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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
September 17, 1998
SAKS INCORPORATED
(Formerly known as Proffitt's, Inc.)
(Exact name of registrant as specified in its charter)
Tennessee 1-13113 62-0331040
(State of incorporation) (Commission File (I.R.S. Employer
Number) Identification No.)
750 Lakeshore Parkway
Birmingham, Alabama 35211
(Address of principal
executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 940-4000
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Item 5. Other Events.
As of September 17, 1998, the registrant entered into: (i) an
Amended and Restated Credit Agreement with certain lenders and
Nationsbank, N.A. ("Nationsbank"), as administrative agent for the
lenders, providing for an aggregate maximum principal of
$750,000,000 with a maturity of five years; and (ii) a Credit
Agreement with certain lenders and Nationsbank, as administrative
agent for the lenders, providing for an aggregate maximum principal
amount of $750,000,000 and having a maturity of 364 days.
Also as of on September 17, 1998, Saks Holdings, Inc. ("Holdings"),
a wholly owned subsidiary of the registrant, entered into a
Supplemental Indenture with Bankers Trust Company, as trustee,
amending an indenture dated as of September 25, 1996, relating to
the 51/2% Convertible Subordinated Notes due September 15, 2006 (the
"Notes") issued by Holdings.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed as a part of this
report:
Exhibit
Number Description
- ------- -------------
4.1 Amended and Restated Credit Agreement dated
as of September 17, 1998, by and among Saks
Incorporated, Nationsbank, N.A., as
administrative agent, Nationsbanc Montgomery
Securities LLC, as loan arranger, Morgan
Guaranty Trust Company of New York and The
Chase Manhattan Bank, as co-syndication
agents, Citibank, N.A., as documentation
agent, and certain lenders.
4.2 Credit Agreement as of dated September 17, 1998, by
and among Saks Incorporated, Nationsbank,
N.A., as administrative agent, Nationsbanc
Montgomery Securities LLC, as loan arranger,
Morgan Guaranty Trust Company of New York and
The Chase Manhattan Bank, as co-syndication
agents, Citibank, N.A., as documentation
agent, and certain lenders.
4.3 Supplemental Indenture dated as of September
17, 1998, between Saks Holdings, Inc. and
Bankers Trust Company, as trustee.
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 hereunto duly authorized.
SAKS INCORPORATED
Date: September 23, 1998
By: /s/ Charles J. Hansen
_______________________
Charles J. Hansen, Vice
President and General
Counsel
EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ------------ ------
4.1 Amended and Restated Credit Agreement dated
as of September 17, 1998, by and among Saks
Incorporated, Nationsbank, N.A., as
administrative agent, Nationsbanc Montgomery
Securities LLC, as loan arranger, Morgan
Guaranty Trust Company of New York and The
Chase Manhattan Bank, as co-syndication
agents, Citibank, N.A., as documentation
agent, and certain lenders.
4.2 Credit Agreement dated as of September 17, 1998, by
and among Saks Incorporated, Nationsbank,
N.A., as administrative agent, Nationsbanc
Montgomery Securities LLC, as loan arranger,
Morgan Guaranty Trust Company of New York and
The Chase Manhattan Bank, as co-syndication
agents, Citibank, N.A., as documentation
agent, and certain lenders.
4.3 Supplemental Indenture dated as of September
17, 1998, between Saks Holdings, Inc. and
Bankers Trust Company, as trustee.
AMENDED AND RESTATED
CREDIT AGREEMENT
(Five Year Facility)
by and among
SAKS INCORPORATED
as Borrower,
NATIONSBANK, N. A.,
as Administrative Agent,
NATIONSBANC MONTGOMERY SECURITIES LLC
as Lead Arranger,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
and
THE CHASE MANHATTAN BANK,
as Co-Syndication Agents,
CITIBANK, N.A.,
as Documentation Agent
and
The Lenders from time to time party hereto
September 17, 1998
TABLE OF CONTENTS Page
ARTICLE I -- Definitions and Terms
1.01 Definitions. . . . . . . . . . . . . . . . . . . . . .2
1.02 Accounting Terms . . . . . . . . . . . . . . . . . . 26
1.03 Terms Consistent . . . . . . . . . . . . . . . . . . 27
ARTICLE II -- Revolving Credit Loans
2.01 Revolving Credit Loans . . . . . . . . . . . . . . . 28
2.02 Swing Line . . . . . . . . . . . . . . . . . . . . . 30
2.03 Competitive Bid Loans. . . . . . . . . . . . . . . . 31
2.04 Payment of Interest. . . . . . . . . . . . . . . . . 34
2.05 Payment of Principal . . . . . . . . . . . . . . . . 35
2.06 Payments; Non-Conforming Payments. . . . . . . . . . 36
2.07 Borrower's Account . . . . . . . . . . . . . . . . . 36
2.08 Notes. . . . . . . . . . . . . . . . . . . . . . . . 36
2.09 Pro Rata Payments. . . . . . . . . . . . . . . . . . 37
2.10 Reductions . . . . . . . . . . . . . . . . . . . . . 37
2.11 Conversions and Elections of Subsequent Interest
Periods . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.12 Facility Fees and Utilization Premium. . . . . . . . 38
2.13 Deficiency Loans . . . . . . . . . . . . . . . . . . 38
2.14 Use of Proceeds. . . . . . . . . . . . . . . . . . . 39
2.15 Additional Fees. . . . . . . . . . . . . . . . . . . 39
ARTICLE III -- Letters of Credit
3.01 Letters of Credit. . . . . . . . . . . . . . . . . . 40
3.02 Reimbursement. . . . . . . . . . . . . . . . . . . . 40
3.03 Letter of Credit Fee . . . . . . . . . . . . . . . . 43
3.04 Administrative Fees. . . . . . . . . . . . . . . . . 44
3.05 Existing Letters of Credit . . . . . . . . . . . . . 44
ARTICLE IV -- Change in Circumstances
4.01 Increased Cost and Reduced Return. . . . . . . . . . 45
4.02 Limitation on Types of Loans . . . . . . . . . . . . 46
4.03 Illegality . . . . . . . . . . . . . . . . . . . . . 46
4.04 Treatment of Affected Loans. . . . . . . . . . . . . 47
4.05 Compensation . . . . . . . . . . . . . . . . . . . . 47
4.06 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE V -- Conditions to Making Loans and Issuing Letters of
Credit
5.01 Conditions of Initial Loan and Issuance of Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . . . 51
5.02 Conditions of Loans. . . . . . . . . . . . . . . . . 53
ARTICLE VI -- Representations and Warranties
6.01 Representations and Warranties . . . . . . . . . . . 55
ARTICLE VII -- Affirmative Covenants
7.01 Financial Reports, Etc.. . . . . . . . . . . . . . . 62
7.02 Maintain Properties. . . . . . . . . . . . . . . . . 63
7.03 Existence, Qualification, Etc. . . . . . . . . . . . 63
7.04 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 63
7.05 Insurance. . . . . . . . . . . . . . . . . . . . . . 64
7.06 True Books . . . . . . . . . . . . . . . . . . . . . 64
7.07 Right of Inspection. . . . . . . . . . . . . . . . . 64
7.08 Observe All Laws; Licenses . . . . . . . . . . . . . 64
7.09 Covenants Extending to Subsidiaries. . . . . . . . . 64
7.10 Officer's Knowledge of Default . . . . . . . . . . . 64
7.11 Suits or Other Proceedings . . . . . . . . . . . . . 64
7.12 Notice of Discharge of Hazardous Material or
Environmental Complaint . . . . . . . . . . . . . . . . . 65
7.13 Environmental Compliance . . . . . . . . . . . . . . 65
7.14 Year 2000 Notice . . . . . . . . . . . . . . . . . . 65
7.15 Further Assurances . . . . . . . . . . . . . . . . . 65
7.16 Benefit Plans. . . . . . . . . . . . . . . . . . . . 65
7.17 Continued Operations . . . . . . . . . . . . . . . . 66
7.18 New Subsidiaries . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII -- Negative Covenants
8.01 Consolidated Net Worth . . . . . . . . . . . . . . . 68
8.02 Consolidated Fixed Charge Ratio. . . . . . . . . . . 68
8.03 Consolidated Funded Total Indebtedness to
Consolidated EBITDA . . . . . . . . . . . . . . . . . . . 68
8.04 Indebtedness . . . . . . . . . . . . . . . . . . . . 68
8.05 Liens. . . . . . . . . . . . . . . . . . . . . . . . 70
8.06 Transfer of Assets . . . . . . . . . . . . . . . . . 71
8.07 Investments; Acquisitions. . . . . . . . . . . . . . 72
8.08 Merger or Consolidation. . . . . . . . . . . . . . . 72
8.09 Transactions with Affiliates . . . . . . . . . . . . 73
8.10 Benefit Plans. . . . . . . . . . . . . . . . . . . . 73
8.11 Fiscal Year. . . . . . . . . . . . . . . . . . . . . 73
8.12 Dissolution, etc.. . . . . . . . . . . . . . . . . . 73
8.13 Rate Hedging Obligations . . . . . . . . . . . . . . 74
ARTICLE IX -- Events of Default and Acceleration
9.01 Events of Default. . . . . . . . . . . . . . . . . . 75
9.02 Agent to Act . . . . . . . . . . . . . . . . . . . . 78
9.03 Cumulative Rights. . . . . . . . . . . . . . . . . . 79
9.04 No Waiver. . . . . . . . . . . . . . . . . . . . . . 79
9.05 Allocation of Proceeds . . . . . . . . . . . . . . . 79
ARTICLE X -- The Agent
10.01. Appointment, Powers, and Immunities . . . . . . 81
10.02. Reliance by Agent . . . . . . . . . . . . . . . 81
10.03. Defaults. . . . . . . . . . . . . . . . . . . . 81
10.04. Rights as Lender. . . . . . . . . . . . . . . . 82
10.05. Indemnification . . . . . . . . . . . . . . . . 82
10.06. Non-Reliance on Agent and Other Lenders . . . . 82
10.07. Resignation of Agent. . . . . . . . . . . . . . 83
ARTICLE XI -- Miscellaneous
11.01 Assignments and Participations. . . . . . . . . 84
11.02 Notices . . . . . . . . . . . . . . . . . . . . 86
11.03 Confidentiality . . . . . . . . . . . . . . . . 87
11.04 Right of Setoff; Adjustments. . . . . . . . . . 87
11.05 Survival. . . . . . . . . . . . . . . . . . . . 88
11.06 Expenses. . . . . . . . . . . . . . . . . . . . 88
11.07 Amendments and Waivers. . . . . . . . . . . . . 88
11.08 Counterparts . . . . . . . . . . . . . . . . 89
11.09 Termination . . . . . . . . . . . . . . . . . . 89
11.10 Governing Law . . . . . . . . . . . . . . . . . 89
11.11 Indemnification . . . . . . . . . . . . . . . . 90
11.12 Headings and References . . . . . . . . . . . . 91
11.13 Severability. . . . . . . . . . . . . . . . . . 91
11.14 Entire Agreement. . . . . . . . . . . . . . . . 91
11.15 Agreement Controls. . . . . . . . . . . . . . . 91
11.16 Usury Savings Clause. . . . . . . . . . . . . . 91
11.17 Reserved. . . . . . . . . . . . . . . . . . . . 92
11.18 Waiver of Jury Trial. . . . . . . . . . . . . . 92
11.19 Removal of Lenders. . . . . . . . . . . . . . . 92
11.20 Guaranty Terminations.. . . . . . . . . . . . . 93
EXHIBIT A Commitments. . . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B Form of Assignment and Acceptance. . . . . . . . . .B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative . . . . . . . . . . . . . . . . . . .C-1
EXHIBIT D Form of Borrowing Notice--Revolving Credit Loans and
Swing Line Loans and/or Competitive Bid Quote Request
(Five Year Facility) . . . . . . . . . . . . . . . .D-1
EXHIBIT E [Reserved] . . . . . . . . . . . . . . . . . . . . .E-1
EXHIBIT F Form of Competitive Bid Quote (Five Year Facility) .F-1
EXHIBIT G Form of Guaranty Agreement . . . . . . . . . . . . .G-1
EXHIBIT H Form of Guarantor Joinder Agreement. . . . . . . . .H-1
EXHIBIT I Form of Revolving Credit Notes (Five Year Facility).I-1
EXHIBIT J Form of Competitive Bid Notes (Five Year Facility) .J-1
EXHIBIT K Form of Swing Line Note (Five Year Facility). . . .K-1
EXHIBIT L Form of Interest Rate Selection Notice (Five Year
Facility). . . . . . . . . . . . . . . . . . . . . .L-1
EXHIBIT M Form of Opinion of Counsel to the Borrower and Counsel to
the Guarantors . . . . . . . . . . . . . . . . . . .M-1
EXHIBIT N Form of Compliance Certificate . . . . . . . . . . .N-1
EXHIBIT O Form of LC Account Agreement . . . . . . . . . . . .O-1
Schedule 6.01(d) Subsidiaries
Schedule 6.01(f) Contingent Liabilities
Schedule 6.01(g) Liens
Schedule 6.01(h) Tax Matters
Schedule 6.01(j) Litigation
Schedule 6.01(m) Patents
Schedule 6.01(o) Consents
Schedule 8.04 Indebtedness
AMENDED AND RESTATED CREDIT AGREEMENT
(Five Year Facility)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (Five Year
Facility), dated as of September 17, 1998 (the "Agreement"), is
made by and among:
SAKS INCORPORATED, a Tennessee corporation having its
principal place of business in Birmingham, Alabama (the
"Borrower"); and
Each lender executing and delivering a signature page hereto
and each other lender which may hereafter execute and deliver an
instrument of assignment with respect to this Agreement pursuant to
Section 11.01 hereof (hereinafter such lenders may be referred to
individually as a "Lender" or collectively as the "Lenders"); and
NATIONSBANK, N. A., a national banking association organized
and existing under the laws of the United States of America
("NationsBank"), in its capacity as Administrative Agent for the
Lenders (in such capacity, the "Agent"); and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK and THE CHASE
MANHATTAN BANK, each in its capacity as Co-Syndication Agents and
CITIBANK, N.A., in its capacity as Documentation Agent;
W I T N E S S E T H:
WHEREAS, the Borrower (formerly known as Proffitt's, Inc.),
the Agent and certain of the Lenders are party to that certain
Credit Agreement dated as of February 2, 1998 (the "Existing Credit
Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend and
restate the Existing Credit Agreement to make available to the
Borrower a revolving credit facility in the maximum aggregate
principal amount at any time outstanding of $750,000,000 with a
maturity of 5 years, which shall include (i) a standby letter of
credit facility of $150,000,000 and (ii) a swing line facility of
$50,000,000, the proceeds of such facilities to be used to provide
working capital, to finance capital expenditures, to finance
Permitted Acquisitions (as herein defined) and to provide for the
general corporate purposes of the Borrower and its Subsidiaries;
and
WHEREAS, the Lenders and the Agent are willing to amend and
restate the Existing Credit Agreement and to make all such
facilities available to the Borrower upon the terms and conditions
set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby
agree that the Existing Credit Agreement is amended and restated in
its entirety as follows:
ARTICLE I
Definitions and Terms
1.01 Definitions. For the purposes of this Agreement, in
addition to the definitions set forth above, the following terms
shall have the respective meanings set forth below:
"Absolute Rate" has the meaning assigned thereto in
Section 2.03(c)(ii)(C) hereof.
"Acquisition" means the acquisition, including without
limitation by means of merger or consolidation, by the
Borrower or any Subsidiary of (i) a controlling equity
interest in another Person (including the purchase of an
option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes
exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest,
(ii) assets of another Person which constitute all or
substantially all of the assets of such Person or (iii) a
Business Unit.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined
by the Agent to be equal to the sum of (i) the quotient
obtained by dividing (x) the Eurodollar Rate for such
Eurodollar Loan for such Interest Period by (y) the difference
of 1 minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period plus (ii) the Applicable Interest
Addition.
"Affiliate" means a Person (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower,
(ii) which beneficially owns or holds 10% or more of any class
of the outstanding voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity
interest) of the Borrower, or (iii) 10% or more of any class
of the outstanding voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity
interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through
ownership of voting stock, by contract or otherwise.
"Affiliate Transaction" has the meaning assigned thereto
in Section 8.09 hereof.
"Alternative Rating Agency" has the meaning assigned to
such term in the definition of "Applicable Interest Addition"
in Section 1.01 hereof.
"Applicable Commitment Percentage" means, at
any time for each Lender with respect to the Revolving Credit
Facility (including its Participations and its obligations
hereunder to the Issuing Bank and Swing Line Lender to acquire
Participations), a fraction (expressed as a percentage), (i)
the numerator of which shall be the amount of such Lender's
Revolving Credit Commitment at such date of determination
(which Revolving Credit Commitment for each Lender as of the
Closing Date is set forth in Exhibit A attached hereto and
incorporated herein by reference), and (ii) the denominator of
which shall be the Total Revolving Credit Commitment at such
date of determination; provided, that the Applicable
Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender
effected in accordance with Section 11.01 hereof. The
Applicable Commitment Percentage hereunder shall at all times
be equal to the Applicable Commitment Percentage as defined in
the 364 Day Facility Credit Agreement.
"Applicable Facility Fee" means, at any time, that
percent per annum set forth in the table below corresponding
to the Level at which the Applicable Interest Addition is then
determined in accordance with the definition thereof:
Applicable
Level Facility Fee
-------- ------------
I 0.225%
II 0.200%
III 0.150%
IV 0.125%
V 0.100%
Any change in the Level at which the Applicable Interest
Addition is determined shall result in a corresponding and
simultaneous change in the Applicable Facility Fee. As of the
date hereof, the initial Applicable Facility Fee equals
0.150%.
"Applicable Interest Addition" means, for each Eurodollar
Loan and with respect to the fee per annum set forth in
Section 3.03(i) hereof, that percent per annum set forth below
in the applicable column, which shall be (i) determined based
upon the rating of each rated class of the Borrower's long-term,
senior unsecured Indebtedness for Money Borrowed,
including without limitation Indebtedness hereunder and, if no
such Indebtedness is then outstanding, a class of long-term,
senior unsecured Indebtedness for Money Borrowed that the
Borrower may issue from its shelf registration statement filed
with the Securities and Exchange Commission covering, among
other things, long-term senior unsecured Indebtedness for
Money Borrowed (the "Rated Debt"), assigned by S&P and Moody's
(or to the extent permitted as described below, such other
Alternative Rating Agency) (the "Debt Rating") as specified
below and (ii) applicable to all Eurodollar Loans existing on
and after the first date a specific Debt Rating is effective
and continuing until, but not including, the date any change
in such Debt Rating is effective (the "Debt Rating Date"):
Level Debt Rating Interest
--------- ---------------- -----------
I Less than or equal to BB by S&P and
Ba2 by Moody's
0.525%
II
BB+ by S&P and Ba1 by Moody's
0.425%
III
BBB- by S&P and Baa3 by Moody's
0.350%
IV
BBB by S&P and Baa2 by Moody's
0.275%
V
Greater than or equal to BBB+ by S&P
and Baa1 by Moody's
0.250%
As of the date hereof, the initial Applicable
Interest Addition equals 0.350%.
In the event that the Debt Ratings assigned by S&P
and Moody's differ by one rating level, the Applicable
Interest Addition shall be determined by reference to the
rating level having the higher Debt Rating without regard
to the lower Debt Rating. In the event that the Debt
Ratings assigned by S&P and Moody's differ by more than
one rating level, the Applicable Interest Addition shall
be determined by reference to the Debt Rating which is
one rating level higher than the lower assigned Debt
Rating without regard to the higher assigned Debt Rating.
The final Debt Rating level by which the Applicable
Interest Addition is determined is referred to herein as
a "Level". By way of illustration and not limitation, if
S&P assigned a rating of BB+ (i.e., Level II) and Moody's
assigns a rating of Baa3 (i.e., Level III), the
Applicable Interest Addition will be 0.350%; however if
S&P assigns a rating of BB (i.e., Level I) and Moody's
assigns a rating of Baa1 (i.e., Level V), the Applicable
Interest Addition will be 0.425%.
In the event that either S&P or Moody's (but not
both) shall not make a rating of any class of Rated Debt,
the above calculations shall be made based on (i) the
rating provided by S&P or Moody's, whichever shall then
maintain a current rating, of the Rated Debt and (ii) the
rating provided by a nationally recognized securities
rating agency selected by the Borrower and approved by
the Agent, which shall be substituted for either S&P or
Moody's, as the case may be (the "Alternative Rating
Agency"), of the Rated Debt and the Alternative Rating
Agency's equivalent rating levels shall be substituted
for the Debt Rating levels of either S&P or Moody's,
whichever shall no longer then make the applicable Debt
Rating; provided further; in the event that no
Alternative Rating Agency shall make a rating of each
class of Rated Debt and (i) only one of S&P or Moody's
shall then make a Debt Rating, the Applicable Interest
Addition shall be determined by the Debt Rating which is
one Level lower than the Debt Rating assigned by S&P or
Moody's, as applicable (e.g., if only Moody's provides a
Debt Rating and such Debt Rating is Level V, the
Applicable Interest Addition shall be 0.275%); or (ii)
neither S&P nor Moody's shall then make a Debt Rating,
the Applicable Interest Addition shall be Level I.
"Applicable Lending Office" means, for each Lender
and for each Type of Loan, the "Applicable Lending
Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature
pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrower by written
notice in accordance with the terms hereof as the office
by which its Loans of such Type are to be made and
maintained.
"Applications and Agreements for Letters of Credit"
means, collectively, the Applications and Agreements for
Letters of Credit executed by the Borrower from time to
time and delivered to the Issuing Bank to support the
issuance of Letters of Credit.
"Assignment and Acceptance" means an Assignment and
Acceptance substantially in the form of Exhibit B
attached hereto and incorporated herein by reference
(with blanks appropriately filled in) delivered to the
Agent in connection with an assignment of a Lender's
interest under this Agreement pursuant to Section 11.01.
"Audited Restated Financial Statements" means,
collectively, the audited restated combined income
statement of the Borrower and its Subsidiaries (giving
effect to the Saks Acquisition) for the Fiscal Year ended
January 31, 1998 and the audited restated combined
balance sheet of the Borrower and its Subsidiaries
(giving effect to the Saks Acquisition) as at January 31,
1998.
"Authorized Representative" means any of the
Chairman, Vice Chairmen, President or Executive Vice
Presidents of the Borrower and, with respect to financial
matters, the Treasurer or Chief Financial Officer of the
Borrower and, with respect to Borrowing Notices,
Competitive Bid Quote Requests, Applications and
Agreements for Letters of Credit and notices of
Conversion or Continuation, any person designated by the
Treasurer or the Chief Financial Officer in writing to
the Agent, or any other person expressly designated by
the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized
Representative of the Borrower, as set forth from time to
time in a certificate substantially in the form attached
hereto as Exhibit C and incorporated herein by reference.
"Base Rate" means, for any day, the rate per annum
equal to the higher of (a) the Federal Funds Rate for
such day plus one-half of one percent (0.500%) and (b)
the Prime Rate for such day. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan for which the rate
of interest is determined by reference to the Base Rate.
"Board" means the Board of Governors of the Federal
Reserve System (or any successor body).
"Borrower's Account" means the demand deposit
account with the Agent designated by the Borrower from
time to time in writing delivered and acceptable to the
Agent, or any successor account thereto with the Agent,
which may be maintained at one or more offices of the
Agent or an agent of the Agent.
"Borrower's Audited Statements" has the meaning
assigned thereto in Section 6.01(f) hereof.
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with a Loan
(other than a Competitive Bid Loan), in substantially the
form attached hereto as Exhibit D and incorporated herein
by reference.
"Business Day" means any day which is not a
Saturday, Sunday or a day on which banks in the State of
North Carolina are authorized or obligated by law,
executive order or governmental decree to be closed.
"Business Unit" means (i) one or more retail stores,
warehouses or distribution centers, including the related
land, buildings and trade fixtures of a Person or a
division of a Person, which may, but is not required to,
include inventory, receivables, furniture, fixtures and
equipment, and intangible and other assets related to
such retail stores, warehouses or distribution centers or
(ii) all or substantially all of a line or lines of
business conducted by a Person or a division of a Person.
"Capital Leases" means all leases which have been or
should be capitalized in accordance with Generally
Accepted Accounting Principles as in effect from time to
time including Statement No. 13 of the Financial
Accounting Standards Board and any successor thereof.
"Closing Date" means the date on which the
conditions set forth in Section 5.01 hereof have been
satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended, any successor provision or provisions and any
regulations promulgated thereunder.
"Combined Three Month Statements" has the meaning
assigned thereto in Section 6.01(f) hereof.
"Common Stock" means the common stock, par value
$.10 per share, of the Borrower.
"Competitive Bid Borrowing" has the meaning assigned
thereto in Section 2.03(b) and shall consist of one or
more Competitive Bid Loans.
"Competitive Bid Facility" means the subfacility
under the Revolving Credit Facility described in Section
2.03 providing for Competitive Bid Loans to the Borrower.
"Competitive Bid Loan" means a Loan made by a Lender
pursuant to the Competitive Bid Facility provided for by
Section 2.03.
"Competitive Bid Notes" means, collectively, the
promissory notes of the Borrower evidencing Competitive
Bid Loans executed and delivered to the Lenders
substantially in the form of Exhibit J attached hereto
and incorporated herein by reference.
"Competitive Bid Outstandings" means, as of any date
of determination, the aggregate principal amount of all
Competitive Bid Loans then outstanding.
"Competitive Bid Quote" means an offer in accordance
with Section 2.03(c) by a Lender to make a Competitive
Bid Loan with one single specified interest rate, which
shall be in substantially the form of Exhibit F attached
hereto and incorporated herein by reference.
"Competitive Bid Quote Request" has the meaning
assigned to such term in Section 2.03(b) and shall be in
substantially the form of Exhibit D attached hereto and
incorporated herein by reference.
"Consistent Basis" in reference to the application
of Generally Accepted Accounting Principles means the
accounting principles observed in the period referred to
are comparable in all material respects to those applied
in the preparation of the Audited Restated Financial
Statements, which accounting principles shall be the same
in all material respects as those accounting principles
applied in the preparation of the Combined Three Month
Statements.
"Consolidated EBITDA" means, with respect to the
Borrower and its Subsidiaries for any period of
computation thereof, the sum of, without duplication, (i)
Consolidated Net Income, plus (ii) Consolidated Interest
Expense, plus (iii) taxes on income, plus (iv)
amortization, plus (v) depreciation, all determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis;
provided, however, that (x) extraordinary and unusual
charges incurred by the Borrower directly as a result of
(A) the Saks Acquisition (including in any event
repayment or retirement of Indebtedness of the Saks REMIC
Subsidiaries), the Acquisition by the Borrower of Carson
Pirie Scott & Co. effective January 31, 1998, the
Acquisition by the Borrower of Parisian, Inc. effective
October 11, 1996, the Acquisition by the Borrower of
Younkers, Inc. effective February 3, 1996, the
Acquisition by the Borrower of G.R. Herberger's, Inc.
effective February 1, 1997, the prepayment of the Junior
Subordinated Debentures, the retirement of the Parisian
Senior Subordinated Notes and the retirement of the
Senior Notes and (B) any Permitted Acquisition after the
Closing Date in an amount up to and including 10% of the
Cost of Acquisition for such Permitted Acquisition, and
(y) any non-recurring, non-cash loss, shall all be
excluded from the computation of Consolidated Net Income;
provided further, however, that effective as of the
effective date of any Acquisition, Consolidated EBITDA
shall be computed giving pro forma effect to such
Acquisition for each Four-Quarter Period then and
thereafter occurring until such Acquisition has been
effective for a complete Four-Quarter Period.
"Consolidated Financing Charges" means those charges
owed and allocated to third parties with respect to
accounts receivable securitizations transacted in the
ordinary course of business.
"Consolidated Fixed Charge Ratio" means, with
respect to the Borrower and its Subsidiaries for the
Four-Quarter Period ending on the date of computation
thereof, the ratio of (i) Consolidated EBITDA plus
Consolidated Financing Charges plus, to the extent
deducted in arriving at Consolidated EBITDA, lease,
rental and all other payments made in respect of or in
connection with operating leases, to (ii) Consolidated
Fixed Charges during such Four-Quarter Period.
"Consolidated Fixed Charges" means, with respect to
Borrower and its Subsidiaries, for the periods indicated,
the sum of, without duplication, (i) Consolidated
Interest Expense, plus (ii) to the extent deducted in
arriving at Consolidated EBITDA, lease, rental and all
other payments made in respect of or in connection with
operating leases, plus (iii) Consolidated Financing
Charges, all determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis; provided further, however,
that effective as of the effective date of any
Acquisition, such calculations shall be computed giving
pro forma effect to such Acquisition for each Four-Quarter Period
then and thereafter occurring until such
Acquisition has been effective for a complete Four-Quarter Period.
"Consolidated Funded Total Indebtedness" means, at
any time as of which the amount thereof is to be
determined, all Indebtedness for Money Borrowed of the
Borrower and its Subsidiaries (including, but not limited
to, all current maturities and borrowings under short
term loans) plus the face amount of all issued and
outstanding standby letters of credit and all obligations
(to the extent not duplicative) arising under such
letters of credit, all determined on a consolidated basis
in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis.
"Consolidated Interest Expense" means, with respect
to any period of computation thereof, the gross interest
expense of the Borrower and its Subsidiaries, including
without limitation (i) the amortization of debt
discounts, (ii) the amortization of all fees (including,
without limitation, fees payable in respect of a Swap
Agreement) payable in connection with the incurrence of
Indebtedness to the extent included in interest expense
and (iii) the portion of any payments made in connection
with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis.
"Consolidated Net Income" means, for any period of
computation thereof, the net income of the Borrower and
its Subsidiaries as determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis; but excluding as income:
(i) net gains on the sale, conversion or other
disposition of capital assets and net gains on the
acquisition, retirement, sale or other disposition of
capital stock and other securities of the Borrower or its
Subsidiaries, (ii) any write-up of any asset, and (iii)
any other net gain or credit of an extraordinary nature,
all determined in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis.
"Consolidated Net Worth" means at any time as of
which the amount thereof is to be determined, the
shareholders' equity of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis (excluding intercompany items among the
Borrower and its Subsidiaries and any upward adjustment
after the Closing Date due to revaluation of assets).
"Consolidated Subordinated Debt" means all
Consolidated Funded Total Indebtedness which is by its
terms subordinate to the Loans as required by, and in
substance acceptable to, the Agent.
"Consolidated Total Assets" means, as at any time of
determination thereof, the net book value of all assets
of the Borrower and its Subsidiaries as determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis.
"Contingent Obligation" of any Person means (i) all
contingent liabilities required (or which, upon the
creation or incurring thereof, would be required) to be
included in the consolidated financial statements
(including footnotes) of such Person in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis, including Statement No. 5 of the
Financial Accounting Standards Board, and (ii) all
reimbursement obligations of such Person with respect to
any letter of credit and all obligations of such Person
guaranteeing or in effect guaranteeing any Indebtedness
of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including
obligations of such Person however incurred:
(a) to purchase such Indebtedness or any
property or assets constituting security therefor;
(b) to advance or supply funds in any manner
(x) for the purchase or payment of such
Indebtedness or (y) to maintain a minimum working
capital, net worth or other balance sheet condition
or any income statement condition of the primary
obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on
any property or assets of such Person to secure
payment of such Indebtedness;
(d) to lease property or to purchase
securities or other property or services primarily
for the purpose of assuring the owner or holder of
such Indebtedness of the ability of the primary
obligor to make payment of such Indebtedness; or
(e) otherwise to assure the owner of the
Indebtedness of the primary obligor against loss in
respect thereof.
With respect to Contingent Obligations, such liabilities
shall be computed at the amount which, in light of all
the facts and circumstances existing at the time,
represent the present value of the amount which can
reasonably be expected to become an actual or matured
liability.
"Continue", "Continuation", and "Continued" shall
refer to the continuation pursuant to Section 2.11 hereof
of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Convert", "Conversion", and "Converted" shall refer
to a conversion pursuant to Section 2.11 or Article IV of
one Type of Loan into another Type of Loan.
"Cost of Acquisition" means, as at the date of
closing any Acquisition, the sum of the following: (i)
the value of the capital stock, or warrants or options to
acquire capital stock, of the Borrower or any Subsidiary
to be transferred in connection therewith, (ii) any cash
or other property (excluding property described in clause
(i)) or the unpaid principal amount of any debt
instrument given as consideration in such Acquisition,
and (iii) any Indebtedness or liabilities assumed by the
Borrower or its Subsidiaries in connection with such
Acquisition. For purposes of determining the Cost of
Acquisition for any transaction, (A) the capital stock of
the Borrower shall be valued (I) at its market value as
reported on the New York Stock Exchange or any national
securities exchange with respect to shares that are
freely tradeable, and (II) with respect to shares that
are not freely tradeable, as determined by the Board of
Directors of the Borrower (which determination shall be
conclusive), (B) the capital stock of any Subsidiary
shall be valued as determined by the Board of Directors
of such Subsidiary (which determination shall be
conclusive), and (C) with respect to any Acquisition
accomplished pursuant to the exercise of options or
warrants or the conversion of securities, the Cost of
Acquisition shall include both the cost of acquiring such
option, warrant or convertible security as well as the
cost of exercise or conversion.
"Credit Exposure" means for each Lender an amount
equal at all times (i) other than following the
occurrence and during the continuance of an Event of
Default, to its Revolving Credit Commitment, and
(ii) following the occurrence and during the continuance
of an Event of Default, to the sum of the aggregate
principal amount of Revolving Credit Loans owing to such
Lender plus the aggregate unutilized amounts of such
Lender's Revolving Credit Commitment plus the amount of
such Lender's Applicable Commitment Percentage of Swing
Line Outstandings and Letter of Credit Outstandings plus
the amount of such Lender's Competitive Bid Outstandings;
provided, if any Lender shall have failed to pay to the
Swing Line Lender or the Issuing Bank, as applicable,
such Lender's Applicable Commitment Percentage of any
Swing Line Loan or drawing under any Letter of Credit
resulting in an outstanding Reimbursement Obligation,
such Lender's Credit Exposure attributable to such Swing
Line Outstandings or Letter of Credit Outstandings or
both shall be deemed to be held by the Swing Line Lender
or the Issuing Bank, as applicable, for purposes of this
definition.
