option plan).

        Section 6.4    Restriction on Fundamental Changes.  The Borrower shall 
not, and shall not permit any Subsidiary to, enter into any merger, 
consolidation, reorganization or recapitalization, liquidate, wind up or 
dissolve or sell, lease, transfer or otherwise dispose of, in one transaction 
or a series of transactions, all or substantially all of its or their business 
or assets, whether now owned or hereafter acquired, provided that as long as 
no Default or Event of Default shall exist after giving effect thereto (a) any 
Solvent Subsidiary or other Solvent Person (other than the Borrower) may be 
merged or consolidated with or into the Borrower (so long as the Borrower is 
the surviving entity) or any Subsidiary, (b) any Subsidiary may be liquidated, 
wound up or dissolved, and (c) in addition to transactions permitted under 
Section 6.5, all or substantially all of any Subsidiary's business or assets 
may be sold, leased, transferred or otherwise disposed of, in one transaction 
or a series of transactions, to the Borrower or another Subsidiary.

                                    37

<PAGE>
        Section 6.5    Asset Dispositions.  The Borrower shall not, and shall 
not (except as permitted by Section 6.4(c)) permit any Subsidiary to, sell, 
lease or otherwise dispose of during any Fiscal Year property or other assets 
constituting, in the aggregate, 10% or more of the Borrower's and its 
Subsidiaries' assets, taken as a whole, in terms of either book value or fair 
market value, whichever is lower. Notwithstanding the foregoing limitation, 
the Borrower and its Subsidiaries shall be permitted to sell their receivables 
in a transaction to securitize such receivables.

        Section 6.6    Transactions with Affiliates.  The Borrower shall not, 
and shall not permit any Subsidiary to, directly or indirectly, enter into any 
transaction (including the purchase, sale, lease, or exchange of any property 
or the rendering of any service) with any Affiliate of the Borrower, unless 
(a) such transaction is not otherwise prohibited by this Agreement, (b) such 
transaction is in the ordinary course of business and (c) if such transaction 
is other than with a Wholly-Owned Subsidiary, such transaction is on fair and 
reasonable terms no less favorable to the Borrower or its Subsidiary, as the 
case may be, than those terms which might be obtained at the time in a 
comparable arm's length transaction with a Person who is not an Affiliate or, 
if such transaction is not one which by its nature could be obtained from such 
other Person, is on fair and reasonable terms and was negotiated in good 
faith, provided that this Section shall not restrict (i) dividends, 
distributions and other payments and transfers on account of any shares of 
capital stock of the Borrower or any Subsidiary otherwise permissible 
hereunder, and (ii) transactions pursuant to the Investment Agreement and any 
other agreement between the Borrower and any Affiliate of the Borrower 
pursuant to which the Borrower sells or discounts accounts receivable in the 
ordinary course of its business.

        Section 6.7    Amendments of Investment Agreement.  So long as any 
amount shall remain outstanding under, or any Revolving Commitment (as defined 
in the NCI Credit Agreement) shall remain in effect under, the NCI Credit 
Agreement, the Borrower will not amend the Investment Agreement if such 
amendment, waiver or relinquishment would have a Material Adverse Effect as 
defined in the NCI Credit Agreement (including Section 6.7 thereof).

    ARTICLE 7

    EVENTS OF DEFAULT, ETC.

        Section 7.1    Events of Default.  The occurrence of any one or more 
of the following events, acts or occurrences shall constitute an event of 
default (each an "Event of Default"):

        7.1.1    Failure to Make Payments.  The Borrower (a) shall fail to pay 
as and when due (whether at stated maturity, upon acceleration, upon required 
prepayment or otherwise) any principal of any Loan, or (b) shall fail to pay 
any interest, Fees or other amounts (other than principal) payable under the 
Loan Documents within five days of the date when due under the Loan Documents; 
or

                                    38

<PAGE>
        7.1.2    Default in Other Debt.  (a) The Borrower or any Subsidiary 
shall default in the payment (whether at stated maturity, upon acceleration, 
upon required prepayment or otherwise), beyond any period of grace provided 
therefor, of any principal of or interest on any other Debt with a principal 
amount (individually or in the aggregate) in excess of $10,000,000, or (b) any 
other breach or default (or other event or condition), beyond any period of 
grace provided therefor, shall occur under the NCI Credit Agreement or under 
any agreement, indenture or instrument relating to any such other Debt with a 
principal amount (individually or in the aggregate) in excess of $10,000,000, 
if the effect of such breach or default (or such other event or condition) is 
to cause, or to permit the holder or holders of the other Debt (or a Person on 
behalf of such holder or holders) to cause (upon the giving of notice or 
otherwise), such other Debt to become or be declared due and payable, or 
required to be prepaid, redeemed, purchased or defeased (or an offer of 
prepayment, redemption, purchase or defeasance be made), prior to its stated 
maturity (other than by a scheduled mandatory prepayment); provided, however, 
that if any such breach or default described in this Section 7.1.2. is cured 
or waived prior to any action being taken pursuant to Section 7.2.1 or 7.2.2., 
the Event of Default under this Agreement in respect of such breach or default 
shall be deemed cured to the extent of such cure or waiver; or

        7.1.3    Breach of Certain Covenants.  The Borrower shall fail to 
perform, comply with or observe any agreement, covenant or obligation under 
Article 6 or under Section 5.1.4. or 5.3. (insofar as it requires the 
preservation of the corporate existence of the Borrower); or

        7.1.4    Other Defaults Under Loan Documents.  The Borrower shall fail 
to perform, comply with or observe any agreement, covenant or obligation under 
any provision of any Loan Document (other than those provisions referred to in 
Sections 7.1.1., 7.1.2. and 7.1.3.) and such failure shall not have been 
remedied within 30 days after written notice thereof by the Agent, at the 
request of the Required Lenders, to the Borrower; or 

        7.1.5    Breach of Warranty.  Any representation or warranty or 
certification made or furnished by the Borrower under any Loan Document shall 
prove to have been false or incorrect in any material respect when made (or 
deemed made); or

        7.1.6    Involuntary Bankruptcy; Appointment of Receiver, Etc.  There 
shall be commenced against the Borrower or any of its Subsidiaries, an 
involuntary case seeking the liquidation or reorganization of the Borrower or 
any of its Subsidiaries under Chapter 7 or Chapter 11, respectively, of the 
Bankruptcy Code or any similar proceeding under any other Applicable Law or an 
involuntary case or proceeding seeking the appointment of a receiver, 
liquidator, sequestrator, custodian, trustee or other officer having similar 
powers of the Borrower or any of its Subsidiaries or to take possession of all 
or a substantial portion of its property or to operate all or a substantial 
portion of its business, and any of the following events occur:  (a) the 
Borrower or any of its Subsidiaries consents to the institution of the 
involuntary case or proceeding; (b) the petition commencing the involuntary 
case or proceeding is not timely controverted; (c) the petition commencing the 
involuntary case or proceeding remains undismissed and unstayed for a period 
of 60 days; or (d) an order for relief shall have been issued or entered 
therein; or

                                    39

<PAGE>
        7.1.7    Voluntary Bankruptcy; Appointment of Receiver, Etc.  The 
Borrower or any of its Subsidiaries shall institute a voluntary case seeking 
liquidation or reorganization under Chapter 7 or Chapter 11, respectively, of 
the Bankruptcy Code or any similar proceeding under any other Applicable Law, 
or shall consent thereto; or shall consent to the conversion of an involuntary 
case to a voluntary case; or shall file a petition, answer a complaint or 
otherwise institute any proceeding seeking, or shall consent to or acquiesce 
in the appointment of, a receiver, liquidator, sequestrator, custodian, 
trustee or other officer with similar powers of it or to take possession of 
all or a substantial portion of its property or to operate all or a 
substantial portion of its business; or shall make a general assignment for 
the benefit of creditors; or shall generally not pay its debts as they become 
due; or the Board of Directors of the Borrower or any of its Subsidiaries (or 
any committee thereof) adopts any resolution or otherwise authorizes action to 
approve any of the foregoing; or 

        7.1.8    Judgments and Attachments.  The Borrower or any Subsidiary 
shall suffer any money judgments, writs or warrants of attachment or similar 
processes that, individually or in the aggregate, involve an amount or value 
in excess of $10,000,000 and such judgments, writs, warrants or other orders 
shall continue unsatisfied and unstayed for a period of 60 days; or

        7.1.9    ERISA.  The Borrower or any member of the Controlled Group 
shall fail to pay when due any material amount or amounts that it shall have 
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or a 
proceeding shall be instituted by a fiduciary of any such Plan or Plans 
against the Borrower or any member of the Controlled Group to enforce Section 
515 of ERISA; or any ERISA Event shall occur which could reasonably be 
expected to have a Material Adverse Effect; or the Borrower or any member of 
the Controlled Group shall partially or completely withdraw from any 
Multiemployer Plan; or any Multiemployer Plan to which Borrower or any member 
of its Controlled Group becomes obliged to make or accrue a contribution is 
placed in reorganization or terminates; or

        7.1.10  Change of Control.  a Change of Control shall occur; or

        7.1.11  Termination of Loan Documents, Etc.  Any Loan Document, or any 
material provision thereof, shall cease to be in full force and effect for any 
reason; or the Borrower shall contest or purport to repudiate or disavow any 
of its obligations under or the validity of enforceability of any Loan 
Document or any material provision thereof.

        Section 7.2    Remedies.  Upon the occurrence of an Event of Default:

        7.2.1    If an Event of Default occurs under Section 7.1.6. or 7.1.7., 
then the Revolving Commitments shall automatically and immediately terminate, 
and the obligation of the Lenders to make any Loan hereunder shall cease, and 
the unpaid principal amount of the Loans and all other Obligations shall 
automatically become immediately due and payable, without presentment, demand, 
protest, notice or other requirements of any kind, all of which are hereby 
expressly waived by the Borrower.

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<PAGE>
        7.2.2  If an Event of Default occurs, other than under Section 7.1.6. 
or 7.1.7., the Agent shall (a) upon written request of the Required Lenders, 
by written notice to the Borrower, declare that the Revolving Commitments and 
all pending Bid Loan Quotes (whether or not accepted) are terminated, 
whereupon the obligation of the Lender Parties to make any Loan hereunder 
shall cease, and/or (b) upon written request of the Required Lenders, declare 
the unpaid principal amount of the Loans and all other Obligations to be, and 
the same shall thereupon become, due and payable, without presentment, demand, 
protest, any additional notice or other requirements of any kind, all of which 
are hereby expressly waived by the Borrower.

    ARTICLE 8

    THE AGENT AND THE LENDERS

        Section 8.1    Authorization and Action.

        8.1.1    Each Lender hereby irrevocably appoints and authorizes the 
Agent Bank to act as its agent hereunder and under the other Loan Documents, 
to execute and deliver or accept, on its behalf, the other Loan Documents and 
any other documents, instruments and agreements related thereto or hereto to 
take such action on its behalf under the provisions hereof and thereof and to 
exercise such rights, remedies, powers and privileges hereunder and thereunder 
as are delegated to the Agent by the terms hereof and thereof, together with 
such rights, remedies, powers and privileges as are reasonably incidental 
thereto. 