"Debt Rating" has the meaning assigned to such term
in the definition of "Applicable Interest Addition" in
Section 1.01 hereof.
"Debt Rating Date" has the meaning assigned to such
term in the definition of "Applicable Interest Addition"
in Section 1.01 hereof.
"Default" means any event or condition which, with
the giving or receipt of notice or lapse of time or both,
would constitute an Event of Default hereunder.
"Dollars" and the symbol "$" means dollars
constituting legal tender for the payment of public and
private debts in the United States of America.
"Eligible Assignee" means (i) a Lender; (ii) an
affiliate of a Lender; and (iii) any other Person
approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is
effected in accordance with Section 11.01, the Borrower,
such approval not to be unreasonably withheld or delayed
by the Borrower or the Agent, as applicable, and such
approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the
Agent from the Borrower within six (6) Business Days
after written notice of such proposed assignment has been
provided by the assigning Lender to the Borrower;
provided, however, that neither the Borrower nor an
affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Eligible Securities" means the following
obligations and any other obligations previously approved
in writing by the Agent:
(i) Government Securities;
(ii) the following debt securities of the
following agencies or instrumentalities of the
United States of America if at all times the full
faith and credit of the United States of America is
pledged to the full and timely payment of all
interest and principal thereof:
(a) all direct or fully guaranteed
obligations of the United States Treasury; and
(b) mortgage-backed securities and
participation certificates guaranteed by the
Government National Mortgage Association;
(iii) the following obligations of the
following agencies or instrumentalities of or
corporations established by the United States of
America:
(a) participation certificates and debt
obligations of the Federal Home Loan Mortgage
Corporation;
(b) consolidated debt obligations, and
obligations secured by a letter of credit, of
the Federal Home Loan Banks; and
(c) debt obligations and mortgage-backed
securities of the Federal National Mortgage
Association which have not had the interest
portion thereof severed therefrom;
(iv) obligations of any corporation organized
under the laws of any state of the United States of
America or under the laws of any other nation,
payable in the United States of America, expressed
to mature not later than 180 days following the
date of issuance thereof and rated in an investment
grade rating category by S&P or Moody's;
(v) interest bearing demand or time deposits
issued by any Lender or certificates of deposit
maturing within one year from the date of
acquisition issued by a bank or trust company
organized under the laws of the United States or of
any state thereof having capital surplus and
undivided profits aggregating at least $500,000,000
and being rated A- or better by S&P or A-3 or
better by Moody's;
(vi) Repurchase Agreements;
(vii) Pre-Refunded Municipal Obligations;
(viii) shares of mutual funds which invest
in obligations described in paragraphs (i) through
(iii) above, the shares of which mutual funds are
at all times rated "AAA" by S&P or Aaa by Moody's;
(ix) asset-backed remarketed certificates of
participation representing a fractional undivided
interest in the assets of a trust, which
certificates are rated at least "A-1" by S&P or "P-1" by Moody's;
(x) shares of money market funds which comply
with the provisions of Rule 2a-7 of the Securities
and Exchange Commission (17 C.F.R. Section 270.2a-7); and
(xi) other investments approved in writing by
the Required Lenders, which approval shall not be
unreasonably withheld.
Obligations listed in paragraphs (i), (ii) and (iii)
above which are in book-entry form must be held in a
trust account with the Federal Reserve Bank or with a
clearing corporation or chain of clearing corporations
which has an account with the Federal Reserve Bank.
"Environmental Laws" means any federal, state or
local statute, law, ordinance, code, rule, regulation,
order, decree, permit or license regulating, relating to,
or imposing liability or standards of conduct concerning,
any environmental matters or conditions, environmental
protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended; the Superfund
Amendments and Reauthorization Act of 1986, as amended;
the Resource Conservation and Recovery Act, as amended;
the Toxic Substances Control Act, as amended; the Clean
Air Act, as amended; the Clean Water Act, as amended;
together with all regulations promulgated thereunder, and
any other "Superfund" or "Superlien" law.
"ERISA" means, at any date, the Employee Retirement
Income Security Act of 1974, as amended, and the
regulations thereunder, all as the same shall be in
effect at such date.
"Eurodollar Business Day" means a domestic Business
Day and one on which the relevant international financial
markets are open for the transaction of the business
contemplated by this Agreement (including without
limitation dealings in U.S. Dollar deposits) in London,
England, New York, New York and Charlotte, North
Carolina.
"Eurodollar Loan" means a Loan that bears interest
at rates based upon the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%)
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
Eurodollar Business Days prior to the first day of such
Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the
term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Eurodollar
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 (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Event of Default" means any of the occurrences set
forth as such in Section 9.01 hereof.
"Existing Letters of Credit" means those certain
standby letters of credit (i) number 919266 issued for
the account of the Borrower on December 4, 1996 by
NationsBank, N.A. (formerly known as NationsBank, N.A.
(South)) for the benefit of Frederick Atkins, Inc. in the
current stated amount of $7,033,495.00; (ii) issued for
the account of the Borrower on September 16, 1998 by
NationsBank, N.A. under the Existing Credit Agreement for
the benefit of The Chase Manhattan Bank in the original
stated amount of $1,446,394.95; and (iii) issued for the
account of the Borrower on September 16, 1998 by
NationsBank, N.A. under the Existing Credit Agreement for
the benefit of Bankers Trust Company in the original
stated amount of $2,831,850.00.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest
1/100 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 by the Federal Reserve
Bank of New York on the Business Day next succeeding such
day; provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and
(ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to the Agent (in
its individual capacity) on such day on such transactions
as determined by the Agent.
"Filing Date" has the meaning assigned thereto in
Section 5.01(a)(xiii) hereof.
"Fiscal Year" means the 52-week or 53-week period of
the Borrower ending on the Saturday of each calendar year
closest (whether before or after) to January 31 and
"Fiscal Year" followed by a numerical year means the
Fiscal Year which has a Fiscal Year Beginning occurring
during such numerical calendar year.
"Fiscal Year Beginning" means the first day of a
Fiscal Year.
"Fixed Rate Loan" means a Loan which is either a
Eurodollar Rate Loan or a Competitive Bid Loan.
"Foreign Benefit Law" means any applicable statute,
law, ordinance, code, rule, regulation, order or decree
of any foreign nation or any province, state, territory,
protectorate or other political subdivision thereof
regulating, relating to, or imposing liability or
standards of conduct concerning, any pension, retirement,
healthcare, death, disability or other employee benefit
plan.
"Foreign Subsidiary" means a Subsidiary not
organized or existing under the laws of the United States
of America, any state thereof, or the District of
Columbia.
"Four-Quarter Period" means a period of four full
consecutive fiscal quarterly periods, taken together as
one accounting period, and in the event any such fiscal
quarterly period occurs prior to the effective date of
any Acquisition, or is the period in which such effective
date occurs (each a "Pre-Acquisition Period"), all
financial statements, data, computations and
determinations for such Four-Quarter Period shall be made
on a pro forma basis for each Pre-Acquisition Period
giving effect to such Acquisition for all prior periods.
"GAAP" or "Generally Accepted Accounting Principles"
means those principles of accounting set forth in
pronouncements of the Financial Accounting Standards
Board, the American Institute of Certified Public
Accountants or which have other substantial authoritative
support and are applicable in the circumstances as of the
date of a report, as such principles are from time to
time supplemented and amended, subject to compliance at
all times with Section 1.02 hereof.
"Government Securities" means direct obligations of,
or obligations the timely payment of principal and
interest on which are fully and unconditionally
guaranteed by, the United States of America.
"Governmental Authority" means any Federal, state,
municipal, national, foreign or other governmental
department, commission, board, bureau, agency, court,
arbitration body or instrumentality or political
subdivision thereof or any entity or officer exercising
executive, legislative or judicial, regulatory or
administrative functions of or pertaining to any
government or any court, in each case whether a state of
the United States, the United States or foreign nation,
state, province or other governmental instrumentality.
"Guarantor Joinder Agreement" means a Guarantor
Joinder Agreement substantially in the form of Exhibit H
attached hereto and incorporated herein by reference
(with blanks appropriately filled in) executed and
delivered to the Agent in connection with a Material
Subsidiary (or other Person) becoming a Guarantor and
party to the Guaranty.
"Guarantors" means, collectively, (i) each Material
Subsidiary existing on the Closing Date and (ii) any
other Person who shall become a Material Subsidiary after
the Closing Date and shall become a party to the Guaranty
as provided in Section 7.18 hereof; provided further, for
all purposes of this Agreement, the term "Guarantor"
shall be deemed to be "Subsidiary" at all times following
the termination of the Guaranty in accordance with
Section 11.20 hereof.
"Guaranty" means the Guaranty Agreement of the
Guarantors (including without limitation those Guarantors
which subsequently become a party thereto in accordance
with Section 7.18 hereof) in favor of the Agent
guaranteeing in whole or in part the payment of
Obligations, substantially in the form of Exhibit G
attached hereto and incorporated herein by reference, as
the same may be amended, modified or supplemented.
"Hazardous Material" means and includes any
pollutant, contaminant, or hazardous, toxic or dangerous
waste, substance or material (including without
limitation petroleum products, asbestos-containing
materials and lead), the generation, handling, storage,
transportation, disposal, treatment, release, discharge
or emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person,
without duplication, all Indebtedness for Money Borrowed,
all indebtedness of such Person for the acquisition of
property, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness
is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the
ordinary course of business), all Contingent Obligations,
all Rate Hedging Obligations, that portion of obligations
with respect to Capital Leases which in accordance with
Generally Accepted Accounting Principles is classified as
a liability on a balance sheet and all Synthetic Lease
Indebtedness; but excluding all accounts payable in the
ordinary course of business and only so long as payment
therefor is due within one year; provided, that in no
event shall the term Indebtedness include surplus and
retained earnings, minority interest in Subsidiaries,
lease obligations (other than pursuant to Capital Leases
or in connection with any tax retention operating lease
or any form of synthetic lease as provided above),
reserves for deferred income taxes and investment
credits, other deferred credits and reserves, and
deferred compensation obligations.
"Indebtedness for Money Borrowed" means for any
Person all indebtedness in respect of money borrowed,
including without limitation all Capital Leases and the
deferred purchase price of any property or asset,
evidenced by a promissory note, bond or similar written
obligation for the payment of money (including, but not
limited to, conditional sales or similar title retention
agreements).
"Interest Period"
(a) means for each Eurodollar Loan a period
commencing on the date such Eurodollar Loan is made or
Converted and each subsequent period commencing on the
last day of the immediately preceding Interest Period for
such Eurodollar Loan, and ending, at the Borrower's
option, on the date one, two, three, six or (if
available) nine months thereafter as notified to the
Agent by an Authorized Representative three (3)
Eurodollar Business Days prior to the beginning of such
Interest Period; provided, that,
(i) if the Authorized Representative fails to
notify the Agent of the length of an Interest
Period three (3) Eurodollar Business Days prior to
the first day of such Interest Period, the Loan for
which such Interest Period was to be determined
shall be deemed to be a Base Rate Loan;
(ii) if an Interest Period for a Eurodollar
Loan would end on a day which is not a Eurodollar
Business Day such Interest Period shall be extended
to the next Eurodollar Business Day (unless such
extension would cause the applicable Interest
Period to end in the succeeding calendar month, in
which case such Interest Period shall end on the
next preceding Eurodollar Business Day);
(iii) any Interest Period which begins on
the last Eurodollar 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 Eurodollar Business Day of a calendar
month;
(iv) no Interest Period shall extend past the
Stated Revolving Credit Termination Date; and
(v) on any day, with respect to all
Fixed Rate Loans hereunder and as defined in the
364 Day Facility Credit Agreement, there shall be
not more than twenty (20) Interest Periods in
effect; and
(b) means for each Competitive Bid Loan, the period
commencing on the date such Competitive Bid Loan is made
and ending on the date specified in the Competitive Bid
Quote Request and related Competitive Bid Quote for such
Competitive Bid Loan; provided that,
(i) no Interest Period for a Competitive Bid
Loan shall be for a period of less than seven days
or greater than 120 days;
(ii) no Interest Period for a Competitive Bid
Loan shall extend past the Stated Revolving Credit
Termination Date;
(iii) there shall not be more than twenty
(20) Interest Periods in effect on any day for all
Fixed Rate Loans hereunder and as defined in the
364 Day Facility Credit Agreement; and
(iv) each Interest Period shall end on a day
that is a Business Day.
"Investment Grade Rating" means the assignment of a
rating of both BBB- or higher by S&P and Baa3 or higher
by Moody's to the Rated Debt issued by the Borrower.
"Issuing Bank" means, as of the Closing Date,
NationsBank, and thereafter any replacement or successor
thereto which is then a Lender and shall agree with the
Borrower to succeed to and become vested with all the
rights, powers, discretions, privileges and duties of the
Issuing Bank, including without limitation as set forth
in Article III; provided further, the term "Issuing Bank"
means NationsBank with respect to the Existing Letters of
Credit.
"Junior Subordinated Debentures" means the 7.5%
Junior Subordinated Debentures Due March 31, 2004 of the
Borrower issued in the original principal amount of
$17,500,000.
"LC Account Agreement" means the LC Account
Agreement dated as of the date hereof between the
Borrower and the Agent substantially in the form of
Exhibit O attached hereto and incorporated herein by
reference, as amended, modified or supplemented from time
to time.
"Lending Party" has the meaning assigned thereto in
Section 11.03.
"Letter of Credit" means any standby or documentary
letter of credit issued by the Issuing Bank under the
Revolving Credit Facility for the account of the Borrower
in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower and shall include
the Existing Letters of Credit.
"Letter of Credit Commitment" means with respect to
each Lender, the obligation of such Lender to acquire
Participations up to an aggregate stated amount at any
one time outstanding equal to such Lender's Applicable
Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from
time to time pursuant to this Agreement; each Lender's
Letter of Credit Commitment is included within, and is
not in addition to, its Revolving Credit Commitment.
"Letter of Credit Facility" means the facility
described in Article III hereof providing for the
issuance by the Issuing Bank for the account of the
Borrower of Letters of Credit under the Revolving Credit
Facility in an aggregate stated amount at any time
outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means all undrawn
amounts of Letters of Credit plus all Reimbursement
Obligations then due and payable.
"Level" has the meaning assigned to such term in the
definition of "Applicable Interest Addition" in Section
1.01 hereof.
"Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than
the owner of the property, whether such interest is based
on the common law, statute or contract, and including but
not limited to the lien or security interest arising from
a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. For the purposes of
this Agreement, the Borrower and its Subsidiaries shall
be deemed to be the owners of any property which either
of them have acquired or hold subject to a conditional
sale agreement, financing lease, or other arrangement
pursuant to which title to the property has been retained
by or vested in some other Person for security purposes.
"Loan" or "Loans" means any of the Eurodollar Loans
or Base Rate Loans and includes, unless the context
otherwise requires or as specifically otherwise
referenced, Competitive Bid Loans and Swing Line Loans.
"Loan Documents" means this Agreement, the Notes,
the Guaranty, Applications and Agreements for Letters of
Credit, each Letter of Credit, the LC Account Agreement,
any Pledge Agreement and all other instruments and
documents heretofore or hereafter executed or delivered
to and in favor of any Lender or the Agent in connection
with the Loans made or the Letters of Credit issued under
this Agreement as the same may be amended, modified or
supplemented from time to time.
"Loan Parties" means, collectively, the Borrower
and, until such time as the Guaranty is terminated in
accordance with Section 11.20 hereof, each of the
Guarantors.
"Material Adverse Effect" means a material adverse
effect on (i) the business, business prospects, results
of operations or condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole or
(ii) the ability of any Loan Party to observe and perform
the covenants and agreements contained herein or in any
other Loan Document or the ability of any Lender to
receive the benefit of any remedy provided thereto under
any Loan Document.
"Material Subsidiary" means any direct or indirect
Subsidiary of the Borrower, other than a Securitization
Subsidiary or a Saks REMIC Subsidiary, which (i) has
total assets equal to or greater than 5% of Consolidated
Total Assets (calculated as of the most recent fiscal
period with respect to which the Agent shall have
received financial statements required to be delivered
pursuant to Sections 7.01(a) or (b) (or if prior to
delivery of any financial statements pursuant to such
Sections, then calculated with respect to the Combined
Three Month Statements) (the "Required Financial
Information")) or (ii) has net income equal to or greater
than 5% of Consolidated Net Income (each calculated for
the most recent period for which the Agent has received
the Required Financial Information); provided, however,
that notwithstanding the foregoing, the term "Material
Subsidiaries" shall mean Subsidiaries of the Borrower,
other than Securitization Subsidiaries and Saks REMIC
Subsidiaries, that together with the Borrower have assets
equal to not less than 95% of Consolidated Total Assets
(calculated as described above but excluding assets
directly owned by Securitization Subsidiaries and Saks
REMIC Subsidiaries) and net income of not less than 95%
of Consolidated Net Income (calculated as described above
but excluding income directly earned by Securitization
Subsidiaries and Saks REMIC Subsidiaries); provided
further that if more than one combination of Subsidiaries
satisfies such threshold, then those Subsidiaries so
determined to be "Material Subsidiaries" shall be
specified by the Borrower.
"Moody's" means Moody's Investors Services, Inc.
"Multi-employer Plan" means an employee pension
benefit plan covered by Title IV of ERISA and in respect
of which the Borrower or any Subsidiary is an "employer"
as described in Section 4001(b) of ERISA, which is also
a multi-employer plan as defined in Section 4001(a)(3) of
ERISA.
"Net Proceeds" from a disposition of assets (other
than assets sold in the ordinary course of business and
accounts receivable sold in connection with an accounts
receivable securitization transacted in the ordinary
course of business by a Securitization Subsidiary) or
issuance of equity means cash payments received therefrom
as and when received, net of (i) all reasonable legal,
accounting, banking, underwriting, title and recording
expenses, commissions, discounts and other fees and
expenses incurred in connection therewith, (ii) all taxes
required to be paid or accrued as a consequence of such
disposition or issuance and (iii) all amounts necessary
to repay Indebtedness for Borrowed Money the repayment of
which is secured by such disposed assets.
"NMS" means NationsBanc Montgomery Securities LLC,
a Delaware limited liability company.
"Notes" means, collectively, the Revolving Credit
Notes, the Competitive Bid Notes and the Swing Line Note.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the
principal and interest on the Loans as evidenced by the
Notes, (ii) the Reimbursement Obligations, (iii) all
liabilities of Borrower to any Lender which arise under
a Swap Agreement, and (iv) the payment and performance of
all other obligations, liabilities, fees and Indebtedness
of the Borrower to the Lenders or the Agent hereunder,
under any one or more of the other Loan Documents or with
respect to the Loans.
"Operating Documents" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or
other legally authorized incorporated or unincorporated
entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other
comparable documents relating to the operation,
governance or management of such entity.
"Organizational Action" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or
other legally authorized incorporated or unincorporated
entity, any corporate, organizational or partnership
action (including any required shareholder, member or
partner action), or other similar official action, as
applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or
other legally authorized incorporated or unincorporated
entity, the articles of incorporation, certificate of
incorporation, articles of organization, certificate of
limited partnership or other comparable organizational or
charter documents relating to the creation of such
entity.
"Parisian Indenture" means that certain Amended and
Restated Indenture dated as of October 11, 1996 among the
Borrower, Parisian, Inc. and AmSouth Bank of Alabama
(formerly known as AmSouth Bank, N.A.), trustee, as
amended from time to time thereafter.
"Parisian Senior Subordinated Notes" means the
9.875% Senior Subordinated Notes Due 2003 of Parisian,
Inc. in the original aggregate principal amount of
$125,000,000 issued pursuant to the Parisian Indenture.
"Participation" means, with respect to any Lender
(other than the Swing Line Lender or Issuing Bank, as
applicable), the extension of credit represented by the
participation of such Lender hereunder in the liability
of the Swing Line Lender in respect of a Swing Line Loan
made or the liability of the Issuing Bank in respect of
a Letter of Credit issued in accordance with the terms
hereof.
"Permitted Acquisition" means an Acquisition beyond
the normal course of business effected with the consent
and approval of the board of directors or other
applicable governing body of the Person being acquired,
and with the duly obtained approval of such shareholders
or other holders of equity interest as such Person may be
required to obtain, so long as (i) immediately prior to
and immediately after the consummation of such
Acquisition, no Default or Event of Default has occurred
and is continuing, (ii) substantially all of the sales
and operating profits generated by such Person (or
assets) so acquired or invested are derived from (A) the
same or related line or lines of business as conducted by
the Borrower and its Subsidiaries on the Closing Date or
(B) a line or lines of business not inconsistent with the
business substantially as conducted by the Borrower and
its Subsidiaries on the Closing Date; provided that the
Cost of Acquisition of all such Acquisitions permitted
pursuant to this clause (ii)(B) shall not in the
aggregate exceed $100,000,000 during any Four-Quarter
Period and (iii) if the Cost of Acquisition therefor
equals or exceeds $250,000,000, pro forma historical
financial statements as of the end of the most recently
completed Four-Quarter Period giving effect to such
Acquisition are delivered to the Agent not less than five
(5) Business Days prior to the consummation of such
Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with the
financial covenants set forth in Article VIII hereof
after giving effect to such Acquisition.
"Person" means an individual, partnership, limited
partnership, corporation, limited liability company,
limited liability partnership, trust, unincorporated
organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement", "Pledged Stock" and "Pledgor"
each has the meaning assigned thereto in Section
7.18(b)(i) hereof.
"Pre-Refunded Municipal Obligations" means
obligations of any state of the United States of America
or of any municipal corporation or other public body
organized under the laws of any such state which are
rated, based on the escrow, in the highest investment
rating category by either S&P or Moody's and which have
been irrevocably called for redemption and advance
refunded through the deposit in escrow of Government
Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to
maturity, (ii) irrevocably pledged solely to the payment
of all principal and interest on such obligations as the
same becomes due and (iii) in a principal amount and bear
such rate or rates of interest as shall be sufficient to
pay in full all principal of, interest, and premium, if
any, on such obligations as the same becomes due as
verified by a nationally recognized firm of certified
public accountants.
"Prime Rate" means the per annum rate of interest
established from time to time by NationsBank as its prime
rate, which rate may not be the lowest rate of interest
charged by NationsBank to its customers.
"Principal Office" means the office of the Agent at
NationsBank, N.A., presently located at Independence
Center, 101 N. Tryon Street, 15th Floor, NC1-001-15-04,
Charlotte, North Carolina, 28255 Attention: Herbert Boyd,
Agency Services, or such other office and address as the
Agent may from time to time designate.
"Quotation Date" has the meaning assigned to such
term in Section 2.03(b).
"Rate Hedging Obligations" means any and all
obligations of the Borrower or any Subsidiary, whether
absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect
at least one of the parties thereto from the fluctuations
of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to,
Dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate
options, puts, warrants and those commonly known as
interest rate "swap" agreements; and (ii) any and all
cancellations, buybacks, reversals, terminations or
assignments of any of the foregoing.
"Rated Debt" has the meaning assigned to such term
in the definition of "Applicable Interest Addition" in
Section 1.01 hereof.
"Registration Statement" has the meaning assigned
thereto in Section 5.01(a)(xiii) hereof.
"Regulation D" means Regulation D of the Board as
the same may be amended or supplemented from time to
time.
"Reimbursement Obligation" means at any time, the
obligation of the Borrower with respect to any Letter of
Credit to reimburse the Issuing Bank for amounts
theretofore paid by the Issuing Bank pursuant to a
drawing under such Letter of Credit.
"Repurchase Agreement" means a repurchase agreement
entered into with (i) any financial institution whose
debt obligations or commercial paper are rated "A" or
"A2" by either of S&P or Moody's or "A-1" by S&P or "P-1"
by Moody's, or (ii) any Lender.
"Required Financial Information" has the meaning
assigned to such term in the definition of "Material
Subsidiary" in Section 1.01 hereof.
"Required Lenders" means, as of any date, Lenders on
such date having Credit Exposures aggregating more than
50% of the aggregate Credit Exposures of all the Lenders
on such date.
"Reserve Requirement" means, at any time, the
maximum rate at which reserves (including, without
limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under
regulations issued from time to time by the Board (or
any successor) by member banks of the Federal Reserve
System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member
banks with respect to (i) any category of liabilities
which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined, or (ii) any
category of extensions of credit or other assets which
include Eurodollar Loans. The Adjusted Eurodollar Rate
shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Revolving Credit Commitment" means with respect to
each Lender, the obligation of such Lender to make
Revolving Credit Loans to, and purchase Participations in
Letters of Credit issued for the benefit of and Swing
Line Loans to, the Borrower up to an aggregate principal
amount at any one time outstanding equal to the amount
set forth opposite such Lender's name on Exhibit A hereto
as the same may be increased or decreased from time to
time pursuant to this Agreement; provided, however, that
amounts advanced by any Lender as Competitive Bid Loans
shall not reduce such Lender's Revolving Credit
Commitment or modify its obligation to make its
Applicable Commitment Percentage of Revolving Credit
Loans.
"Revolving Credit Facility" means the facility
described in Section 2.01 hereof providing (i) for
Revolving Credit Loans to the Borrower by the Lenders in
the maximum aggregate principal amount at any time
outstanding equal to (A) the Total Revolving Credit
Commitment, minus (B) the aggregate principal amount of
Swing Line Outstandings and Letter of Credit
Outstandings, (ii) for Swing Line Loans to the Borrower
by the Swing Line Lender in the maximum aggregate
principal amount at any time outstanding not to exceed
the Total Swing Line Commitment and (iii) for Letters of
Credit issued for the benefit of the Borrower by the
Issuing Bank in the maximum aggregate stated amount at
any time not to exceed the Total Letter of Credit
Commitment.
"Revolving Credit Loan" means a Loan made pursuant
to the Revolving Credit Facility (but specifically
excluding all Swing Line Loans and all Competitive Bid
Loans).
"Revolving Credit Notes" means, collectively, the
promissory notes of the Borrower evidencing Revolving
Credit Loans executed and delivered to the Lenders as
provided in Section 2.08(a) hereof substantially in the
form attached hereto as Exhibit I and incorporated herein
by reference, with appropriate insertions as to amounts,
dates and names of Lenders, as the same shall be amended,
modified or supplemented and in effect from time to time.
"Revolving Credit Termination Date" means the
earliest of (i) the Stated Revolving Credit Termination
Date or (ii) such date of termination of Lenders'
obligations pursuant to Section 9.01 upon the occurrence
of an Event of Default, or (iii) such date as the
Borrower may voluntarily and permanently terminate the
Revolving Credit Facility by payment in full of all Total
Outstandings.
"S&P" means Standard & Poor's Rating Group, a
division of McGraw-Hill Companies, Inc.
"Saks" means Saks Holdings, Inc., a Delaware
corporation.
"Saks Acquisition" has the meaning assigned thereto
in Section 5.01(a)(xiv) hereof.
"Saks Acquisition Agreement" has the meaning
assigned thereto in Section 5.01(a)(xv) hereof.
"Saks REMIC Subsidiary" means any of Calwin Realty
II, Inc., Win Realty Holdings II, Inc., Florida Win
Trust, Or. Win, Inc., York Win Realty, Inc., Fifth Win,
Inc., Ohio Win, Inc., Tex Win II, Inc., Vir. Win, Inc.,
Cal SFA, Inc., Penn SFA, Inc., Tex SFA, Inc., Fifth
Avenue Capital Trust and Fifteenth Win, Inc.
"Securitization Subsidiary" means Proffitt's Credit
Corporation, National Bank of the Great Lakes, SFA
Finance Company, SFA Finance Company II and any other
present or future Subsidiary (including any credit card
bank) of the Borrower that is, directly or indirectly,
wholly owned by the Borrower (except, in the case of SFA
Finance Company and SFA Finance Company II, for 1000
shares of Series A Preferred Stock of SFA Finance
Company owned by certain independent directors of SFA
Finance Company) and organized for the purpose of and is
only engaged in (i) originating, purchasing, acquiring,
financing, servicing or collecting accounts receivable
obligations of customers of the Borrower or its
Subsidiaries, (ii) issuing or servicing credit cards,
engaging in other credit card operations or financing
accounts receivable obligations of customers of the
Borrower and its Subsidiaries, (iii) the sale or
financing of such accounts receivable and interests
therein and (iv) other activities incident thereto.
"Senior Indenture" means that certain Indenture
dated as of May 21, 1997 among the Borrower and The First
National Bank of Chicago, as trustee, as amended from
time to time thereafter.
"Senior Notes" means the 8.125% Senior Notes due
2004 of the Borrower in the aggregate principal amount of
$125,000,000 issued pursuant to the Senior Indenture.
"Single Employer Plan" means any employee pension
benefit plan covered by Title IV of ERISA and in respect
of which the Borrower or any Subsidiary is an "employer"
as described in Section 4001(b) of ERISA, which is not a
Multi-employer Plan.
"Solvent" means, when used with respect to any
Person, that at the time of determination:
(i) the fair value of its assets (both at
fair valuation and at present fair saleable value
on an orderly basis) is in excess of the total
amount of its liabilities, including, without
limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry
on its business as conducted and as proposed to be
conducted.
"Stated Revolving Credit Termination Date" means
September 17, 2003.
"Subsidiary" means any corporation or other entity
in which more than 50% of its outstanding voting stock or
more than 50% of all equity interests is owned directly
or indirectly by the Borrower and/or by one or more of
the Borrower's Subsidiaries at or after the Closing Date,
and specifically includes Saks and each of its
subsidiaries as of the Closing Date; notwithstanding the
foregoing, the reference to "Subsidiary" or
"Subsidiaries" in Sections 6.01(f)(iii), (g), (k), (l),
(m), (o), or (r), Section 7.01(d), Section 7.09 (as
applicable to Sections 7.02 and 7.05) and Sections 7.12,
7.13, 7.18, 8.04, 8.05, 8.06, 8.07 (other than 8.07
(viii)), 8.08, 8.09, 8.12 and 11.20 and in the
introductory paragraph of Article VIII to the extent
relating to any of the Sections of such Article referred
to above does not include any Securitization Subsidiary.
"Swap Agreement" means one or more agreements
between the Borrower and another Person, on terms
mutually acceptable to the Borrower and such Person,
which agreements create Rate Hedging Obligations.
"Swing Line" means the revolving line of credit
established under the Revolving Credit Facility by the
Swing Line Lender in favor of the Borrower pursuant to
Section 2.02.
"Swing Line Lender" means, as of the Closing Date,
NationsBank, and thereafter any replacement or successor
thereto which is then a Lender and shall agree with the
Borrower to succeed to and become vested with all the
rights, powers, discretions, privileges and duties of the
Swing Line Lender, including without limitation as set
forth in Section 2.02 hereof.
"Swing Line Loans" means Loans made by the Swing
Line Lender to the Borrower under the Revolving Credit
Facility pursuant to Section 2.02.
"Swing Line Note" means the promissory note of the
Borrower evidencing Swing Line Loans executed and
delivered to the Swing Line Lender substantially in the
form attached hereto as Exhibit K and incorporated herein
by reference, as the same shall be amended, modified or
supplemented and in effect from time to time.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all
Swing Line Loans then outstanding.
"Swing Line Termination Date" has the meaning
assigned to such term in Section 2.02(g) hereof.
"Synthetic Lease Indebtedness" means, with respect
to a Person that is a lessee under a synthetic lease, an
amount equal to (i) the aggregate purchase price of any
property that the lessor under such synthetic lease
acquired, through one or a series of related
transactions, and thereafter leased to such Person
pursuant to such synthetic lease less (ii) the aggregate
amount of all payments of fixed rent or other rent
payments which reduce such Person's obligation under such
synthetic lease and which are not the financial
equivalent of interest. Synthetic Lease Indebtedness of
a Person shall also include, without duplication, the
amount of Synthetic Lease Indebtedness of others to the
extent guarantied by such Person.
"364 Day Facility" means the revolving credit
facility made available to the Borrower by the Lenders
under the 364 Day Facility Credit Agreement.
"364 Day Facility Commitment" means with respect to
each Lender, the obligation of such Lender to make loans
to the Borrower under the 364 Day Facility.
"364 Day Facility Credit Agreement" means that
certain Credit Agreement (364 Day Facility) among the
Borrower, the Agent, the Co-Syndication Agents, the
Documentation Agent and the Lenders of even date, as
amended, modified or supplemented from time to time.
"364 Day Facility Loans" means the Loans as defined
in the 364 Day Facility Credit Agreement.
"Total Combined Outstandings" means, as at any time
of determination, the sum of all Total Outstandings plus
all Revolving Credit Outstandings (as defined in the 364
Day Facility Credit Agreement).
"Total Facility Termination Date" has the meaning
assigned thereto in Section 11.09 hereof.
"Total Letter of Credit Commitment" means an amount
equal to $150,000,000.
"Total Outstandings" means, as at any time of
determination, the sum of the aggregate principal amount
of all Revolving Credit Loans then outstanding, Letter of
Credit Outstandings, Swing Line Outstandings and
Competitive Bid Outstandings.
"Total Swing Line Commitment" means an amount equal
to $50,000,000.
"Total Revolving Credit Commitment" means an amount
equal to $750,000,000, as reduced from time to time in
accordance with Section 2.10 hereof; the Total Letter of
Credit Commitment and the Total Swing Line Commitment are
included within, and are not in addition to, the Total
Revolving Credit Commitment.
"Type" means any type of Loan (i.e., a Base Rate
Loan, a Eurodollar Loan or a Competitive Bid Loan).
"Utilization Premium" means an additional interest
payment in an amount equal to 10 basis points per annum
calculated in accordance with Section 2.12(b) hereof.
"wholly owned" means, when used with respect to a
Subsidiary of the Borrower, that all of the outstanding
capital stock (excluding director qualifying shares) or
other comparable equity interest of such Subsidiary are
owned directly or indirectly by the Borrower.
"Year 2000 Compliant" has the meaning assigned
thereto in Section 6.01(u) hereof.
1.02 Accounting Terms. All accounting terms not
specifically defined herein shall have the meanings assigned
to such terms and shall be interpreted in accordance with
Generally Accepted Accounting Principles as in effect on the
date of the Audited Restated Financial Statements, which shall
be the same in all material respects as those accounting
principles applied in the preparation of the Combined Three
Month Statements, and applied on a Consistent Basis.
1.03 Terms Consistent. All of the terms defined in this
Agreement shall have such defined meanings when used in any of
the Loan Documents unless the context shall require otherwise.
All references to the Borrower, the Agent and any Lender shall
be deemed to include any successor or permitted assignee of
any thereof. All plural references and definitions shall have
a corresponding meaning in the singular, and all singular
references and definitions shall have a corresponding meaning
in the plural.
ARTICLE II
Revolving Credit Loans
2.01 Revolving Credit Loans.
(a) Revolving Credit Commitment. Subject to the terms
and conditions of this Agreement, each Lender severally agrees
to make Revolving Credit Loans to the Borrower, from time to
time on a pro rata basis as to the total borrowing of
Revolving Credit Loans requested by the Borrower on any day
determined by such Lender's Applicable Commitment Percentage
of the Total Revolving Credit Commitment up to but not
exceeding the Revolving Credit Commitment of such Lender;
provided, however, that the Lenders will not be required and
shall have no obligation to make any Revolving Credit Loans
(i) so long as a Default or an Event of Default has occurred
and is continuing or (ii) if the maturity of the Revolving
Credit Notes has been accelerated as a result of an Event of
Default. Within such limits, the Borrower may borrow, repay
and reborrow hereunder, a Base Rate Loan on a Business Day and
a Eurodollar Loan on a Eurodollar Business Day, from the
Closing Date until, but (as to borrowings and reborrowings)
not including, the Revolving Credit Termination Date;
(b) Amounts. The aggregate unpaid principal amount of
the Total Outstandings shall not exceed at any time an amount
equal to the Total Revolving Credit Commitment. Each
Revolving Credit Loan made, Converted or Continued, unless
made in accordance with Sections 2.01(c)(iv), 2.02(e) or
3.02(c) hereof, shall be in a principal amount of at least
$5,000,000 (or the remaining Total Revolving Credit Commitment
if less), and, if greater than $5,000,000, an integral
multiple of $1,000,000.
(c) Loans and Rate Selection.
(i) An Authorized Representative shall give the
Agent (1) at least three (3) Eurodollar Business Days'
irrevocable telephonic notice of each Eurodollar Loan
(whether representing an additional borrowing hereunder
or the Conversion of borrowing hereunder from Base Rate
Loans to Eurodollar Loans or the Continuation of
borrowing hereunder of Eurodollar Loans) prior to 11:30
A.M., Charlotte, North Carolina time; and (2) irrevocable
telephonic notice of each Base Rate Loan representing an
additional borrowing hereunder or the Conversion of
borrowing hereunder from Eurodollar Loans to Base Rate
Loans prior to 11:30 A.M. Charlotte, North Carolina time
on the day of such proposed Base Rate Loan. Each such
notice shall specify the amount of the Loan, the Type of
Loan, the date of the Loan and, if a Eurodollar Loan, the
Interest Period to be used in the computation of
interest. The Authorized Representative shall provide
the Agent written confirmation of each such telephonic
notice on the same day by telefacsimile transmission in
the form of a Borrowing Notice, for additional Loans, or
in the form attached hereto as Exhibit L and incorporated
herein by reference as to selection or Conversion of
interest rates as to outstanding Loans, in each case with
appropriate insertions, but failure to provide such
confirmation shall not affect the validity of such
telephonic notice. The duration of the initial Interest
Period for each Loan that is a Eurodollar Loan shall be
as specified in the initial Borrowing Notice. The
Borrower shall have the option to elect the duration of
subsequent Interest Periods and to Convert the Loans in
accordance with Section 2.11 hereof. If the Agent does
not receive a notice of election of duration of an
Interest Period or to Convert by the time prescribed
hereby and by Section 2.11 hereof, the Borrower shall be
deemed to have elected to Convert such Loan to (or
Continue such Loan as) a Base Rate Loan until the
Borrower notifies the Agent in accordance herewith and
with Section 2.11.
. (ii) Notice of receipt of each Borrowing Notice
shall be provided by the Agent to each Lender by
telephone with reasonable promptness, but not later than
1:00 P.M. Charlotte, North Carolina time on the same day
as Agent's receipt of such notice. The Agent shall
provide each Lender written confirmation of such
telephonic confirmation by telefacsimile transmission but
failure to provide such notice shall not affect the
validity of such telephonic notice.
(iii) Not later than 3:00 P.M., Charlotte, North
Carolina time on the date specified for each Loan, each
Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make the amount of the Loan
or Loans to be made by it on such day available to the
Agent, by depositing or transferring the proceeds thereof
in Dollars and in immediately available funds at the
Principal Office. The amount so received by the Agent
shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower not later
than 3:30 P.M., Charlotte, North Carolina time by
delivery of the proceeds thereof to the Borrower's
Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized
Representative.
(iv) Notwithstanding the foregoing, if a drawing is
made under any Letter of Credit prior to the Revolving
Credit Termination Date and payment in full to the
Issuing Bank of all amounts so drawn is not made by the
Borrower by 11:30 a.m. on the day of such drawing, then
notice of such drawing shall be provided promptly by the
Issuing Bank to the Agent and the drawing shall be paid
by the Agent without the requirement of notice from the
Borrower in immediately available funds which shall be
advanced by the Swing Line Lender under the Swing Line
(provided that a Swing Line Loan shall then be
available). If a drawing is presented under any Letter
of Credit in accordance with the terms thereof and the
Borrower shall not reimburse the Issuing Bank for the
amount of such drawing as provided above, and if a Swing
Line Loan in the amount of such drawing shall not be
available, then notice of such drawing or payment shall
be provided promptly by the Issuing Bank to the Agent and
the Agent shall provide notice to each Lender by
telephone. If notice to the Lenders of a drawing under
any Letter of Credit is given by the Agent at or before
1:00 P.M. Charlotte, North Carolina time on any Business
Day, the Borrower shall be deemed to have requested, and
each Lender shall, pursuant to the conditions of this
Agreement, make a Base Rate Loan under the Revolving
Credit Facility in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and
shall pay such amount to the Agent for the account of the
Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 3:00 P.M. Charlotte,
North Carolina time on the same Business Day. If notice
to the Lenders is given by the Agent after 1:00 P.M.
Charlotte, North Carolina time on any Business Day, the
Borrower shall be deemed to have requested, and each
Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make a Base Rate Loan under
the Revolving Credit Facility in the amount of such
Lender's Applicable Comitment Percentage of such drawing
or payment and shall pay such amount to the Agent for the
account of the Issuing Bank at the Principal Office in
Dollars and in immediately available funds before 1:00
P.M. Charlotte, North Carolina time on the next following
Business Day. Such Base Rate Loan shall continue unless
and until the Borrower Converts such Base Rate Loan in
accordance with the terms of Section 2.11 hereof.
2.02 Swing Line. Notwithstanding any other provision of
this Agreement to the contrary, in order to administer the
Revolving Credit Facility in an efficient manner and to
minimize the transfer of funds between the Agent and the
Lenders, the Swing Line Lender shall make available Swing Line
Loans under the Revolving Credit Facility to the Borrower
prior to the Revolving Credit Termination Date. Each
provision of Section 2.01(c) hereof applicable to Base Rate
Loans shall be applicable in all respects to each Swing Line
Loan.
(a) The Swing Line Lender shall not make any Swing Line
Loan pursuant hereto (i) if the Borrower is not in compliance
with all the conditions to the making of Revolving Credit
Loans set forth in this Agreement, (ii) if after giving effect
to such Swing Line Loan, the Swing Line Outstandings exceed
the Total Swing Line Commitment, or (iii) if after giving
effect to such Swing Line Loan, the sum of the Total
Outstandings exceeds the Total Revolving Credit Commitment.
(b) All Swing Line Loans shall bear interest at the rate
agreed to between the Borrower and the Swing Line Lender
(provided that in the absence of any agreed upon interest rate
for a Swing Line Loan, such Swing Line Loan shall bear
interest at the Base Rate) and, unless made in accordance with
Sections 2.01(c)(iv), 2.02(e) or 3.02(c), shall be in the
minimum principal amount of $1,000,000 (or the remaining Total
Swing Line Commitment, if less) and any increment of $100,000
in excess thereof.
(c) The principal amount of each Swing Line Loan shall
be payable on the earlier to occur of (i) the demand for
repayment thereof with a Revolving Credit Loan pursuant to
Section 2.02(e) below and (ii) the Swing Line Termination
Date.
(d) The Borrower and each Lender acknowledge that all
Swing Line Loans are to be made solely by the Swing Line
Lender to the Borrower but that each such Lender shall share
the risk of loss with respect to such Swing Line Loans by
making a Revolving Credit Loan in the manner set forth in
Section 2.02(e) below to repay such Swing Line Loan in an
amount equal to such Lender's Applicable Commitment Percentage
of such Swing Line Loan. The obligation of each Lender to so
pay its ratable share of the principal amount of outstanding
Swing Line Loans by making such Revolving Credit Loans up to
but not exceeding the Revolving Credit Commitment of such
Lender shall be absolute and unconditional and shall be made
without counterclaim, deduction or set-off by such Lender.
Without limiting the generality of the foregoing, each
Lender's obligation to pay its ratable share of the principal
amount of all outstanding Swing Line Loans by making such
Revolving Credit Loans as set forth above in this Section
2.02(d) shall not be affected by:
(i) any failure or inability of the Borrower to
satisfy the applicable conditions to borrowing set forth
in Section 5.02,
(ii) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents (including
such documents as defined in the 364 Day Facility Credit
Agreement), or
(iii) the occurrence of any Default or Event of
Default.
(e) The Swing Line Lender may, at any time, in its sole
discretion, by written notice to the Borrower, the Agent and
the Lenders, demand repayment of its Swing Line Loans. Any
such demand for repayment of the Swing Line Loans, and the
occurrence of the Swing Line Termination Date, shall be deemed
to constitute a Borrowing Notice delivered and received
pursuant to Section 2.01(c)(i) and (ii), effective on the date
of such demand or occurrence, respectively, with respect to a
Base Rate Loan advanced under the Revolving Credit Facility on
the date of such Borrowing Notice in the aggregate principal
amount of all outstanding Swing Line Loans. Each Lender shall
pay to the Agent, for the account of the Swing Line Lender, an
amount of such Base Rate Loan under the Revolving Credit
Facility equal to its Applicable Commitment Percentage
(determined before giving effect to any termination of the
Revolving Credit Commitments pursuant to Section 9.01) in the
manner described in Section 2.01(c)(iii).
(f) The Agent shall upon the receipt of a Revolving
Credit Loan pursuant to Section 2.02(e) in an amount
sufficient to repay any or all Swing Line Loan(s) then
outstanding, provide to the Swing Line Lender the amount
necessary to repay such Swing Line Loan(s) (which the Swing
Line Lender shall then apply to such repayment) and credit any
balance of the Revolving Credit Loan in immediately available
funds to the Borrower's Account.
(g) The Swing Line shall continue in effect until the
Revolving Credit Termination Date (the "Swing Line
Termination Date").
2.03 Competitive Bid Loans. (a) In addition to
borrowings of Revolving Credit Loans, at any time prior to the
Revolving Credit Termination Date the Borrower may, as set
forth in this Section 2.03, request the Lenders to make offers
to make Competitive Bid Loans to the Borrower in Dollars. 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 2.03.
The making of a Competitive Bid Loan by any Lender shall not
reduce such Lender's available Revolving Credit Commitment
except as a result of such Competitive Bid Loan reducing the
availability under the Total Revolving Credit Commitment.
Immediately after giving effect to each Competitive Bid Loan,
Total Outstandings shall not exceed the Total Revolving Credit
Commitment. Each Competitive Bid Loan may be repaid only on
the last day of the Interest Period with respect thereto
unless such payment is accompanied by the additional payment,
if any, required by Section 4.05.
(b) When the Borrower wishes to request offers from
Lenders to make Competitive Bid Loans, it shall give the Agent
(which shall promptly notify the Lenders) notice (a
"Competitive Bid Quote Request") to be received no later than
10:00 A.M. on the Business Day immediately preceding the date
of borrowing proposed therein (or such other time and date as
the Borrower and the Agent, with the consent of the Required
Lenders, may agree). The Borrower may request offers from
Lenders to make Competitive Bid Loans for up to four (4)
different Interest Periods in a single notice; provided that
the request for each separate Interest Period shall be deemed
to be a separate Competitive Bid Quote Request for a separate
borrowing (a "Competitive Bid Borrowing") of one or more
Competitive Bid Loans from the Lenders. Each such Competitive
Bid Quote Request shall be substantially in the form of
Exhibit D hereto and shall specify as to each Competitive Bid
Borrowing:
(i) the proposed date of such Competitive Bid
Borrowing, which shall be a Business Day;
(ii) the amount of such Competitive Bid Borrowing,
which shall be at least $5,000,000 (or a larger multiple
of $1,000,000) but shall not cause the limits specified
in Section 2.03(a) to be violated;
(iii) the duration of the Interest Period
applicable thereto; and
(iv) the date on which the Competitive Bid Quotes
are to be submitted if it is before the proposed date of
borrowing (the date on which such Competitive Bid Quotes
are to be submitted is called the "Quotation Date").
Except as otherwise provided in this Section 2.03(b), no
Competitive Bid Quote Request shall be given within five (5)
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 Competitive Bid Quote Request.
(c) (i) Each Lender may submit one or more Competitive
Bid Quotes, each containing an offer to make a
Competitive Bid Loan, in response to any Competitive Bid
Quote Request; provided that, if the Borrower's request
under Section 2.03(b) specifies more than one Interest
Period, such Lender may make a single submission
containing one or more Competitive Bid Quotes for each
such Interest Period. Each Competitive Bid Quote must be
submitted to the Agent not later than 10:00 A.M.
Charlotte, North Carolina time on the Quotation Date (or
such other time and date as the Borrower and the Agent,
with the consent of the Required Lenders, may agree; the
Agent shall promptly notify all Lenders of such other
agreed upon time and date); provided, that any
Competitive Bid 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 9:45
A.M. (or 15 minutes prior to such other agreed upon time)
Charlotte, North Carolina time on the Quotation Date.
Subject to the express provisions of this Agreement, any
Competitive Bid Quote so made shall be irrevocable except
with the consent of the Agent given at the instruction of
the Borrower.
(ii) Each Competitive Bid Quote shall be
substantially in the form of Exhibit F hereto and shall
specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Competitive
Bid Loan for which such offer is being made, which
principal amount shall be at least $1,000,000 (or a
larger multiple of $1,000,000); provided that (x)
the aggregate principal amount of all Competitive
Bid Loans for which a Lender submits Competitive
Bid Quotes in response to a Competitive Bid Quote
Request may not exceed the principal amount of the
Competitive Bid Borrowing for the Interest Period
for which offers were requested, and (y) the limits
specified in Section 2.03(a) shall not be exceeded;
(C) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/10,000th of
1%) offered for each such Competitive Bid Loan (the
"Absolute Rate"); and
(D) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no
Competitive Bid Quote shall contain qualifying,
conditional or similar language or propose terms other
than or in addition to those set forth in the applicable
Competitive Bid Quote Request, and, in particular, no
Competitive Bid Quote may be conditioned upon acceptance
by the Borrower of all (or some specified minimum) of the
principal amount of the Competitive Bid Loan for which
such Competitive Bid Quote is being made.
(d) The Agent shall, as promptly as practicable after
the Competitive Bid Quote is submitted (but in any event not
later than 10:30 A.M. Charlotte, North Carolina time on the
Quotation Date), notify the Borrower of the terms (i) of any
Competitive Bid Quote submitted by a Lender that is in
accordance with Section 2.03(c) and (ii) of any Competitive
Bid Quote that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Lender
with respect to the same Competitive Bid Quote Request. Any
such subsequent Competitive Bid Quote shall be disregarded by
the Agent unless such subsequent Competitive Bid Quote is
submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Agent's notice to the Borrower
shall specify (A) the aggregate principal amount of the
Competitive Bid Loans for which Competitive Bid Quotes have
been received and (B) the respective principal amounts and
Absolute Rates so offered by each Lender (identifying the
Lender that made each Competitive Bid Quote).
(e) Not later than 11:00 A.M. Charlotte, North Carolina
time on the Quotation Date (or such other time and date as the
Borrower and the Agent, with the consent of the Required
Lenders, may agree), the Borrower shall notify the Agent of
its acceptance or nonacceptance of the Competitive Bid Quotes
so notified to it pursuant to Section 2.03(d) (and the failure
of the Borrower to give such notice by such time shall
constitute nonacceptance) and the Agent shall promptly notify
each affected Lender. In the case of acceptance, such notice
shall specify the aggregate principal amount of Competitive
Bid Quotes for each Interest Period that are accepted. The
Borrower may accept any Competitive Bid Quote in whole or in
part (provided that any Competitive Bid Quote accepted in part
shall be at least $1,000,000 or a larger multiple of
$1,000,000); provided that:
(i) the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable
amount set forth in the related Competitive Bid Quote
Request;
(ii) the aggregate principal amount of each
Competitive Bid Borrowing shall be at least $5,000,000
(or a larger multiple of $1,000,000) but shall not cause
the limits specified in Section 2.03(a) to be violated;
(iii) acceptance of Competitive Bid Quotes may
be made only in ascending order of Absolute Rates,
beginning with the lowest rate so offered; and
(iv) the Borrower may not accept any Competitive Bid
Quote where the Agent has correctly advised the Borrower
that such offer fails to comply with Section 2.03(c)(ii)
or otherwise fails to comply with the requirements of
this Agreement (including, without limitation, Section
2.03(a)).
If Competitive Bid Quotes are made by two or more Lenders with
the same Absolute Rates, for an aggregate principal amount
that is greater than the amount in respect of which
Competitive Bid Quotes are accepted for the related Interest
Period (after taking into account the acceptance of all
Competitive Bid Quotes with lower Absolute Rates, if any,
offered by any Lender for such related Interest Period), then
the principal amount of Competitive Bid Loans in respect of
which such Competitive Bid Quotes are accepted shall be
allocated by the Borrower among such Lenders as nearly as
possible (in amounts of at least $1,000,000) in proportion to
the aggregate principal amount of such Competitive Bid Quotes.
Determinations by the Borrower of the amounts of Competitive
Bid Loans and the Absolute Rates as provided in Section
2.03(e)(iii) shall be conclusive in the absence of manifest
error.
(f) Any Lender whose Competitive Bid Quote has been
accepted in accordance with Section 2.03(e) shall, not later
than 1:00 P.M. Charlotte, North Carolina time on the date
specified for the making of such Competitive Bid Loan, make
the amount of such Competitive Bid Loan as accepted by the
Borrower available to the Agent at the Principal Office in
Dollars and in immediately available funds, for the account of
the Borrower. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same,
in Dollars and in immediately available funds, in the
Borrower's Account or otherwise as shall be directed by the
Borrower.
2.04 Payment of Interest. (a) The Borrower shall pay
interest to the Agent at the Principal Office (i) for the
account of each Lender in the case of each Revolving Credit
Loan, on the outstanding and unpaid principal amount of each
Revolving Credit Loan made by such Lender for the period
commencing on the date of such Loan until such Loan shall be
due at the Adjusted Eurodollar Rate or the Base Rate, as
elected or deemed elected by the Borrower or otherwise
applicable to such Loan as herein provided, (ii) for the
account of the Swing Line Lender in the case of each Swing
Line Loan, on the outstanding and unpaid principal amount of
each Swing Line Loan made by the Swing Line Lender for the
period commencing on the date of such Swing Line Loan until
such Swing Line Loan is paid in full by the Borrower or with
a Revolving Credit Loan pursuant to Section 2.02(e) at the
rate per annum as determined pursuant to Section 2.02(b), and
(iii) for the account of each Lender making a Competitive Bid
Loan, on the outstanding and unpaid principal amount of such
Competitive Bid Loan for the period commencing on the date of
such Competitive Bid Loan until such Competitive Bid Loan is
paid in full at the applicable Absolute Rate; provided,
however, that if any Event of Default shall have occurred and
be continuing, all amounts outstanding hereunder shall bear
interest thereafter (i) in the case of a Eurodollar Loan, at
a rate of interest per annum which shall be two percent (2%)
above the Adjusted Eurodollar Rate for such Eurodollar Loan
until the end of the Interest Period during which such Event
of Default occurred, and thereafter at a rate of interest per
annum which shall be two percent (2%) above the Base Rate,
(ii) or in the case of a Competitive Bid Loan, at a rate of
interest per annum which shall be two percent (2%) above the
applicable Absolute Rate for such Competitive Bid Loan until
the end of the Interest Period during which such Event of
Default occurred, and thereafter at a rate of interest per
annum which shall be two percent (2%) above the Base Rate, and
(iii) in the case of a Base Rate Loan or a Swing Line Loan, at
a rate of interest per annum which shall be two percent (2%)
above the Base Rate, or in each of (i), (ii) and (iii) above,
the maximum rate permitted by applicable law, whichever is
lower, from the date such amount was due and payable until the
date such amount is paid in full; provided further, it is
expressly agreed that the imposition of an additional or
higher rate of interest as provided in this Section 2.04 shall
not constitute a penalty or forfeiture.
(b) Interest on the outstanding principal balance of
each Loan shall be computed on the basis of a year of 360 days
and calculated for the actual number of days elapsed.
Interest on each Loan shall be paid (i) quarterly in arrears
on the first Business Day of each February, May, August and
November commencing November 2, 1998, on each Base Rate Loan
and each Swing Line Loan, (ii) on the last day of the
applicable Interest Period for each Fixed Rate Loan and, for
any Eurodollar Rate Loan having an Interest Period longer than
three months also on the last day of every third month of such
Interest Period, and (iii) upon payment or prepayment in full
of the principal amount of such Loan (or the date such payment
or prepayment is due if earlier).
2.05 Payment of Principal. All Total Outstandings shall
be due and payable to the Agent for the benefit of each Lender
(or the Swing Line Lender in the case of Swing Line
Outstandings and the Lender making Competitive Bid Loans in
the case of Competitive Bid Outstandings) in full on the
Revolving Credit Termination Date, or earlier as herein
expressly provided. Competitive Bid Loans shall be due and
payable to the Agent for the benefit of the Lender making such
Competitive Bid Loan in full on the last day of the Interest
Period for such Loan. The principal amount of any Loan may be
prepaid in whole or in part at any time without penalty;
provided, however, in connection with the prepayment of a
Fixed Rate Loan, the Borrower shall pay to the Agent for the
account of the applicable Lenders the amount, if any, required
under Section 4.05 hereof. In the event that at any time
Total Outstandings exceed the Total Revolving Credit
Commitment, the Borrower shall promptly repay an amount of the
Total Outstandings equal to or greater than such excess. All
prepayments made by the Borrower shall be in the amount of
$5,000,000 or such greater amount which is an integral
multiple of $1,000,000 (or with respect to Swing Line Loans,
in the amount of $1,000,000 or such greater amount which is an
integral multiple of $100,000), or such other amount as
necessary to comply with this Section 2.05 or with
Section 2.10, together with accrued and unpaid interest on the
amounts paid.
2.06 Payments; Non-Conforming Payments. (a) Each
payment of principal (including any prepayment), interest and
other amounts to be made by the Borrower under this Agreement
and other Loan Documents shall be made to the Agent at the
Principal Office, for the account of each Lender's Applicable
Lending Office, in Dollars and in immediately available funds,
without setoff, deduction or counterclaim, before 1:30 P.M.
Charlotte, North Carolina time on the date such payment is
due. With respect to Swing Line Loans and Competitive Bid
Loans, each payment of principal and payment of interest shall
be made to the Agent, for the account of the Swing Line
Lender's Applicable Lending Office or the Applicable Lending
Office of the Lender making such Competitive Bid Loan, as
applicable, at the Principal Office in Dollars and in
immediately available funds before 1:30 P.M. Charlotte, North
Carolina, time on the date such payment is due. The Borrower
shall give the Agent prior telephonic notice of any payment of
principal, such notice to be given by not later than 11:30
A.M. Charlotte, North Carolina time, on the date of such
payment.
(b) The Agent shall deem any payment by or on behalf of
the Borrower hereunder that is not made both (i) in Dollars
and in immediately available funds and (ii) prior to 1:30 P.M.
Charlotte, North Carolina time on the date payment is due to
be a non-conforming payment. Any such payment shall not be
deemed to be received by the Agent until the time such funds
become available funds. Any non-conforming payment shall be
deemed not to have been made for purposes of Section 9.01(a)
and (b) hereof. The Agent shall give prompt notice to the
Authorized Representative and each of the Lenders (confirmed
in writing) if any payment is non-conforming. Interest shall
continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available
funds (but in no event less than the period from the date of
such payment to the next succeeding Business Day) at the
respective rates of interest per annum specified in Section
2.04(a) in respect of late payments of interest, from the date
such amount was due and payable until the date such amount is
paid in full.
(c) In the event that any payment hereunder or under the
Notes becomes due and payable on a day other than a Business
Day, then such due date shall be extended to the next
succeeding Business Day unless provided otherwise under
clause (a) (ii) under the definition of "Interest Period";
provided, that interest shall continue to accrue during the
period of any such extension.
2.07 Borrower's Account. The Borrower shall
continuously maintain the Borrower's Account for the purposes
herein contemplated.
2.08 Notes. (a) Revolving Credit Loans made by each
Lender shall be evidenced by, and be repayable with interest
in accordance with the terms of, the Revolving Credit Note
payable to the order of such Lender in the amount of its
Revolving Credit Commitment, which Revolving Credit Note shall
be dated the Closing Date or such later date pursuant to an
Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
(b) Competitive Bid Loans made by each Lender shall be
evidenced by, and be repayable with interest in accordance
with the terms of, the Competitive Bid Note payable to the
order of such Lender, which shall be dated the Closing Date or
such later date pursuant to an Assignment and Acceptance and
shall be duly completed, executed and delivered by the
Borrower.
(c) Swing Line Loans made by the Swing Line Lender shall
be evidenced by, and be repayable with interest in accordance
with the terms of, the Swing Line Note dated the Closing Date
or such later date in the event of a substitute Swing Line
Lender and shall be duly executed and delivered by the
Borrower.
2.09 Pro Rata Payments. Except as otherwise provided
herein, (a) each payment and prepayment on account of the
principal of and interest on the Revolving Credit Loans and
the fees described in Section 2.12 hereof shall be made to the
Agent in the aggregate amount payable to the Lenders for the
account of the Lenders pro rata based on their Applicable
Commitment Percentages, (b) each payment on account of the
principal of and interest on a Competitive Bid Loan shall be
made to the Agent for the account of the respective Lender
making such Competitive Bid Loan, (c) each payment on account
of the principal of and interest on a Swing Line Loan shall be
made to the Agent for the account of the Swing Line Lender,
(d) all payments to be made by the Borrower for the account
of each of the Lenders on account of principal, interest and
fees, shall be made without set-off or counterclaim, and
(e) the Agent will promptly distribute such payments received
to the Lenders as provided for herein.
2.10 Reductions. The Borrower shall, by notice from an
Authorized Representative, have the right from time to time
(but not more frequently than once during each calendar
quarter upon not less than five (5) Business Days written
notice to the Agent) to reduce the Total Revolving Credit
Commitment. The Agent shall give each Lender, within one (1)
Business Day, telephonic notice (confirmed in writing) of such
reduction. Each such reduction shall be in the amount of
$10,000,000 or such greater amount which is in an integral
multiple of $5,000,000, and shall permanently reduce the Total
Revolving Credit Commitment and the Revolving Credit
Commitment of each Lender pro rata. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by
payment of the principal amount of the Total Outstandings to
the extent that the Total Outstandings exceed the Total
Revolving Credit Commitment after giving effect to such
reduction, together with amounts required under Section 4.05.
2.11 Conversions and Elections of Subsequent Interest
Periods. The Borrower may:
(a) upon notice to the Agent on or before 11:30 A.M.
Charlotte, North Carolina time on any Business Day Convert all
or a part of Eurodollar Loans to Base Rate Loans on the last
day of the Interest Period for such Eurodollar Loans; and
(b) provided that no Default or Event of Default shall
have occurred and be continuing and subject to the limitations
set forth below and in Sections 4.01, 4.02 and 4.03 hereof, on
three (3) Eurodollar Business Days' notice to the Agent on or
before 11:30 A.M. Charlotte, North Carolina time:
(i) Continue Eurodollar Loans and elect a
subsequent Interest Period for all or a portion of
Eurodollar Loans to begin on the last day of the current
Interest Period for such Eurodollar Loans; or
(ii) Convert Base Rate Loans (other than Swing Line
Loans) to Eurodollar Loans on any Eurodollar Business
Day.
Notice of any such Continuation or Conversion shall
specify the effective date of such Continuation or Conversion
and, with respect to Eurodollar Loans, the Interest Period to
be applicable to the Loan as Continued or Converted. Each
Continuation and Conversion pursuant to this Section 2.11
shall be subject to the limitations on Eurodollar Loans set
forth in the definition of "Interest Period" herein and in
Sections 2.01(a), (b) and (c) and Article IV hereof. All such
Continuations or Conversions of Loans shall be effected pro
rata based on the Applicable Commitment Percentages of the
Lenders.
2.12 Facility Fees and Utilization Premium.
(a) Facility Fees. For the period beginning on the
Closing Date and ending on the Revolving Credit Termination
Date, the Borrower agrees to pay to the Agent, for the
pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, the Applicable Facility Fee payable
quarterly in arrears on the amount of the Total Revolving
Credit Commitment. Such payments of fees provided for in this
Section 2.12 (a) shall be due in arrears on the first Business
Day of each February, May, August and November, beginning
November 2, 1998 to and on the Revolving Credit Termination
Date. Notwithstanding the foregoing, so long as any Lender
fails to make available any portion of its Revolving Credit
Commitment when requested, such Lender shall not be entitled
to receive payment of its pro rata share of such fee until
such Lender shall make available such portion. Such fee shall
be calculated on the basis of a year of 360 days for the
actual number of days elapsed.
(b) Utilization Premium. For the period beginning on
the Closing Date and ending on the Total Facility Termination
Date, the Borrower agrees to pay to the Agent, for the pro
rata benefit of the Lenders based on their Applicable
Commitment Percentages, an additional interest payment on each
day on which the amount of Total Combined Outstandings exceeds
$750,000,000 in an amount equal to the Utilization Premium
times the difference of Total Outstandings less all Swing Line
Outstandings and Competitive Bid Outstandings ("Adjusted Total
Outstandings") calculated on the basis of a year of 360 days.
Notwithstanding the foregoing, such additional interest
payment shall also be payable on the average daily amount of
the Adjusted Total Outstandings during the period commencing
on the Closing Date and continuing until but excluding the
date on which the certificate is delivered to the Agent
pursuant to Section 7.01(b)(ii) hereof immediately following
the third fiscal quarter of Fiscal Year 1998. Such additional
interest payment shall be payable in arrears on the first
Business Day of each February, May, August and November,
beginning November 2, 1998.
2.13 Deficiency Loans. No Lender shall be responsible
for any default of any other Lender in respect to such other
Lender's obligation to make any Loan hereunder nor shall the
Revolving Credit Commitment of any Lender hereunder be
increased as a result of such default of any other Lender.
Without limiting the generality of the foregoing, in the event
any Lender shall fail to advance funds to the Borrower as
herein provided, the Agent may in its discretion, but shall
not be obligated to, advance under the applicable Note in its
favor as a Lender all or any portion of such amount or amounts
(each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest
rate or rates to which such other Lender would have been
entitled had it made such advance under its applicable Note;
provided, that upon payment to the Agent from such other
Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest
thereon, from the most recent date or dates interest was paid
to the Agent by the Borrower on each Loan comprising the
deficiency advance at the interest rate per annum for
overnight borrowing by the Agent from the Federal Reserve
Bank, then such payment shall be credited against the
applicable Note of the Agent in full payment of such
deficiency advance and the Borrower shall be deemed to have
borrowed the amount of such deficiency advance from such other
Lender as of the most recent date or dates, as the case may
be, upon which any payments of interest were made by the
Borrower thereon.
2.14 Use of Proceeds. The proceeds of the Loans shall
be used by the Borrower and its Subsidiaries to provide
working capital, to finance capital expenditures, to finance
Permitted Acquisitions and to provide for the general
corporate purposes of the Borrower and its Subsidiaries. None
of such proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock or for the
purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for
any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" directly or indirectly
secured by margin stock within the meaning of Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board.
2.15 Additional Fees. In addition to any fees described
above, the Borrower agrees to pay to the Agent, NMS and
NationsBank such other fees as may be agreed to in a separate
writing or writings.
ARTICLE III
Letters of Credit
3.01 Letters of Credit. The Issuing Bank agrees,
subject to the terms and conditions of this Agreement, upon
request and for the account of Borrower, to issue from time to
time Letters of Credit for the Borrower's general corporate
purposes upon delivery to the Issuing Bank of an Application
and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank; provided, that the Letter of
Credit Outstandings shall not exceed the Total Letter of
Credit Commitment. No Letter of Credit shall be issued by the
Issuing Bank with an expiry date or payment date occurring
subsequent to the fifth Business Day preceding the Stated
Revolving Credit Termination Date. The Issuing Bank shall not
issue any Letter of Credit if the Total Outstandings when
added to the face amount of any requested Letter of Credit
would exceed the Total Revolving Credit Commitment.