        8.1.2    Except for any matters expressly subject to the consent or 
approval of the Agent under the Loan Documents, the Agent shall not, without 
the prior approval of the Required Lenders (or, as provided in Section 9.3., 
all of the Lenders), consent to any departure by the Borrower from the terms 
of, waive any default under or otherwise amend this Agreement or any other 
Loan Documents.  The Agent will, to the extent practicable under the 
circumstances, consult with the other Lender Parties prior to taking action on 
their behalf under the Loan Documents and in acting as their Agent thereunder.  
The Agent will not take any action contrary to the written direction of 
Required Lenders, will take any lawful action not contrary to the provisions 
of the Loan Documents prescribed in written instructions of the Required 
Lenders (or, as provided in Section 9.3., all the Lenders) and, as to any 
matters not expressly provided for by the Loan Documents (including 
enforcement or collection), may decline to take any action, except upon the 
written instructions of the Required Lenders (or, as provided in Section 9.3., 
all the Lenders).  If such instructions are requested reasonably promptly, the 
Agent shall be absolutely entitled to refrain from taking any action and shall 
not have any liability to the Borrower or any Lender for refraining from 
taking any action until it shall have received such instructions.  Any 
provision of this Agreement or any other Loan Document to the contrary 
notwithstanding, the Agent shall in no event be required to take or refrain 
from taking any action that would, in the Agent's opinion, expose the Agent to 
any liability or be inconsistent with the Agent's practice in similar 
situations when acting solely for its own account or be contrary to the 
provisions of any Loan Document or Applicable Law.

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<PAGE>
        8.1.3    The Agent shall not have any duties or responsibilities 
except those expressly set forth in the Loan Documents.  No duty to act, or 
refrain from acting, and no other obligation whatsoever, shall be implied on 
the basis of any right, power or authority granted to the Agent or shall 
become effective in the event of any temporary or partial exercise of such 
rights, power or authority.  The Agent shall not be required to exercise any 
right, power, remedy or privilege granted to it in any Loan Document, to 
ascertain or inquire whether any Default or Event of Default has occurred and 
is continuing, or to inspect the property (including the books and records) of 
the Borrower or to take any other affirmative action, except as provided in 
Section 7.2., or unless requested or directed to do so in accordance with the 
provisions of Section 8.1.2.

        8.1.4    The duties of the Agent shall be mechanical and 
administrative in nature. The Agent shall not have by reason of this Agreement 
a fiduciary relationship in respect of any other Lender Party.  Except for 
notices, reports and other documents and information expressly required to be 
furnished to the Lender Parties by the Agent hereunder, the Agent shall not 
have any duty or responsibility to provide any Lender Party with any credit or 
other information concerning the affairs, financial condition or business of 
the Borrower that may come into the possession of the Agent or any of its 
Affiliates.

        Section 8.2    Exculpation; Agent's Reliance, Etc.  Neither the Agent 
nor any of its directors, officers, agents, attorneys or employees shall be 
liable to the Borrower or any other Lender Party for any action taken or 
omitted to be taken by it or them under or in connection with any Loan 
Document (a) with the consent or at the request of the Required Lenders (or, 
as provided in Section 9.3., all the Lenders), or (b) in any other 
circumstances, except for its or their own gross negligence or willful 
misconduct as determined by a final judgment of a court of competent 
jurisdiction.  The Agent makes no warranty or representation to any other 
Lender Party and shall not be responsible to any other Lender Party for any 
recitals, statements, warranties or representations made in, or in connection 
with, any Loan Document or for the execution, effectiveness, genuineness, 
validity, enforceability, collectibility, or sufficiency of any Loan Document 
or any financial information, opinions of counsel or other documents executed 
and delivered pursuant thereto, or for the financial condition of the 
Borrower.  The Agent shall not be responsible to any Lender for the 
satisfaction of any condition specified in Article 3., except receipt of items 
required to be delivered to the Agent.  The Agent may treat the payee of any 
Note as the holder thereof until the Agent receives the related Assignment and 
Assumption signed by such holder and the assignee and in form satisfactory to 
the Agent.  The Agent shall be entitled to rely upon any notice, certificate 
or other writing believed by the Agent to be genuine and correct and to have 
been signed or sent by the proper Person or Persons.  The Agent shall be 
entitled to consult with legal counsel, independent public accountants and 
other experts selected by the Agent and to act in reliance upon the advice of 
such counsel and other experts concerning its actions and duties hereunder.

        Section 8.3    Agent and Affiliates.  In its capacity as a Lender, the 
Agent Lender shall have the same rights, powers and obligations under this 
Agreement and the other Loan Documents as any other Lender and may exercise or 
refrain from exercising the same as though it were not the Agent, including 
the right to give or deny consent to any

                                    42

<PAGE>
action requiring consent or direction of the Required Lenders or all the 
Lenders.  The Agent and its Affiliates may accept deposits from, lend money 
to, act as trustee under indentures of, enter into and otherwise be a party to 
securitization transactions with and generally engage in any kind of business 
with, the Borrower, any Subsidiary and any Affiliate of the Borrower, all as 
if the Agent were not the Agent and without any duty to account therefor to 
the Lenders.  The Agent shall be entitled to receive from the Borrower its 
fees or portions thereof in connection with this transaction without any 
liability to account therefor to any other Lender, except as the Agent may 
have expressly agreed. 

        Section 8.4    Lender Credit Decision.  Each Lender Party acknowledges 
that it has, independently and without reliance upon the Agent or any other 
Lender Party and based on such documents and information as it has deemed 
appropriate, made its own credit analysis and decision to enter into this 
Agreement.  Each Lender Party also acknowledges that it will, independently 
and without reliance upon the Agent or any other Lender Party and based on 
such documents and information as it shall deem appropriate at the time, 
continue to make its own credit decisions in taking or not taking action under 
the Loan Documents.

        Section 8.5    Indemnification.  The Agent shall in no event be 
required to take any action under the Loan Documents or in relation thereto 
unless it shall first be indemnified to its satisfaction by the other Lender 
Parties against any and all liability and expense that it may incur by reason 
of taking any such action.  Each Lender (other than the Designated Bidders) 
agrees to indemnify and hold the Agent harmless (to the extent not promptly 
paid or reimbursed by the Borrower), ratably according to their respective 
Revolving Commitments, from and against any and all (a) costs, expenses and 
other amounts otherwise payable by the Borrower for the account of the Agent 
pursuant to Section 9.1. and (b) Indemnified Liabilities that may be imposed 
on, incurred by, or asserted against the Agent, except to the extent they are 
finally adjudged by a court of competent jurisdiction to have directly 
resulted from the gross negligence or willful misconduct of the Agent.

        Section 8.6    Successor Agent.  The Agent may resign at any time as 
Agent under the Loan Documents by giving written notice thereof to the Lenders 
and the Borrower. The Agent may be removed at any time with or without cause 
by written action of the Required Lenders (other than the Agent Bank) 
delivered to the Agent.  Upon any such resignation or removal, the Required 
Lenders shall have the right to appoint a successor Agent with the prior 
consent of the Borrower (provided that such consent shall not be unreasonably 
withheld and no such consent shall be required if an Event of Default shall 
have occurred and is continuing).  If no successor Agent shall have been so 
appointed by the Required Lenders (and, if required, approved by the 
Borrower), and shall have accepted such appointment, within 30 days after the 
retiring Agent's notice of resignation or the removal of the Agent, then the 
retiring or removed Agent may with the prior consent of the Borrower (provided 
that such consent shall not be unreasonably withheld and no such consent shall 
be required if an Event of Default shall have occurred and is continuing), on 
behalf of the other Lender Parties, appoint a successor Agent, which shall be 
a financial institution having a combined capital and surplus of at least 
$100,000,000, or a branch or agency of such a financial institution, organized 
or licensed to do business under the laws of the United States of America or 
any State thereof.  Upon the acceptance of any appointment as the Agent by a

                                    43

<PAGE>
successor Agent, such successor Agent shall thereupon succeed to and become 
vested with all the rights, powers, privileges and duties of the retiring 
Agent, and the retiring Agent shall be discharged of its duties and 
obligations under the Loan Documents.  Upon any retiring Agent's resignation 
or removal, the provisions of this Article 8. (as well as other expense 
reimbursement, indemnification and exculpatory provisions in the other Loan 
Documents) shall continue in effect for its benefit as to any actions taken or 
omitted by it while it was Agent.

        Section 8.7    Excess Payments.  If any Lender shall obtain any 
payment or other recovery (whether voluntary, involuntary, by application of 
setoff or otherwise) on account of any Obligations in excess of its pro rata 
share of payments and other recoveries on account of such Obligations obtained 
by all Lenders, such Lender shall purchase from the other Lenders such 
participations in such Obligations held by them as shall be necessary to cause 
such purchasing Lender to share the excess payment or other recovery ratably 
with each of the other Lenders; provided, however, that if all or any portion 
of the excess payment or other recovery is thereafter recovered from such 
purchasing Lender, the purchase shall be rescinded and the purchase price 
restored to such Lender to the extent of such recovery, but without interest.  
The Borrower agrees that any Lender so purchasing a participation from-another 
Lender pursuant to this Section 8.7. may, to the fullest extent permitted by 
Applicable Law and by Section 9.8., exercise all of its rights of payment 
(including setoff) with respect to such participation as fully as if such 
Lender were the direct creditor of the Borrower in the amount of such 
participation.

        Section 8.8    Lender Parties.  The provisions of this Article 8 are 
solely for the benefit of the Agent and the other Lender Parties and the 
Borrower shall not have any rights to rely on or enforce any of the provisions 
hereof (except that the provisions of Sections 8.6. are also for the benefit 
of the Borrower).  In performing its functions and duties under the Loan 
Documents, the Agent shall act solely as agent of the Lenders and does not 
assume and shall not be deemed to have assumed any obligation toward or 
relationship of agency or trust with or for the Borrower. 

        Section 8.9    Payments; Availability of Funds; Certain Notices. 

        8.9.1  If the Agent shall fail to deliver to any other Lender Party 
its share of any payment received from the Borrower as and when required by 
Section 2.9., the Agent shall pay to such Lender its share of such payment 
together with interest on such amount at the Federal Funds Rate, for each day 
from the date such amount was required to be paid to such Lender until the 
date the Agent pays such amount to such Lender, calculated as set forth in 
Section 2.4.4.

        8.9.2  Unless (a) the Agent shall have been notified by a Lender prior 
to the date upon which a Loan is to be made or (b) the Agent shall have been 
notified by the Borrower prior to the date on which the Borrower is required 
to make any payment hereunder that such Lender or the Borrower, as the case 
may be (the "Obligated Party"), does not intend to make available to the Agent 
the Obligated Party's portion of such Loan or such payment, the Agent may 
assume that the Obligated Party will make such amount

                                    44

<PAGE>
available to the Agent on such date and the Agent may, in reliance upon such 
assumption (but shall not be required to), make available to the Borrower (in 
the case of a Loan) or the Lenders (in the case of a payment by the Borrower) 
a corresponding amount.  If such corresponding amount is not in fact made 
available to the Agent by the Obligated Party, the Agent shall be entitled to 
recover such amount on demand from the Obligated Party (or, in the case of a 
Loan, if the Lender that is the Obligated Party fails to pay such amount 
forthwith upon such demand, from the Borrower).  Such amount shall be payable 
together with interest thereon from the day on which such corresponding amount 
was made available by the Agent to the Lender or the Borrower, as applicable, 
to the date of payment by the Obligated Party (or the Borrower, as 
applicable), at a rate of interest equal to (i) in the case of any payment by 
any other Lender Party, the Federal Funds Rate, and (ii) in the case of any 
payment by the Borrower, the interest rate applicable to the Loan.

        8.9.3  The Agent shall promptly notify the Lenders by telex or 
telecopy of each Interest Period chosen by the Borrower, the Euro-Dollar Rate 
for each Interest Period (and the relevant interest rate), the date of any 
expected payment and all other material notices transmitted by the Borrower. 

        Section 8.10    Obligations of Lender Parties Several; Enforcement by 
the Agent.