3.02 Reimbursement.
(a) The Borrower hereby unconditionally and irrevocably
agrees immediately to pay to the Issuing Bank on demand at the
office designated by the Issuing Bank all amounts required to
pay all drafts drawn under the Letters of Credit and all
reasonable and customary expenses incurred by the Issuing Bank
in connection with the Letters of Credit. The Borrower's
obligations to pay the Issuing Bank under this Section 3.02,
and the Issuing Bank's right to receive the same, shall be
absolute, irrevocable and unconditional and shall not be
affected by any circumstance whatsoever. If the Borrower
fails to make payment in full to the Issuing Bank of all
amounts drawn under any Letter of Credit by 11:30 a.m. on the
date of such drawing, then to the extent permitted by
Sections 2.01(c)(iv) and 3.02(c)(i) and (ii) hereof, all
amounts owing in connection with a Letter of Credit shall be
paid pursuant to Swing Line Loans or Revolving Credit Loans.
The Borrower agrees that the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any
Letter of Credit, any drafts or other documents otherwise in
order which may be signed or issued by an administrator,
executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver,
attorney in fact or other legal representative of a party who
is authorized under such Letter of Credit to draw or issue any
drafts or other documents. The Borrower agrees to pay the
Issuing Bank interest on any amounts not paid when due
hereunder at the Base Rate plus two percent (2%), or the
maximum rate permitted by applicable law, if lower.
(b) In accordance with the provisions of Section
2.01(c) hereof, the Issuing Bank shall notify the Agent (and
shall also notify the Borrower) of any drawing under any
Letter of Credit as promptly as practicable following the
receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a
Participation in the liability of the Issuing Bank in respect
of each Letter of Credit in an amount equal to such Lender's
Applicable Commitment Percentage of such liability, and to the
extent that the Borrower is obligated to pay the Issuing Bank
under Section 3.02(a), each Lender (other than the Issuing
Bank) thereby shall, as hereinafter described, absolutely,
unconditionally and irrevocably assume, and shall be
unconditionally obligated to pay to the Issuing Bank its
Applicable Commitment Percentage of the liability of the
Issuing Bank under such Letter of Credit in the manner set
forth below:
(i) With respect to amounts owing in connection
with a Letter of Credit for which Swing Line Loans shall
then be available, such Swing Line Loans shall be
advanced under the Swing Line and each Lender (including
the Swing Line Lender in its capacity as a Lender) shall
share in the risk of loss with respect to such Swing Line
Loans by, at the request of the Swing Line Lender, making
a Revolving Credit Loan to repay such Swing Line Loan in
an amount equal to such Lender's Applicable Commitment
Percentage of such Swing Line Loan as set forth in
Section 2.02.
(ii) With respect to amounts owing in connection
with a Letter of Credit for which a Swing Line Loan shall
not be available, each Lender (including the Issuing Bank
in its capacity as a Lender) prior to the Revolving
Credit Termination Date, shall, subject to the terms and
conditions of Article II, make a Revolving Credit Loan
bearing interest at the Base Rate to the Borrower by
paying to the Agent for the account of the Issuing Bank
at the Principal Office in Dollars and in immediately
available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of
Credit, all as described in and pursuant to Section
2.01(c)(iv).
(iii) With respect to drawings under any of the
Letters of Credit for which a Revolving Credit Loan is
not made as set forth in clause (ii) above, each Lender,
upon receipt from the Agent of notice of a drawing in the
manner described in Section 2.01(c), shall promptly pay
to the Agent for the account of the Issuing Bank, prior
to the applicable time set forth in Section 2.01(c), its
Applicable Commitment Percentage of such drawing.
Simultaneously with the making of each such payment by a
Lender to the Agent for the account of the Issuing Bank,
such Lender shall, automatically and without any further
action on the part of the Issuing Bank or such Lender,
acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting
interest) in the related Reimbursement Obligation of the
Borrower. The Lenders' acquisition of and payment for
Participations in any Reimbursement Obligation as set
forth in this clause (iii) shall occur only if such
Reimbursement Obligation is not paid pursuant to Swing
Line Loans or Revolving Credit Loans. The Reimbursement
Obligations of the Borrower shall be immediately due and
payable whether by Revolving Credit Loans made in
accordance with Section 2.01(c) or otherwise.
(iv) Each Lender's obligation to make payment to the
Agent for the account of the Issuing Bank pursuant to
this Section 3.02(c), and the right of the Issuing Bank
to receive the same, shall be made without any offset,
abatement, withholding or reduction whatsoever. If any
Lender is obligated to pay but does not pay amounts to
the Agent for the account of the Issuing Bank in full
upon such request as required by this Section 3.02(c),
such Lender shall, on demand, pay to the Agent for the
account of the Issuing Bank interest on the unpaid amount
for each day during the period commencing on the date of
notice given to such Lender pursuant to Section 2.01(c)
until such Lender pays such amount to the Agent for the
account of the Issuing Bank in full at the interest rate
per annum for overnight borrowing by the Issuing Bank
from the Federal Reserve Bank.
(v) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set
forth in clause (iii) above, then at any time payment is
received by the Issuing Bank as issuer of the Letter of
Credit from the Borrower of such Reimbursement
Obligation, in whole or in part, the Issuing Bank shall
pay to each Lender an amount equal to its Applicable
Commitment Percentage of such payment from the Borrower.
(vi) Nothing contained herein shall be deemed to
release the Issuing Bank from any obligation it may incur
to reimburse any Lender arising from the Issuing Bank's
wrongful payment of a drawing under any Letter of Credit
as a result of its gross negligence or willful
misconduct.
(d) Promptly following the end of each calendar quarter,
the Issuing Bank shall deliver to the Agent, and the Agent
shall deliver to each Lender, a notice describing the
aggregate undrawn amount of all Letters of Credit at the end
of such quarter. Upon the request of any Lender from time to
time, the Issuing Bank shall deliver to the Agent, and the
Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each
Outstanding Letter of Credit.
(e) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set
forth in Section 5.01 and Section 5.02 hereof, be subject to
the conditions that such Letter of Credit be in such form and
contain such terms as shall be reasonably satisfactory to the
Issuing Bank consistent with the then current practices and
procedures of the Issuing Bank with respect to similar letters
of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters
of Credit as the Issuing Bank shall have reasonably requested
consistent with such practices and procedures. All Letters of
Credit shall be issued pursuant to and subject to the Uniform
Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all
subsequent amendments and revisions thereto.
(f) Without duplication of Section 11.11 hereof, the
Borrower hereby agrees to defend, indemnify and hold harmless
the Issuing Bank, each other Lender and the Agent from and
against any and all claims and damages, losses, liabilities,
reasonable costs and expenses which the Issuing Bank, such
other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by
any Person by reason of or in connection with the issuance or
transfer of or payment or failure to pay under any Letter of
Credit; provided, that the Borrower shall not be required to
indemnify the Issuing Bank, any other Lender or the Agent for
any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by the willful
misconduct or gross negligence of the party to be indemnified.
The provisions of this Section 3.02(f) shall survive repayment
of the Obligations, the occurrence of the Total Facility
Termination Date, and expiration or termination of this
Agreement.
(g) Without limiting Borrower's rights as set forth in
Section 3.02(f) above, the obligation of the Borrower to
immediately reimburse the Issuing Bank for drawings made under
Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and such Letters of Credit
and the related Applications and Agreements for Letters of
Credit, notwithstanding the existence of any of the following
circumstances:
(i) any lack of validity or enforceability of the
Letter of Credit, the obligation supported by the Letter
of Credit or any other agreement or instrument relating
thereto (collectively, the "Related Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related Documents;
(iii) the existence of any claim, setoff,
defense or other rights which the Borrower may have at
any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), Agent,
Lenders or any other Person, whether in connection with
the Loan Documents (including without limitation such
documents as defined in the 364 Day Facility Credit
Agreement), the Related Documents or any unrelated
transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a
Letter of Credit (or any persons or entities for whom
such beneficiary or any such transferee may be acting),
Agent, Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by Agent, with or without notice to or approval
by the Borrower in respect of any of Borrower's
Obligations under this Agreement; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing; provided, however, that nothing contained
herein shall be deemed to release the Issuing Bank or any
other Lender of any liability for actual loss arising as
a result of its gross negligence or willful misconduct.
3.03 Letter of Credit Fee. The Borrower agrees to pay
(i) to the Agent, for the pro rata benefit of the Lenders
based on their Applicable Commitment Percentages, a fee per
annum on the aggregate amount available to be drawn on each
outstanding Letter of Credit at a rate equal to the Applicable
Interest Addition as in effect from time to time which fee
shall be deemed immediately earned when paid and (ii) to the
Issuing Bank for its own account, as issuer of each Letter of
Credit, a fee per annum equal to 0.125% of the aggregate
amount available to be drawn on each outstanding Letter of
Credit which fee shall be deemed immediately earned when paid.
Such payments of fees provided for in this Section 3.03 with
respect to each Letter of Credit shall be payable in arrears
in quarterly installments on the first Business Day of each
February, May, August and November, commencing November 2,
1998. Such fees shall be calculated on the basis of a year of
360 days for the actual number of days elapsed.
3.04 Administrative Fees. The Borrower shall pay to the
Issuing Bank such administrative fee and other fees, if any,
in connection with the Letters of Credit in such amounts and
at such times as the Issuing Bank and the Borrower shall agree
in writing from time to time.
3.05 Existing Letters of Credit. The Existing Letters
of Credit shall be deemed issued hereunder as of the Closing
Date and constitute both usage of the Total Letter of Credit
Commitment and Letter of Credit Outstandings. Accordingly,
each of the Lenders (other than the Issuing Bank) shall be
deemed to have, as of the Closing Date, a Participation in the
liability of the Issuing Bank in respect of each such Existing
Letter of Credit in an amount equal to such Lender's
Applicable Commitment Percentage of such liability.
ARTICLE IV
Change in Circumstances
4.01 Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with
respect to any Fixed Rate Loans, its Note, or its
obligation to make Eurodollar Loans, or change the basis
of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its
Note in respect of any Fixed Rate Loans (other than taxes
imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar
requirement (other than the Reserve Requirement utilized
in the determination of the Adjusted Eurodollar Rate)
relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments
of, such Lender (or its Applicable Lending Office),
including the Revolving Credit Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or on the London interbank
market any other condition affecting this Agreement or
its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost
to such Lender (or its Applicable Lending Office) of making,
Converting into, Continuing, or maintaining any Fixed Rate
Loans or to reduce any sum received or receivable by such
Lender (or its Applicable Lending Office) under this Agreement
or its Notes with respect to any Fixed Rate Loans, then the
Borrower shall pay to such Lender on demand such amount or
amounts as will compensate such Lender for such increased cost
or reduction. If any Lender requests compensation by the
Borrower under this Section 4.01(a), the Borrower may, by
notice to such Lender (with a copy to the Agent), suspend the
obligation of such Lender to make or Continue Eurodollar
Loans, or to Convert Base Rate Loans into Loans of such Type,
until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of
Section 4.04 shall be applicable); provided that such
suspension shall not affect the right of such Lender to
receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or
in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether
or not having the force of law) of any such Governmental
Authority, central bank, or comparable agency, has or would
have the effect of reducing the rate of return on the capital
of such Lender or any corporation controlling such Lender as
a consequence of such Lender's obligations hereunder to a
level below that which such Lender or such corporation could
have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect
to capital adequacy), then from time to time upon demand the
Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 4.01 for a period not
greater than 180 days and will designate a different
Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under
this Section 4.01 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to
be paid to it hereunder which shall be conclusive when made in
good faith and in the absence of manifest error. In
determining such amount, such Lender may use any reasonable
averaging and attribution methods. Any claim for compensation
under this Section 4.01 shall be made by the applicable Lender
within 180 days after the date on which the officer of such
Lender who has responsibility for compliance with the
obligations under this Agreement knows or has reason to know
of such Lender's right to any compensation under this Section
4.01 or, if any such Lender fails to deliver such demand
within such 180-day period, such Lender shall only be entitled
to compensation under this Section 4.01 from and after the
date that is 180 days prior to the date such Lender delivers
such demand.
4.02. Limitation on Types of Loans. If on or prior to
the first day of any Interest Period for any Eurodollar Loan:
(a) the Agent reasonably determines (which
determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the
Adjusted Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine
(which determination shall be conclusive) and notify the
Agent that the Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof
and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar
Loans, Continue Eurodollar Loans, or to Convert Base Rate
Loans into Eurodollar Loans.
4.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to make, maintain, or
fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's
obligation to make or Continue Eurodollar Loans and to Convert
Base Rate Loans into Eurodollar Loans shall be suspended until
such time as such Lender may again make, maintain, and fund
Eurodollar Loans (in which case the provisions of Section 4.04
shall be applicable).
4.04 Treatment of Affected Loans. If the obligation of
any Lender to make a Eurodollar Loan or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 4.01, 4.02 or 4.03 hereof (such
Eurodollar Loans being herein called "Affected Loans"), such
Lender's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current
Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 4.03 hereof, on such earlier
date as such Lender may specify to the Borrower with a copy to
the Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Section
4.01, 4.02 or 4.03 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Affected Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such
Lender's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be
made or Continued instead as Base Rate Loans, and all
Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall be Converted instead into (or
shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to
the Agent) that the circumstances specified in Section 4.01,
4.02 or 4.03 hereof that gave rise to the Conversion of such
Lender's Affected Loans pursuant to this Section 4.04 no
longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when Eurodollar
Loans made by other Lenders are outstanding, such Lender's
Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such
outstanding Eurodollar Loans made by other Lenders, to the
extent necessary so that, after giving effect thereto, all
Loans held by the Lenders holding Eurodollar Loans and by such
Lender are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their respective
Revolving Credit Commitment.
4.05 Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender)
to compensate it for any loss, cost, or expense incurred by it
as a result of:
(a) any payment, prepayment, or Conversion of a
Fixed Rate Loan for any reason (including, without
limitation, the acceleration of the Loans pursuant to
Section 9.01) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any
condition precedent specified in Section 5.02 to be
satisfied) to borrow, Convert, Continue, or prepay a
Fixed Rate Loan on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the
relevant Borrowing Notice, prepayment, Continuation, or
Conversion under this Agreement.
4.06 Taxes. (a) Any and all payments by the Borrower
to or for the account of any Lender or the Agent hereunder or
under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the
case of each Lender and the Agent, (i) taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any
political subdivision thereof (ii) any taxes (other than
withholding taxes) that would not be imposed but for a
connection between the Agent or a Lender and the jurisdiction
imposing such taxes (other than a connection arising solely by
virtue of the activities of the Agent or such Lender pursuant
to or in respect of this Agreement or any other Loan
Document), (iii) any withholding taxes payable with respect
to payments hereunder or under any other Loan Document under
applicable law in effect on the date hereof, and (iv) and
taxes arising after the date hereof solely as a result of or
attributable to a Lender changing its Applicable Lending
Office after the date such Lender becomes a party hereto (all
such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable
under this Agreement or any other Loan Document to any Lender
or the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 4.06) such Lender or the Agent receives an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority
in accordance with applicable law, and (iv) the Borrower shall
furnish to the Agent, at its principal office, the original or
a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which
arise from any payment made under this Agreement or any other
Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this
Section 4.06) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Lender listed on the signature pages hereof and
on or prior to the date on which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so
long as such Lender remains lawfully able to do so), shall
provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying
that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business
in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the
appropriate form pursuant to Section 4.06(d) (unless such
failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be
entitled to indemnification under Section 4.06(a) or 4.06(b)
with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to
recover such Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Lender pursuant to this
Section 4.06, then such Lender will agree to use reasonable
efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to
such Lender.
(g) Within thirty (30) days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent the
original or a certified copy of a receipt evidencing such
payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 4.06
shall survive the expiration or termination of this Agreement
and repayment in full of the Notes and all other Obligations
and the occurrence of the Total Facility Termination Date.
(i) Any Lender claiming additional amounts payable
pursuant to this Section 4.06 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to file any certificate or document requested by
the Borrower or to change the jurisdiction of its Applicable
Lending Office if the making of such filing or change would
avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole
judgment of such Lender, be disadvantageous to such Lender.
The Borrower shall promptly upon request by any Lender or the
Agent take all actions (including, without limitation, the
completion of forms and the provisions of information to the
appropriate taxing authorities) reasonably requested by such
Lender or the Agent to secure the benefit of any exemption
from, or relief with respect to, Taxes or Other Taxes in
relation to any amounts payable under this Agreement.
(j) In the event that an additional payment is made
under Section 4.06(a) or 4.06(c) for the account of any Lender
and such Lender, in its reasonable opinion, determines that it
has received or been granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it
in respect of or calculated with reference to the deduction or
withholding giving rise to such payment, such Lender shall, to
the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or
repayment, pay to the Borrower such amount as such Lender
shall reasonably determine to be attributable to such
deduction or withholding and as will leave such Lender (after
such payment) in no better or worse position than it would
have been in if the Borrower had not been required to make
such deduction or withholding.
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.01 Conditions of Initial Loan and Issuance of Letters
of Credit. The obligation of the Lenders to make the initial
Loan and of the Issuing Bank to issue the Letters of Credit is
subject to the following conditions precedent:
(a) The Agent shall have received on the Closing Date,
in form and substance satisfactory to the Agent and Lenders,
or otherwise be satisfied as to, each of the following:
(i) executed originals of each of this Agreement,
the Notes and the other Loan Documents and the 364 Day
Facility Credit Agreement and the promissory notes and
loan documents referred to therein, together with all
schedules and exhibits thereto;
(ii) favorable written opinions of special counsel
or in-house counsel to the Borrower and the Guarantors
dated the Closing Date, addressed to the Agent and the
Lenders and satisfactory to the Agent, the Lenders and to
Smith Helms Mulliss & Moore, L.L.P., special counsel to
the Agent, substantially in the form of Exhibit M
attached hereto and incorporated herein by reference;
(iii) Organizational Action of the Borrower and
each of the Guarantors certified by its secretary or
assistant secretary or other appropriate official as of
the Closing Date, appointing (in the case of the
Borrower) the initial Authorized Representatives and
approving and adopting the Loan Documents to be executed
by such Person, and authorizing the execution and
delivery thereof and the incurrence of obligations
thereunder;
(iv) specimen signatures of officers of the Borrower
and each Guarantor executing the Loan Documents on behalf
of such Person, certified by the secretary or assistant
secretary or other appropriate official of the Borrower
or Guarantor, as applicable;
(v) the Organizational Documents of the Borrower
and each Guarantor certified as of a recent date by the
Secretary of State or other appropriate Governmental
Authority of its jurisdiction of incorporation (or other
organization, as applicable);
(vi) the Operating Documents of the Borrower and
each Guarantor certified as of the Closing Date as true
and correct by the secretary or assistant secretary or
other appropriate official of the Person to whom such
Operating Documents relate;
(vii) certificates issued as of a recent date by
the Secretary of State or other appropriate Governmental
Authority of its jurisdiction of incorporation (or other
organization, as applicable) as to the due existence and,
if issued by such governmental authority, good standing
of the Borrower and each Guarantor therein;
(viii) appropriate certificates of qualification
to do business, good standing and, where appropriate,
authority to conduct business under assumed name, issued
in respect of the Borrower and each Guarantor as of a
recent date by the Secretary of State or other
appropriate Governmental Authority of each jurisdiction
in which the failure to be qualified to do business or
authorized so to conduct business could reasonably be
expected to have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative of the Borrower in the form of Exhibit C
hereto;
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating pro forma compliance
with the financial covenants contained in Sections 8.02
and 8.03, all as of May 2, 1998, substantially in the
form of Exhibit N attached hereto;
(xi) an initial Borrowing Notice;
(xii) all fees payable by the Borrower on the
Closing Date to the Agent, NationsBank, NMS and the
Lenders, including any upfront fee as agreed to in
writing;
(xiii) historical pro forma consolidated
financial statements giving effect to the proposed
combination with Saks (the "Saks Acquisition") as set
forth in the Borrower's Registration Statement on Form
S-4, Registration No.333-60123, as filed with the
Securities and Exchange Commission on July 29, 1998 (the
"Filing Date") as amended by each amendment thereto (as
so amended, the "Registration Statement"), as well as the
actual historical consolidated financial statements of
the Borrower and its Subsidiaries incorporated by
reference in such Registration Statement;
(xiv) certificate of an Authorized
Representative stating that all conditions precedent to
the consummation of the Saks Acquisition as set forth in
the Agreement and Plan of Merger dated as of July 4, 1998
(the "Saks Acquisition Agreement") have been satisfied or
waived;
(xv) fully executed copy of the Saks Acquisition
Agreement and other related documents, instruments and
agreements requested by the Agent, each certified as true
and complete by an Authorized Representative;
(xvi) evidence as to the termination of that
certain Credit Agreement among Saks, The Chase Manhattan
Bank, as Administrative Agent, and the other lenders
party thereto dated as of October 8, 1996 and repayment
in full of all obligations (other than the undrawn
principal amount of the letters of credit then
outstanding listed on Schedule 8.04 hereof) owing
thereunder;
(xvii) a certificate of an Authorized
Representative as to the occurrence or truthfulness, as
applicable, of the matters set forth in Section 5.01(b)
hereof as of the Closing Date; and
(xviii) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby.
(b) Each of the following shall have occurred or be
true:
(i) there shall not be any action, suit,
investigation or proceeding pending or threatened by,
before or otherwise involving any Governmental Authority
or other Person that could reasonably be expected to have
a material adverse effect on (x) the business, business
prospects, results of operations or condition (financial
or otherwise) of the Borrower or its Subsidiaries or (y)
the ability of the Borrower or its Subsidiaries to
observe and perform the covenants and agreements
contained herein or in any other Loan Document or the
ability of any Lender to receive the benefit of any
remedy provided thereto under any Loan Document or (z)
any transaction contemplated hereby;
(ii) consummation of the Saks Acquisition, which
shall not have a Material Adverse Effect; and
(iii) the Borrower and its Subsidiaries shall be
in compliance with respect to all existing financial
obligations.
(c) In the good faith judgment of the Agent and the
Lenders:
(i) there shall not have occurred a material
adverse change since the Filing Date in the business,
business prospects, results of operations or condition
(financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole or Saks and its
Subsidiaries taken as a whole, or in the facts and
information regarding such entities as represented to
date;
(ii) the Agent and NMS shall have completed all due
diligence deemed necessary with respect to the business,
operations, financial condition and prospects of Saks and
its Subsidiaries; and
(iii) the Agent shall have received and
reviewed, with results satisfactory to the Agent and its
counsel, all information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual
or contingent), real estate leases, material contracts,
debt agreements, property ownership, and contingent
liabilities of the Borrower and its Subsidiaries.
5.02 Conditions of Loans. The obligations of the
Lenders to make any Loan, the Swing Line Lender to make Swing
Line Loans and the Issuing Bank to issue Letters of Credit
hereunder, on or subsequent to the Closing Date are (except as
set forth in Section 2.01(c)(iv), 2.02(e) or 3.02(c)) subject
to the satisfaction of the following conditions (which are not
applicable as conditions precedent to any Loan being Continued
or Converted pursuant to Section 2.11 hereof).
(a) the Agent shall have received a notice of such
borrowing or request if required by Article II hereof;
(b) the representations and warranties of the Borrower
and each Guarantor set forth in Article VI hereof and in each
of the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Loan or
issuance of such Letters of Credit, as the case may be, with
the same effect as though such representations and warranties
had been made on and as of such date, other than such
representations and warranties which expressly relate to an
earlier date, except that the representations and warranties
set forth in Section 6.01(d) and (e) shall be deemed to
include and take into account the Saks Acquisition and any
merger or consolidation permitted under Section 8.08 hereof,
and except that the financial statements referred to in
Section 6.01(f)(i) shall be deemed to be those financial
statements most recently delivered to the Agent and the
Lenders pursuant to Section 7.01 hereof;
(c) in the case of the issuance of a Letter of Credit,
Borrower shall have executed and delivered to the Issuing Bank
an Application and Agreement for Letter of Credit in form and
content acceptable to the Issuing Bank together with such
other instruments and documents as it may reasonably request;
(d) at the time of each such Loan, Swing Line Loan or
issuance of each Letter of Credit, as the case may be, no
Default or Event of Default shall have occurred and be
continuing and the obligations shall not have been declared to
be immediately due and payable pursuant to Section 9.01(A)(ii)
hereof;
(e) immediately after giving effect to a Swing Line
Loan, the aggregate Swing Line Outstandings shall not exceed
the Total Swing Line Commitment;
(f) immediately after issuing any Letter of Credit, the
aggregate Letter of Credit Outstandings shall not exceed the
Total Letter of Credit Commitment; and
(g) immediately after giving effect to any Loan or
Letter of Credit (i) Total Outstandings shall not exceed the
Total Revolving Credit Commitment and (ii) each Lender's
Applicable Commitment Percentage of Revolving Credit Loans
(other than Competitive Bid Loans) and Participations shall
not exceed its Revolving Credit Commitment.
ARTICLE VI
Representations and Warranties
6.01 Representations and Warranties. The Borrower
represents and warrants to the Lenders and the Agent with
respect to itself and to its Subsidiaries (which
representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans and
issuance of Letters of Credit), that:
(a) Organization and Authority.
(i) the Borrower and each Subsidiary is a legal
entity duly organized or created and validly existing
under the laws of the jurisdiction of its incorporation
or creation;
(ii) the Borrower and each Subsidiary (1) has the
requisite power and authority to own its properties and
assets and to carry on its business as now being
conducted, and (2) is qualified to do business in each
jurisdiction in which its ownership or lease of property
or the nature of its business makes such qualification
necessary and in which failure so to qualify could
reasonably be expected to have a Material Adverse Effect;
(iii) the Borrower has the power and authority
to execute, deliver and perform this Agreement and the
Notes, and to borrow hereunder, and to execute, deliver
and perform each of the other Loan Documents to which it
is a party;
(iv) each Guarantor has the power and authority to
execute, deliver and perform the Guaranty and the other
Loan Documents to which it is a party; and
(v) each of the Loan Documents to which a Loan
Party is a party has been duly executed and delivered by
such Loan Party and is the legal, valid and binding
obligation or agreement, as the case may be, of such Loan
Party, enforceable against such Loan Party in accordance
with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of
creditors' rights generally and to the effect of general
principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in
equity);
(b) Loan Documents. The execution, delivery and
performance by a Loan Party of each of the Loan Documents to
which such Loan Party is a party:
(i) have been duly authorized by all requisite
Organizational Action (including any required shareholder
approval) of such Loan Party required for the lawful
execution, delivery and performance thereof;
(ii) do not violate any provisions of (1) applicable
law, rule or regulation, (2) any order of any court or
other agency of government binding on the Borrower or any
Guarantor, or their respective properties, or (3) the
Organizational Documents or Operating Documents of such
Loan Party;
(iii) will not be in conflict with, result in a
breach of or constitute an event of default, or an event
which, with notice or lapse of time, or both, would
constitute an event of default, under any indenture,
agreement or other instrument to which any Loan Party is
a party, or by which the properties or assets of any Loan
Party are bound; and
(iv) will not result in the creation or imposition
of any Lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of any
Loan Party except any Liens in favor of the Agent and the
Lenders created by the Loan Documents;
(c) Solvency. Each Loan Party is Solvent after giving
effect to the Saks Acquisition and the transactions
contemplated by this Agreement and the other Loan Documents;
(d) Subsidiaries and Stockholders. Borrower has no
Subsidiaries other than those Persons listed as Subsidiaries
in Schedule 6.01(d) hereto (which Schedule includes all
Subsidiaries acquired in connection with the Saks Acquisition)
and Subsidiaries after the date hereof acquired or created in
compliance with Section 7.18 (if then applicable); Schedule
6.01(d) to this Agreement states as of the date hereof (i)
with respect to all wholly owned Subsidiaries, the names and
owners thereof and (ii) with respect to all non-wholly owned
Subsidiaries, the authorized and issued capitalization of each
such Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest
issued and outstanding of each such Subsidiary and the number
and/or percentage of outstanding shares or other equity
interest (including options, warrants and other rights to
acquire any interest) of each such class of capital stock or
equity interest owned by Borrower or by any such Subsidiary;
the outstanding shares or other equity interests of each
Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable; and Borrower and each such
Subsidiary owns beneficially and of record all the shares and
other interests it is listed as owning in Schedule 6.01(d) and
all shares and other interests for each of its wholly owned
Subsidiaries, free and clear of any Lien;
(e) Ownership Interests. Borrower owns no interest in
any Person other than as permitted under Section 8.07;
(f) Financial Condition.
(i) The Borrower has heretofore furnished to each
Lender (1) the audited income statement, balance sheet,
and statements of cash flow and changes in shareholders'
equity of the Borrower and its Subsidiaries (which do not
give effect to the Saks Acquisition) for the Fiscal Year
ended January 31, 1998 (the "Borrower's Audited
Statements") and (2) the unaudited pro forma condensed
combined income statements of the Borrower and its
Subsidiaries (giving effect to the Saks Acquisition) for
the years ended February 1, 1997 and January 31, 1998 and
for the three-month period ended May 2, 1998 and the
unaudited pro forma combined balance sheet of the
Borrower and its Subsidiaries as at May 2, 1998
(collectively, the "Combined Three Month Statements").
Except as set forth therein, the Borrower's Audited
Statements present fairly, in all material respects, the
financial condition of the Borrower and its Subsidiaries
as of the Fiscal Year then ended and the results of
operations and changes in stockholders' equity for the
Fiscal Year then ended, all in conformity with Generally
Accepted Accounting Principles applied on a basis
consistent with prior periods. The Combined Three Month
Statements have been prepared by the Borrower and Saks,
based on their respective financial statements for such
periods and at such date together with available
information and certain assumptions which the Borrower
believes to be reasonable, and give pro forma effect to
the Saks Acquisition under the pooling-of-interest method
of accounting;
(ii) since the Filing Date, there has been no
material adverse change in the condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as
a whole or in the businesses, properties and operations
of the Borrower and its Subsidiaries, considered as a
whole, nor have such businesses or properties, taken as
a whole, been materially adversely affected as a result
of any fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo or act of
God;
(iii) except as set forth in the financial
statements referred to in Section 6.01(f)(i) or in
Schedule 6.01(f) or Schedule 6.01(j) attached hereto, or
as permitted under Section 8.04 hereof or any other
provision of this Agreement or any other Loan Document,
neither Borrower nor any Subsidiary has incurred, other
than in the ordinary course of business, any material
indebtedness, obligations, commitments or other liability
contingent or otherwise which remain outstanding or
unsatisfied;
(g) Title to Properties. The Borrower and its
Subsidiaries have title to all their respective owned real and
personal properties, subject to no Liens of any kind, except
for (i) the Liens described in Schedule 6.01(g) attached
hereto and (ii) Liens permitted under Section 8.05 hereof;
(h) Taxes. Except as set forth in Schedule 6.01(h)
attached hereto, the Borrower and its Subsidiaries have filed
or caused to be filed all federal, state, local and foreign
tax returns which are required to be filed by them and except
for taxes and assessments being contested as permitted under
Section 7.04, have paid or caused to be paid all taxes as
shown on said returns or on any assessment received by them,
to the extent that such taxes have become due;
(i) Other Agreements. Neither the Borrower nor any
Subsidiary is
(i) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which
could reasonably be expected to have a Material Adverse
Effect; or
(ii) in default in the performance, observance or
fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to
which the Borrower or any Subsidiary is a party, which
default has, or if not remedied within any applicable
grace period could reasonably be expected to have, a
Material Adverse Effect;
(j) Litigation. Except as set forth in
Schedule 6.01(j) attached hereto, there is no action, suit,
litigation, investigation or proceeding at law or in equity or
by or before any Governmental Authority pending, including
without limitation matters pertaining to labor, employment,
wages, hours, occupational safety and taxation, or, to the
knowledge of the Borrower, threatened by or against the
Borrower or any Subsidiary or affecting the Borrower or any
Subsidiary or any properties or rights of the Borrower or any
Subsidiary, an adverse ruling or determination in which could
reasonably be expected to have a Material Adverse Effect;
(k) Margin Stock. Neither the Borrower nor any agent
acting in its behalf has taken or will take any action which
might cause this Agreement or any of the documents or
instruments delivered pursuant hereto to violate any
regulation of the Board or to violate the Securities Exchange
Act of 1934, as amended, or the Securities Act of 1933, as
amended, or any state securities laws, in each case as in
effect on the date hereof;
(l) Investment Company. Neither the Borrower nor any
Subsidiary is an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. Section 80a-1,
et seq.). The application of the proceeds of the Loans and
repayment thereof by the Borrower and the performance by the
Borrower of the transactions contemplated by this Agreement
will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange
Commission thereunder, in each case as amended from time to
time;
(m) Patents, Etc. Except as set forth in Schedule
6.01(m) attached hereto, the Borrower and its Subsidiaries own
or have the right to use, under valid license agreements or
otherwise, all material patents, licenses, franchises,
trademarks, trademark rights, trade names, trade name rights,
trade secrets and copyrights necessary to the conduct of their
businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade secrets and
confidential commercial or proprietary information, trade
name, copyright, rights to trade secrets or other proprietary
rights of any other Person, except to the extent the failure
to have such ownership or rights could not reasonably be
expected to have a Material Adverse Effect;
(n) No Untrue Statement. Neither this Agreement nor any
other Loan Document or certificate or document executed and
delivered by or on behalf of any Loan Party in accordance with
or pursuant to any Loan Document contains any
misrepresentation or untrue statement of material fact or
omits to state a material fact necessary, in light of the
circumstance under which it was made, in order to make any
such representation or statement contained therein not
misleading in any material respect;
(o) No Consents, Etc. Except as set forth in Schedule
6.01(o) attached hereto, neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any
relationship between the Borrower or any Subsidiary and any
other Person, nor any circumstance in connection with the
execution, delivery and performance of the Loan Documents and
the transactions contemplated hereby is such as to require a
consent, approval or authorization of, or filing, registration
or qualification with, any Governmental Authority on the part
of the Borrower or any Subsidiary as a condition to the
execution, delivery and performance of, or consummation of the
transactions contemplated by, this Agreement or the other Loan
Documents or if so, such consent, approval, authorization,
filing, registration or qualification has been obtained or
effected, as the case may be;
(p) Benefit Plans.
(i) None of the employee benefit plans maintained
at any time by the Borrower or any Subsidiary or the
trusts created thereunder has engaged in a prohibited
transaction or violated any Foreign Benefit Law which
could subject any such employee benefit plan or trust to
a material tax or penalty on prohibited transactions
imposed under Internal Revenue Code Section 4975 or ERISA
or under any Foreign Benefit Law;
(ii) None of the employee benefit plans maintained
at any time by the Borrower or any Subsidiary which are
employee pension benefit plans and which are subject to
Title IV of ERISA or any Foreign Benefit Law or the
trusts created thereunder has been terminated so as to
result in a material liability of the Borrower under
ERISA or under any Foreign Benefit Law nor has any such
employee benefit plan of the Borrower or any Subsidiary
incurred any material liability to the Pension Benefit
Guaranty Corporation established pursuant to ERISA or any
other Person exercising similar duties and functions
under any Foreign Benefit Law, other than for required
insurance premiums which have been paid or are not yet
due and payable; neither the Borrower nor any Subsidiary
has withdrawn from or caused a partial withdrawal to
occur with respect to any Multi-employer Plan resulting
in any material assessed and unpaid withdrawal liability;
the Borrower and the Subsidiaries have made or provided
for all contributions in all material amounts to all such
employee pension benefit plans which they maintain and
which are required as of the end of the most recent
fiscal year under each such plan; neither the Borrower
nor any Subsidiary has incurred any material accumulated
funding deficiency with respect to any such plan, whether
or not waived; nor has there been any reportable event,
or other event or condition, which presents a material
risk of termination of any such employee benefit plan by
such Pension Benefit Guaranty Corporation or any other
Person exercising similar duties and functions under any
Foreign Benefit Law;
(iii) The present value of all vested accrued
benefits under the employee pension benefit plans which
are subject to Title IV of ERISA or any Foreign Benefit
Law, maintained by the Borrower or any Subsidiary, did
not, as of the most recent valuation date for each such
plan, exceed by a material amount the then current value
of the assets of such employee benefit plans allocable to
such benefits;
(iv) To the knowledge of the Borrower based on its
actual knowledge and based on information, if any, that
the Lenders may provide to the Borrower from time to
time, the consummation of the Loans and the issuance of
the Letters of Credit provided for in Article II and
Article III will not involve any prohibited transaction
under ERISA or any Foreign Benefit Law which is not
subject to a statutory or administrative exemption;
(v) To the best of the Borrower's knowledge, each
employee pension benefit plan subject to Title IV of
ERISA or any Foreign Benefit Law, maintained by the
Borrower or any Subsidiary, has been administered in
accordance with its terms in all material respects and is
in compliance in all material respects with all
applicable requirements of ERISA and other applicable
laws, regulations and rules and any applicable Foreign
Benefit Law;
(vi) There has been no material withdrawal
liability incurred and unpaid with respect to
any Multi-employer Plan to which the Borrower
or any Subsidiary is or was a contributor;
(vii) As used in this Agreement, the terms
"employee benefit plan," "employee pension benefit plan,"
"accumulated funding deficiency," "reportable event," and
"accrued benefits" shall have the respective meanings
assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in
Code Section 4975 and ERISA;
(viii) Neither the Borrower nor any Subsidiary
has any liability not disclosed on any of the financial
statements furnished to the Lenders pursuant to Section
7.01 hereof, contingent or otherwise, under any plan or
program or the equivalent for unfunded post-retirement
benefits, including pension, medical and death benefits,
which liability could reasonably be expected to have a
Material Adverse Effect;
(q) No Default. As of the date hereof, there does not
exist any Default or Event of Default hereunder;
(r) Environmental Matters. The Borrower and each
Subsidiary is in compliance with all applicable Environmental
Laws the failure of which to comply could reasonably be
expected to have a Material Adverse Effect and has been issued
and currently maintains all federal, state and local permits,
licenses, certificates and approvals the failure of which to
obtain or maintain could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any
Subsidiary has been notified of any material pending or
threatened action, suit, proceeding or investigation, and
neither the Borrower nor any Subsidiary is aware of any facts,
which (a) calls into question, or could reasonably be expected
to call into question, compliance by the Borrower or any
Subsidiary with any Environmental Laws, (b) seeks, or could
reasonably be expected to form the basis of a meritorious
proceeding, to suspend, revoke or terminate any license,
permit or approval necessary for the operation of the
Borrower's or any Subsidiary's business or facilities or for
the generation, handling, storage, treatment or disposal of
any Hazardous Materials, or (c) seeks to cause, or could
reasonably be expected to form the basis of a meritorious
proceeding to cause, any property of the Borrower or any
Subsidiary to be subject to any restrictions on ownership,
use, occupancy or transferability under any Environmental Law,
in each case which could reasonably be expected to have a
Material Adverse Effect;
(s) RICO. Neither the Borrower nor any Subsidiary is
engaged in or has engaged in any course of conduct that could
subject any of their respective properties to any Lien,
seizure or other forfeiture under any criminal law, racketeer
influenced and corrupt organizations law, civil or criminal,
or other similar laws;
(t) Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all laws, rules and
regulations, and all applicable laws, rules and regulations
pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational
safety and taxation and all other valid requirements of any
Governmental Authority with respect to the conduct of its
business, the noncompliance with which could reasonably be
expected to have a Material Adverse Effect.
(u) Year 2000 Compliance. The Borrower has (i)
initiated a review and assessment of all areas within its and
each of its Subsidiaries' business and operations (including
those affected by suppliers, vendors and customers) that could
reasonably be expected to be adversely affected by the "Year
2000 Problem" (that is, the risk that computer hardware and
software applications used by the Borrower or any of its
Subsidiaries (or material suppliers, vendors and customers)
may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and time line for
addressing the Year 2000 Problem on a timely basis, and (iii)
to date, implemented that plan in accordance with that
timetable. Based on the foregoing, the Borrower believes that
all computer hardware and software applications (including
those of its suppliers, vendors and customers) that are
material to its or any of its Subsidiaries' business and
operations are reasonably expected on a timely basis to be
able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "Year 2000
Compliant"), except to the extent that a failure to do so
could not reasonably be expected to have a Material Adverse
Effect.
ARTICLE VII
Affirmative Covenants
Until the occurrence of the Total Facility Termination
Date, unless the Required Lenders shall otherwise consent in
writing, the Borrower will:
7.01 Financial Reports, Etc. (a) as soon as
practicable and in any event within ninety-five (95) days
after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Agent and each Lender (i) the
consolidated balance sheets of the Borrower and its
Subsidiaries, in each case with the notes thereto, the related
consolidated statements of operations, cash flow, and
shareholders' equity and the respective notes thereto for such
Fiscal Year, setting forth in the case of the consolidated
statements comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis
and containing, with respect to the consolidated financial
reports, an opinion of PriceWaterhouseCoopers LLP, or any
other "Big 5" accounting firm or other such independent
certified public accountants of recognized national standing
selected by the Borrower and approved by the Agent, which is
unqualified and devoid of any exception which is not
acceptable to the Required Lenders; and (ii) a certificate of
an Authorized Representative as to the existence or non-existence
of any Default or Event of Default, demonstrating
compliance with Sections 8.01, 8.02 and 8.03 of this Agreement
as of the end of the most recent Fiscal Year for which such
covenant compliance is demonstrated, which certificate shall
be substantially in the form attached hereto as Exhibit N and
incorporated herein by reference;
(b) as soon as practicable and in any event within fifty
(50) days after the end of each quarterly period of each
Fiscal Year (except the last reporting period of the Fiscal
Year), or if an extension has been granted by the Securities
and Exchange Commission for the filing by the Borrower of its
quarterly report on Form 10-Q, then by the earlier of the date
such Form 10-Q is actually filed and the last day of such
extended time period, but in no event later than sixty (60)
days after the end of such quarterly period for which such
Form 10-Q is to be filed, deliver to the Agent and each Lender
(i) the consolidated balance sheets of the Borrower and its
Subsidiaries, in each case as of the end of such reporting
period, the related consolidated statements of operations and
cash flow for such reporting period and for the period from
the beginning of the Fiscal Year through the end of such
reporting period, accompanied by a certificate of an
Authorized Representative to the effect that such financial
statements present fairly, in all material respects, the
financial position of the Borrower and its Subsidiaries as of
the end of such reporting period and the results of their
operations and the changes in their financial position for
such reporting period, all of such interim financial
statements being prepared on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis, subject to normal year-end
audit adjustments, and (ii) a certificate of an Authorized
Representative as to the existence or non-existence of any
Default or Event of Default and containing computations for
such quarter comparable to that required pursuant to Section
7.01(a)(ii);
(c) together with each delivery of the financial
statements required by Section 7.01(a)(i) hereof, deliver to
the Agent and each Lender a letter from the Borrower's
accountants specified in Section 7.01(a)(i) hereof stating
that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 7.01(a)(i),
they obtained no knowledge of any Default or Event of Default
by the Borrower in the fulfillment of the terms and provisions
of this Agreement insofar as they relate to financial matters
(which at the date of such statement remains uncured); and if
the accountants have obtained knowledge of such Default or
Event of Default, a statement specifying the nature and period
of existence thereof;
(d) promptly upon their becoming available to the
Borrower, the Borrower shall deliver to the Agent and each
Lender a copy of (i) all regular or special reports or
effective registration statements which Borrower or any
Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities
exchange, and (ii) any proxy statement distributed by the
Borrower to its shareholders, bondholders or the financial
community in general;
(e) promptly, and in any event within two (2) Business
Days, after the public announcement of any change in the Debt
Rating, deliver written notice to the Agent of such new Debt
Rating and the Debt Rating Date. The Borrower shall also
provide such additional evidence of such new Debt Rating as
may be requested by the Agent, including without limitation
evidence from either or both of S&P and Moody's (or such other
Alternative Rating Agency), as applicable, within ten (10)
Business Days of such request;
(f) no later than 75 calendar days following the
consummation of the Saks Acquisition, deliver to the Agent and
each Lender a copy of the Audited Restated Financial
Statements; and
(g) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information
regarding Borrower's and each Subsidiary's operations,
business affairs and financial condition as the Agent or such
Lender may reasonably request.
7.02 Maintain Properties. (i) Maintain all properties
necessary to its operations in good working order and
condition (ordinary wear and tear excepted) and make all
needed repairs, replacements and renewals as are necessary to
conduct its business in accordance with customary business
practices and (ii) preserve and protect its material patents,
copyrights, licenses, trademarks, trademark rights, trade
names, trade name rights, trade secrets and know-how necessary
or useful in the conduct of its operations.
7.03 Existence, Qualification, Etc. Do or cause to be
done all things necessary to preserve and keep in full force
and effect its existence and all material rights and
franchises, trade names, trademarks and permits, except to the
extent conveyed in connection with transactions permitted
under Sections 8.06 or 8.08 hereof, and maintain its license
or qualification to do business as a foreign corporation and
good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such
license or qualification necessary and in which the failure so
to qualify could reasonably be expected to have a Material
Adverse Effect.
7.04 Taxes. Pay all taxes, assessments, governmental
charges, claims for labor, supplies, rent and any other
obligation which, if unpaid, might become a Lien against any
of its properties except any of the foregoing being contested
in good faith by appropriate proceedings diligently conducted
and against which reserves sufficient under GAAP have been
established.
7.05 Insurance. (i) Maintain insurance with responsible
insurance carriers against loss or damage by fire and other
hazards as are customarily insured against by similar
businesses owning such properties similarly situated, (ii)
maintain general public liability insurance at all times with
responsible insurance carriers against liability on account of
damage to persons and property having such limits,
deductibles, exclusions and co-insurance and other provisions
providing no less coverage than insurance customarily carried
by similar businesses owning similar properties and conducting
similar operations, and (iii) maintain insurance under all
applicable workers' compensation laws (or in the alternative,
maintain required reserves if self-insured for workers'
compensation purposes).
7.06 True Books. Keep true books of record and account
in compliance with Generally Accepted Accounting Principles.
7.07 Right of Inspection. Permit any Lender or the
Agent (through their employees and other agents), at the
expense of such Lender or the Agent, as applicable, or at the
reasonable expense of the Borrower if a Default has occurred
and is continuing, to visit and inspect any of the properties
(subject to the rights of third party tenants in possession),
corporate books and financial reports of the Borrower and its
Subsidiaries, and to discuss their respective affairs,
finances and accounts with their principal officers and
independent certified public accountants, all at reasonable
times, at reasonable intervals and with reasonable prior
notice.
7.08 Observe All Laws; Licenses. Comply in all material
respects with all laws, rules and regulations and all other
valid requirements of any Governmental Authority with respect
to the conduct of its business, including without limitation
Environmental Laws, the noncompliance with which could
reasonably be expected to have a Material Adverse Effect.
Borrower shall also obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as
currently conducted and as contemplated by the Loan Documents
and with respect to which the failure to so obtain and
maintain could reasonably be expected to have a Material
Adverse Effect.
7.09 Covenants Extending to Subsidiaries. Cause each of
its Subsidiaries to do with respect to itself, its business
and its assets, each of the things required of the Borrower in
Sections 7.02 through 7.08, inclusive.
7.10 Officer's Knowledge of Default. Upon any
Authorized Representative of the Borrower obtaining knowledge
of any Default or Event of Default, promptly notify the Agent
of the nature thereof, the period of existence thereof, and
what action the Borrower proposes to take with respect thereto
and stating that such notice is a "notice of default."
7.11 Suits or Other Proceedings. Upon any Authorized
Representative of the Borrower obtaining knowledge of any
litigation or other proceeding being instituted against the
Borrower or any Subsidiary, or any attachment, levy, execution
or other process being instituted against any assets of the
Borrower or any Subsidiary, in an aggregate amount greater
than $10,000,000 not otherwise covered by insurance, promptly
deliver to the Agent written notice thereof stating the nature
and status of such litigation, proceeding, levy, execution or
other process.
7.12 Notice of Discharge of Hazardous Material or
Environmental Complaint. Promptly provide to the Agent true,
accurate and complete copies of any and all written notices,
complaints, orders, directives, claims, or citations received
by the Borrower or any Subsidiary relating to any of the
following, in each case which could reasonably be expected to
have a Material Adverse Effect: (a) violation or alleged
violation by the Borrower or any Subsidiary of any applicable
Environmental Laws; (b) release or threatened release by the
Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf
of the Borrower or any Subsidiary, or at any facility or
property owned or leased or operated by the Borrower or any
Subsidiary, of any Hazardous Material, except where occurring
legally pursuant to a permit or license or otherwise; or (c)
liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating
or responding to a release of Hazardous Materials.
7.13 Environmental Compliance. If the Borrower or any
Subsidiary shall receive any letter, notice, complaint,
order, directive, claim or citation from any Governmental
Authority alleging that the Borrower or any Subsidiary has
violated any applicable Environmental Law, released any
Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous
Materials, in each case the violation or occurrence of which
could reasonably be expected to have a Material Adverse
Effect, the Borrower shall promptly (and in any event within
the time period permitted and to the extent required by the
applicable Environmental Law or by the applicable Governmental
Authority responsible for enforcing such Environmental Law)
remove or remedy, or cause the applicable Subsidiary to remove
or remedy, such violation or release or satisfy such
liability.
7.14 Year 2000 Notice. Notify the Agents and the
Lenders in the event the Borrower discovers or determines that
any computer application (including those of its suppliers,
vendors and customers) that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000
Compliant by September 30, 1999, except to the extent that
such failure could not reasonably be expected to result in a
Material Adverse Effect.
7.15 Further Assurances. At its cost and expense, upon
request of the Agent, duly execute and deliver or cause
another Loan Party to duly execute and deliver, to the Agent
such further instruments, documents, certificates, and
agreements, and do and cause another Loan Party to do such
further acts that may be reasonably necessary or advisable in
the reasonable opinion of the Agent to carry out the
provisions and purposes of this Agreement and the other Loan
Documents.
7.16 Benefit Plans. Comply in all material respects
with all requirements of ERISA and any Foreign Benefit Law
applicable to it and furnish to the Agent as soon as possible
and in any event (i) within thirty (30) days after the
Borrower knows or has reason to know that any reportable event
or other event under any Foreign Benefit Law with respect to
any employee benefit plan maintained by the Borrower or any
Subsidiary which could give rise to termination or the
imposition of any material tax or penalty has occurred,
written statement of an Authorized Representative describing
in reasonable detail such reportable event or such other event
and any action which the Borrower or applicable Subsidiary
proposes to take with respect thereto, together with a copy of
the notice of such reportable event given to the Pension
Benefit Guaranty Corporation or to any other applicable Person
exercising similar duties and functions under any Foreign
Benefit Law or a statement that said notice will be filed with
the annual report of the United States Department of Labor
with respect to such plan if such filing has been authorized,
(ii) promptly after receipt thereof, a copy of any notice that
the Borrower or any Subsidiary may receive from the Pension
Benefit Guaranty Corporation or from any other Person
exercising similar duties and functions under any Foreign
Benefit Law relating to the intention of the Pension Benefit
Guaranty Corporation or any such Person to terminate any
employee benefit plan or plans of the Borrower or any
Subsidiary or to appoint a trustee to administer any such
plan, (iii) within 10 days after a filing with the Pension
Benefit Guaranty Corporation pursuant to Section 412(n) of the
Code or with any Person pursuant to any Foreign Benefit Law of
a notice of failure to make a required installment or other
payment with respect to a plan, a certificate of an Authorized
Representative setting forth details as to such failure and
the action that the Borrower or its affected Subsidiary, as
applicable, proposes to take with respect thereto, together
with a copy of such notice given to the Pension Benefit
Guaranty Corporation or to such Person, and (iv) promptly
after the incurrence thereof and in any event within 10 days,
notice of withdrawal by the Borrower or any Subsidiary from
any Multi-employer Plan which withdrawal could reasonably
result in a material withdrawal liability.
7.17 Continued Operations. Continue at all times to
conduct its business and engage principally in a line or lines
of business similar to the business substantially as conducted
on the Closing Date by the Borrower and its Subsidiaries
(subject to the right to dispose of assets in transactions
permitted under Section 8.06 hereof).
7.18 New Subsidiaries.
(a) Subject to subsection (c) below, not later than
forty-five (45) Business Days following the acquisition or
creation of any Material Subsidiary (other than a Foreign
Subsidiary), or upon any previously existing Person becoming
a Material Subsidiary (other than a Foreign Subsidiary), cause
to be delivered to the Agent for the benefit of the Lenders
each of the following:
(i) a Guarantor Joinder Agreement executed by such
Subsidiary, with appropriate insertions of identifying
information and such other changes to which the Agent may
consent in its discretion;
(ii) an opinion of counsel to such Subsidiary dated
as of the date of delivery of the Guarantor Joinder
Agreement provided in the foregoing clause (i) and
addressed to the Agent and the Lenders, in form and
substance substantially similar to the opinions of
counsel to the Guarantors delivered on the Closing Date
to the Lenders pursuant to Section 5.01 hereof; and
(iii) current copies of the Organizational
Documents and Operating Documents of such Subsidiary,
minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors (or
other comparable group of individuals performing a
similar function), or appropriate committees thereof
(and, if required by such Organizational Documents or
Operating Documents or by applicable laws, of the
shareholders) of such Subsidiary authorizing the actions
and the execution and delivery of documents described in
clause (i) of this Section 7.18 and evidence satisfactory
to the Agent (confirmation of the receipt of which will
be provided by the Agent to the Lenders) that such
Subsidiary is Solvent as of such date and after giving
effect to the Guaranty.
(b) Subject to subsection (c) below, not later than
forty-five (45) Business Days following the acquisition or
creation of a Foreign Subsidiary which is a Material
Subsidiary, or upon any previously existing Person becoming a
Foreign Subsidiary which is a Material Subsidiary, cause to be
delivered to the Agent for the benefit of the Lenders each of
the following:
(i) a pledge agreement (the "Pledge Agreement") to
be entered into by the Borrower or Subsidiary owning any
or all of the capital stock or other ownership interest
of such Foreign Subsidiary (the "Pledgor") in form and
substance acceptable to the Agent pledging 65% of all
such capital stock or ownership interests (the "Pledged
Stock");
(ii) the certificates evidencing the Pledged Stock
together with duly executed stock powers or powers of
assignment in blank affixed thereto;
(iii) an opinion of counsel to the Pledgor dated
as of the date of delivery of the Pledge Agreement
provided in the foregoing clause (i) and addressed to the
Agent and the Lenders as to matters regarding the
enforceability of such Pledge Agreement and the status of
such Pledged Stock in form and substance acceptable to
the Agent; and
(iv) the items referred to in (a)(iii) above with
respect to the Pledgor.
(c) This Section shall be of no further force or effect
if the Guaranty has been terminated in accordance with Section
11.20 hereof.
ARTICLE VIII
Negative Covenants
Until the occurrence of the Total Facility Termination
Date, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not, nor will it permit any
Subsidiary to:
8.01 Consolidated Net Worth. Permit Consolidated Net
Worth at any time to be less than (A) the amount equal to
ninety percent (90%) of the Borrower's Consolidated Net Worth
as of November 1, 1998 after completion of the Saks
Acquisition plus (B) an amount equal to one hundred percent
(100%) of the Net Proceeds of each sale of capital stock or
other equity interest (including those instruments and
securities exchangeable, convertible or exercisable into
capital stock or other equity interests at such time as such
instruments are recognizable in Consolidated Net Worth in
accordance with GAAP) in the Borrower or any Subsidiary after
November 1, 1998 plus (C) an amount equal to the sum of fifty
percent (50%) of Consolidated Net Income of the Borrower and
its Subsidiaries (without deduction for any negative
Consolidated Net Income) for each full fiscal quarter ending
after November 1, 1998.
8.02 Consolidated Fixed Charge Ratio. Permit, at the
end of any Four-Quarter Period of the Borrower, the
Consolidated Fixed Charge Ratio for such Four-Quarter Period
to be equal to or less than 1.50 to 1.00.
8.03 Consolidated Funded Total Indebtedness to
Consolidated EBITDA. Permit, at the end of any Four-Quarter
Period of the Borrower, the ratio of Consolidated Funded Total
Indebtedness to Consolidated EBITDA for such Four-Quarter
Period to be greater than 3.50 to 1.00.
8.04 Indebtedness. (a) Incur, create, assume or permit
to exist any Indebtedness, howsoever evidenced, except
(i) All Indebtedness existing as of the date hereof
(including Indebtedness of Saks and its Subsidiaries as
of the date hereof, other than Indebtedness incurred in
anticipation of the Saks Acquisition and Indebtedness
which must be repaid pursuant to Section 5.01(a)(xvi))
and set forth in Schedule 8.04 attached hereto and
incorporated herein by reference and any extension,
renewal or refinancing thereof that does not increase the
principal amount thereof from that existing immediately
prior to such extension, renewal or refinancing; and that
does not result in an interest rate which is greater than
the market rate generally available to companies
similarly situated to the Borrower for similar
transactions; provided, none of the instruments and
agreements evidencing or governing such Indebtedness
(including extensions, renewals and refinancings thereof)
shall be amended, modified or supplemented after the
Closing Date (nor shall any new or other documents be
entered into which are effective) to change any terms of
repayment, subordination with respect to the Obligations,
restrictions against incurring Liens or Indebtedness,
rights of conversion, put or exchange, mandatory
prepayment, reduction in commitment or addition of or
adverse change in any borrowing base with respect to such
Indebtedness from such terms and rights as in effect on
the Closing Date unless such amendments, modifications or
supplements (or new or other documents) would not
reasonably be expected to have an adverse effect on the
Borrower, or its creditworthiness with respect to its
Obligations;
(ii) Indebtedness owing to the Agent or any Lenders
in connection with this Agreement, any Note or other Loan
Document;
(iii) Indebtedness consisting of Rate Hedging
Obligations permitted under Section 8.13 hereof;
(iv) The endorsement of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business;
(v) Indebtedness incurred directly by the Borrower
or any Subsidiary exclusively to finance machinery,
equipment and other fixed assets purchased after the
Closing Date and Indebtedness incurred after the Closing
Date and secured by the Borrower's or any Subsidiary's
real property (including without limitation,
Indebtedness secured in connection with any tax retention
operating leases and synthetic leases), provided that
such Indebtedness (i) is secured, if at all, solely by a
Lien permitted in accordance with Sections 8.05(iii) or
(vii) hereof, as applicable, (ii) shall not be refinanced
for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing and
(iii) does not, at the time of incurrence, in the
aggregate during any consecutive twelve month period for
the Borrower and all Subsidiaries exceed a principal
amount equal to five percent (5%) of Consolidated Net
Worth (calculated as of the most recent fiscal period
with respect to which the Agent shall have received the
Required Financial Information);
(vi) Indebtedness of any Subsidiary owing to the
Borrower or a Subsidiary and Indebtedness of the Borrower
owing to a Subsidiary;
(vii) Additional Indebtedness of the Borrower
and its Subsidiaries, including without limitation
Indebtedness related to commercial and documentary
letters of credit, standby letters of credit, or
otherwise, provided that (i) the affirmative and negative
covenants and events of default contained in the
documents evidencing such additional Indebtedness are not
materially more restrictive than those contained in the
Loan Documents, (ii) neither a Default nor Event of
Default exists at the time such additional Indebtedness
is incurred or would result from the incurrence of such
additional Indebtedness and (iii) in the event such
additional Indebtedness matures or requires any principal
payment, including pursuant to acceleration, or mandatory
prepayment or redemption, on or prior to the Total
Facility Termination Date, the aggregate amount
outstanding of such additional Indebtedness which is due
(either at maturity or as a principal payment) prior to
the Total Facility Termination Date shall not at any time
(as determined by the face amount of such Indebtedness
where applicable) exceed fifteen percent (15%) of
Consolidated Total Assets (calculated as of the most
recent fiscal period with respect to which the Agent
shall have received the Required Financial Information);
and
(viii) Any guaranty of Indebtedness of the
Borrower or any Guarantor which is permitted to be
incurred pursuant to this Section 8.04.
(b) Permit at any time the amount of Indebtedness of all
Subsidiaries (excluding Securitization Subsidiaries and Saks
REMIC Subsidiaries) in the aggregate to exceed ten percent
(10%) of Consolidated Net Worth (calculated as of the most
recent fiscal period with respect to which the Agent shall
have received the Required Financial Information); provided,
prior to the Borrower's achievement of an Investment Grade
Rating and the release of the Guaranty pursuant to Section
11.20, this limitation shall only apply to Subsidiaries (other
than Securitization Subsidiaries and Saks REMIC Subsidiaries)
which are not Guarantors.
8.05 Liens. Incur, create or permit to exist any Lien
with respect to any property or assets now owned or hereafter
acquired by the Borrower or any of its Subsidiaries, other
than
(i) Liens existing as of the date hereof and as set
forth in Schedule 6.01(g) attached hereto;
(ii) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet
due or which are being contested in good faith by
appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with
Generally Accepted Accounting Principles;
(iii) Liens in respect of purchase money
Indebtedness in connection with the acquisition of
machinery, equipment and other fixed assets permitted to
be incurred pursuant to Section 8.04(v) hereof; provided
that (a) the original principal balance of the
Indebtedness secured by such Lien constitutes not less
than 75% and not more than 100% of the purchase price of
the property acquired and (b) such Lien extends only to
the property acquired with the proceeds of the
indebtedness so secured;
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
Liens imposed by law or created in the ordinary course of
business and in existence less than 120 days from the
date of creation thereof for amounts not yet due or which
are being contested in good faith by appropriate
proceedings diligently conducted and with respect to
which adequate reserves or other appropriate provisions
are being maintained in accordance with Generally
Accepted Accounting Principles;
(v) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety
bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of
social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and
other similar obligations or arising as a result of
progress payments under government contracts;
(vi) easements (including, without limitation,
reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other
restrictions, charges or encumbrances (whether or not
recorded), which do not interfere materially with the
ordinary conduct of the business of the Borrower or any
Subsidiary and which do not materially detract from the
value of the property to which they attach or materially
impair the use thereof by the Borrower or any Subsidiary;
(vii) Liens on real property securing
Indebtedness permitted under Section 8.04(v) hereof;
(viii) Liens on specific items of inventory of
the Borrower or any Subsidiary granted to secure
reimbursement obligations incurred with respect to
documentary letters of credit issued in connection with
the purchase of such inventory; provided such liens at
all times remain unperfected and no such lien attaches to
inventory not acquired with the credit support of such
documentary letter of credit; and
(ix) Liens arising out of the refinancing,
extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by this Section 8.05 to the
extent such Liens are attached to the same property
previously encumbered as collateral for such Indebtedness
or for any other previously existing Indebtedness so
refinanced, extended, renewed or refunded at such time.
8.06 Transfer of Assets. Other than as permitted in
Section 8.08 hereof, sell, lease, transfer or otherwise
dispose of any assets (including without limitation capital
stock or similar ownership interests transferred by way of
merger or other consolidation) of the Borrower or any
Subsidiary during any Fiscal Year unless the sum of (i) the
aggregate book value of such assets to be so disposed and
previously disposed during such Fiscal Year plus (ii) the book
value of the total assets of each Subsidiary party to a merger
during such Fiscal Year in which the survivor is not or does
not become a Subsidiary and which is otherwise permitted under
Section 8.08(ii) hereof plus (iii) the book value of assets
allocated or to be distributed during such Fiscal Year to a
Person other than the Borrower or a wholly owned Subsidiary in
the event of a dissolution of a Subsidiary which is not wholly
owned by the Borrower and which is otherwise permitted under
Section 8.12(iii) hereof, in the aggregate for (i), (ii) and
(iii) does not exceed fifteen percent (15%) of the book value
of the Consolidated Total Assets as at the last day of the
immediately preceding Fiscal Year; provided, however, such
determination shall be made on a noncumulative basis, with the
effect that the amount of assets not disposed of in one Fiscal
Year may not be carried forward and disposed of in a
subsequent Fiscal Year and such determination shall be made
with respect to the Audited Restated Financial Statements
until delivery of the audited financial statements pursuant to
Section 7.01(a) for Fiscal Year 1998. The foregoing
limitation shall not apply to any of the following: (a) sales
of assets in the ordinary course of business; (b) transfers of
assets among the Borrower and its Subsidiaries, including
transfers of accounts receivable to a Securitization
Subsidiary, subject to compliance with Section 7.18 hereof
after giving effect to any such transfer; and (c) sales of
assets with respect to which the Net Proceeds are applied
within 180 days of receipt thereof to make Permitted
Acquisitions or to acquire, construct or improve properties,
or capital assets, in each case, to be used in a line or lines
of business consistent with the terms of Section 7.17 hereof.
8.07 Investments; Acquisitions. Purchase, own, invest
in or otherwise acquire, directly or indirectly, any stock or
other securities of, or all or substantially all of the assets
of, or make or permit to exist any interest whatsoever in, any
other Person or otherwise make any Acquisition or permit to
exist any loans or advances to any Person, except that
Borrower and its Subsidiaries may maintain investments or
invest in:
(i) Eligible Securities;
(ii) investments existing as of the date hereof;
(iii) accounts receivable arising and trade
credit granted in the ordinary course of business and any
securities received in satisfaction or partial
satisfaction thereof in connection with accounts of
financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(iv) loans and advances to and investments in
Subsidiaries which are Guarantors;
(v) loans and advances to its officers, directors
and employees for travel expenses incurred in the
ordinary course of business without limitation and for
any other business purpose in an aggregate principal
amount at any time outstanding not to exceed $25,000,000;
(vi) other investments in an aggregate amount at any
time outstanding not to exceed 5% of Consolidated Net
Worth (calculated as of the most recent fiscal period
with respect to which the Agent shall have received the
Required Financial Information);
(vii) Permitted Acquisitions and other mergers
permitted in Section 8.08 hereof; and
(viii) Securitization Subsidiaries of the
Borrower in an aggregate amount not to exceed 10% of
Consolidated Net Worth (calculated as of the most recent
fiscal period with respect to which the Agent shall have
received the Required Financial Information); provided
further, investments made in Securitization Subsidiaries
on or prior to the date hereof and the retained earnings
of Securitization Subsidiaries as of the date hereof and
subsequent thereto may be transferred between
Securitization Subsidiaries or between the Borrower and
a Securitization Subsidiary without limitation.
8.08 Merger or Consolidation. Consolidate with or merge
into any other Person, or permit any other Person to merge
into it; provided, however, subject to compliance with the
other terms and conditions of this Agreement, including
without limitation Sections 7.18 and 8.06 hereof after giving
effect to any of the following transactions, (i) any
Subsidiary of the Borrower may merge into or consolidate with
the Borrower or any other Subsidiary, (ii) any Subsidiary may
merge into another Person whereby such other Person is the
surviving corporation and (iii) in connection with any
Permitted Acquisition, any Person may merge with the Borrower
or any Subsidiary if the Borrower or such Subsidiary, as
applicable, shall be the surviving corporation.
8.09 Transactions with Affiliates. Other than
transactions permitted under Section 8.07 hereof, enter into
any transaction (or series of related transactions) after the
Closing Date, with, or for the benefit of, any Affiliate of
the Borrower or any officer or director of the Borrower or any
Subsidiary (each, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business
and is for the purchase or sale of goods or receipt or
delivery of services on terms that are no less favorable to
the Borrower or the Subsidiary, as the case may be, than those
which could have been obtained in a comparable transaction at
such time from Persons who do not have such a relationship or
(ii) such Affiliate Transaction is with a wholly owned
Subsidiary (other than a Foreign Subsidiary) of the Borrower.