        8.10.1  Each Lender Party's obligations hereunder are several, and not 
joint or joint and several. The failure of any Lender Party to make any Loan 
or otherwise to perform its obligations hereunder will not increase the 
obligations of any other Lender Party.  Notwithstanding the foregoing, any 
Lender may assume, but shall have no obligation to any Person to assume, any 
non-performing Lender's obligation to make a Loan.  Nothing contained in this 
Agreement and no action taken by the Agent or any other Lender Party pursuant 
to this Agreement shall be deemed to constitute the Agent and any other Lender 
Party to be a partnership, an association, a joint venture or any other kind 
of entity.

        8.10.2  Each Lender agrees that, except with the prior written consent 
of the Agent or as provided in Section 9.8., no Lender Party shall have any 
right individually to enforce any Loan Document or any provision thereof, or 
make demand thereunder, it being agreed that such rights and remedies may only 
be exercised by the Agent for the ratable benefit of the Lenders upon the 
terms of this Agreement.

        Section 8.11    Managing Agents.  No Managing Agent, in such capacity, 
shall have any right, power, obligation, liability, duty or responsibility 
whatsoever under the Loan Documents, and no Managing Agent shall be deemed to 
have any fiduciary relationship with any Lender.  Each Lender acknowledges 
that it has not relied, and will not rely, on any of the Managing Agents in 
deciding to enter into this Agreement or in taking or not taking any action 
hereunder.

                                    45

<PAGE>
    ARTICLE 9

    MISCELLANEOUS

        Section 9.1    Expenses.  The Borrower shall pay on demand:

        9.1.1    any and all attorneys' fees and disbursements (including 
allocated costs of in-house counsel) and out-of-pocket cost and expenses 
incurred by the Agent in connection with the development, drafting and 
negotiation of the Loan Documents, any amendments thereto and the syndication 
and closing of the transactions contemplated thereby; and

        9.1.2    all costs and expenses (including fees and disbursements of 
in-house and other attorneys, appraisers and consultants) incurred by the 
Lender Parties in any workout, restructuring or similar arrangements or, after 
an Event of Default, in connection with the protection, preservation, exercise 
or enforcement of any of the terms of the Loan Documents or in connection with 
any foreclosure, collection or bankruptcy proceedings.

        Section 9.2    Indemnity. 

        9.2.1    Borrower shall indemnify, defend and hold harmless each 
Lender Party and its Affiliates and the officers, directors, employees, 
agents, attorneys, affiliates, successors and assigns of each Lender Party and 
its Affiliates (collectively, the "Indemnitees") from and against (a) any and 
all transfer taxes, documentary taxes, assessments or charges made by any 
Governmental Authority by reason of the execution and delivery of the Loan 
Documents or the making of the Loans (provided that any Lender claiming any 
additional amounts payable pursuant to this Section 9.2.1(a) shall use 
reasonable efforts (consistent with its internal policy and legal and 
regulatory restrictions) to change the jurisdiction of its Applicable Lending 
Office if the making of such a change would avoid the need for, or reduce the 
amount of, any such additional amounts that may thereafter accrue and would 
not, in the reasonable judgment of such Lender, be otherwise disadvantageous 
to such Lender), and (b) any and all liabilities, losses, damages, penalties, 
judgments, claims, costs and expenses of any kind or nature whatsoever 
(including reasonable attorneys' fees, including allocated costs of in-house 
counsel, and disbursements in connection with any actual or threatened 
investigative, administrative or judicial proceeding, whether or not such 
Indemnitee shall be designated a party thereto) that may be imposed on, 
incurred by or asserted against such Indemnitee, in any manner relating to or 
arising out of the Loan Documents, the Loans, or the use or intended use of 
the proceeds of the Loans (the "Indemnified Liabilities"); provided that no 
Indemnitee shall have the right to be indemnified or held harmless hereunder 
for its own gross negligence, or willful misconduct, as determined by a final 
judgment of a court of competent jurisdiction.

        9.2.2    To the extent that the undertaking to indemnify and hold 
harmless set forth in Section 9.2.1. may be unenforceable as violative of any 
Applicable Law or public policy, the Borrower shall make the maximum 
contribution to the payment and satisfaction of each of the Indemnified 
Liabilities that is permissible under Applicable Law.  All Indemnified 
Liabilities shall be payable on demand. 

                                    46

<PAGE>
        Section 9.3    Waivers; Modifications in Writing.

        9.3.1    No amendment of any provision of this Agreement or any other 
Loan Document (including a waiver thereof or consent relating thereto) shall 
be effective unless the same shall be in writing and signed by the Agent and 
the Required Lenders and, except as to a waiver or consent requested by or to 
the benefit of the Borrower, the Borrower.  Notwithstanding the foregoing:

            9.3.1.1  no amendment, waiver, consent, forbearance or other 
agreement  that has the effect of (a) reducing the rate or amount, or 
extending the stated maturity or due date, of any amount payable by the 
Borrower to any Lender Party under the Loan Documents, (b) increasing the 
amount, or extending the stated termination or reduction date, of any Lender's 
Revolving Commitment hereunder or subjecting any Lender Party to any 
additional obligation to extend credit, (c) altering the rights and 
obligations of the Borrower to prepay the Loans, or (d) changing this Section 
9.3. or the definition of the term "Required Lenders" or any other percentage 
of Lenders specified in this Agreement to be the applicable percentage to act 
on specified matters shall be effective unless the same shall be signed by or 
on behalf of all of the Lenders (other than the Designated Bidders);

            9.3.1.2  no amendment that has the effect of (a) increasing the 
duties or obligations of the Agent, (b) increasing the standard of care or 
performance required on the part of the Agent, or (c) reducing or eliminating 
the indemnities or immunities to which the Agent is entitled (including any 
amendment of this Section), shall be effective unless the same shall be signed 
by or on behalf of the Agent;

            9.3.1.3  no amendment that has the effect of (a) increasing the 
duties or obligations of any Designated Bidder, (b) reducing the principal of, 
interest on, or other amounts due with respect to the Bid Loan Note payable to 
any Designated Bidder, or (c) amending the definition of Required Lenders in a 
manner which adversely affects a Designated Bidder, shall be effective unless 
the same shall be signed by or on behalf of such Designated Bidder; and

            9.3.1.4  any waiver or consent shall be effective only in the 
specific instance and for the specific purpose for which given.  No notice to 
or demand on the Borrower in any case shall entitle the Borrower to any other 
or further notice or demand in similar or other circumstances.  Any amendment 
effected in accordance with this Section 9.3. shall be binding upon each 
present and future Lender Party and the Borrower. 

        Section 9.4    Cumulative Remedies; Failure or Delay.  The rights and 
remedies provided for under this Agreement are cumulative and are not 
exclusive of any rights and remedies that may be available to the Lender 
Parties under Applicable Law or otherwise.  No failure or delay on the part of 
any Lender Party in the exercise of any power, right or remedy under the Loan 
Documents shall impair such power, right or remedy or operate as a waiver 
thereof, nor shall any single or partial exercise of any such power, right or 
remedy preclude other or further exercise thereof or of any other power, right 
or remedy.

                                    47

<PAGE>
        Section 9.5    Notices, Etc.  All notices and other communications 
under this Agreement shall be in writing and (except for financial statements, 
other related informational documents and routine communications, which may be 
sent by first-class mail, postage prepaid) shall be personally delivered or 
sent by prepaid courier, by overnight, registered or certified mail (postage 
prepaid), or by telex or telecopy, and shall be deemed given when received by 
the intended recipient thereof.  Unless otherwise specified in a notice sent 
or delivered in accordance with this Section 9.5., all notices and other 
communications shall be given to the parties hereto at their respective 
addresses (or to their respective telex or telecopier numbers) indicated on 
Schedule 1.1.B (in the case of the Lender Parties) or Schedule 9.5. (in the 
case of the Borrower).

        Section 9.6    Successors and Assigns; Designations.

        9.6.1    This Agreement shall be binding upon and inure to the benefit 
of the parties hereto and their respective successors and permitted assigns.  
The Borrower may not assign or transfer any interest hereunder without the 
prior written consent of each Lender Party.

        9.6.2    Subject to the terms of this Section 9.6.2, each Lender 
(other than the Designated Bidders) shall have the right at any time to assign 
(an "Assignment") all or any portion of such Lender's Revolving Commitment and 
Loans to one or more banks or other institutions; provided, however, that (a) 
each Assignment to any Person that is not then a Lender with a Revolving 
Commitment shall be of a portion of the Loans and Revolving Commitments at 
least equal to $10,000,000 (or, if less, all of the assigning Lender's Loans 
and Revolving Commitment) and, unless otherwise agreed by the Agent, shall be 
of a constant, and not a varying, percentage of all of the assigning Lender's 
rights and obligations under this Agreement and the other Loan Documents; (b) 
no Assignment (other than an Assignment to a Person that is then a Lender with 
a Revolving Commitment or an Affiliate of such a Lender) shall be effective 
without the consent of the Borrower (unless a Default or Event of Default then 
exists) and the Agent, which consents shall not be unreasonably withheld or 
delayed; (c) the parties to the Assignment shall execute and deliver to the 
Agent an Assignment and Assumption substantially in the form of Exhibit H (an 
"Assignment and Assumption"); (d) so long as the NCI Credit Agreement is in 
effect, each Assignment shall be made concurrently with an assignment of, and 
the applicable assignee shall concurrently assume, a ratable portion of the 
assigning Lender's Revolving Commitment and Loans under the NCI Credit 
Agreement; and (e) the assignee shall pay to the Agent a processing and 
recordation fee of $3,500.  From and after the date on which the conditions in 
the foregoing clauses and the Assignment and Assumption have been satisfied, 
the assignee shall be a "Lender" hereunder and, to the extent that rights and 
obligations hereunder have been assigned to it, shall have the rights and 
obligations of the assigning Lender hereunder, and the assigning Lender shall, 
to the extent that rights and obligations hereunder have been assigned by it, 
relinquish its rights and be released from its obligations under this 
Agreement (and, in the case of an assignment covering all or the remaining 
portion of the assigning Lender's rights and obligations under this Agreement, 
shall cease to be a party hereto). The foregoing notwithstanding, each 
Designated Bidder may assign to its Designating Lender (as defined in Section 
9.6.6 below) any Bid Loan owing to it.

                                    48

<PAGE>
        9.6.3    Each Lender (other than the Designated Bidders) shall have 
the right at any time to grant or sell participations (each a "Participation") 
in all or any portion of such Lender's Revolving Commitment and Loans to one 
or more banks or other institutions without the consent of the Borrower or any 
other Lender Party, subject to the terms and conditions set forth in this 
Section 9.6.3.  If any Lender sells or grants a Participation, (a) such Lender 
shall make and receive all payments for the account of its participant, (b) 
such Lender's obligations under this Agreement shall remain unchanged, (c) 
such Lender shall continue to be the sole holder of its Notes and other Loan 
Documents subject to the Participation and shall have the sole right to 
enforce its rights and remedies under the Loan Documents, (d) the Borrower and 
the other Lender Parties shall continue to deal solely and directly with such 
Lender in connection with such Lender's rights and obligations under the Loan 
Documents, and (e) the Participation agreement shall not restrict such 
Lender's ability to agree to any amendment of the terms of the Loan Documents, 
or to exercise or refrain from exercising any powers or rights that such 
Lender may have under or in respect of the Loan Documents, except that the 
participant may be granted the right to consent to (i) any reduction of the 
rate or amount, or any extension of the stated maturity or due date, of any 
principal, interest or Fees payable by the Borrower and subject to the 
Participation, or (ii) any increase in the amount or extension of the stated 
termination or reduction date of the affected Revolving Commitment.  A 
participant shall have the rights of the Lenders under Sections 2.11., 2.12., 
9.2. and 9.8., subject to the obligations imposed by such Sections; provided 
that amounts payable to any participant shall not exceed the amounts that 
would have been payable under such Sections to the Lender granting the 
Participation, had such Participation not been granted.