8.10 Benefit Plans. With respect to all employee
pension benefit plans maintained by the Borrower or any
Subsidiary:
(i) terminate any of such employee pension benefit
plans so as to incur any material liability to the
Pension Benefit Guaranty Corporation established pursuant
to ERISA or to any other Person exercising similar duties
and functions under any Foreign Benefit Law;
(ii) allow or suffer to exist any prohibited
transaction involving any of such employee pension
benefit plans or any trust created thereunder which would
subject the Borrower or a Subsidiary to a material tax or
material penalty or other material liability (a) on
prohibited transactions imposed under Internal Revenue
Code Section 4975 or ERISA or (b) under any Foreign
Benefit Law;
(iii) fail to pay to any such employee pension
benefit plan any material contribution which it is
obligated to pay under the terms of such plan;
(iv) allow or suffer to exist any material
accumulated funding deficiency, whether or not waived,
with respect to any such employee pension benefit plan;
(v) allow or suffer to exist any occurrence of a
reportable event or any other event or condition, which
presents a material risk of termination by the Pension
Benefit Guaranty Corporation, or to any other Person
exercising similar duties and functions under any Foreign
Benefit Law, of any such employee pension benefit plan
that is a Single Employer Plan, which termination could
result in any material liability (a) to the Pension
Benefit Guaranty Corporation or (b) under any Foreign
Benefit Law; or
(vi) incur any material withdrawal liability with
respect to any Multi-employer Plan.
8.11 Fiscal Year. Change its Fiscal Year.
8.12 Dissolution, etc. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any
proceedings seeking any such winding up, liquidation or
dissolution, except in connection with (i) the merger or
consolidation of Subsidiaries into each other or into the
Borrower permitted under Section 8.08, (ii) the dissolution of
Subsidiaries wholly owned by the Borrower or by another wholly
owned Subsidiary or (iii) the dissolution of a Subsidiary
which is not wholly owned by the Borrower so long as the
Borrower remains in compliance with Section 8.06 after giving
effect to such dissolution.
8.13 Rate Hedging Obligations. Incur any Rate Hedging
Obligations or enter into any agreements, arrangements,
devices or instruments relating to Rate Hedging Obligations,
except in connection with the management of interest rate
fluctuation risks of the Borrower and its Subsidiaries and in
no event shall any Rate Hedging Obligation be incurred for
speculative purposes.
ARTICLE IX
Events of Default and Acceleration
9.01 Events of Default. If any one or more of the
following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected
by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), that
is to say:
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or Reimbursement
Obligation, when and as the same shall be due and payable
whether pursuant to any provision of Article II or Article III
hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees
or other amounts payable to the Lenders, the Agent, the Swing
Line Lender or the Issuing Bank under the Loan Documents on
the date on which the same shall be due and payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 7.07, 7.10,
7.18 or Article VIII hereof; or
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement
or provision contained in this Agreement or the Notes (other
than as described in clauses (a), (b) or (c) above) and such
default shall continue for thirty (30) or more days after the
earlier of receipt of notice of such default by the Authorized
Representative from the Agent or the Borrower becomes aware of
such default, or if a default shall be made in the performance
or observance of, or shall occur under, any covenant,
agreement or provision contained in any of the other Loan
Documents (beyond any applicable grace period, if any,
contained therein), or if any Loan Document ceases to be in
full force and effect (other than in accordance with its terms
in the absence of default or by reason of any action by the
Agent or any Lender), or if without the written consent of the
Agent and the Lenders, this Agreement or any other Loan
Document shall be disaffirmed or shall terminate, be
terminable or be terminated or become void or unenforceable
for any reason whatsoever (other than in accordance with its
terms in the absence of default or by reason of any action by
the Agent or any Lender); or
(e) if a default shall occur, which is not waived,
(i) in the payment of any principal, interest, premium or
other amounts with respect to any Indebtedness for Money
Borrowed (other than the Loans) or Rate Hedging Obligations of
the Borrower or of any Subsidiary which Indebtedness is in an
amount (which amount for Rate Hedging Obligations shall be
equal to the market exposure thereunder on the date of
default) not less than $20,000,000 in the aggregate
outstanding and includes without limitation any of the
Consolidated Subordinated Debt, and such default shall
continue for more than the period of grace, if any, therein
specified or (ii) in the performance, observance or
fulfillment of any term or covenant contained in any agreement
or instrument under or pursuant to which any such Indebtedness
for Money Borrowed, including without limitation any of the
Consolidated Subordinated Debt and the Senior Notes, or Rate
Hedging Obligations, may have been issued, created, assumed,
guaranteed or secured by the Borrower or any Subsidiary, and
as a result of such default the holder of any such
Indebtedness, including without limitation any of the
Consolidated Subordinated Debt and the Senior Notes, may
accelerate the maturity thereof; or
(f) if any representation, warranty or other statement
of fact by the Borrower or any Guarantor contained herein or
any other Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender
by or on behalf of the Borrower or any Guarantor pursuant to
or in connection with this Agreement or the other Loan
Documents, or otherwise, shall be false or misleading in any
material respect when given or made; or
(g) if the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) shall be
unable to pay its debts generally as they become due; file a
petition to take advantage of any insolvency, reorganization,
bankruptcy, receivership or similar law, domestic or foreign;
make an assignment for the benefit of its creditors; commence
a proceeding for the appointment of a receiver, trustee,
liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer
seeking reorganization or arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or
statute, federal, state or foreign; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver,
trustee, liquidator or conservator of the Borrower or any
Material Subsidiary (or any Securitization Subsidiary or any
Saks REMIC Subsidiary that would otherwise qualify as a
Material Subsidiary) or of the whole or any substantial part
of its properties and such order, judgment or decree continues
unstayed and in effect for a period of sixty (60) days, or
approve a petition filed against the Borrower or any Material
Subsidiary (or any Securitization Subsidiary or any Saks REMIC
Subsidiary that would otherwise qualify as a Material
Subsidiary) seeking reorganization or arrangement or similar
relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or
any state or foreign country, province or other political
subdivision, which petition is not dismissed within sixty (60)
days; or if, under the provisions of any other law for the
relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of the Borrower or any
Material Subsidiary (or any Securitization Subsidiary or any
Saks REMIC Subsidiary that would otherwise qualify as a
Material Subsidiary) or of the whole or any substantial part
of its properties, which control is not relinquished within
sixty (60) days; or if there is commenced against the Borrower
or any Material Subsidiary (or any Securitization Subsidiary
or any Saks REMIC Subsidiary that would otherwise qualify as
a Material Subsidiary) any proceeding or petition seeking
reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state or foreign
country, province or other political subdivision which
proceeding or petition remains undismissed for a period of
sixty (60) days; or if the Borrower or any Material Subsidiary
(or any Securitization Subsidiary or any Saks REMIC Subsidiary
that would otherwise qualify as a Material Subsidiary) takes
any action to indicate its consent to or approval of any such
proceeding or petition; or
(i) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies
liability) is in excess of $20,000,000 is rendered against the
Borrower or any Subsidiary, or (ii) there is any attachment,
injunction or execution against any of the Borrower's or any
Subsidiary's properties for any amount in excess of
$1,000,000, and such judgment, attachment, injunction or
execution remains unpaid, unstayed, undischarged, unbonded or
undismissed for a period of sixty (60) days; or
(j) if the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) shall, other
than as permitted under Section 8.06 hereof or in the ordinary
course of business (as determined by past practices), suspend
(other than for a period not to exceed twenty (20) days by
reason of force majeure) all or any part of its operations
material to the conduct of the business of the Borrower or
such Material Subsidiary (or any Securitization Subsidiary or
any Saks REMIC Subsidiary), taken as a whole; or
(k) if (i) the Borrower or any Subsidiary shall engage
in any prohibited transaction (as described in Section
8.10(ii) hereof), which is not subject to a statutory or
administrative exemption, involving any employee pension
benefit plan of the Borrower or any Subsidiary and thereby
incur any material tax, material penalty or other material
liability, (ii) any material accumulated funding deficiency
(as referred to in Section 8.10(iv) hereof), whether or not
waived, shall exist with respect to any Single Employer Plan,
(iii) a reportable event (as referred to in Section 8.10(v)
hereof) (other than a reportable event for which the statutory
notice requirement to the Pension Benefit Guaranty Corporation
has been waived by regulation) shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed to administer or to terminate, any
Single Employer Plan, which reportable event or institution or
proceedings is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Single
Employer Plan for purposes of Title IV of ERISA, and in the
case of such a reportable event, the continuance of such
reportable event shall be unremedied for sixty (60) days after
notice of such reportable event pursuant to Section 4043(a),
(c) or (d) of ERISA is given, as the case may be, and shall
result in the incurrence of a material liability to any
Governmental Authority (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, and such
termination results in a material liability of the Borrower or
any Subsidiary to such Single Employer Plan or the Pension
Benefit Guaranty Corporation, or (v) the Borrower or any
Subsidiary shall withdraw from a Multi-employer Plan for
purposes of Title IV of ERISA, and, as a result of any such
withdrawal, the Borrower or any Subsidiary shall incur a
material withdrawal liability to such Multi-employer Plan; or
(l) if there shall occur any "Event of Default" as
defined in any of the Loan Documents or as defined in the 364
Day Facility Credit Agreement; or
(m) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (except for the
Proffitt's Inc. 401(k) Retirement Plan) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person will be deemed to have
"beneficial ownership" of all securities that such Person has
the right to acquire, whether such right is exercisable
immediately or only after the passage of time or the
occurrence of an event or condition), directly or indirectly,
of more than 20% of the total voting power of the then
outstanding voting capital stock of the Borrower;
then, and in any such event and at any time thereafter, if
such Event of Default or any other Event of Default shall have
not been waived,
(A) either or both of the following actions
may be taken: (i) the Agent may, and at the
direction of the Required Lenders shall, declare
any obligation of the Lenders to make further Loans
or issue Letters of Credit terminated, whereupon
the obligation of each Lender to make further Loans
or issue Letters of Credit, hereunder shall
terminate immediately, and (ii) the Agent shall at
the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and
payable, and the same, including all interest
accrued thereon and all other obligations of the
Borrower to the Agent and the Lenders, shall
forthwith become immediately due and payable
without presentment, demand, protest, notice or
other formality of any kind, all of which are
hereby expressly waived, anything contained herein
or in any instrument evidencing the Obligations to
the contrary notwithstanding; provided, however,
that notwithstanding the above, if (I) there shall
occur an Event of Default under clause (g) or (h)
above, then the obligation of the Lenders to make
Loans and issue Letters of Credit hereunder shall
automatically terminate and automatically any and
all of the Obligations shall be immediately due and
payable without the necessity of any action by the
Agent or the Required Lenders or notice by the
Agent or the Lenders or to the Borrower or any
other Person or (II) if the Obligations shall
immediately become due and payable pursuant to (ii)
above, then the obligation of the Lenders to make
Loans and issue Letters of Credit hereunder shall
automatically terminate without the necessity of
any action by the Agent or the Required Lenders or
notice by the Agent or the Lenders or to the
Borrower or any other Person;
(B) The Borrower shall, upon demand of the
Agent acting on the direction of the Required
Lenders, and automatically upon the occurrence of
an Event of Default under clause (g) or (h) above,
deposit cash with the Agent in an amount equal to
the amount of any outstanding Letters of Credit
remaining undrawn, unpaid or at any time that might
become payable under the Letters of Credit, as
collateral security pursuant to the LC Account
Agreement for the repayment of any future drawings
or payments under such Letters of Credit; and
(C) the Agent and the Lenders shall have all
of the rights and remedies available under the Loan
Documents or under any applicable law.
9.02 Agent to Act. In case any one or more Events of
Default shall occur and not have been waived, the Agent shall,
at the direction of the Required Lenders, proceed to protect
and enforce their rights or remedies either by suit in equity
or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision
contained herein or in any other Loan Document, or to enforce
the payment of the Obligations or any other legal or equitable
right or remedy.
9.03 Cumulative Rights. No right or remedy herein
conferred upon the Lenders or the Agent is intended to be
exclusive of any other rights or remedies contained herein or
in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other
such right or remedy contained herein and therein or now or
hereafter existing at law or in equity or by statute, or
otherwise.
9.04 No Waiver. No course of dealing between the
Borrower and any Lender or the Agent or any failure or delay
on the part of any Lender or the Agent in exercising any
rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or
remedies and no single or partial exercise of any rights or
remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or
remedy on a future occasion.
9.05 Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes
and Obligations has been accelerated pursuant to Article IX
hereof, all payments received by the Agent hereunder, in
respect of any principal of or interest on the Obligations or
any other amounts payable by the Borrower hereunder shall be
applied by the Agent in the following order:
(i) amounts due to the Agent, the Issuing Bank, the
Swing Line Lender and the Lenders pursuant to Sections
2.12, 3.02(f), 3.03(i), 11.06 and 11.11 hereof;
(ii) amounts due to (A) the Issuing Bank pursuant to
Sections 3.03(ii) and 3.04 hereof, and (B) to
NationsBank, NMS and the Agent pursuant to Section 2.15
hereof;
(iii) payments of interest on Revolving Credit
Loans and Reimbursement Obligations, to be applied for
the ratable benefit of the Lenders, and payments of
interest on Competitive Bid Loans and Swing Line Loans to
be applied to the applicable Competitive Bid Loan Lender
and the Swing Line Lender, respectively;
(iv) payments of principal on Revolving Credit Loans
and Reimbursement Obligations, to be applied for the
ratable benefit of the Lenders, and payments of principal
on Competitive Bid Loans and Swing Line Loans to be
applied to the applicable Competitive Bid Loan Lender and
the Swing Line Lender, respectively;
(v) payment of cash amounts to the Agent in respect
of Letter of Credit Outstandings pursuant to Section
9.01(B) hereof;
(vi) payment of Obligations owed a Lender or Lenders
pursuant to Swap Agreements on a pro rata basis according
to amounts owed;
(vii) payments of all other amounts due under
this Agreement, if any, to be applied for the ratable
benefit of the Lenders; and
(viii) any surplus remaining after application as
provided for herein, to the Borrower or otherwise as may be
required by applicable law.
ARTICLE X
The Agent
10.01. Appointment, Powers, and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Agreement and the other Loan Documents
with such powers and discretion as are specifically delegated
to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this
sentence and in Section 10.05 and the first sentence of
Section 10.06 hereof shall include its affiliates and its own
and its affiliates' officers, directors, employees, agents):
(a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a
trustee or fiduciary for any Lender; (b) shall not be
responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in
or in connection with any Loan Document or any certificate or
other document referred to or provided for in, or received by
any of them under, any Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any
Loan Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or
have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by
any Loan Party or the satisfaction of any condition or to
inspect the property (including the books and records) of any
Loan Party or any of its Subsidiaries or affiliates; (d) shall
not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and (e) shall
not be responsible for any action taken or omitted to be taken
by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable
care.
10.02. Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel for any Loan
Party), independent accountants, and other experts selected by
the Agent. The Agent may deem and treat the payee of any Note
as the holder thereof for all purposes hereof unless and until
the Agent receives and accepts an Assignment and Acceptance
executed in accordance with Section 11.01 hereof. As to any
matters not expressly provided for by this Agreement, the
Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal
liability or that is contrary to any Loan Document or
applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any
such action.
10.03. Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of
Default unless the Agent has received written notice from a
Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the
occurrence of a Default or Event of Default, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall
(subject to Section 10.02 hereof) take such action with
respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders, provided that,
unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable
in the best interest of the Lenders.
10.04. Rights as Lender. With respect to its Revolving
Credit Commitment and the Loans made by it and the Letters of
Credit issued by it as the Issuing Bank, NationsBank (and any
successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the
Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits
from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other
business with any Loan Party or any of its Subsidiaries or
affiliates as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its affiliates may
accept fees and other consideration from any Loan Party or any
of its Subsidiaries or affiliates for services in connection
with this Agreement or otherwise without having to account for
the same to the Lenders.
10.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 11.11
hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their
respective Applicable Commitment Percentages, for any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees),
or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising
out of any Loan Document or the transactions contemplated
thereby or any action taken or omitted by the Agent under any
Loan Document provided that no Lender shall be liable for any
of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its
ratable share of any costs or expenses payable by the Borrower
under Section 11.11, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the
Borrower. The agreements contained in this Section 10.05
shall survive payment in full of the Loans, the Obligations
and all other amounts payable under this Agreement.
10.06. Non-Reliance on Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance
on the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own
credit analysis of the Loan Parties and their Subsidiaries and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under
the Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial
condition, or business of any Loan Party or any of its
Subsidiaries or affiliates that may come into the possession
of the Agent or any of its affiliates.
10.07. Resignation of Agent. The Agent may resign at
any time by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America
having combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by
a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article X shall continue in
effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
ARTICLE XI
Miscellaneous
11.01 Assignments and Participations.
(a) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a
portion of its Loans, its Notes, and its Revolving Credit
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) each such assignment by a Lender shall (A) be
of an equal percentage of all of its rights and obligations
under both the Revolving Credit Facility and the 364 Day
Facility, (B) be of a constant, and not varying, percentage of
all of its rights and obligations under this Agreement and its
Notes and under the 364 Day Facility Credit Agreement and the
promissory notes issued thereunder and (C) result in the
assigning Lender having an equivalent Applicable Commitment
Percentage under both the Revolving Credit Facility and the
364 Day Facility and the assignee Lender having an equivalent
Applicable Commitment Percentage under both the Revolving
Credit Facility and the 364 Day Facility; and
(iii) except in the case of an assignment to
another Lender or an assignment of all of a Lender's rights
and obligations under this Agreement and under the 364 Day
Facility Credit Agreement, any partial assignment of a
Lender's Revolving Credit Commitment and its 364 Day Facility
Commitment shall be in an aggregate amount at least equal to
$10,000,000 or an integral multiple of $5,000,000 in excess
thereof;
(iv) except in the case of an assignment of all of
a Lender's rights and obligations under this Agreement, no
Lender shall make any assignment that would result in the sum
of its Revolving Credit Commitment and its 364 Day Facility
Commitment being less than $15,000,000;
(v) in the event a Lender assigns all of its
Revolving Credit Commitment, such assignment must include all
of its Competitive Bid Loans; and
(vi) the parties to such assignment shall execute
and deliver to the Agent for its acceptance an Assignment and
Acceptance, together with any Note subject to such assignment
and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment
and Acceptance, the assignee thereunder shall be a party
hereto and, to the extent of such assignment, have the
obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations
under this Agreement; provided, the assigning Lender shall be
entitled to reimbursement from the Borrower with respect to
amounts payable pursuant to Sections 4.01, 4.05, 4.06, 11.06
and 11.11 in connection with events prior to such assignment;
provided further, to the extent the Borrower makes any such
payments to the assigning Lender, the Borrower shall not be
required to also pay the assignee such amounts. Upon the
consummation of any assignment pursuant to this Section, the
assignor, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or
a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 4.06.
(b) The Agent shall maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Revolving Credit
Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note
subject to such assignment and payment of the processing fee,
the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii)
give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more
Persons in a portion of its rights, obligations or rights and
obligations under this Agreement (including all or a portion
of its Commitment or its Loans); provided, however, that (i)
such Lender s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in
Article IV and the right of setoff contained in Section 11.04,
and (iv) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender s
rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of the
Borrower relating to its Loans and its Notes and to approve
any amendment, modification, or waiver of any provision of
this Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at
which interest is payable on such Loans or Notes, extending
any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes, or extending its
Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time assign and pledge
all or any portion of its Loans and its Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender
from its obligations hereunder.
(f) Any Lender may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of
such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject,
however, to the provisions of Section 11.03 hereof.
(g) The Borrower may not assign any rights, powers,
duties or obligations under this Agreement or the other Loan
Documents without the prior written consent of all the
Lenders.
11.02 Notices. All notices shall be in writing, except
as to telephonic notices expressly permitted or required
herein, and written notices shall be delivered by hand
delivery, telefacsimile, overnight courier or certified or
registered mail. Any notice shall be conclusively deemed to
have been received by any party hereto and be effective on the
day on which delivered to such party (against (except as to
telephonic or telefacsimile notice) receipt therefor) at the
address set forth below or such other address as such party
shall specify to the other parties in writing:
(a) if to the Borrower:
Saks Incorporated
750 Lakeshore Parkway
Birmingham, AL 35211
Attention: Treasurer
Telephone: (205) 940-4732
Telefacsimile: (205) 940-4098
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: Paul Cushing
Telephone: (404) 881-7000
Telefacsimile: (404) 881-4777
(b) if to the Agent or to NationsBank in its capacity as
the initial Issuing Bank:
NationsBank, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mr. Herbert Boyd, Agency Services
Telephone: (704) 388-3225
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, N.A.
600 Peachtree Street, N.E., 9th Floor
Atlanta, Georgia 30308-2213
Attention: Nancy Goldman
Telephone: 404-607-5539
Telefacsimile: 404-607-6467
(c) if to the Lenders:
At the addresses set forth on the signature
pages hereof and on the signature page of each
Assignment and Acceptance.
11.03 Confidentiality. The Agent and each Lender
(each, a "Lending Party") agrees to keep confidential any
information furnished or made available to it by the Borrower
pursuant to this Agreement and that is marked confidential;
provided that nothing herein shall prevent any Lending Party
from disclosing such information (a) to any other Lending
Party or any affiliate of any Lending Party, or any officer,
director, employee, agent or advisor of any Lending Party or
any affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or
regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory
agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in
connection with the exercise of any remedy under this
Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this
Section, to any actual or proposed participant or assignee.
11.04 Right of Setoff; Adjustments.
(a) Upon the occurrence and during the continuance of
any Event of Default, each Lender (and each of its affiliates)
is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time
owing by such Lender (or any of its affiliates) to or for the
credit or the account of the Borrower against any and all of
the Obligations of the Borrower now or hereafter existing,
irrespective of whether such Lender shall have made any demand
under this Agreement or any of its Notes. Each Lender agrees
promptly to notify the Borrower after any such setoff and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender under
this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that
such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any
time receive any payment of all or part of the Loans (other
than Competitive Bid Loans) owing to it, or interest thereon,
or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, or otherwise), in a
greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other
Lender's Loans (other than Competitive Bid Loans) owing to it,
or interest thereon, such benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans (other than
Competitive Bid Loans) owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that any
Lender so purchasing a participation from a Lender pursuant to
this Section 11.04 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the
right of setoff) with respect to such participation as fully
as if such Person were the direct creditor of the Borrower in
the amount of such participation.
11.05 Survival. All covenants, agreements,
representations and warranties made herein shall survive the
making by the Lenders of the Loans and the expiration of the
Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in
full force and effect until the occurrence of the Total
Facility Termination Date. Whenever in this Agreement, any of
the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such
party and all covenants, provisions and agreements by or on
behalf of the Borrower which are contained in this Agreement,
the Notes and the other Loan Documents shall inure to the
benefit of the successors and permitted assigns of the Lenders
or any of them.
11.06 Expenses. The Borrower agrees to pay on demand
all reasonable costs and expenses of the Agent in connection
with the preparation, execution, delivery, administration,
modification, waiver and amendment of this Agreement, the
other Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees
and expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. The Borrower
further agrees to pay on demand all reasonable costs and
expenses of the Agent and of each of the Lenders, if any
(including, without limitation, reasonable attorneys' fees
actually incurred and expenses and the cost of internal
counsel), in connection with the enforcement, workout or
preservation of any rights under this Agreement and other Loan
Documents (whether through negotiations, legal proceedings, or
otherwise) and the other documents to be delivered hereunder.
11.07 Amendments and Waivers. Any provision of this
Agreement or any other Loan Document may be amended or waived
if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Required Lenders (and, if
Article X or the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Lenders, (i) increase
the Revolving Credit Commitments of the Lenders, (ii) reduce
the principal of, or rate of interest on, any Loan (other than
a Swing Line Loan or a Competitive Bid Loan, which shall
require only the written consent or approval by the Swing Line
Lender or applicable Lender for such Competitive Bid Loan,
respectively) or any fees or other amounts payable hereunder,
including without limitation accrued interest, (iii) postpone
any date fixed for the payment of any scheduled installment of
principal of or interest on any Loan or any fees or other
amounts payable hereunder or for termination of any Revolving
Credit Commitment, (iv) change the percentage of the Revolving
Credit Commitments or of the unpaid principal amount of the
Notes, or the number of Lenders, or the amount of Credit
Exposure, which shall be required for the Lenders or any of
them to take any action under this Section or any other
provision of this Agreement, (v) release any Guarantor or (vi)
amend or delete any provision of this Section 11.07.
11.08 Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or
account for more than one such fully-executed counterpart.
11.09 Termination. At such date (the "Total Facility
Termination Date") as (a) all of the Revolving Credit
Commitments have been terminated, (b) none of the Lenders is
obligated any longer under this Agreement to make any Loans,
(c) the Issuing Bank is no longer obligated under this
Agreement to issue any Letters of Credit, (d) the Swing Line
Lender is no longer obligated under this Agreement to make
Swing Line Loans, (e) no Letters of Credit remain issued and
outstanding and (f) all Obligations (other than liabilities of
the Borrower to any Lender under a Swap Agreement and
obligations which survive as provided in the following two
sentences) have been paid and satisfied in full, this
Agreement shall terminate. Notwithstanding the foregoing, the
termination of this Agreement shall not affect any rights of
the Borrower, the Lenders or the Agent or any obligation of
the Borrower, the Lenders or the Agent, arising prior to the
effective date of such termination, and all representations,
warranties, covenants, waivers and agreements contained herein
shall continue until this Agreement is so terminated, unless
continuing thereafter as otherwise provided herein. Without
limitation of the foregoing, the provisions of Sections 4.05,
4.06, 10.05, 11.06 and 11.11 shall survive the occurrence of
the Total Facility Termination Date and the termination of
this Agreement and the Loan Documents. Notwithstanding the
foregoing, if after receipt of any payment pursuant to the
Loan Documents of all or any part of the Obligations, any
Lender is for any reason compelled to surrender such payment
to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of
trust funds or for any other reason, this Agreement shall
continue in full force and the Borrower shall be liable to,
and shall indemnify and hold such Lender harmless for, the
amount of such payment surrendered until such Lender shall
have been finally and irrevocably paid in full. The
provisions of the foregoing sentence shall be and remain
effective notwithstanding any contrary action which may have
been taken by the Lenders in reliance upon such payment, and
any such contrary action so taken shall be without prejudice
to the Lenders' rights under this Agreement and shall be
deemed to have been conditioned upon such payment having
become final and irrevocable.
11.10 Governing Law. All documents executed pursuant to
the transactions contemplated herein, including, without
limitation, this Agreement and each of the Loan Documents
shall be deemed to be contracts made under, and for all
purposes shall be construed in accordance with, the internal
laws and judicial decisions of the State of Georgia. The
Borrower hereby submits to the jurisdiction and venue of the
state and federal courts of Georgia for the purposes of
resolving disputes hereunder or for the purposes of
collection.
11.11 Indemnification. (a) The Borrower agrees to
indemnify and hold harmless the Agent and each Lender and each
of their affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without
limitation, assessment and cleanup costs and reasonable
attorneys', consultants or other expert fees, expenses and
disbursements ) that are incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or
in connection with or relating to or by reason of (including,
without limitation, in connection with any investigation,
litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the
transactions contemplated herein, the actual or proposed use
of the Letters of Credit or proceeds of the Loans, the
violation of any Environmental Law by the Borrower or any
Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or the handling,
storage, transportation, treatment, emission, release,
discharge or disposal of any Hazardous Material by, on behalf
or in respect of the Borrower or any Subsidiary or on or with
respect to property owned or leased or operated by the
Borrower or any Subsidiary, except to the extent (i) such
claim, damage, loss, liability, cost, or expense is found in
a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct or (ii) relating to
actions or proceedings brought by an Indemnified Party against
another Indemnified Party not arising from any action or
inaction by the Borrower or any Subsidiary or (iii) resulting
from any claim brought by the Borrower against any Lender for
failure to fund under the Revolving Credit Facility (including
the failure to fund a Competitive Bid Loan after the
Borrower's acceptance of such Lender's Competitive Bid Quote
in accordance with Section 2.03 hereof) in accordance with
this Agreement in which the Borrower is the prevailing party.
In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.11
applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. If and to
the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable
law. The Borrower further agrees not to assert any claim
against the Agent, any Lender, any of their affiliates, or any
of their respective directors, officers, employees, attorneys,
agents, and advisers, on any theory of liability for special,
indirect, consequential, or punitive damages arising out of or
otherwise relating to the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use
of the proceeds of the Loans. Without prejudice to the
survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this
Section 11.11 shall survive the occurrence of the Total
Facility Termination Date.
(b) If a claim is to be made by a party entitled to
indemnification under this Section 11.11 against the Borrower,
the Indemnified Party shall give written notice to the
Borrower promptly after the Indemnified Party receives actual
notice of any claim, action, suit, loss, cost, liability,
damage or expense incurred or instituted for which the
indemnification is sought. If requested by Borrower in
writing, and so long as no Default or Event of Default shall
have occurred and be continuing, such Indemnified Party shall
contest at the expense of the Borrower the validity,
applicability and/or amount of such suit, action, or cause of
action to the extent such contest may be conducted in good
faith on legally supportable grounds. If any lawsuit or
enforcement action is filed against any Indemnified Party,
written notice thereof shall be given to the Borrower as soon
as practicable (and in any event within 20 days after the
service of the citation or summons). Notwithstanding the
foregoing, the failure so to notify the Borrower as provided
in this Section will relieve the Borrower from liability
hereunder only if and to the extent that such failure results
in the forfeiture by the Borrower of any substantive rights or
defenses. The Indemnified Party shall control the defense and
investigation of such lawsuit or action and to employ and
engage counsel of its own choice to handle and defend the
same, at the Borrower's cost, risk and expense; provided,
however, that the Borrower may, at its own cost participate in
the investigation, trial and defense of such lawsuit or action
and any appeal arising therefrom. If the Borrower has
acknowledged to the Indemnified Party its obligation to
indemnify hereunder, the Indemnified Party, so long as no
Default or Event of Default shall have occurred and be
continuing, shall not settle such lawsuit or enforcement
action without the prior written consent of the Borrower and,
if the Borrower has not so acknowledged its obligation, the
Indemnified Party shall not settle such lawsuit or enforcement
action without giving twenty (20) days' prior written notice
of such settlement and its terms to the Borrower.
11.12 Headings and References. The headings of the
Articles and Sections of this Agreement are inserted for
convenience of reference only and are not intended to be a
part of, or to affect the meaning or interpretation of this
Agreement. Words such as "hereof", "hereunder", "herein" and
words of similar import shall refer to this Agreement in its
entirety and not to any particular Section or provisions
hereof, unless so expressly specified. As used herein, the
singular shall include the plural, and the masculine shall
include the feminine or a neutral gender, and vice versa,
whenever the context requires.
11.13 Severability. If any provision of this Agreement
or the other Loan Documents shall be determined to be illegal
or invalid as to one or more of the parties hereto, then such
provision shall remain in effect with respect to all parties,
if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall
remain effective and binding on the parties hereto.
11.14 Entire Agreement. This Agreement, together with
the other Loan Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof
and supersedes all previous proposals, negotiations,
representations, commitments and other communications between
or among the parties, both oral and written, with respect
thereto.
11.15 Agreement Controls. In the event that any term of
any of the Loan Documents other than this Agreement conflicts
with any term of this Agreement, the terms and provisions of
this Agreement shall control.
11.16 Usury Savings Clause. Notwithstanding any other
provision herein, the aggregate interest rate charged under
any of the Notes, including all charges or fees in connection
therewith deemed in the nature of interest under Georgia law,
shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any
time exceeds the Highest Lawful Rate (as defined below), the
outstanding amount of the Loans made hereunder shall bear
interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which
would have been due hereunder if the stated rates of interest
set forth in this Agreement had at all times been in effect.
In addition, if and when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account
the increase provided for above) is less than the total amount
of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times
been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the
difference between the amount of interest paid and the amount
of interest which would have been paid if the Highest Lawful
Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower
to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives
any consideration which constitutes interest in excess of the
Highest Lawful Rate, then any such excess shall be canceled
automatically and, if previously paid, shall at such Lender's
option be applied to the outstanding amount of the Loans made
hereunder or be refunded to the Borrower. As used in this
paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from time to
time may be contracted for, charged, or received under the
laws applicable to suc Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now
allow.
11.17 Reserved.
11.18 Waiver of Jury Trial. EXCEPT AS PROHIBITED BY
LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE LOAN DOCUMENTS.
11.19 Removal of Lenders. If (a) a Lender requests
compensation pursuant to Sections 4.01(a) or (b) or Section
4.06 and the Required Lenders are not also doing the same, (b)
the obligation of a Lender to make Eurodollar Loans or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans
shall be suspended pursuant to Section 4.01(a) or Section 4.03
but the obligation of the Required Lenders shall not have been
suspended under such Sections, or (c) any Lender refuses or
otherwise fails to consent to any waiver, amendment or other
modification of any Loan Document which (i) requires the
unanimous written consent of all Lenders under Section 11.07
and (ii) has been approved in writing by the Required Lenders,
then, so long as there does not then exist any Default or
Event of Default, the Borrower may either (A) demand that such
Lender (the "Affected Lender"), and upon such demand the
Affected Lender shall promptly, assign its Revolving Credit
Commitment and its 364 Day Facility Commitment and all of its
Loans and 364 Day Facility Loans to another Eligible Assignee
identified by the Borrower and willing to become a Lender
hereunder and under the 364 Day Facility Credit Agreement
subject to and in accordance with the provisions of Section
11.01(a) for a purchase price equal to the aggregate principal
balance of Loans and 364 Day Facility Loans then owing to the
Affected Lender plus any accrued but unpaid interest thereon,
accrued but unpaid fees owing to the Affected Lender and any
amounts owing the Affected Lender under Section 4.05 hereunder
and Section 4.05 under the 364 Day Facility Credit Agreement,
or (B) pay to the Affected Lender the aggregate principal
balance of Loans and 364 Day Facility Loans then owing to the
Affected Lender plus any accrued but unpaid interest thereon,
accrued but unpaid fees owing to the Affected Lender, any
amounts owing the Affected Lender under Section 4.05 hereunder
and Section 4.05 under the 364 Day Facility Credit Agreement
and any other amounts agreed by the Borrower to be owing to
the Affected Lender, whereupon the Affected Lender shall no
longer be a party hereto or the 364 Day Facility Credit
Agreement or have any rights or obligations hereunder or
thereunder or under any of the other Loan Documents (including
such documents as defined in the 364 Day Facility Credit
Agreement) and the Total Revolving Credit Commitment shall
immediately and permanently be reduced by an amount equal to
the amount of the Affected Lender's Revolving Credit
Commitment and the Total Revolving Credit Commitment (as
defined in the 364 Day Facility Credit Agreement) shall
immediately and permanently be reduced by an amount equal to
the amount of the Affected Lender's 364 Day Facility
Commitment. Each of the Agent and the Affected Lender shall
reasonably cooperate in effectuating the replacement of an
Affected Lender under this Section 11.19, but at no time shall
the Agent or the Affected Lender be obligated in any way
whatsoever to initiate any such replacement. The exercise by
the Borrower of its rights under this Section 11.19 shall be
at the Borrower's sole cost and expense.