        9.6.4    Each Lender may at any time assign or pledge any portion of 
its rights under the Loan Documents to a Federal Reserve Bank.  No such 
assignment or pledge shall be subject to the provisions of Sections 9.6.2. or 
9.6.3.

        9.6.5    Each Lender shall have the right at any time to furnish one 
or more potential assignees or participants with any information concerning 
the Borrower and its Subsidiaries that has been supplied by the Borrower or 
any such Subsidiary to any Lender Party.  The Borrower shall supply all 
reasonably requested information and execute and deliver all such instruments 
and take all such further action (including, in the case of an Assignment, the 
execution and delivery of replacement Notes) as the Agent may reasonably 
request in connection with any Assignment or Participation arrangement.

        9.6.6    Each Lender (other than the Designated Bidders) may, with the 
written consent of the Borrower and the Agent (such consent not to be 
unreasonably withheld), designate one or more banks or other entities to have 
a right to make Bid Loans as a Lender pursuant to Section 2.2; provided, 
however, that (i) no such Lender shall be entitled to make more than three 
such designations, (ii) each such Lender making one or more of such 
designations shall retain the right to make Bid Loans as a Lender pursuant to 
Section 2.2, (iii) each such designation shall be to a Designated Bidder and 
(iv) the parties to each such designation shall execute and deliver to the 
Agent a Designation Agreement.  Upon such execution, delivery, acceptance and 
recording, from and after the effective date specified in

                                    49

<PAGE>
each Designation Agreement, the designee thereunder shall be a party hereto 
with a right to make Bid Loans as a Lender pursuant to Section 2.2 and the 
obligations related thereto.  The Lender designating any Designated Bidder (a 
"Designating Lender") shall act as the agent for such Designated Bidder and 
deliver and receive all communications and notices under the Credit Agreement 
and the other Loan Documents to and on behalf of such Designated Bidder and 
shall exercise on such Designated Bidder's behalf all rights, if any, to vote 
and to grant and make approvals, waivers, consents or amendments to or under 
the Credit Agreement and the other Loan Documents.  Any document executed by a 
Designating Lender on the Designated Bidder's behalf in connection with the 
Credit Agreement or other Loan Documents shall be binding on the Designee.

        Section 9.7    Choice of Forum.

        9.7.1    All actions or proceedings arising in connection with this 
Agreement may be tried and litigated in state or Federal courts located in 
Seattle, Washington, unless such actions or proceedings are required to be 
brought in another court to obtain subject matter jurisdiction over the matter 
in controversy.  EACH OF THE BORROWER AND THE LENDER PARTIES WAIVES ANY RIGHT 
IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT IT 
IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE 
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

        9.7.2    Nothing contained in this Section shall preclude the Lender 
Parties from bringing any action or proceeding arising out of or relating to 
this Agreement in the courts of any place where the Borrower or any of its 
assets may be found or located.

        Section 9.8    Set Off.  In addition to any rights now or hereafter 
granted under Applicable Law, during the existence of any Event of Default, 
each Lender Party is hereby irrevocably authorized by the Borrower, at any 
time or from time to time, without notice to the Borrower or to any other 
Person, any such notice being hereby expressly waived, to set off and to 
appropriate and to apply any and all deposits (general or special, including 
certificates of deposit, whether matured or unmatured, but not including trust 
accounts) and any other indebtedness, in each case whether direct or indirect 
or contingent or matured or unmatured at any time held or owing by such Lender 
Party to or for the credit or the account of the Borrower, against and on 
account of the Obligations, irrespective of whether or not such Lender Party 
shall have made any demand for payment, provided that such Lender Party shall, 
promptly following such set off or application, give notice to the Borrower 
thereof, which notice shall contain an explanation of the basis for the set 
off or application.

        Section 9.9    Changes in Accounting Principles.  If any changes in 
generally accepted accounting principles from those used in the preparation of 
the financial statements referred to in this Agreement hereafter result from 
by the promulgation of rules, regulations, pronouncements, or opinions of or 
required by the Financial Accounting Standards Board or the American Institute 
of Certified Public Accountants (or successors thereto or agencies with

                                    50

<PAGE>
similar functions), or there shall occur any change in the Borrower's fiscal 
or tax years and, as a result of any such changes, there shall result a change 
in the method of calculating any of the financial covenants, negative 
covenants, standards or other terms or conditions found in this Agreement, 
then the parties hereto agree to enter into negotiations in order to amend 
such provisions so as to equitably reflect such changes with the desired 
result that the criteria for evaluating the Borrower's financial condition 
shall be the same after such changes as if such changes had not been made. 

        Section 9.10    Survival of Agreements, Representations and 
Warranties.  All agreements, representations and warranties made herein shall 
survive the execution and delivery of this Agreement, the closing and the 
extensions of credit hereunder and shall continue until payment and 
performance of any and all Obligations.  Any investigation at any time made by 
or on behalf of the Lender Parties shall not diminish the right of the Lender 
Parties to rely thereon.  Without limitation, the agreements and obligations 
of the Borrower contained in Sections 2.11., 2.12., 9.1., and 9.2. and the 
obligations of the Lenders under Section 8.5. shall survive the payment in 
full of all other Obligations.

        Section 9.11    Execution in Counterparts.  This Agreement may be 
executed in any number of counterparts, each of which counterparts, when so 
executed and delivered, shall be deemed to be an original and all of which 
counterparts, taken together, shall constitute but one and the same Agreement.  
Faxed signatures to this Agreement shall be binding for all purposes.

        Section 9.12    Complete Agreement.  This Agreement, together with the 
other Loan Documents, is intended by the parties as the final expression of 
their agreement regarding the subject matter hereof and as a complete and 
exclusive statement of the terms and conditions of such agreement.

        Section 9.13    Limitation of Liability.  No claim shall be made by 
the Borrower or any Lender Party against any party hereto or the Affiliates, 
directors, officers, employees or agents of any party hereto for any special, 
indirect, consequential or punitive damages in respect of any claim for breach 
of contract or under any other theory of liability arising out of or related 
to the transactions contemplated by this Agreement, or any act, omission or 
event occurring in connection therewith; and the Borrower and each Lender 
Party waives, releases and agrees not to sue upon any claim for any such 
damages, whether or not accrued and whether or not known or suspected to exist 
in its favor.

        Section 9.14    WAIVER OF TRIAL BY JURY.  THE BORROWER AND THE LENDER 
PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS AGREEMENT 
OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS 
OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.

        Section 9.15    NO ORAL AGREEMENTS.  ORAL AGREEMENTS OR 
ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR

                                    51

<PAGE>
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

                                    52

<PAGE>


    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
executed and delivered as of the date first set forth above.

                        Borrower:

                        NORDSTROM, INC.
                        a Washington corporation


                        By:/s/  John A. Goesling
                                ----------------
                        Name:   John A. Goesling
                        Title:  Executive Vice President


                        Agent:

                        NATIONSBANK OF TEXAS, N.A.,
                        as Agent


                        By:/s/  Charles F. Lilygren
                                -------------------
                        Name:   Charles F. Lilygren
                        Title:  Vice President

                        Lenders and Managing Agents:

                        NATIONSBANK OF TEXAS, N.A.,
                        as Lender


                        By:/s/  Charles F. Lilygren
                                -------------------
                        Name:   Charles F. Lilygren
                        Title:  Vice President


                        BANK OF AMERICA NATIONAL TRUST
                        AND SAVINGS ASSOCIATION,
                        as Lender and Managing Agent


                        By:/s/  Maria Vickroy-Peralta
                                ---------------------
                        Name:   Maria Vickroy-Peralta
                        Title:  Vice President
                                    S-1

<PAGE>
                        MORGAN GUARANTY TRUST COMPANY 
                        OF NEW YORK,
                        as Lender and Managing Agent
                        

                        By:/s/  Adam J. Silver
                                --------------
                        Name:   Adam J. Silver
                        Title:  Associate


                        BANK ONE, COLORADO, N.A. 
                        as Lender


                        By:/s/  David L. Ericson
                                ----------------
                        Name:   David L. Ericson
                        Title:  Vice President


                        KEYBANK NATIONAL ASSOCIATION,
                        as Lender


                        By:/s/  Kathleen J. Johanson
                                --------------------
                        Name:   Kathleen J. Johanson
                        Title:  Vice President


                        NORWEST BANK MINNESOTA,
                        NATIONAL ASSOCIATION,
                        as Lender


                        By:/s/  Janet M. Klein
                                --------------
                        Name:   Janet M. Klein
                        Title:  Vice President


                        PNC BANK, NATIONAL ASSOCIATION, 
                        as Lender


                        By:/s/  Philip K. Liebscher
                                -------------------
                        Name:   Philip K. Liebscher
                        Title:  Vice President

                                    S-2

<PAGE>
                        U.S. BANK,
                        as Lender
                        

                        By:/s/  Arnold J. Conrad
                                ----------------
                        Name:   Arnold J. Conrad
                        Title:  Vice President

                                    S-3




<PAGE>
    SCHEDULE 1.1.A


<TABLE>
    REVOLVING COMMITMENTS
<CAPTION>
    Lender                                               Revolving Commitments
<S>                                                      <C>
NationsBank of Texas, N.A.                                     $50,000,000
Bank of America                                                $38,000,000
JP Morgan                                                      $38,000,000
Key Bank                                                       $20,000,000
US National Bank                                               $20,000,000
Bank One                                                       $14,000,000
Norwest Bank                                                   $10,000,000
PNC Bank, National Association                                 $10,000,000


    Total                                                     $200,000,000
</TABLE>


<PAGE>
    SCHEDULE 1.1.B

    LENDERS INFORMATION

Agent's Address for Notice:

NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Fax: (214) 508-2515
Phone: (214) 508-3255
Attention: Molly Oxford

with a copy to:

NATIONSBANK OF TEXAS, N.A., as Agent
444 South Flower Street, Suite 1500
Los Angeles, California 90071
Fax:  (213) 624-5812
Phone:  (213) 236-4918
Attention: William B. Guffey

Agent's Account:    NationsBank TX Dallas
            ABA #  111000025
            Attn:  Commercial Loans
            Account # 1292000883
            Ref:  Nordstrom, Inc.



<TABLE>
Lenders:
<CAPTION>
    Lender                  Domestic Lending Office             Euro-Dollar 
Lending Office
<S>                         <C>                                  <C>
NationsBank of Texas, N.A.  444 South Flower Street, Suite 4100  444 South Flower Street, Suite 4100
                            Los Angeles, California 90071        Los Angeles, California 90071
                            Fax:  (213) 236-5815                 Fax:  (213) 236-5815
                            Telex:                               Telex:
                            Phone:  (213) 236-4918               Phone:  (213) 236-4918
                            Attention: William B. Guffey         Attention: William B. Guffey

PNC Bank, National          249 Fifth Avenue                     249 Fifth Avenue
Association                 One PNC Plaza, 2nd Floor             One PNC Plaza, 2nd Floor 
                            Pittsburgh, PA 15222-2707            Pittsburgh,PA 15222-2707
                            Fax: (412) 762-6484                  Fax: (412) 762-6484
                            Telex:                               Telex:
                            Phone: (412) 762-3202                Phone: (412) 762-3202
                            Attention: Philip K. Liebscher       Attention: Philip K. Liebscher
                            Borrowing Notices to Sally Hunter    Borrowing Notices to Sally Hunter
</TABLE>

                                    2

<PAGE>

<TABLE>
<CAPTION>
    Lender                  Domestic Lending Office             Euro-Dollar 
Lending Office
<S>                         <C>                                  <C>
KeyBank National            700 5th Ave.                         700 5th Ave.   
Association                 P.O. Box 90                          P.O. Box 90     
                            MS WA-31-10-4812                     MS WA-31-10-4812   
                            Seattle, WA 98111                    Seattle, WA 98111  
                            Fax: (206) 684-6035                  Fax: (206) 684-6035  
                            Telex:                               Telex:              
                            Phone: (206) 684-6308                Phone: (206) 684-6308     
                            Attention: Kathleen J. Johanson      Attention: Kathleen J. Johanson 

Morgan Guaranty Trust       60 Wall Street, 22nd Floor           Nassau Bahamas Office
Company of New York         New York, New York 10260-0060        c/o J.P. Morgan Services Inc.
                            Fax: (212) 648-9974                  Euro-Loan Servicing Unit 
                            Telex: 177615 MGT UT or 620106 MGT   500 Stanton Christiana Road 
                            UW                                   Newark, DE 19713
                            Phone: (212) 648-5018                Fax: (302) 634-1094
                            Attention: Kevin J. O'Brien          Telex: 177425 MBDEL UT
                                                                 Phone:
                                                                 Attention:

U.S. Bank                   1420 Fifth Avenue                    1420 Fifth Avenue
                            Seattle, WA 98101                    Seattle, WA 98101
                            Fax: (206) 587-5259                  Fax: (206) 587-5259
                            Telex:                               Telex:
                            Phone: (206) 587-5236                Phone: (206) 587-5236
                            Attention: Arnold J. Conrad          Attention: Arnold J. Conrad

Bank of America National    555 California Street, 41st Floor    555 California Street, 41st Floor
Trust & Savings Association San Francisco, CA 94104              San Francisco, CA 94104
                            Fax: (415) 622-4585                  Fax: (415) 622-4585
                            Telex:                               Telex:
                            Phone: (415) 622-7198                Phone: (415) 622-7198
                            Attention: Maria Vickroy-Peralta     Attention: Maria Vickroy-Peralta

Bank One, Colorado, N.A.    1125 17th Street, 3rd Floor          1125 17th Street, 3rd Floor
                            Denver, CO 80202                     Denver, CO 80202
                            Fax: (303) 297-4435                  Fax: (303) 297-4435
                            Telex:                               Telex:
                            Phone: (303) 297-4294                Phone: (303) 297-4294
                            Attention: David Ericson             Attention: David Ericson

Norwest Bank Minnesota,     6th & Marquette                      6th & Marquette 
N.A.                        Minneapolis, MN 55479                Minneapolis, MN 55479
                            Fax: (612) 667-4145                  Fax: (612) 667-4145
                            Telex:                               Telex:
                            Phone: (612) 667-5186                Phone: (612) 667-5186
                            Attention: Debbie Edstrom            Attention: Debbie Edstrom
</TABLE>

                                    3

<PAGE>

    SCHEDULE 1.1.D

    EXISTING LIENS
     Nordstrom, Inc.

<TABLE>
<CAPTION>
                                                      Original Principal
     Lien Holder                Collateral                  Amount      
  <S>                       <C>                       <C>
  Dubuque In-Futuro, Inc.   Equipment Located at the        $500,000
                            Iowa distribution center

  City of Dubuque           Equipment Located at the        $300,000
                            Iowa distribution center
</TABLE>


<PAGE>
    SCHEDULE 3.1.2

    CLOSING DOCUMENTS


<TABLE>
<CAPTION>

                                                   Primary
                                                Responsibility        Status

MAJOR LOAN DOCUMENTS.  The following, in
each case duly executed by all parties,
as appropriate
<S>                                                 <C>               <C>
1.    Credit Agreement                              L&W
        Schedule 1.1A    Revolving Commitments      NB
        Schedule 1.1B    Lender Information         NB/L&W
        Schedule 1.1D    Existing Liens             Borrower
        Schedule 3.1.2   Closing Documents          L&W
        Schedule 4.1    Organization of Borrower    Borrower
                        and Subsidiaries
        Schedule 4.5    Material Litigation         Borrower
        Schedule 9.5    Borrower Information        Borrower
        Exhibit A-1     Form of Revolving Loan Note L&W
        Exhibit A-3    Form of Bid Loan Notes       L&W
        Exhibit B     Form of Designation Agreement L&W
        Exhibit E-1    Form of Notice of Borrowing  L&W
        Exhibit E-3    Form of Notice of            L&W
                       Conversion/Continuation
        Exhibit E-4    Form of Bid Loan Quote       L&W
                       Request
        Exhibit E-5    Form of Bid Loan Quote       L&W
        Exhibit E-7    Form of Notice of            L&W
                       Responsible Officer
        Exhibit F-1    Form of Secretary's          L&W 
                       Certificate
        Exhibit F-3    Form of Closing Officer's    L&W
                       Certificate
        Exhibit F-6    Form of Compliance           L&W
                       Certificate
        Exhibit G      Form of Opinion of           L&W
                       Borrower's Counsel
        Exhibit H      Form of Assignment           L&W
                       and Assumption
</TABLE>

                                    5

<PAGE>

<TABLE>
<CAPTION>
                                                   Primary
                                                Responsibility        Status


<S>                                             <C>                   <C>
        Exhibit I    Controlling Stockholders       Borrower




2.    Notes for all Lenders                         L&W
    CHARTER DOCUMENTATION AND CERTIFICATES. The
    following, in the case of certificates
    and the like duly executed by the
    parties specified herein or therein:

3.    For the Borrower, as of a recent date,        Borrower
      the charter or articles of incorporation,
      as amended, certified by the appropriate
      Governmental Authority of its jurisdiction 
      of its formation, and good standing 
      certificates by the appropriate 
      Governmental Authorities of its 
      jurisdiction of formation.  and of each 
      other jurisdiction listed below:

    Company  Jurisdiction of  Other Jurisdiction
                Formation

    Borrower    Washington       [none]             [LPSL]/
                                                    Borrower

4.    For the Borrower, a certificate dated the     [LPSL]/
      Closing Date, substantially in the form of    Borrower
      Exhibit F-1, including all exhibits 

5.    For the Borrower, an Officer's Closing        [LPSL]/
      Certificate,substantially in the form of      Borrower
      Exhibit F-3

6.    For the Borrower, a Notice of Responsible     [LPSL]/
      Officers, substantially in the form of        Borrower
      Exhibit E-7 

      LEGAL OPINIONS. Favorable legal opinions 
      dated the Closing Date:

7.    Of counsel to the Borrower, addressed to      [LPSL]
      the Agent and the Lenders in substantially
      the form of Exhibit G-1 

8.    Of Latham & Watkins, counsel to the Agent,    L&W
      addressed to the Agent and the Lenders in 
      form and substance satisfactory to the Agent.
</TABLE>

                                    6

<PAGE>
    SCHEDULE 4.1

    ORGANIZATION OF BORROWER AND SUBSIDIARIES
                  Nordstrom, Inc.

<TABLE>
<CAPTION>
    Borrower/Subsidiary             Form and State of 
                                    Organization
    <S>                             <C>
    Nordstrom, Inc.                 a Washington corporation
    Nordstrom                       a Washington corporation
    Distribution, Inc.
    NLC, Inc.                       a Washington corporation
    Nordstrom Credit, Inc.          a Colorado corporation
    Nordstrom National              a national banking association
    Credit Bank, N.A.
    NIHC Inc.                       a Colorado corporation
    NTN, Inc.                       a Colorado corporation
    N2HC, Inc.                      a Colorado corporation
</TABLE>


<PAGE>
    SCHEDULE 4.5

    MATERIAL LITIGATION
       Nordstrom, Inc.

    None


<PAGE>
    SCHEDULE 9.5

    BORROWER INFORMATION
      Nordstrom, Inc.

Address for Notices: 

Nordstrom, Inc.
Arcade Plaza Building
1321-2nd Avenue, 5th Floor
Seattle, WA  98101
Business:      (206) 233-6303
Fax:           (206) 233-6339
Attention:     John A. Goesling

Borrower Account (for the funding of Loans):    Account # 
[_________________________]


<PAGE>
    PROMISSORY NOTES AND MISCELLANEOUS EXHIBITS TO CREDIT
    AGREEMENT

        Exhibit A-1    Form of Revolving Loan Note
        Exhibit A-3    Form of Bid Loan Note
        Exhibit B      Form of Designation Agreement
        Exhibit E-1    Form of Notice of Borrowing
        Exhibit E-3    Form of Notice of Conversion/Continuation
        Exhibit E-4    Form of Bid Loan Quote Request
        Exhibit E-5    Form of Bid Loan Quote
        Exhibit E-7    Form of Notice of Responsible Officers
        Exhibit F-1    Form of Secretary's Certificate
        Exhibit F-3    Form of Closing Officer's Certificate
        Exhibit F-6    Form of Compliance Certificate
        Exhibit G      Form of Opinion of Borrower's Counsel
        Exhibit H      Form of Assignment and Assumption

                                    10

<PAGE>
    EXHIBIT A-1
    FORM OF
    REVOLVING LOAN NOTE

$[insert amount in figures]1                          Seattle, Washington
                                                       July [__], 1997

        FOR VALUE RECEIVED, the undersigned, NORDSTROM, INC., a Washington 
corporation (the "Borrower"), hereby promises to pay to the order of [insert 
name of Lender], a [insert organizational status] (the "Lender"), for the 
account of its Applicable Lending Office, the lesser of (i) the principal sum 
of [insert amount in all capitalized words] ($[insert amount in figures])2 , 
or (ii) the aggregate unpaid principal amount of the Revolving Loans (the 
"Loans") made by the Lender to the Borrower under the Credit Agreement 
referred to below, on the dates and in the amounts set forth in the Credit 
Agreement.  The Borrower further promises to pay interest on the unpaid 
principal amount of each such Loan from time to time outstanding on the dates 
and at the rates specified in the Credit Agreement.

        This Revolving Loan Note (the "Note") is one of the Revolving Loan 
Notes referred to in, and is entitled to the benefits of, the Credit 
Agreement, dated as of July 24, 1997 (as the same may be amended, 
supplemented, replaced, renewed or otherwise modified from time to time, the 
"Credit Agreement"), by and among the Borrower, each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (including the Lender, the "Lenders"), certain Managing Agents and 
NATIONSBANK OF TEXAS, N.A., a national banking association, in its capacity as 
administrative agent on behalf of the Lenders (in such capacity, the "Agent"), 
to which reference is hereby made for a more complete statement of the terms 
and conditions on which the Loans evidenced hereby are made and are to be 
repaid.  The Credit Agreement provides for, among other things, the 
acceleration of the maturity hereof upon the occurrence of certain events and 
for voluntary and mandatory prepayments under certain circumstances and upon 
certain terms and conditions.

        Terms with initial capital letters used but not defined herein have 
the meanings assigned to them in the Credit Agreement.  All payments due 
hereunder shall be made to the Agent at the time and place, in the type of 
funds, and in the manner set forth in the Credit Agreement, without any 
deduction whatsoever, including, without limitation, any deduction for any 
set-off, recoupment, counterclaim or Taxes. The Borrower hereby waives 
diligence, presentment, demand, protest, notice of dishonor and all other 
demands and notices in connection with the execution, delivery, performance or 
enforcement of this Note, except as otherwise set forth in the Credit 
Agreement.

        The Lender is authorized (but not obligated) to endorse on the 
Schedule hereto, or on

- ----------------------------
1  Insert amount of Revolving Commitment of Lender.
2  Insert amount of Revolving Commitment of Lender.

                                    A-1-1

<PAGE>
a continuation thereof, each Loan made by the Lender and each payment or 
prepayment with respect thereto.  The Borrower promises to pay all costs and 
expenses, including attorneys' fees and disbursements, incurred in the 
collection or enforcement hereof.

        Except as permitted by Section 9.6 of the Credit Agreement, this Note 
may not be assigned to any Person.

        THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON.  THE
BORROWER AND, BY ACCEPTANCE HEREOF, THE LENDER WAIVE THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE OR ANY ACTION
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.

        NORDSTROM, INC., 
        a Washington corporation



    By:     
    Name:     
    Title:     

                                    A-1-2

<PAGE>


    SCHEDULE
    REVOLVING LOAN NOTE

<TABLE>
<CAPTION>
                                                 Amount of
        Type and        Interest    Interest    Principal Paid    Unpaid Principal    Notation
Date    Amount of Loan    Period     Rate         or Prepaid       Amount of Note     Made By
<S>     <C>             <C>         <C>         <C>               <C>                 <C>
</TABLE>


<PAGE>
EXHIBIT A-3
    FORM OF
    BID LOAN NOTE

                                                      Seattle, Washington
                                                       July [__], 1997


        FOR VALUE RECEIVED, the undersigned, NORDSTROM, INC., a Washington 
corporation (the "Borrower"), hereby promises to pay to the order of [insert 
name of Lender], a [insert organizational status] (the "Lender"), for the 
account of its Domestic Lending Office, the aggregate unpaid principal amount 
of all Bid Loans (the "Loans") made by the Lender to the Borrower under the 
Credit Agreement referred to below, on the dates and in the amounts set forth 
in the Credit Agreement.  The Borrower further promises to pay interest on the 
unpaid principal amount of each such Loan from time to time outstanding on the 
dates and at the rates specified in the Credit Agreement.

        This Bid Loan Note (the "Note") is one of the Bid Loan Notes referred 
to in, and is entitled to the benefits of, the Credit Agreement, dated as of 
July 24, 1997 (as the same may be amended, supplemented, replaced, renewed or 
otherwise modified from time to time, the "Credit Agreement"), by and among 
the Borrower, each of the banks and other financial institutions that either 
now or in the future are parties thereto as lenders (including the Lender, the 
"Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, N.A., a national 
banking association, in its capacity as administrative agent on behalf of the 
Lenders (in such capacity, the "Agent"), to which reference is hereby made for 
a more complete statement of the terms and conditions on which the Loans 
evidenced hereby are made and are to be repaid.  The Credit Agreement provides 
for, among other things, the acceleration of the maturity hereof upon the 
occurrence of certain events and for voluntary and mandatory prepayments under 
certain circumstances and upon certain terms and conditions.


        Terms with initial capital letters used but not defined herein have 
the meanings assigned to them in the Credit Agreement.  All payments due 
hereunder shall be made to the Agent at the time and place, in the type of 
funds, and in the manner set forth in the Credit Agreement, without any 
deduction whatsoever, including, without limitation, any deduction for any 
set-off, recoupment, counterclaim or Taxes.  The Borrower hereby waives 
diligence, presentment, demand, protest, notice of dishonor and all other 
demands and notices in connection with the execution, delivery, performance or 
enforcement of this Note, except as otherwise set forth in the Credit 
Agreement.

        The Lender is authorized (but not obligated) to endorse on the 
Schedule hereto, or on a continuation thereof, each Loan made by the Lender 
and each payment or prepayment with respect thereto.  The Borrower promises to 
pay all costs and expenses, including attorneys' fees and disbursements, 
incurred in the collection or enforcement hereof.

                                    A-3-1

<PAGE>
        Except as permitted by Section 9.6 of the Credit Agreement, this Note 
may not be assigned to any Person.

        THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON.  THE
BORROWER AND, BY ACCEPTANCE HEREOF, THE LENDER WAIVE THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE OR ANY ACTION
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.

                    NORDSTROM, INC.,
                    a Washington corporation



                    By:
                    Name:
                    Title:

                                    A-3-2

<PAGE>
    SCHEDULE
    BID LOAN NOTE

<TABLE>
<CAPTION>
                                                 Amount of
        Type and        Interest    Interest    Principal Paid    Unpaid Principal    Notation
Date    Amount of Loan    Period     Rate         or Prepaid       Amount of Note     Made By
<S>     <C>             <C>         <C>         <C>               <C>                 <C>
</TABLE>


<PAGE>
EXHIBIT B

    FORM OF DESIGNATION AGREEMENT

    Dated           , 19  


    Reference is made to the Credit Agreement dated as of July 24, 1997 (as 
amended, supplemented or otherwise modified from time to time, the "Credit 
Agreement") among Nordstrom, Inc., a Washington corporation (the "Borrower"), 
the Lenders parties thereto, and NationsBank of Texas, N.A., as Agent (the 
"Agent") for the Lenders.  Terms defined in the Credit Agreement are used 
herein with the same meaning.

    [NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"), 
the Agent and the Borrower agree as follows:

        2.    The Designor hereby designates the Designee, and the Designee 
hereby accepts such designation, to have a right to make Bid Loans pursuant to 
Section 2.2 of the Credit Agreement.

        3.    Except as set forth in Section 7 below, the Designor makes no 
representation or warranty and assumes no responsibility pursuant to this 
Designation Agreement with respect to (a) any statements, warranties or 
representations made in or in connection with any Loan Document or the 
execution, legality, validity, enforceability, genuineness, sufficiency or 
value of any Loan Document or any other instrument and document furnished 
pursuant thereto and (b) the financial condition of the Borrower or any Loan 
Party or the performance or observance by the Borrower or any Loan Party or 
any of their respective obligations under any Loan Document or any other 
instrument or document furnished pursuant thereto.  (It is acknowledged that 
the Designor may make representations and warranties of the type described 
above in other agreements to which the Designor is a party).

        4.    The Designee (a) confirms that it has received a copy of the 
Credit Agreement and the other Loan Documents, together with copies of the 
financial statements referred to in Section 4.3 of the Credit Agreement or 
delivered pursuant to Section 5.1 thereof prior to the date hereof and such 
other documents and information as it has deemed appropriate to make its own 
credit analysis and decision to enter into this Designation Agreement; (b) 
agrees that it will, independently and without reliance upon the Agent, the 
Designor or any other Lender Party, and based on such documents and 
information as it shall deem appropriate at the time, continue to make its own 
credit decisions in taking or not taking action under the Credit Agreement or 
the other Loan Documents; (c) appoints and authorizes the Agent to take such 
actions on its behalf and to exercise such powers under the Loan Documents as 
are delegated to the Agent by the terms thereof, together with such powers as 
are reasonably incidental thereto; (d) agrees that it will perform in 
accordance with their terms all of the obligations which by the terms of the 
Credit Agreement or the other Loan Documents are required to be performed by 
it as a Lender; and (e) specifies as its address for notices the office set 
forth beneath its name on the signature pages hereof.

        5.    The Designee hereby appoints Designor as Designee's agent and 
attorney in fact, and grants to Designor an irrevocable power of attorney, to 
deliver and receive all communications and notices

                                    B-1

<PAGE>
under the Credit Agreement and the other Loan Documents and to exercise on 
Designee's behalf all rights to vote and to grant and make approvals, waivers, 
consents or amendments to or under the Credit Agreement or the other Loan 
Documents.  Any document executed by the Designor on the Designee's behalf in 
connection with the Credit Agreement or other Loan Documents shall be binding 
on the Designee.  The Borrower, the Agent and each of the Lenders may rely on 
and are beneficiaries of the preceding provisions of this Section 5.

        6.    Following the execution of this Designation Agreement by the 
Designor and its Designee, it will be delivered to the Agent for acceptance 
and recording by the Agent.  The effective date for this Designation Agreement 
(the "Effective Date") shall be the date of acceptance hereby by the Agent, 
unless otherwise specified on the signature page hereto.

        7.    Neither the Agent nor the Borrower shall institute or join any 
other person in instituting against the Designee any bankruptcy, 
reorganization, arrangement, insolvency or liquidation proceeding, or other 
proceeding under any federal or state bankruptcy or similar law, for one year 
and a day after the Maturity Date of the Credit Agreement.

[ Optional Provision:    .  The Designor unconditionally agrees to pay or 
reimburse the Designee for, and save the Designee harmless against, all 
liabilities, obligations, losses, damages, penalties, actions, judgments, 
suits, costs, expenses or disbursements of any kind or nature whatsoever which 
may be imposed or asserted by any of the parties to the Loan Documents against 
the Designee, in its capacity as such, in any way relating to or arising out 
of this Designation Agreement or any other Loan Documents or any action taken 
or omitted by the Designee hereunder or thereunder, provided that the Designor 
shall not be liable for any portion of such liabilities, obligations, losses, 
damages, penalties, actions, judgments, suits, costs, expenses or 
disbursements if the same results from the Designee's gross negligence or 
willful misconduct.]

        8.    Upon such acceptance and recording by the Agent, as of the 
Effective Date, the Designee shall be a party to the Credit Agreement with a 
right to make Bid Loans as a Lender pursuant to Section 2.2 of the Credit 
Agreement and the rights and obligations of a Lender related thereto.

        9.    THIS DESIGNATION AGREEMENT SHALL BE GOVERNED BY, AND 
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF WASHINGTON.

       10.    This Designation 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 
taken together shall constitute one and the same agreement.  Delivery of an 
executed counterpart of a signature page to this Designation Agreement by 
facsimile transmission shall be effective as delivery of a manually executed 
counterpart of this Designation Agreement.

                                    B-2

<PAGE>

        IN WITNESS WHEREOF, the Designor and the Designee, intending to be 
legally bound, have caused this Designation Agreement to be executed by their 
officers thereunto duly authorized as of the date first above written.

Effective Date:                  , 19  


[NAME OF DESIGNOR], as Designor


By:
Title:


[NAME OF DESIGNEE], as Designee


By:
Title:


Applicable Lending Office (and address for notices):

                            [ADDRESS]

Accepted this     day of 
             , 1997

[AGENT], as Agent

By:
Title:



[BORROWER]

By:
Title:

                                    B-3

<PAGE>
    EXHIBIT E-1
    FORM OF
    NOTICE OF BORROWING

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        Pursuant to Article 2 of the Credit Agreement: 

        1.    The Borrower hereby requests to borrow Revolving Loans in the 
aggregate principal amounts and types as follows (the "Loans"): (a) Euro-
Dollar Rate Loans in the amount of $              on             ,     1 [with 
an Interest Period of              ]2 ; and (b) Base Rate Loans in the mount 
of $                on              ,     3; and

        2.    The Borrower hereby represents and warrants as follows:

            (a)    All of the representations and warranties contained in 
Article 4 of the Credit Agreement and in the other Loan Documents are true and 
correct in all material respects on and as of the date hereof and shall be 
true and correct in all material respects on and as of each Funding Date 
proposed herein as though made on and as of each such date (except, in each 
case, to the extent that such representations and warranties expressly were 
made only as of a specific date); 

            (b)    No Default or Event of Default exists or would result from 
the making of the Loans; and 

- ----------------------------
1  Must be a Business Day.
2  For Euro-Dollar Rate Loans.  With respect to each Euro-Dollar Rate
   Loan, permissible Interest Periods are periods of one, two, three or six
   months.
3  Must be a Business Day.

                                    E-1-1

<PAGE>
            (c)    All other conditions to borrowing set forth in Section 3.2 
of the Credit Agreement are satisfied. 

    Date:               ,      

    NORDSTROM, INC.,
    a Washington corporation


    By:                       4
    Name:
    Title:

- ----------------------------
4  Must be a Responsible Officer.

                                    E-1-2

<PAGE>
    EXHIBIT E-3


    FORM OF
    NOTICE OF CONVERSION/CONTINUATION


TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        Pursuant to Article 2 of the Credit Agreement:

        [FOR CONVERSION OF BASE RATE INTO EURO-DOLLAR RATE]

        Effective as of            ,      , the Borrower hereby requests to 
convert $            of presently outstanding Base Rate Loans on           ,
      into Euro-Dollar Rate Loans with an Interest Period of 
[one/two/three/six] months[s].