11.20 Guaranty Terminations. Upon the satisfaction of
each of the following conditions, the Guaranty shall upon
delivery to the Agent of the written request of the Borrower
automatically terminate and be of no further force or effect
and each Guarantor thereunder shall be automatically,
unconditionally and fully released and discharged from all of
its obligations and liabilities under or in respect thereof
without any action by the Borrower, any Subsidiary, the Agent
(other than its written approval of the release terms as
contemplated in condition (b) below) or any Lender: (a) the
achievement of an Investment Grade Rating by the Borrower and
(b) each Subsidiary of the Borrower shall be released
(simultaneously with, or prior to, the effectiveness of this
Section 11.20) on terms reasonably satisfactory to the Agent
from its guaranty obligations of any other Indebtedness for
Money Borrowed of the Borrower (other than such guarantees
which together with all other Subsidiary Indebtedness (after
giving effect to the termination of the Guaranty) in the
aggregate do not exceed the maximum amount of Subsidiary
Indebtedness then permitted under Section 8.04(b) hereof). In
addition, any Pledge Agreement delivered pursuant to Section
7.18 shall automatically terminate and be of no further force
or effect simultaneously with the termination of the Guaranty.
The Agent shall promptly deliver to the Borrower any stock
certificates and stock powers delivered to the Agent in
connection with any such Pledge Agreement.
[Signatures on following pages.]
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be made, executed and delivered by their duly
authorized officers as of the day and year first above
written.
SAKS INCORPORATED
By:
Title:
ATTEST:
_________________________
_________________________
NATIONSBANK, N.A., as
Administrative Agent for the
Lenders
By:
Title: _________ Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Co-Syndication
Agent and as a Lender
By:
Name:
Title:
Lending Office:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260-0060
Attention: Patricia Merritt
Vice President
Telephone: (212) 648-0332
Telefacsimile: (212) 648-5939
Wire Transfer Instructions:
Morgan Guaranty Trust Company of
New York
New York, New York
ABA# 021-000-238
For Credit to: Loan Department
A/C: 999-99-090
Attention:Corporate Processing
- Mod 02
Reference: Proffitt's, Inc.
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent and as
a Lender
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
The Chase Manhattan Bank
270 Park Avenue, 48th Floor
New York, New York 10017
Attention: Barry Bergman
Telephone: (212) 270-0203
Telefacsimile: (212) 270-5646
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA No.: 021-000021
Attention: John Knapp, Loan
Services Dept.
Reference:
CITIBANK, N.A.,
as Documentation Agent and as a
Lender
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
Citicorp Securities
399 Park Avenue - 12/19
New York, New York 10022
Attention:Gregory Frenzel
Assistant Vice President -
Banker
Telephone: (212) 559-6422
Telefacsimile: (212) 793-7585
Wire Transfer Instructions:
Citibank, N.A.
399 Park Avenue
New York, New York 10022
ABA No.: 021000089
Account No.: 4063-2387
Attention: Debby Freidland
Reference: Saks Incorporated
NATIONSBANK, N.A.
By:
Name:
Title: _______ Vice President
Lending Office:
NationsBank, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mr. Herbert Boyd,
Agency Services
Telephone: (704) 388-3225
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, N.A.
ABA# 053000196
Reference: Saks Incorporated
Account No.: 136621-2250600
Attention: CCS/Agency Services
NATIONAL CITY BANK, KENTUCKY
By:
Name:
Title: Vice President
Lending Office:
National City Bank, Kentucky
101 South 5th Street
8th Floor
Louisville, Kentucky 40202
Attention: Mr. Kevin L.
Anderson,
Vice President
Telephone: (502) 581-7894
Telefacsimile: (502) 581-5122
Wire Transfer Instructions:
National City Bank Kentucky
101 South 5th Street
Louisville, Kentucky 40202
ABA# 083-000-056
Reference: Saks Incorporated
Account No.: 5737553042
Attention: Ms. Etta Moore,
Commercial Loan Operations
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office:
SouthTrust Bank, N.A.
420 N. 20th Street
11th Floor
Birmingham, Alabama 35203
Attention: Mr. Alex Morton
Assistant Vice President
Telephone: (205) 254-4990
Telefacsimile: (205) 254-8270
Wire Transfer Instructions:
SouthTrust Bank, N.A.
420 N. 20th Street
Birmingham, Alabama 35203
ABA# 062000080
Account No.: 131009
Reference: Saks Incorporated
Attention: Ms. Tracey Crawford
(ext. 5446)
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
Name:
Title: Senior Vice President
Lending Office:
First Tennessee Bank National
Association
165 Madison Ave.
6th Floor Main Office
Memphis, Tennessee 38103
Attention: Mr. Jim Chapman
Telephone: (901) 523-4273
Telefacsimile: (901) 523-4633
Wire Transfer Instructions:
First Tennessee Bank National
Association
Memphis, Tennessee
ABA# 084000026
Account No.: 114174 6870
Reference: Proffitt's, Inc
Saks, Incorporated.
Attention: Ms. Deborah Johnson
ext. 4188
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
Lending Office:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Mr. Patrick M.
Brown, Relationship
Manager
Telephone: (404) 877-1506
Telefacsimile: (404) 888-8998
Wire Transfer Instructions:
The Bank of Nova Scotia
New York Agency
One Liberty Plaza
New York, New York 10006
ABA# 026002532
For Further Credit to:
The Bank of Nova Scotia -
Atlanta Agency
Account No.: 0606634
Attention:Atlanta/Houston Loan
Operations
Reference: Saks Incorporated
HIBERNIA NATIONAL BANK
By:
Name:
Title: Vice President
Lending Office:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Mr. Christopher B.
Pitre, Vice
President
Telephone: (504) 533-2878
Telefacsimile: (504) 533-5344
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA# 065000090
Account No.: 0520-36615
Reference: Proffitt's Inc.
Attention: National Accounts
FIRST AMERICAN NATIONAL BANK
By:
Name:
Title:
Lending Office:
First American National Bank
6000 Poplar Ave.
Suite 300
Memphis, Tennessee 38119
Attention: Mr. William R.
Stutts
Senior Vice President
Telephone: (901) 762-5675
Telefacsimile: (901) 762-5665
Wire Transfer Instructions:
First American National Bank
490 Metroplex Drive
Nashville, Tennessee 37211
ABA# 064000017
Account No.: 1002295498
Reference: Saks Incorporated
Attention: Frenisa Joy
NORWEST BANK IOWA, NATIONAL
ASSOCIATION
By:
Name:
Title: Vice President
Lending Office:
Norwest Bank Iowa, National
Association
M.S. 4019
666 Walnut
Des Moines, Iowa 50309
Attention: Mr. Randall R.
Stromley, Vice President
Telephone: (515) 245-3249
Telefacsimile: (515) 245-3128
Wire Transfer Instructions:
Norwest Bank Iowa, N.A.
Des Moines, Iowa
ABA# 073000228
Account No.: 970656
Reference: Proffitt's, Inc./
Saks Incorporated
Attention: Cheryl Hansen or
Brian Jones
THE FIRST NATIONAL BANK OF
CHICAGO
By:
Name:
Title:
Lending Office:
The First National Bank of
Chicago
One First National Plaza
Suite 0086
Chicago, Illinois 60670
Attention: Ms. Debora
Oberling
Telephone: (312) 732-4644
Telefacsimile: (312) 732-1117
Wire Transfer Instructions:
The First National Bank of
Chicago
Chicago, Illinois
ABA# 071000013
Account No.: 7521-7653
DCS Incoming
Clearing Account
Reference: Saks Incorporated
Attention: Rosario Guzman
CREDIT LYONNAIS ATLANTA AGENCY
By:
Name:
Title: Vice President
Credit Lyonnais Atlanta Agency
303 Peachtree St., N.E., Suite
4400
Atlanta, Georgia 30308
Attention: Christina Earnshaw
Vice President
Telephone: (404) 524-3700
Telefacsimile: (404) 584-5249
Wire Transfer Instructions:
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
ABA#0260-0807-3
Account No.:01-24173.0001.00
Credit: Credit Lyonnais
Atlanta Agency
Reference: Saks Incorporated
Attention: Loan Servicing
THE BANK OF NEW YORK
By:
Name:
Title:
Lending Office:
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Paula D. Regan
Vice President
Telephone: (212) 635-7867
Telefacsimile:(212)635-1481/1483
Wire Transfer Instructions:
Base Rate Loans: The Bank of New York
101 Barclay Street
ABA: 021000018
Commercial Loan Servicing
Department
GLA No.: 111556
Reference: Saks Incorporated
ie: principal, interest, fees
EuroDollar Loans: The Bank of New York
101 Barclay Street
ABA: 021000018
Eurodollar/Cayman Funding Area
GLA No.: 111556
Reference: Saks Incorporated
ie: principal, interest
U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
Lending Office:
U.S. Bank National Association
601 Second Avenue South, Mail
Stop MPFP0510
Minneapolis, Minnesota 55402
Attention: Michael J. Reymann
Telephone: (612) 973-4549
Telefacsimile: (612) 973-0821
Wire Transfer Instructions:
U.S. National Bank Association
601 Second Avenue South
Minneapolis, Minnesota 55402
ABA #: 091000022
Attention: Commercial Loan
Service Center
Account No.: 30000472160600
Reference: for Proffitt's,
Inc.
A/C No.: 1735056807
UNION BANK OF CALIFORNIA, N.A.
By:
Name:
Title:
Lending Office:
Union Bank of California, N.A.
350 California St., 6th Floor
San Francisco, California 94104
Attention: Susan Biba
Vice President
Telephone: (415) 705-5097
Telefacsimile: (415) 705-5093
Wire Transfer Instructions:
Union Bank of California, N.A.
1980 Saturn Street
Monterey Park, California 91755
ABA No.: 1220-0049-6
Account No.: 070196431
Attention: Commercial Loan
Operations
Reference: Saks Incorporated
WACHOVIA BANK, N.A.
By:
Name:
Title:
Lending Office:
Wachovia Bank, N.A.
MCGA 3940
191 Peachtree Street, NE, 29th
Floor
Atlanta, Georgia 30303
Attention: Lanny Nixon
Vice President
Telephone: (404) 332-4884
Telefacsimile: (404) 332-5016
Wire Transfer Instructions:
Wachovia Bank, N.A.
191 Peachtree Street, NE
Atlanta, Georgia 30303-17517
ABA# 061000010
Account No.: 18-800-621
Attention: Margery Pace
Reference: Saks Inc.
ABN AMRO BANK NV
By:
Name:
Title:
Lending Office:
ABN AMRO Bank N.V.
135 South LaSalle Street, Suite
625
Chicago, Illinois 60603
Attention: Credit
Administration
Telephone: (312) 904-8835
Telefacsimile: (312) 904-8840
With a copy to: ABN AMRO Bank N.V.
1 Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA# 026009580
Account No.: 650-001-1789-41
Attention: Chicago CPU
Ref: Proffitts/Saks, Inc.
BANKBOSTON, N.A.
By:
Name:
Title:
Lending Office:
BankBoston, N.A.
100 Federal Street
Retail & Apparel Division
Mail Stop 01-09-05
Boston, Massachusetts 02110
Attention: Ms. Kathleen A.
Dimock
Vice President
Telephone:(617) 434-3830
Telefacsimile: (617) 434-6685
Wire Transfer Instructions:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
ABA# 011 000 390
Attention: Commercial Loan
Services
Admin. 57
Reference: Saks Incorporated
FIFTH THIRD BANK
By:
Name:
Title:
Lending Office:
Fifth Third Bank
38 Fountain Square Plaza
Maildrop 109054
Cincinnati, Ohio 45263
Attention: Anne M. Koch,
Officer
Telephone: (513) 579-4110
Telefacsimile: (513) 579-5226
Wire Transfer Instructions:
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
ABA# 042000314
Account No.: 72876175
Attention: Anne Koch
Reference: Saks Incorporated
BANK OF MONTREAL
By:
Name:
Title:
Lending Office:
Bank of Montreal
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Sheila C. Weimer
Telephone: (312) 750-6044
Telefacsimile: (312) 750-3702
Wire Transfer Instructions:
Harris Trust & Savings Bank
Chicago, Illinois
ABA# 071000288
Account No.: 124-856-6
Attention: Client Services
Reference: Saks Incorporated
MELLON BANK, N.A.
By:
Name:
Title:
Lending Office:
Mellon Bank
1 Mellon Bank Center
Room 4525
Pittsburgh, Pennsylvania 15258
Attention: Richard Schaich
Telephone: (412) 234-4420
Telefacsimile: (412) 236-1914
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania
ABA# 043000261
Account No.: 990873800
Attention: Jodi Stewart
Reference: Saks Incorporated
FIRST UNION NATIONAL BANK
By:
Name: Jeff Fisher
Title:
By:
Name:
Title:
Lending Office:
First Union National Bank
999 Peachtree Street, 9th Floor
Atlanta, Georgia 30309
Telephone: (404) 827-7580
Telefacsimile: (404) 225-4255
Attention: Wes Burton
Wire Transfer Instructions:
First Union National Bank
Jacksonville, Florida
ABA No.: 063000021
Attention: Janie Cusack
Reference:Saks Incorporated
(Proffitt's, Inc.)
Account Name: Commercial Loans
Account No.: GL145916 2008
STAR BANK, N.A.
By:
Name:
Title:
Lending Office:
Star Bank, N.A.
425 Walnut Street, ML 8160
Cincinnati, Ohio 45201
Attention: Richard W. Neltner,
Vice President
Telephone: (513) 632-4073
Telefacsimile: (513) 632-2068
Wire Transfer Instructions:
Star Bank, N.A.
ABA# 042-000-013
Account No.: 990-189 3
Reference: Saks Incorporated
Attention: Cathy Siegel, Loan
Operations
AMSOUTH BANK
By:
Name: David A. Simmons
Title: Senior Vice President
Lending Office:
AmSouth Bank
1900 Fifth Avenue North
7th Floor
Birmingham, Alabama 35203
Attention: David A. Simmons
Telephone: (205) 326-5924
Telefacsimile: (205) 801-0157
Wire Transfer Instructions:
AmSouth Bank
ABA# 062000019
Account No.: 001102450400100
Reference: Saks Incorporated
Attention: Wendy Fields
MERCANTILE BANK NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office:
Mercantile Bank
One Mercantile Center
7th & Washington
St. Louis, Missouri 63166
Attention: Lisa Voland
Telephone: (314) 418-2513
Telefacsimile: (314) 418-8162
Wire Transfer Instructions:
Mercantile Bank
St. Louis, Missouri
ABA# 081000210
Account No.: 140117-939
Attention: Commercial Loan
Operations
Reference:
Exhibit 4.2
CREDIT AGREEMENT
(364 Day Facility)
by and among
SAKS INCORPORATED
as Borrower,
NATIONSBANK, N. A.,
as Administrative Agent,
NATIONSBANC MONTGOMERY SECURITIES LLC
as Lead Arranger,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
and
THE CHASE MANHATTAN BANK,
as Co-Syndication Agents,
CITIBANK, N.A.,
as Documentation Agent
and
The Lenders from time to time party hereto
September 17, 1998
TABLE OF CONTENTS
Page
ARTICLE I -- Definitions and Terms
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.02 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . 25
1.03 Terms Consistent. . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II -- Revolving Credit Loans
2.01 Revolving Credit Loans. . . . . . . . . . . . . . . . . . . . 26
2.02 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.03 Competitive Bid Loans . . . . . . . . . . . . . . . . . . . . 27
2.04 Payment of Interest . . . . . . . . . . . . . . . . . . . . . 30
2.05 Payment of Principal. . . . . . . . . . . . . . . . . . . . . 31
2.06 Payments; Non-Conforming Payments . . . . . . . . . . . . . . 31
2.07 Borrower's Account. . . . . . . . . . . . . . . . . . . . . . 32
2.08 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.09 Pro Rata Payments . . . . . . . . . . . . . . . . . . . . . . 32
2.10 Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.11 Conversions and Elections of Subsequent Interest Periods 33
2.12 Facility Fees and Utilization Premium . . . . . . . . . . . . 33
2.13 Deficiency Loans. . . . . . . . . . . . . . . . . . . . . . . 34
2.14 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 34
2.15 Additional Fees . . . . . . . . . . . . . . . . . . . . . . . 35
2.16 Revolving Credit Facility Extension and Term Loan Option 35
ARTICLE III -- [Reserved]
ARTICLE IV -- Change in Circumstances
4.01 Increased Cost and Reduced Return . . . . . . . . . . . . . . 38
4.02. Limitation on Types of Loans. . . . . . . . . . . . . . . . . 39
4.03 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.04 Treatment of Affected Loans . . . . . . . . . . . . . . . . . 40
4.05 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 40
4.06 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V -- Conditions to Making Loans
5.01 Conditions of Initial Loan. . . . . . . . . . . . . . . . . . 44
5.02 Conditions of Loans . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI -- Representations and Warranties
6.01 Representations and Warranties. . . . . . . . . . . . . . . . 48
ARTICLE VII -- Affirmative Covenants
7.01 Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . 55
7.02 Maintain Properties . . . . . . . . . . . . . . . . . . . . . 56
7.03 Existence, Qualification, Etc.. . . . . . . . . . . . . . . . 56
7.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.05 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.06 True Books. . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.07 Right of Inspection . . . . . . . . . . . . . . . . . . . . . 57
7.08 Observe All Laws; Licenses. . . . . . . . . . . . . . . . . . 57
7.09 Covenants Extending to Subsidiaries . . . . . . . . . . . . . 57
7.10 Officer's Knowledge of Default. . . . . . . . . . . . . . . . 57
7.11 Suits or Other Proceedings. . . . . . . . . . . . . . . . . . 57
7.12 Notice of Discharge of Hazardous Material or
Environmental Complaint. . . . . . . . . . . . . . . . . . . . . . . . . 58
7.13 Environmental Compliance. . . . . . . . . . . . . . . . . . . 58
7.14 Year 2000 Notice. . . . . . . . . . . . . . . . . . . . . . . 58
7.15 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 58
7.16 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . 58
7.17 Continued Operations. . . . . . . . . . . . . . . . . . . . . 59
7.18 New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VIII -- Negative Covenants
8.01 Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . 61
8.02 Consolidated Fixed Charge Ratio . . . . . . . . . . . . . . . 61
8.03 Consolidated Funded Total Indebtedness to Consolidated EBITDA 61
8.04 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 61
8.05 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.06 Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . 64
8.07 Investments; Acquisitions . . . . . . . . . . . . . . . . . . 65
8.08 Merger or Consolidation . . . . . . . . . . . . . . . . . . . 65
8.09 Transactions with Affiliates. . . . . . . . . . . . . . . . . 66
8.10 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . 66
8.11 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.12 Dissolution, etc. . . . . . . . . . . . . . . . . . . . . . . 66
8.13 Rate Hedging Obligations. . . . . . . . . . . . . . . . . . . 67
ARTICLE IX -- Events of Default and Acceleration
9.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . 68
9.02 Agent to Act. . . . . . . . . . . . . . . . . . . . . . . . . 71
9.03 Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . 71
9.04 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.05 Allocation of Proceeds. . . . . . . . . . . . . . . . . . . . 72
ARTICLE X -- The Agent
10.01 Appointment, Powers, and Immunities. . . . . . . . . . . . . 73
10.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . 73
10.03 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.04 Rights as Lender. . . . . . . . . . . . . . . . . . . . . . . 74
10.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 74
10.06 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . 74
10.07 Resignation of Agent. . . . . . . . . . . . . . . . . . . . . 75
ARTICLE XI -- Miscellaneous
11.01 Assignments and Participations. . . . . . . . . . . . . . . . 76
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.03 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 79
11.04 Right of Setoff; Adjustments. . . . . . . . . . . . . . . . . 79
11.05 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.06 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.07 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 80
11.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 81
11.09 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 81
11.11 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 81
11.12 Headings and References . . . . . . . . . . . . . . . . . . . 83
11.13 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 83
11.14 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 83
11.15 Agreement Controls. . . . . . . . . . . . . . . . . . . . . . 83
11.16 Usury Savings Clause. . . . . . . . . . . . . . . . . . . . . 83
11.17 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.18 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 84
11.19 Removal of Lenders. . . . . . . . . . . . . . . . . . . . . . 84
11.20 Guaranty Terminations.. . . . . . . . . . . . . . . . . . . . 85
EXHIBIT A Commitments . . . . . . . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B Form of Assignment and Acceptance . . . . . . . . . . . . . .B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative. . . . . . . . . . . . . . . . . . . . . . . .C-1
EXHIBIT D Form of Borrowing Notice--Revolving Credit Loans and/
or Competitive Bid Quote Request(364 Day Facility). . . . . .D-1
EXHIBIT E [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . .E-1
EXHIBIT F Form of Competitive Bid Quote (364 Day Facility). . . . . . .F-1
EXHIBIT G Form of Guaranty Agreement. . . . . . . . . . . . . . . . . .G-1
EXHIBIT H Form of Guarantor Joinder Agreement . . . . . . . . . . . . .H-1
EXHIBIT I Form of Revolving Credit Notes (364 Day Facility) . . . . . .I-1
EXHIBIT J Form of Competitive Bid Notes (364 Day Facility). . . . . . .J-1
EXHIBIT K Form of Interest Rate Selection Notice (364 Day
Facility) . . . . . . . . . . . . . . . . . . . . . . . . . .K-1
EXHIBIT L Form of Opinion of Counsel to the Borrower and Counsel
to the Guarantors . . . . . . . . . . . . . . . . . . . . . .L-1
EXHIBIT M Form of Compliance Certificate. . . . . . . . . . . . . . . .M-1
Schedule 6.01(d) Subsidiaries
Schedule 6.01(f) Contingent Liabilities
Schedule 6.01(g) Liens
Schedule 6.01(h) Tax Matters
Schedule 6.01(j) Litigation
Schedule 6.01(m) Patents
Schedule 6.01(o) Consents
Schedule 8.04 Indebtedness
CREDIT AGREEMENT
(364 Day Facility)
THIS CREDIT AGREEMENT (364 Day Facility), dated as of
September 17, 1998 (the "Agreement"), is made by and among:
SAKS INCORPORATED, a Tennessee corporation having its
principal place of business in Birmingham, Alabama (the
"Borrower"); and
Each lender executing and delivering a signature page hereto
and each other lender which may hereafter execute and deliver an
instrument of assignment with respect to this Agreement pursuant to
Section 11.01 hereof (hereinafter such lenders may be referred to
individually as a "Lender" or collectively as the "Lenders"); and
NATIONSBANK, N. A., a national banking association organized
and existing under the laws of the United States of America
("NationsBank"), in its capacity as Administrative Agent for the
Lenders (in such capacity, the "Agent"); and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK and THE CHASE
MANHATTAN BANK, each in its capacity as Co-Syndication Agents and
CITIBANK, N.A., in its capacity as Documentation Agent;
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make
available to the Borrower a revolving credit facility in the
maximum aggregate principal amount at any time outstanding of
$750,000,000 with a maturity of 364 days, the proceeds of which are
to be used to provide working capital, to finance capital
expenditures, to finance Permitted Acquisitions (as herein defined)
and to provide for the general corporate purposes of the Borrower
and its Subsidiaries; and
WHEREAS, the Lenders and the Agent are willing to make such
facility available to the Borrower upon the terms and conditions
set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby
agree as follows:<PAGE>
ARTICLE I
Definitions and Terms
1.01 Definitions. For the purposes of this Agreement, in
addition to the definitions set forth above, the following terms
shall have the respective meanings set forth below:
"Absolute Rate" has the meaning assigned thereto in
Section 2.03(c)(ii)(C) hereof.
"Acquisition" means the acquisition, including without
limitation by means of merger or consolidation, by the
Borrower or any Subsidiary of (i) a controlling equity
interest in another Person (including the purchase of an
option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes
exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest,
(ii) assets of another Person which constitute all or
substantially all of the assets of such Person or (iii) a
Business Unit.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan
for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined
by the Agent to be equal to the sum of (i) the quotient
obtained by dividing (x) the Eurodollar Rate for such
Eurodollar Loan for such Interest Period by (y) the difference
of 1 minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period plus (ii) the Applicable Interest
Addition.
"Affiliate" means a Person (i) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Borrower,
(ii) which beneficially owns or holds 10% or more of any class
of the outstanding voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity
interest) of the Borrower, or (iii) 10% or more of any class
of the outstanding voting stock (or in the case of a Person
which is not a corporation, 10% or more of the equity
interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through
ownership of voting stock, by contract or otherwise.
"Affiliate Transaction" has the meaning assigned thereto
in Section 8.09 hereof.
"Alternative Rating Agency" has the meaning assigned to
such term in the definition of "Applicable Interest Addition"
in Section 1.01 hereof.
"Applicable Commitment Percentage" means, at any time for
each Lender with respect to the Revolving Credit Facility a
fraction (expressed as a percentage), (i) the numerator of
which shall be the amount of such Lender's Revolving
Credit Commitment at such date of determination (which
Revolving Credit Commitment for each Lender as of the Closing
Date is set forth in Exhibit A attached hereto and
incorporated herein by reference), and (ii) the denominator of
which shall be the Total Revolving Credit Commitment at such
date of determination; provided, that the Applicable
Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender
effected in accordance with Section 11.01 hereof. The
Applicable Commitment Percentage hereunder shall at all times
be equal to the Applicable Commitment Percentage as defined in
the Five Year Facility Credit Agreement.
"Applicable Facility Fee" means, at any time, that
percent per annum set forth in the table below corresponding
to the Level at which the Applicable Interest Addition is then
determined in accordance with the definition thereof:
Applicable
Level Facility Fee
I 0.200%
II 0.175%
III 0.125%
IV 0.100%
V 0.080%
Any change in the Level at which the Applicable Interest
Addition is determined shall result in a corresponding and
simultaneous change in the Applicable Facility Fee. As of the
date hereof, the initial Applicable Facility Fee equals
0.125%.
"Applicable Interest Addition" means for each Eurodollar
Loan that percent per annum set forth below in the applicable
column, which shall be (i) determined based upon the rating of
each rated class of the Borrower's long-term, senior unsecured
Indebtedness for Money Borrowed, and, if no such Indebtedness
is then outstanding, a class of long-term senior unsecured
Indebtedness for Money Borrowed that the Borrower may issue
from its shelf registration statement filed with the
Securities and Exchange Commission covering, among other
things, long-term senior unsecured Indebtedness for Money
Borrowed (the "Rated Debt"), assigned by S&P and Moody's (or
to the extent permitted as described below, such other
Alternative Rating Agency) (the "Debt Rating") as specified
below and (ii) applicable to all Eurodollar Loans existing on
and after the first date a specific Debt Rating is effective
and continuing until, but not including, the date any change
in such Debt Rating is effective (the "Debt Rating Date"):
Applicable
Level Debt Rating (Eurodollar spread)
----- ------------- ---------------------
I Less than or equal to BB
by S&P and Ba2 by Moody's 0.550%
II BB+ by S&P and Ba1 by Moody's 0.450%
III BBB- by S&P and Baa3 by Moody's 0.375%
IV BBB by S&P and Baa2 by Moody's 0.300%
V Greater than or equal to BBB+
by S&P and Baa1 by Moody's 0.270%
As of the date hereof, the initial Applicable Interest
Addition equals 0.375%.
In the event that the Debt Ratings assigned by S&P and
Moody's differ by one rating level, the Applicable Interest
Addition shall be determined by reference to the rating
level having the higher Debt Rating without regard to the
lower Debt Rating. In the event that the Debt Ratings
assigned by S&P and Moody's differ by more than one rating
level, the Applicable Interest Addition shall be determined
by reference to the Debt Rating which is one rating level
higher than the lower assigned Debt Rating without regard
to the higher assigned Debt Rating. The final Debt Rating
level by which the Applicable Interest Addition is
determined is referred to herein as a "Level". By way of
illustration and not limitation, if S&P assigned a rating
of BB+ (i.e., Level II) and Moody's assigns a rating of
Baa3 (i.e., Level III), the Applicable Interest Addition
will be 0.375%; however if S&P assigns a rating of BB
(i.e., Level I) and Moody's assigns a rating of Baa1 (i.e.,
Level V), the Applicable Interest Addition will be 0.450%.
In the event that either S&P or Moody's (but not both)
shall not make a rating of any class of Rated Debt, the
above calculations shall be made based on (i) the rating
provided by S&P or Moody's, whichever shall then maintain
a current rating, of the Rated Debt and (ii) the rating
provided by a nationally recognized securities rating
agency selected by the Borrower and approved by the Agent,
which shall be substituted for either S&P or Moody's, as
the case may be (the "Alternative Rating Agency"), of the
Rated Debt and the Alternative Rating Agency's equivalent
rating levels shall be substituted for the Debt Rating
levels of either S&P or Moody's, whichever shall no longer
then make the applicable Debt Rating; provided further; in
the event that no Alternative Rating Agency shall make a
rating of each class of Rated Debt and (i) only one of S&P
or Moody's shall then make a Debt Rating, the Applicable
Interest Addition shall be determined by the Debt Rating
which is one Level lower than the Debt Rating assigned by
S&P or Moody's, as applicable (e.g., if only Moody's
provides a Debt Rating and such Debt Rating is Level V, the
Applicable Interest Addition shall be 0.300%); or (ii)
neither S&P nor Moody's shall then make a Debt Rating, the
Applicable Interest Addition shall be Level I.
"Applicable Lending Office" means, for each Lender and
for each Type of Loan, the "Applicable Lending Office" of
such Lender (or of an affiliate of such Lender) designated
for such Type of Loan on the signature pages hereof or such
other office of such Lender (or an affiliate of such
Lender) as such Lender may from time to time specify to the
Agent and the Borrower by written notice in accordance with
the terms hereof as the office by which its Loans of such
Type are to be made and maintained.
"Assignment and Acceptance" means an Assignment and
Acceptance substantially in the form of Exhibit B attached
hereto and incorporated herein by reference (with blanks
appropriately filled in) delivered to the Agent in
connection with an assignment of a Lender's interest under
this Agreement pursuant to Section 11.01.
"Assuming Lender" has the meaning assigned thereto in
Section 2.16(c) hereof.
"Audited Restated Financial Statements" means,
collectively, the audited restated combined income
statement of the Borrower and its Subsidiaries (giving
effect to the Saks Acquisition) for the Fiscal Year ended
January 31, 1998 and the audited restated combined balance
sheet of the Borrower and its Subsidiaries (giving effect
to the Saks Acquisition) as at January 31, 1998.
"Authorized Representative" means any of the Chairman,
Vice Chairmen, President or Executive Vice Presidents of
the Borrower and, with respect to financial matters, the
Treasurer or the Chief Financial Officer of the Borrower
and, with respect to Borrowing Notices, Competitive Bid
Quote Requests and notices of Conversion or Continuation,
any person designated by the Treasurer or the Chief
Financial Officer in writing to the Agent, or any other
person expressly designated by the Board of Directors of
the Borrower (or the appropriate committee thereof) as an
Authorized Representative of the Borrower, as set forth
from time to time in a certificate substantially in the
form attached hereto as Exhibit C and incorporated herein
by reference.
"Base Rate" means, for any day, the rate per annum
equal to the higher of (a) the Federal Funds Rate for such
day plus one-half of one percent (0.500%) and (b) the Prime
Rate for such day. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan for which the rate of
interest is determined by reference to the Base Rate.
"Board" means the Board of Governors of the Federal
Reserve System (or any successor body).
"Borrower's Account" means the demand deposit account
with the Agent designated by the Borrower from time to time
in writing delivered and acceptable to the Agent, or any
successor account thereto with the Agent, which may be
maintained at one or more offices of the Agent or an agent
of the Agent.
"Borrower's Audited Statements" has the meaning
assigned thereto in Section 6.01(f) hereof.
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with a Loan (other
than a Competitive Bid Loan), in substantially the form
attached hereto as Exhibit D and incorporated herein by
reference.
"Business Day" means any day which is not a Saturday,
Sunday or a day on which banks in the State of North
Carolina are authorized or obligated by law, executive
order or governmental decree to be closed.
"Business Unit" means (i) one or more retail stores,
warehouses or distribution centers, including the related
land, buildings and trade fixtures of a Person or a
division of a Person, which may, but is not required to,
include inventory, receivables, furniture, fixtures and
equipment, and intangible and other assets related to such
retail stores, warehouses or distribution centers or (ii)
all or substantially all of a line or lines of business
conducted by a Person or a division of a Person.
"Capital Leases" means all leases which have been or
should be capitalized in accordance with Generally Accepted
Accounting Principles as in effect from time to time
including Statement No. 13 of the Financial Accounting
Standards Board and any successor thereof.
"Closing Date" means the date on which the conditions
set forth in Section 5.01 hereof have been satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended, any successor provision or provisions and any
regulations promulgated thereunder.
"Combined Three Month Statements" has the meaning
assigned thereto in Section 6.01(f) hereof.
"Common Stock" means the common stock, par value $.10
per share, of the Borrower.
"Competitive Bid Borrowing" has the meaning assigned
thereto in Section 2.03(b) and shall consist of one or more
Competitive Bid Loans.
"Competitive Bid Facility" means the subfacility under
the Revolving Credit Facility described in Section 2.03
providing for Competitive Bid Loans to the Borrower.
"Competitive Bid Loan" means a Loan made by a Lender
pursuant to the Competitive Bid Facility provided for by
Section 2.03.
"Competitive Bid Notes" means, collectively, the
promissory notes of the Borrower evidencing Competitive Bid
Loans executed and delivered to the Lenders substantially
in the form of Exhibit J attached hereto and incorporated
herein by reference.