        [FOR CONVERSION OF EURO-DOLLAR RATE INTO BASE RATE]

        Effective as of               ,    , the Borrower hereby requests to 
convert $          of presently outstanding Euro-Dollar Rate Loans with an 
Interest Period of [one/two/three/six] months[s], expiring on             ,
into Base Rate Loans.

        [FOR CONTINUATION OF EURO-DOLLAR RATE]

        Effective as of             ,     , the Borrower hereby requests to 
continue $               continue of presently outstanding Euro-Dollar Rate 
Loans with an Interest Period of           expiring on               ,        
as Euro-Dollar Rate Loans with an

                                    E-3-1

<PAGE>
 Interest Period of [one/two/three/six] month[s].

    Date:             ,       

    NORDSTROM, INC., 
    a Washington corporation


    By:                          1
    Name:
    Title:

- ----------------------------
1  Must be a Responsible Officer.

                                    E-3-2

<PAGE>
    EXHIBIT E-4

    FORM OF
    BID LOAN QUOTE REQUEST

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    13th Floor
    901 Main Street
    Dallas, Texas 75202
    Attention:  Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        Pursuant to Section 2.2 of the Credit Agreement:

        1.    The Borrower hereby gives notice that it requests Bid Loan 
Quotes for the following proposed Bid Loan Borrowing(s)1:


<TABLE>
<CAPTION>

    Funding Date <fn2>    Amount <fn3>    Interest Period <fn4>
<S>                       <C>             <C>

- ----------------------------
<FN>
<fn1>
1  Up to three.
<fn2>
2  Must be a Business Day.
<fn3>
3  Each amount must be at least $10,000,000 and a multiple of $1,000,000.
<fn4>
4  A period of not less than 7 and not more than 30 days after the Funding
   Date and ending on a Business Day.
</FN>
</TABLE>

                                    E-4-1


<PAGE>

        2.    The Borrower hereby represents and warrants as follows:

            (a)    All of the representations and warranties contained in 
Article 4 of the Credit Agreement and in the other Loan Documents are true and 
correct in all material respects on and as of the date hereof and shall be 
true and correct in all material respects on and as of each Funding Date 
proposed herein as though made on and as of each such date (except, in each 
case, to the extent that such representations and warranties expressly were 
made only as of a specific date);

            (b)    No Default or Event of Default exists or would result from 
the Bid Loan Borrowing(s); and

            (c)    All other conditions to borrowing set forth in Section 3.2 
of the Credit Agreement are satisfied.

        Date:             ,     

    NORDSTROM, INC., 
    a Washington corporation

    By:                          5
    Name:
    Title:

- ----------------------------
5  Must be a Responsible Officer.

                                    E-4-2

<PAGE>
    EXHIBIT E-5

    FORM OF
    BID LOAN QUOTE

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention:  Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        In response to the Borrower's Bid Loan Quote Request dated_____
,____  (the "Bid Loan Quote Request"), we hereby make the following Bid Loan 
Quote(s) on the following terms: 

        1.    Quoting Bank:                                         

        2.    Person to contact at Quoting Bank:                

        3.    We hereby offer to make Bid Loan(s) in the following principal 
amount[s], 
for the following Interest Period(s) and at the following rate(s): 


<TABLE>
<CAPTION>
    Funding Date <fn1>    Amount <fn2>    Interest Period <fn3>    Quote <fn4>
    <S>                   <C>             <C>                      <C>


- ----------------------------
<FN>
<fn1>
1  As specified in the Bid Loan Quote Request.
<fn2>
2  The principal amount bid for each Interest Period may not exceed the
   principal amount requested.  Bids must be made for at least $2,000,000
   a multiple of $1,000,000.
<fn3>
3  As specified in the Bid Loan Quote Request.
<fn4>
4  Specify rate of interest per annum ([quoted on an "all-in basis and]
   rounded to the nearest 1/10,000 of 1%).
</FN>
</TABLE>


                                    E-5-1


<PAGE>
        We understand and agree that the offer(s) set forth above, subject to 
the satisfaction of the applicable conditions set forth in the Credit 
Agreement, irrevocably obligate(s) us to make the Bid Loan(s) for which any 
offer(s) are accepted, in whole or in part, subject to the third sentence of 
Section 2.2.2.2 of the Credit Agreement.

        Date:               ,      





    By:                            5
    Name:
    Title:

- ----------------------------
5  Must be an authorized officer.

                                    E-5-2

<PAGE>
    EXHIBIT E-7


    FORM OF
    NOTICE OF RESPONSIBLE OFFICERS

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention:  Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        The Borrower hereby designates the following individuals as 
Responsible Officers, authorized to request and take other actions with 
respect to Loans on behalf of the Borrower and certifies that the signatures 
and telephone numbers of those individuals are as follows:


<TABLE>
<CAPTION>
    Name    Office    Signature    Phone No.
    <S>     <C>       <C>          <C>
</TABLE>


        The Agent is hereby authorized to rely on this Notice of Responsible 
Officers unless and until a new Notice of Responsible Officers is received by 
it, irrespective of whether any of the information set forth herein shall have 
become inaccurate or false. Additional persons may be designated as 
Responsible Officers, or the designation of any person may be revoked, at any 
time, by subsequent Notices of Responsible Officers signed by any person who 
purports to be a Senior Officer of the Borrower. 

                                    E-7-1

<PAGE>
        The foregoing supersedes any Notice of Responsible Officers presently 
in effect under the Credit Agreement.

        Date:             ,      

    NORDSTROM, INC., 
    a Washington corporation

    By:                            1
    Name:
    Title:

- ----------------------------
1  Must be a Senior Officer.

                                    E-7-2

<PAGE>
    EXHIBIT F-1

    FORM OF
    SECRETARY'S CERTIFICATE

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        Pursuant to Section 3.1 of the Credit Agreement, the undersigned 
hereby certifies that he or she is the duly appointed, qualified and acting 
Secretary of the Borrower and hereby further certifies as follows:

        1.    Attached as Exhibit A is a true, correct and complete copy of 
the Bylaws of the Borrower, including all amendments, as in effect on the date 
hereof.

        2.    Attached as Exhibit B is a true, correct and complete copy of 
the resolutions duly and validly adopted by the Board of Directors of the 
Borrower on               ,     .  Such resolutions have not been amended or 
modified and are in full force and effect in the form adopted and are the only 
resolutions adopted by the Board of Directors or by any committee of, or 
designated by, the Board of Directors relating to the Credit Agreement.

                                    F-1-1

<PAGE>
        3.    There have been no changes in the articles of incorporation of 
the Borrower since the date of the certification thereof by the Secretary of 
State of its jurisdiction of incorporation, as it is being delivered to the 
Agent on the date hereof.


        Date:  July    , 1997


    Name:  [Karen E. Purpur]


        The undersigned certifies that he or she is the duly appointed, 
qualified and acting President of the Borrower and further certifies that 
[Karen E. Purpur] is the duly appointed, qualified and acting Secretary of the 
Borrower and that the signature set forth above is his or her genuine 
signature. 

        Date: July    , 1997


    Name:

                                    F-1-2

<PAGE>
    EXHIBIT F-3

    FORM OF
    OFFICER'S CLOSING CERTIFICATE

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: 

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent").  Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

        Pursuant to Section 3.1 of the Credit Agreement, the undersigned 
hereby certifies that he is the President of the Borrower and hereby further 
certifies as follows:

        1.    I have carefully reviewed the terms of the Loan Documents to 
which the Borrower is a party and have made, or caused to be made, such review 
of the Borrower and its business affairs as I have considered necessary for 
the purposes of preparing this Certificate.

        2.    I have carefully prepared and reviewed the contents of this 
Certificate and have conferred with counsel for the Borrower for the purpose 
of discussing the meaning of any provisions hereof that I desired to have 
clarified.

        3.    All representations and warranties of the Borrower contained in 
the Loan Documents to which the Borrower is a party are true and correct in 
all Material respects as of the date hereof as if made on such date.

        4.    No Default or Event of Default exists on and as of the date 
hereof or would result from the making of the Loans on the Closing Date.

                                    F-3-1

<PAGE>
        5.    All of the conditions precedent set forth in Section 3.1 of the 
Credit Agreement have been satisfied (assuming for purposes of this paragraph 
5 that those matters required to be satisfactory to the Agent are satisfactory 
to the Agent).

        Date:  July   , 1997 



        
    Name:
    Title:  President

                                    F-3-2

<PAGE>
    EXHIBIT F-6


    FORM OF
    COMPLIANCE CERTIFICATE


TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: Molly Oxford

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), THE BANKS AND OTHER FINANCIAL 
INSTITUTIONS FROM TIME TO TIME PARTIES THERETO AS LENDERS (the "Lenders"), 
certain MANAGING AGENTS and NATIONSBANK OF TEXAS, N.A. (the "Agent Bank," as 
agent and representative for the Lenders (in such capacity the Agent Bank or 
any successor in such capacity is referred to herein as the "Agent").  Terms 
with initial capital letters used but not defined herein have the meanings 
assigned to them in the Credit Agreement.

        This Compliance Certificate is being delivered pursuant to Section 
5.1.5 of the Credit Agreement and relates to certain financial statements of 
the Borrower (the "Financial Statements") as of and for periods ended (the
"Financial Statement Date").  The undersigned is the [Chief Financial 
Officer/President] of the Borrower, and hereby further certifies as of the 
date hereof, in [his/her] capacity as an officer of the Borrower, as follows:

        1.    I have reviewed the terms of the Loan Documents and have made, 
or have caused to be made under my supervision, a review in reasonable detail 
of the transactions and condition of the Borrower and its Subsidiaries during 
the accounting period covered by the Financial Statements to make the 
statements contained in this Compliance Certificate.  I have also made such 
inquiries as have been necessary of other officers of the Borrower in order to 
complete this Compliance Certificate.

        2.    Such review has not disclosed the existence of any Default or 
Event of Default during such accounting period or as of the Financial 
Statement Date and I do not have knowledge of the existence, as at the date of 
this certificate, of any Default or Event of Default[, except as follows:1].

        I hereby further certify as of the Financial Statement Date, in my 
capacity as an 


- ----------------------------
1  Specify the nature and period of existence of each Default or Event of 
   Default (if any) and what action the Borrower has taken, is taking, or
   proposes to take with respect thereto.

                                    F-6-1

<PAGE>
officer of the Borrower, as follows 2:

<TABLE>
<CAPTION>
I.    Section 6.3.1 Minimum Coverage Ratio for Fiscal Quarter
    <S>                                                        <C>
    A.    EBITDAR for Fiscal Quarter

    B.    Interest Expense for Fiscal Quarter

    C.    Rent Expense for Fiscal Quarter

    D.    Fixed Charge Coverage Ratio for Fiscal Quarter


    E.    Minimum Coverage Ratio                               2.00
</TABLE>



<TABLE>
<CAPTION>
II.    Section 6.3.2 Minimum Net Worth as of Financial Statement Date
    <S>                                                        <C>
    A.    Net Worth of the Borrower as of Financial Statement Date


    B.    Minimum Net Worth of the Borrower as of Financial Statement Date

        1.    Initial Amount                                   $1,100,000,000
        2.    50% of positive net income since July 31, 1997
        3.    50% of net cash proceeds of equity offerings 
              (other than employee stock options) since July 
              31, 1997
</TABLE>


- ----------------------------
2  All accounting terms used herein shall be interpreted, and all accounting
   determinations hereunder shall be made, in accordance with Section 1.2.3 of
   the Credit Agreement.

                                    F-6-2

<PAGE>
The undersigned has executed this Officers' Certificate as of the       th day 
of               ,      .


    Name:      
    Title:  [Chief Financial Officer/President]


                                    F-6-3

<PAGE>
    EXHIBIT G

    FORM OF OPINION OF
    BORROWER'S COUNSEL



    July 24, 1997







NationsBank of Texas, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202

        Re:    Nordstrom, Inc. -- Credit Agreement
            dated as of July 24, 1997                       

Ladies and Gentlemen: 

        We have acted as counsel to Nordstrom, Inc., a Washington corporation 
(the "Borrower"), in connection with the preparation of:

         (i)    the Credit Agreement dated as of July 24, 1997 (the "Credit 
Agreement") by and among the Borrower, the Lenders thereunder (the "Lenders"), 
certain Managing Agents and NationsBank of Texas, N.A., as the agent (the 
"Agent") and a Lender,

        (ii)    the Notes dated July 24, 1997 made by the Borrower payable to 
the order of each Lender; and 

        (iii)    all other documents or instruments related to the loans 
contemplated under the Credit Agreement.

        Each capitalized term used and not defined herein shall have the 
meaning assigned 
to that term in the Credit Agreement.  The Credit Agreement and the Notes are 
collectively referred to as the "Loan Documents." 

        We have assumed with your permission that:

        (a)    The signatures on all documents examined by us are genuine, all 
individuals executing such documents had all requisite legal capacity and 
competency and (except in the case of documents signed on behalf of the 
Borrower and its Subsidiaries) were duly authorized, the documents submitted 
to us as originals are authentic and the

                                    G-1

<PAGE>
documents submitted to us as certified or reproduction copies conform to the 
originals; and

        (b)    The Lenders have all requisite power and authority to execute, 
deliver and perform their obligations under each of the Loan Documents to 
which they are a party, the execution and delivery of such Loan Documents by 
the Lenders and performance of such obligations by the Lenders have been duly 
authorized by all necessary action and such Loan Documents are legal, valid 
and binding obligations of the Lenders, enforceable against them in accordance 
with their respective terms.

        In rendering this opinion, we have made such inquiries and examined, 
among other things, originals or copies, certified or otherwise identified to 
our satisfaction, of such records, agreements, certificates, instruments and 
other documents as we have considered necessary or appropriate for purposes of 
this opinion.  As to certain factual matters, we have relied upon certificates 
of officers of the Borrower or certificates obtained from public officials. 

        Based on the foregoing and in reliance thereon, and subject to the 
assumptions, exceptions, qualifications and limitations set forth herein, we 
are of the opinion that:

        1.    The Borrower has been duly incorporated and is a validly 
existing corporation in good standing under the laws of the State of 
Washington, and has all requisite power and authority to execute, deliver and 
perform its obligations under the Loan Documents and to own or lease the 
properties owned or leased by it.

        2.    Borrower is duly qualified as a foreign corporation in each 
jurisdiction in which the character of the properties owned or leased by it or 
in which the transaction of any of its business makes such qualification 
necessary.

        3.    The execution and delivery of the Loan Documents by the Borrower 
and the performance of its obligations thereunder have been duly authorized by 
all necessary corporate action of the Borrower, and the Loan Documents have 
each been duly executed and delivered by the Borrower.

        4.    Each of the Loan Documents constitutes a legal, valid and 
binding obligation of the Borrower, enforceable against the Borrower in 
accordance with its terms. 

        5.    The Borrower is not an "investment company" or a company 
"controlled by an investment company" within the meaning of the Investment 
Company Act of 1940, as amended. 

        6.    The execution, delivery and performance by the Borrower of the 
Loan Documents do not and will not (A) violate or conflict with any provision 
of the charter or bylaws of the Borrower, or, to the best of our knowledge, 
any order, judgment, injunction or decree of any court or other agency of 
government binding on the Borrower, (B) conflict in any material respect with, 
result in a material breach of or constitute a material default under any 
Contractual Obligation of the Borrower identified

                                    G-2

<PAGE>
to us by officers of the Borrower as material, or (C) result in or require the 
creation or imposition of any Lien upon any of the Borrower's assets.

        7.    The execution and delivery by the Borrower of the Loan Documents 
on the Closing Date, and the incurrence and repayment of Debt by the Borrower 
pursuant to the Loan Documents do not violate any law or regulation of the 
State of Washington or the United States of America applicable to the 
Borrower, which, in our experience, is generally applicable to transactions in 
the nature of those contemplated by the Loan Documents, or require any action 
by or in respect of, or filing with, any governmental body, agency or 
official, or any authorization, consent, waiver or approval, order, judgment 
or decree of any federal or Washington governmental authority, court or 
regulatory body (other than those that have been obtained).

        8.    There is no action, suit or proceeding pending or, to the best 
of our knowledge, threatened against or affecting the Borrower or any of its 
Subsidiaries of the nature described in Section 4.5 of the Credit Agreement or 
in which an injunction or order has been entered preventing or adversely 
affecting the making of the Loans, or the consummation of the transactions 
contemplated by any of the Loan Documents.

        9.    The Borrower and all members of any Controlled Group of which 
the Borrower is a member have fulfilled their obligations under the minimum 
funding standards of ERISA with respect to each Plan to which they are a 
party, and have not incurred any liability to the PBGC in connection with any 
Plan established or maintained by the Borrower or any member of any such 
Controlled Group.

        The foregoing opinions are subject to the following exceptions, 
qualifications and limitations:

        [Appropriate exceptions to be provided by Borrower's counsel]

        This opinion is rendered to the Lenders and the Agent in connection 
with the Loan Documents and may not be relied upon by any person other than 
the Lenders and the Agent or by the Lenders and the Agent in any other 
context, provided that the Lenders and the Agent may provide this opinion (i) 
to bank examiners and other regulatory authorities should they so request or 
in connection with their normal examinations, (ii) to the independent auditors 
and attorneys of the Lenders or the Agent, (iii) pursuant to order or legal 
process of any court or governmental agency, (iv) in connection with any legal 
action to which the Lenders or the Agent are a party arising out of the 
transactions contemplated by the Loan Documents, or (v) to any proposed 
assignee or participant of any Lender.  This opinion may not be quoted without 
the prior written consent of this firm.

                        Very truly yours,

                                    G-3


<PAGE>
    EXHIBIT H

    FORM OF
    ASSIGNMENT AND ASSUMPTION

TO: NATIONSBANK OF TEXAS, N.A., as Agent
    901 Main Street
    13th Floor
    Dallas, Texas 75202
    Attention: Molly Oxford

    Dated                ,         

        Reference is hereby made to the Credit Agreement, dated as of July 24, 
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise 
modified from time to time, the "Credit Agreement"), by and among NORDSTROM, 
INC., a Washington corporation (the "Borrower"), each of the banks and other 
financial institutions that either now or in the future are parties thereto as 
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, 
N.A., a national banking association, in its capacity as administrative agent 
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial 
capital letters used but not defined herein have the meanings assigned to them 
in the Credit Agreement.

                                            (the "Assignor") and
(the "Assignee) agree as follows: 

        1.    Subject to Section 4 below, the Assignor hereby sells and 
assigns to the Assignee, and the Assignee hereby purchases and assumes from 
the Assignor, WITHOUT RECOURSE, a             % interest in and to all of the 
Assignor's rights and obligations under the Credit Agreement and the other 
Loan Documents as of the Effective Date (as defined below), including, without 
limitation, such percentage interest in the Assignor's Revolving Commitment as 
is in effect on the Effective Date, the Revolving Loans owing to the Assignor 
on the Effective Date, the Revolving Loan Note held by the Assignor, the Bid 
Loans owing to the Assignor on the Effective Date and the Bid Loan Note held 
by the Assignor.

        2.    The Assignor (a) represents and warrants that, as of the date 
hereof, its Revolving Commitment (without giving effect to assignments thereof 
which have not yet become effective) is $                     ; (b) represents 
and warrants that it is the legal and beneficial owner of the interest being 
assigned by it hereunder and that such interest is free and clear of any 
adverse claim; (c) makes no representation or warranty and assumes no 
responsibility with respect to any statements, warranties or representations 
made in or in connection with the Credit Agreement or any of the other Loan 
Documents or the execution, legality, validity, enforceability, genuineness, 
sufficiency or value of the Credit Agreement or any of the other Loan 
Documents or any other instrument or document furnished pursuant thereto; (d) 
makes no representation or warranty and assumes no responsibility with respect 
to the financial condition of the Borrower or any of the Borrower's 
obligations under the Loan Documents or any other instrument or document 
furnished pursuant thereto; (e) attaches the Revolving Loan Note

                                    H-1

<PAGE>
referred to in paragraph 1 above and requests that the Agent exchange such 
note for new Revolving Loan Notes as follows: a Revolving Loan Note, dated__,
       , in the principal amount of $                , payable to the 
Assignor or order, and a Revolving Loan Note, dated___,      
in the principal amount of $                  payable to the Assignee or 
order; and (f) attaches the Bid Loan Note referred to in paragraph 1 above and 
requests that the Agent exchange such note for new Bid Loan Notes as follows: 
a Bid Loan Note, dated                   ,       in the principal amount of
$___, payable to the Assignor or order, and a Bid Loan Note, dated
, 19   in the principal amount of $                 payable to the Assignee or 
order.

        3.    The Assignee (a) confirms that it has received a copy of the 
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 4.3 of the Credit Agreement or
delivered pursuant to Section 5.1 thereof prior to the date hereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption;
(b) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit
Agreement or the other Loan Documents; (c) appoints and authorizes the Agent to
take such actions on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (d) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement or the other Loan Documents are required to be
performed by it as a Lender; and (e) specifies as its address for notices the
office set forth beneath its name on the signature pages hereof.

        4.    The effective date of this Assignment and Assumption shall be 
(a)                  or (b) the date on which all conditions set forth in 
Section 9.6.2 of the Credit Agreement have been satisfied, whichever is later 
(the "Effective Date")3.   This Assignment and Assumption shall be delivered 
to the Agent and the Borrower for acceptance and the fee required by Section 
9.6.2 of the Credit Agreement shall be paid to the Agent.

        5.    From and after the Effective Date, (a) the Assignee shall be a 
party to the Credit Agreement and, to the extent provided in this Assignment 
and Assumption, have the rights and obligations of a Lender thereunder and 
under the other Loan Documents and (b) the Assignor shall, to the extent 
provided in this Assignment and Assumption, relinquish its rights and be 
released from its obligations under the Credit Agreement and the other Loan 
Documents.

        6.    From and after the Effective Date, the Agent shall make all 
payments under the Credit Agreement and the other Loan Documents in respect of 
the interest assigned hereby (including all payments of principal, interest 
and Fees) to the Assignee.  The Assignor and Assignee shall make all 
appropriate adjustments in payments under the Credit Agreement and the other 
Loan Documents for periods prior to the Effective Date directly between


- ----------------------------
3  Such Date shall be at least 1 Business Day after the delivery of this
   Assignment and Assumption to the Agent and the Borrower.

                                    H-2

<PAGE>
themselves. 

        7.    THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED 
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE 
STATE OF WASHINGTON.

    [NAME OF ASSIGNOR]



    By:                                            
    Name:                                          
    Title:                                         

    Revolving Commitment after the Effective
    Date: $                

    [NAME OF ASSIGNEE]


    By:                                            
    Name:                                        
    Title:                                          
    Notice Address:
    Revolving Commitment after the Effective
    Date: $                

Accepted this          day of
                ,       


NATIONSBANK OF TEXAS, N.A., as Agent



By:                                       
Name:                                   
Title:                                     


NORDSTROM, INC.



By:                                       
Name:                                   
Title:                                     

                                    H-3






<TABLE> <S> <C>

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<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          JAN-31-1998
<PERIOD-END>                               JUL-31-1997
<CASH>                                          39,837
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