"Competitive Bid Outstandings" means, as of any date
of determination, the aggregate principal amount of all
Competitive Bid Loans then outstanding.
"Competitive Bid Quote" means an offer in accordance
with Section 2.03(c) by a Lender to make a Competitive Bid
Loan with one single specified interest rate, which shall
be in substantially the form of Exhibit F attached hereto
and incorporated herein by reference.
"Competitive Bid Quote Request" has the meaning
assigned to such term in Section 2.03(b) and shall be in
substantially the form of Exhibit D attached hereto and
incorporated herein by reference.
"Consenting Lender" has the meaning assigned to such
term in Section 2.16(a).
"Consistent Basis" in reference to the application of
Generally Accepted Accounting Principles means the
accounting principles observed in the period referred to
are comparable in all material respects to those applied in
the preparation of the Audited Restated Financial
Statements, which accounting principles shall be the same
in all material respects as those accounting principles
applied in the preparation of the Combined Three Month
Statements.
"Consolidated EBITDA" means, with respect to the
Borrower and its Subsidiaries for any period of computation
thereof, the sum of, without duplication, (i) Consolidated
Net Income, plus (ii) Consolidated Interest Expense, plus
(iii) taxes on income, plus (iv) amortization, plus (v)
depreciation, all determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis; provided, however, that (x)
extraordinary and unusual charges incurred by the Borrower
directly as a result of (A) the Saks Acquisition
(including in any event repayment or retirement of
Indebtedness of the Saks REMIC Subsidiaries), the
Acquisition by the Borrower of Carson Pirie Scott & Co.
effective January 31, 1998, the Acquisition by the Borrower
of Parisian, Inc. effective October 11, 1996, the
Acquisition by the Borrower of Younkers, Inc. effective
February 3, 1996, the Acquisition by the Borrower of G.R.
Herberger's, Inc. effective February 1, 1997, the
prepayment of the Junior Subordinated Debentures, the
retirement of the Parisian Senior Subordinated Notes and
the retirement of the Senior Notes, and (B) any Permitted
Acquisition after the Closing Date in an amount up to and
including 10% of the Cost of Acquisition for such Permitted
Acquisition, and (y) any non-recurring, non-cash loss,
shall all be excluded from the computation of Consolidated
Net Income; provided further, however, that effective as of
the effective date of any Acquisition, Consolidated EBITDA
shall be computed giving pro forma effect to such
Acquisition for each Four-Quarter Period then and
thereafter occurring until such Acquisition has been
effective for a complete Four-Quarter Period.
"Consolidated Financing Charges" means those charges
owed and allocated to third parties with respect to
accounts receivable securitizations transacted in the
ordinary course of business.
"Consolidated Fixed Charge Ratio" means, with respect
to the Borrower and its Subsidiaries for the Four-Quarter
Period ending on the date of computation thereof, the ratio
of (i) Consolidated EBITDA plus Consolidated Financing
Charges plus, to the extent deducted in arriving at
Consolidated EBITDA, lease, rental and all other payments
made in respect of or in connection with operating leases,
to (ii) Consolidated Fixed Charges during such Four-Quarter
Period.
"Consolidated Fixed Charges" means, with respect to
Borrower and its Subsidiaries, for the periods indicated,
the sum of, without duplication, (i) Consolidated Interest
Expense, plus (ii) to the extent deducted in arriving at
Consolidated EBITDA, lease, rental and all other payments
made in respect of or in connection with operating leases,
plus (iii) Consolidated Financing Charges, all determined
on a consolidated basis in accordance with Generally
Accepted Accounting Principles applied on a Consistent
Basis; provided further, however, that effective as of the
effective date of any Acquisition, such calculations shall
be computed giving pro forma effect to such Acquisition for
each Four-Quarter Period then and thereafter occurring
until such Acquisition has been effective for a complete
Four-Quarter Period.
"Consolidated Funded Total Indebtedness" means, at any
time as of which the amount thereof is to be determined,
all Indebtedness for Money Borrowed of the Borrower and its
Subsidiaries (including, but not limited to, all current
maturities and borrowings under short term loans) plus the
face amount of all issued and outstanding standby letters
of credit and all obligations (to the extent not
duplicative) arising under such letters of credit, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis.
"Consolidated Interest Expense" means, with respect to
any period of computation thereof, the gross interest
expense of the Borrower and its Subsidiaries, including
without limitation (i) the amortization of debt discounts,
(ii) the amortization of all fees (including, without
limitation, fees payable in respect of a Swap Agreement)
payable in connection with the incurrence of Indebtedness
to the extent included in interest expense and (iii) the
portion of any payments made in connection with Capital
Leases allocable to interest expense, all determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis.
"Consolidated Net Income" means, for any period of
computation thereof, the net income of the Borrower and its
Subsidiaries as determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis; but excluding as income: (i)
net gains on the sale, conversion or other disposition of
capital assets and net gains on the acquisition,
retirement, sale or other disposition of capital stock and
other securities of the Borrower or its Subsidiaries, (ii)
any write-up of any asset, and (iii) any other net gain or
credit of an extraordinary nature, all determined in
accordance with Generally Accepted Accounting Principles
applied on a Consistent Basis.
"Consolidated Net Worth" means at any time as of which
the amount thereof is to be determined, the shareholders'
equity of the Borrower and its Subsidiaries determined on
a consolidated basis in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis
(excluding intercompany items among the Borrower and its
Subsidiaries and any upward adjustment after the Closing
Date due to revaluation of assets).
"Consolidated Subordinated Debt" means all
Consolidated Funded Total Indebtedness which is by its
terms subordinate to the Loans as required by, and in
substance acceptable to, the Agent.
"Consolidated Total Assets" means, as at any time of
determination thereof, the net book value of all assets of
the Borrower and its Subsidiaries as determined on a
consolidated basis in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis.
"Contingent Obligation" of any Person means (i) all
contingent liabilities required (or which, upon the
creation or incurring thereof, would be required) to be
included in the consolidated financial statements
(including footnotes) of such Person in accordance with
Generally Accepted Accounting Principles applied on a
Consistent Basis, including Statement No. 5 of the
Financial Accounting Standards Board, and (ii) all
reimbursement obligations of such Person with respect to
any letter of credit and all obligations of such Person
guaranteeing or in effect guaranteeing any Indebtedness of
any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including obligations of
such Person however incurred:
(a) to purchase such Indebtedness or any
property or assets constituting security therefor;
(b) to advance or supply funds in any manner
(x) for the purchase or payment of such Indebtedness
or (y) to maintain a minimum working capital, net
worth or other balance sheet condition or any income
statement condition of the primary obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any
property or assets of such Person to secure payment of
such Indebtedness;
(d) to lease property or to purchase securities
or other property or services primarily for the
purpose of assuring the owner or holder of such
Indebtedness of the ability of the primary obligor to
make payment of such Indebtedness; or
(e) otherwise to assure the owner of the
Indebtedness of the primary obligor against loss in
respect thereof.
With respect to Contingent Obligations, such liabilities
shall be computed at the amount which, in light of all the
facts and circumstances existing at the time, represent the
present value of the amount which can reasonably be
expected to become an actual or matured liability.
"Continue", "Continuation", and "Continued" shall
refer to the continuation pursuant to Section 2.11 hereof
of a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Convert", "Conversion", and "Converted" shall refer
to a conversion pursuant to Section 2.11 or Article IV of
one Type of Loan into another Type of Loan.
"Cost of Acquisition" means, as at the date of closing
any Acquisition, the sum of the following: (i) the value
of the capital stock, or warrants or options to acquire
capital stock, of the Borrower or any Subsidiary to be
transferred in connection therewith, (ii) any cash or other
property (excluding property described in clause (i)) or
the unpaid principal amount of any debt instrument given as
consideration in such Acquisition, and (iii) any
Indebtedness or liabilities assumed by the Borrower or its
Subsidiaries in connection with such Acquisition. For
purposes of determining the Cost of Acquisition for any
transaction, (A) the capital stock of the Borrower shall be
valued (I) at its market value as reported on the New York
Stock Exchange or any national securities exchange with
respect to shares that are freely tradeable, and (II) with
respect to shares that are not freely tradeable, as
determined by the Board of Directors of the Borrower (which
determination shall be conclusive), (B) the capital stock
of any Subsidiary shall be valued as determined by the
Board of Directors of such Subsidiary (which determination
shall be conclusive), and (C) with respect to any
Acquisition accomplished pursuant to the exercise of
options or warrants or the conversion of securities, the
Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as
well as the cost of exercise or conversion.
"Credit Exposure" means for each Lender an amount
equal at all times (i) other than following the occurrence
and during the continuance of an Event of Default, to its
Revolving Credit Commitment, and (ii) following the
occurrence and during the continuance of an Event of
Default, to the sum of the aggregate principal amount of
Revolving Credit Loans owing to such Lender plus the
aggregate unutilized amounts of such Lender's Revolving
Credit Commitment plus the amount of such Lender's
Competitive Bid Outstandings.
"Debt Rating" has the meaning assigned to such term in
the definition of "Applicable Interest Addition" in Section
1.01 hereof.
"Debt Rating Date" has the meaning assigned to such
term in the definition of "Applicable Interest Addition" in
Section 1.01 hereof.
"Default" means any event or condition which, with the
giving or receipt of notice or lapse of time or both, would
constitute an Event of Default hereunder.
"Dollars" and the symbol "$" means dollars
constituting legal tender for the payment of public and
private debts in the United States of America.
"Eligible Assignee" means (i) a Lender; (ii) an
affiliate of a Lender; and (iii) any other Person approved
by the Agent and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in
accordance with Section 11.01, the Borrower, such approval
not to be unreasonably withheld or delayed by the Borrower
or the Agent, as applicable, and such approval to be deemed
given by the Borrower if no objection is received by the
assigning Lender and the Agent from the Borrower within six
(6) Business Days after written notice of such proposed
assignment has been provided by the assigning Lender to the
Borrower; provided, however, that neither the Borrower nor
an affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Eligible Securities" means the following obligations
and any other obligations previously approved in writing by
the Agent:
(i) Government Securities;
(ii) the following debt securities of the
following agencies or instrumentalities of the United
States of America if at all times the full faith and
credit of the United States of America is pledged to
the full and timely payment of all interest and
principal thereof:
(a) all direct or fully guaranteed
obligations of the United States Treasury; and
(b) mortgage-backed securities and
participation certificates guaranteed by the
Government National Mortgage Association;
(iii) the following obligations of the
following agencies or instrumentalities of or
corporations established by the United States of
America:
(a) participation certificates and debt
obligations of the Federal Home Loan Mortgage
Corporation;
(b) consolidated debt obligations, and
obligations secured by a letter of credit, of the
Federal Home Loan Banks; and
(c) debt obligations and mortgage-backed
securities of the Federal National Mortgage
Association which have not had the interest
portion thereof severed therefrom;
(iv) obligations of any corporation organized
under the laws of any state of the United States of
America or under the laws of any other nation, payable
in the United States of America, expressed to mature
not later than 180 days following the date of issuance
thereof and rated in an investment grade rating
category by S&P or Moody's;
(v) interest bearing demand or time deposits
issued by any Lender or certificates of deposit
maturing within one year from the date of acquisition
issued by a bank or trust company organized under the
laws of the United States or of any state thereof
having capital surplus and undivided profits
aggregating at least $500,000,000 and being rated A-
or better by S&P or A-3 or better by Moody's;
(vi) Repurchase Agreements;
(vii) Pre-Refunded Municipal Obligations;
(viii) shares of mutual funds which invest in
obligations described in paragraphs (i) through (iii)
above, the shares of which mutual funds are at all
times rated "AAA" by S&P or Aaa by Moody's;
(ix) asset-backed remarketed certificates of
participation representing a fractional undivided
interest in the assets of a trust, which certificates
are rated at least "A-1" by S&P or "P-1" by Moody's;
(x) shares of money market funds which comply
with the provisions of Rule 2a-7 of the Securities and
Exchange Commission (17 C.F.R. Section 270.2a-7); and
(xi) other investments approved in writing by the
Required Lenders, which approval shall not be
unreasonably withheld.
Obligations listed in paragraphs (i), (ii) and (iii) above
which are in book-entry form must be held in a trust
account with the Federal Reserve Bank or with a clearing
corporation or chain of clearing corporations which has an
account with the Federal Reserve Bank.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order,
decree, permit or license regulating, relating to, or
imposing liability or standards of conduct concerning, any
environmental matters or conditions, environmental
protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended; the Superfund Amendments
and Reauthorization Act of 1986, as amended; the Resource
Conservation and Recovery Act, as amended; the Toxic
Substances Control Act, as amended; the Clean Air Act, as
amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other
"Superfund" or "Superlien" law.
"ERISA" means, at any date, the Employee Retirement
Income Security Act of 1974, as amended, and the
regulations thereunder, all as the same shall be in effect
at such date.
"Eurodollar Business Day" means a domestic Business
Day and one on which the relevant international financial
markets are open for the transaction of the business
contemplated by this Agreement (including without
limitation dealings in U.S. Dollar deposits) in London,
England, New York, New York and Charlotte, North Carolina.
"Eurodollar Loan" means a Loan that bears interest at
rates based upon the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%)
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 Eurodollar
Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If
for any reason such rate is not available, the term
"Eurodollar Rate" shall mean, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Eurodollar
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 (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Event of Default" means any of the occurrences set
forth as such in Section 9.01 hereof.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100
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 by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; provided
that (i) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if
no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be
the average rate charged to the Agent (in its individual
capacity) on such day on such transactions as determined by
the Agent.
"Filing Date" has the meaning assigned thereto in
Section 5.01(a)(xiii) hereof.
"Fiscal Year" means the 52-week or 53-week period of
the Borrower ending on the Saturday of each calendar year
closest (whether before or after) to January 31 and "Fiscal
Year" followed by a numerical year means the Fiscal Year
which has a Fiscal Year Beginning occurring during such
numerical calendar year.
"Fiscal Year Beginning" means the first day of a
Fiscal Year.
"Five Year Facility" means the revolving credit
facility made available to the Borrower by the Lenders
under the Five Year Facility Credit Agreement.
"Five Year Facility Commitment" means with respect to
each Lender, the obligation of such Lender to make loans
to, and purchase participations in letters of credit issued
for the benefit of and swing line loans to, the Borrower
under the Five Year Facility.
"Five Year Facility Credit Agreement" means that
certain Amended and Restated Credit Agreement (Five Year
Facility) of even date herewith among the Borrower, the
Agent, the Co-Syndication Agents, the Documentation Agent
and the Lenders, as amended, modified or supplemented from
time to time.
"Five Year Facility Loans" means the Loans as defined
in the Five Year Facility Credit Agreement.
"Five Year Facility Termination Date" means the
Revolving Credit Termination Date (as defined in the Five
Year Facility Credit Agreement).
"Fixed Rate Loan" means a Loan which is either a
Eurodollar Rate Loan or a Competitive Bid Loan.
"Foreign Benefit Law" means any applicable statute,
law, ordinance, code, rule, regulation, order or decree of
any foreign nation or any province, state, territory,
protectorate or other political subdivision thereof
regulating, relating to, or imposing liability or standards
of conduct concerning, any pension, retirement, healthcare,
death, disability or other employee benefit plan.
"Foreign Subsidiary" means a Subsidiary not organized
or existing under the laws of the United States of America,
any state thereof, or the District of Columbia.
"Four-Quarter Period" means a period of four full
consecutive fiscal quarterly periods, taken together as one
accounting period, and in the event any such fiscal
quarterly period occurs prior to the effective date of any
Acquisition, or is the period in which such effective date
occurs (each a "Pre-Acquisition Period"), all financial
statements, data, computations and determinations for such
Four-Quarter Period shall be made on a pro forma basis for
each Pre-Acquisition Period giving effect to such
Acquisition for all prior periods.
"GAAP" or "Generally Accepted Accounting Principles"
means those principles of accounting set forth in
pronouncements of the Financial Accounting Standards Board,
the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report,
as such principles are from time to time supplemented and
amended, subject to compliance at all times with Section
1.02 hereof.
"Government Securities" means direct obligations of,
or obligations the timely payment of principal and interest
on which are fully and unconditionally guaranteed by, the
United States of America.
"Governmental Authority" means any Federal, state,
municipal, national, foreign or other governmental
department, commission, board, bureau, agency, court,
arbitration body or instrumentality or political
subdivision thereof or any entity or officer exercising
executive, legislative or judicial, regulatory or
administrative functions of or pertaining to any government
or any court, in each case whether a state of the United
States, the United States or foreign nation, state,
province or other governmental instrumentality.
"Guarantor Joinder Agreement" means a Guarantor
Joinder Agreement substantially in the form of Exhibit H
attached hereto and incorporated herein by reference (with
blanks appropriately filled in) executed and delivered to
the Agent in connection with a Material Subsidiary (or
other Person) becoming a Guarantor and party to the
Guaranty.
"Guarantors" means, collectively, (i) each Material
Subsidiary existing on the Closing Date and (ii) any other
Person who shall become a Material Subsidiary after the
Closing Date and shall become a party to the Guaranty as
provided in Section 7.18 hereof; provided further, for all
purposes of this Agreement, the term "Guarantor" shall be
deemed to be "Subsidiary" at all times following the
termination of the Guaranty in accordance with Section
11.20 hereof.
"Guaranty" means the Guaranty Agreement of the
Guarantors (including without limitation those Guarantors
which subsequently become a party thereto in accordance
with Section 7.18 hereof) in favor of the Agent
guaranteeing in whole or in part the payment of
Obligations, substantially in the form of Exhibit G
attached hereto and incorporated herein by reference, as
the same may be amended, modified or supplemented.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste,
substance or material (including without limitation
petroleum products, asbestos-containing materials and
lead), the generation, handling, storage, transportation,
disposal, treatment, release, discharge or emission of
which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person,
without duplication, all Indebtedness for Money Borrowed,
all indebtedness of such Person for the acquisition of
property, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is
assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the
ordinary course of business), all Contingent Obligations,
all Rate Hedging Obligations, that portion of obligations
with respect to Capital Leases which in accordance with
Generally Accepted Accounting Principles is classified as
a liability on a balance sheet and all Synthetic Lease
Indebtedness; but excluding all accounts payable in the
ordinary course of business and only so long as payment
therefor is due within one year; provided, that in no event
shall the term Indebtedness include surplus and retained
earnings, minority interest in Subsidiaries, lease
obligations (other than pursuant to Capital Leases or in
connection with any tax retention operating lease or any
form of synthetic lease as provided above), reserves for
deferred income taxes and investment credits, other
deferred credits and reserves, and deferred compensation
obligations.
"Indebtedness for Money Borrowed" means for any Person
all indebtedness in respect of money borrowed, including
without limitation all Capital Leases and the deferred
purchase price of any property or asset, evidenced by a
promissory note, bond or similar written obligation for the
payment of money (including, but not limited to,
conditional sales or similar title retention agreements).
"Interest Period"
(a) means for each Eurodollar Loan a period
commencing on the date such Eurodollar Loan is made or
Converted and each subsequent period commencing on the last
day of the immediately preceding Interest Period for such
Eurodollar Loan, and ending, at the Borrower's option, on
the date one, two, three, six or (if available) nine months
thereafter as notified to the Agent by an Authorized
Representative three (3) Eurodollar Business Days prior to
the beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to
notify the Agent of the length of an Interest Period
three (3) Eurodollar Business Days prior to the first
day of such Interest Period, the Loan for which such
Interest Period was to be determined shall be deemed
to be a Base Rate Loan;
(ii) if an Interest Period for a Eurodollar Loan
would end on a day which is not a Eurodollar Business
Day such Interest Period shall be extended to the next
Eurodollar Business Day (unless such extension would
cause the applicable Interest Period to end in the
succeeding calendar month, in which case such Interest
Period shall end on the next preceding Eurodollar
Business Day);
(iii) any Interest Period which begins on the
last Eurodollar 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 Eurodollar
Business Day of a calendar month;
(iv) no Interest Period shall extend past the (A)
Stated Revolving Credit Termination Date for any
Eurodollar Loan other than a Term Loan and (B) Term
Loan Termination Date for any Term Loan; and
(v) on any day, with respect to all Fixed
Rate Loans hereunder and as defined in the Five Year
Facility Credit Agreement, there shall be not more
than twenty (20) Interest Periods in effect; and
(b) means for each Competitive Bid Loan, the period
commencing on the date such Competitive Bid Loan is made
and ending on the date specified in the Competitive Bid
Quote Request and related Competitive Bid Quote for such
Competitive Bid Loan; provided that,
(i) no Interest Period for a Competitive Bid
Loan shall be for a period of less than seven days or
greater than 120 days;
(ii) no Interest Period for a Competitive Bid
Loan shall extend past the Stated Revolving Credit
Termination Date;
(iii) there shall not be more than twenty
(20) Interest Periods in effect on any day for all
Fixed Rate Loans hereunder and as defined in the Five
Year Facility Credit Agreement; and
(iv) each Interest Period shall end on a day that
is a Business Day.
"Investment Grade Rating" means the assignment of a
rating of both BBB- or higher by S&P and Baa3 or higher by
Moody's to the Rated Debt issued by the Borrower.
"Junior Subordinated Debentures" means the 7.5%
Junior Subordinated Debentures Due March 31, 2004 of the
Borrower issued in the original principal amount of
$17,500,000.
"Lending Party" has the meaning assigned thereto in
Section 11.03.
"Level" has the meaning assigned to such term in the
definition of "Applicable Interest Addition" in Section
1.01 hereof.
"Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than the
owner of the property, whether such interest is based on
the common law, statute or contract, and including but not
limited to the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. For the purposes of
this Agreement, the Borrower and its Subsidiaries shall be
deemed to be the owners of any property which either of
them have acquired or hold subject to a conditional sale
agreement, financing lease, or other arrangement pursuant
to which title to the property has been retained by or
vested in some other Person for security purposes.
"Loan" or "Loans" means any of the Eurodollar Loans or
Base Rate Loans and includes, unless the context otherwise
requires or as specifically otherwise referenced,
Competitive Bid Loans, including all the foregoing as part
of the Term Loans.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, any Pledge Agreement and all other instruments
and documents heretofore or hereafter executed or delivered
to and in favor of any Lender or the Agent in connection
with the Loans made under this Agreement as the same may be
amended, modified or supplemented from time to time.
"Loan Parties" means, collectively, the Borrower and,
until such time as the Guaranty is terminated in accordance
with Section 11.20 hereof, each of the Guarantors.
"Material Adverse Effect" means a material adverse
effect on (i) the business, business prospects, results of
operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (ii) the
ability of any Loan Party to observe and perform the
covenants and agreements contained herein or in any other
Loan Document or the ability of any Lender to receive the
benefit of any remedy provided thereto under any Loan
Document.
"Material Subsidiary" means any direct or indirect
Subsidiary of the Borrower, other than a Securitization
Subsidiary or a Saks REMIC Subsidiary, which (i) has total
assets equal to or greater than 5% of Consolidated Total
Assets (calculated as of the most recent fiscal period with
respect to which the Agent shall have received financial
statements required to be delivered pursuant to Sections
7.01(a) or (b) (or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with
respect to the Combined Three Month Statements) (the
"Required Financial Information")) or (ii) has net income
equal to or greater than 5% of Consolidated Net Income
(each calculated for the most recent period for which the
Agent has received the Required Financial Information);
provided, however, that notwithstanding the foregoing, the
term "Material Subsidiaries" shall mean Subsidiaries of the
Borrower, other than Securitization Subsidiaries and Saks
REMIC Subsidiaries, that together with the Borrower have
assets equal to not less than 95% of Consolidated Total
Assets (calculated as described above but excluding assets
directly owned by Securitization Subsidiaries and Saks
REMIC Subsidiaries) and net income of not less than 95% of
Consolidated Net Income (calculated as described above but
excluding income directly earned by Securitization
Subsidiaries and Saks REMIC Subsidiaries); provided further
that if more than one combination of Subsidiaries satisfies
such threshold, then those Subsidiaries so determined to be
"Material Subsidiaries" shall be specified by the Borrower.
"Moody's" means Moody's Investors Services, Inc.
"Multi-employer Plan" means an employee pension
benefit plan covered by Title IV of ERISA and in respect of
which the Borrower or any Subsidiary is an "employer" as
described in Section 4001(b) of ERISA, which is also a
multi-employer plan as defined in Section 4001(a)(3) of
ERISA.
"Net Proceeds" from a disposition of assets (other
than assets sold in the ordinary course of business and
accounts receivable sold in connection with an accounts
receivable securitization transacted in the ordinary course
of business by a Securitization Subsidiary) or issuance of
equity means cash payments received therefrom as and when
received, net of (i) all reasonable legal, accounting,
banking, underwriting, title and recording expenses,
commissions, discounts and other fees and expenses incurred
in connection therewith, (ii) all taxes required to be paid
or accrued as a consequence of such disposition or issuance
and (iii) all amounts necessary to repay Indebtedness for
Borrowed Money the repayment of which is secured by such
disposed assets.
"NMS" means NationsBanc Montgomery Securities LLC, a
Delaware limited liability company.
"Non-Consenting Lender" has the meaning assigned to
such term in Section 2.16(a).
"Notes" means, collectively, the Revolving Credit
Notes and Competitive Bid Notes.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the
principal and interest on the Loans as evidenced by the
Notes, (ii) all liabilities of Borrower to any Lender which
arise under a Swap Agreement, and (iii) the payment and
performance of all other obligations, liabilities, fees and
Indebtedness of the Borrower to the Lenders or the Agent
hereunder, under any one or more of the other Loan
Documents or with respect to the Loans.
"Operating Documents" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or other
legally authorized incorporated or unincorporated entity,
the bylaws, operating agreement, partnership agreement,
limited partnership agreement or other comparable documents
relating to the operation, governance or management of such
entity.
"Organizational Action" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or other
legally authorized incorporated or unincorporated entity,
any corporate, organizational or partnership action
(including any required shareholder, member or partner
action), or other similar official action, as applicable,
taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership,
limited partnership, limited liability partnership or other
legally authorized incorporated or unincorporated entity,
the articles of incorporation, certificate of
incorporation, articles of organization, certificate of
limited partnership or other comparable organizational or
charter documents relating to the creation of such entity.
"Parisian Indenture" means that certain Amended and
Restated Indenture dated as of October 11, 1996 among the
Borrower, Parisian, Inc. and AmSouth Bank of Alabama
(formerly known as AmSouth Bank, N.A.), trustee, as amended
from time to time thereafter.
"Parisian Senior Subordinated Notes" means the 9.875%
Senior Subordinated Notes Due 2003 of Parisian, Inc. in the
original aggregate principal amount of $125,000,000 issued
pursuant to the Parisian Indenture.
"Permitted Acquisition" means an Acquisition beyond
the normal course of business effected with the consent and
approval of the board of directors or other applicable
governing body of the Person being acquired, and with the
duly obtained approval of such shareholders or other
holders of equity interest as such Person may be required
to obtain, so long as (i) immediately prior to and
immediately after the consummation of such Acquisition, no
Default or Event of Default has occurred and is continuing,
(ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or
invested are derived from (A) the same or related line or
lines of business as conducted by the Borrower and its
Subsidiaries on the Closing Date or (B) a line or lines of
business not inconsistent with the business substantially
as conducted by the Borrower and its Subsidiaries on the
Closing Date; provided that the Cost of Acquisition of all
such Acquisitions permitted pursuant to this clause (ii)(B)
shall not in the aggregate exceed $100,000,000 during any
Four-Quarter Period and (iii) if the Cost of Acquisition
therefor equals or exceeds $250,000,000, pro forma
historical financial statements as of the end of the most
recently completed Four-Quarter Period giving effect to
such Acquisition are delivered to the Agent not less than
five (5) Business Days prior to the consummation of such
Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with the financial
covenants set forth in Article VIII hereof after giving
effect to such Acquisition.
"Person" means an individual, partnership, limited
partnership, corporation, limited liability company,
limited liability partnership, trust, unincorporated
organization, association, joint venture or a government or
agency or political subdivision thereof.
"Pledge Agreement", "Pledged Stock" and "Pledgor" each
has the meaning assigned thereto in Section 7.18(b)(i)
hereof.
"Pre-Refunded Municipal Obligations" means obligations
of any state of the United States of America or of any
municipal corporation or other public body organized under
the laws of any such state which are rated, based on the
escrow, in the highest investment rating category by either
S&P or Moody's and which have been irrevocably called for
redemption and advance refunded through the deposit in
escrow of Government Securities or other debt securities
which are (i) not callable at the option of the issuer
thereof prior to maturity, (ii) irrevocably pledged solely
to the payment of all principal and interest on such
obligations as the same becomes due and (iii) in a
principal amount and bear such rate or rates of interest as
shall be sufficient to pay in full all principal of,
interest, and premium, if any, on such obligations as the
same becomes due as verified by a nationally recognized
firm of certified public accountants.
"Prime Rate" means the per annum rate of interest
established from time to time by NationsBank as its prime
rate, which rate may not be the lowest rate of interest
charged by NationsBank to its customers.
"Principal Office" means the office of the Agent at
NationsBank, N.A., presently located at Independence
Center, 101 N. Tryon Street, 15th Floor, NC1-001-15-04,
Charlotte, North Carolina, 28255 Attention: Herbert Boyd,
Agency Services, or such other office and address as the
Agent may from time to time designate.
"Quotation Date" has the meaning assigned to such term
in Section 2.03(b).
"Rate Hedging Obligations" means any and all
obligations of the Borrower or any Subsidiary, whether
absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements,
devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest
rates, exchange rates or forward rates applicable to such
party's assets, liabilities or exchange transactions,
including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest
rate options, puts, warrants and those commonly known as
interest rate "swap" agreements; and (ii) any and all
cancellations, buybacks, reversals, terminations or
assignments of any of the foregoing.
"Rated Debt" has the meaning assigned to such term in
the definition of "Applicable Interest Addition" in Section
1.01 hereof.
"Registration Statement" has the meaning assigned
thereto in Section 5.01(a)(xiii) hereof.
"Regulation D" means Regulation D of the Board as the
same may be amended or supplemented from time to time.
"Repurchase Agreement" means a repurchase agreement
entered into with (i) any financial institution whose debt
obligations or commercial paper are rated "A" or "A2" by
either of S&P or Moody's or "A-1" by S&P or "P-1" by
Moody's, or (ii) any Lender.
"Required Financial Information" has the meaning
assigned to such term in the definition of "Material
Subsidiary" in Section 1.01 hereof.
"Required Lenders" means, as of any date, Lenders on
such date having Credit Exposures aggregating more than 50%
of the aggregate Credit Exposures of all the Lenders on
such date.
"Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are
required to be maintained under regulations issued from
time to time by the Board (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be
determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Loans. The Adjusted
Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Reserve
Requirement.
"Revolving Credit Commitment" means with respect to
each Lender, the obligation of such Lender to make
Revolving Credit Loans to the Borrower up to an aggregate
principal amount at any one time outstanding equal to the
amount set forth opposite such Lender's name on Exhibit A
hereto as the same may be increased or decreased from time
to time pursuant to this Agreement; provided, however, that
amounts advanced by any Lender as Competitive Bid Loans
shall not reduce such Lender's Revolving Credit Commitment
or modify its obligation to make its Applicable Commitment
Percentage of Revolving Credit Loans.
"Revolving Credit Extension Date" means September 15,
1999 and each date thereafter, if any, to which the Stated
Revolving Credit Termination Date has been extended
pursuant to Section 2.16 hereof, but in no event later than
the Stated Term Loan Termination Date.
"Revolving Credit Facility" means the facility
described in Section 2.01 hereof providing for Revolving
Credit Loans, and the Term Loans, to the Borrower by the
Lenders in the aggregate principal amount equal to the
Total Revolving Credit Commitment.
"Revolving Credit Loan" means a Loan made pursuant to
the Revolving Credit Facility, including without limitation
the Term Loans and specifically excluding the Competitive
Bid Loans.
"Revolving Credit Notes" means, collectively, the
promissory notes of the Borrower evidencing Revolving
Credit Loans executed and delivered to the Lenders as
provided in Section 2.08(a) hereof substantially in the
form attached hereto as Exhibit I and incorporated herein
by reference, with appropriate insertions as to amounts,
dates and names of Lenders, as the same shall be amended,
modified or supplemented and in effect from time to time.
"Revolving Credit Outstandings" means, as at any time
of determination, the aggregate principal amount of all
Revolving Credit Loans and Competitive Bid Loans then
outstanding.
"Revolving Credit Termination Date" means the earliest
of (i) the Stated Revolving Credit Termination Date or (ii)
such date of termination of Lenders' obligations pursuant
to Section 9.01 upon the occurrence of an Event of Default
or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by
payment in full of all Revolving Credit Outstandings.
"S&P" means Standard & Poor's Rating Group, a division
of McGraw-Hill Companies, Inc.
"Saks" means Saks Holdings, Inc., a Delaware
corporation.
"Saks Acquisition" has the meaning assigned thereto in
Section 5.01(a)(xiii) hereof.
"Saks Acquisition Agreement" has the meaning assigned
thereto in Section 5.01(a)(xiv) hereof.
"Saks REMIC Subsidiary" means any of Calwin Realty II,
Inc., Win Realty Holdings II, Inc., Florida Win Trust, Or.
Win, Inc., York Win Realty, Inc., Fifth Win, Inc., Ohio
Win, Inc., Tex Win II, Inc., Vir. Win, Inc., Cal SFA, Inc.,
Penn SFA, Inc., Tex SFA, Inc., Fifth Avenue Capital Trust
and Fifteenth Win, Inc.
"Securitization Subsidiary" means Proffitt's Credit
Corporation, National Bank of the Great Lakes, SFA Finance
Company, SFA Finance Company II and any other present or
future Subsidiary (including any credit card bank) of the
Borrower that is, directly or indirectly, wholly owned by
the Borrower (except, in the case of SFA Finance Company
and SFA Finance Company II, for 1000 shares of Series A
Preferred Stock of SFA Finance Company owned by certain
independent directors of SFA Finance Company) and organized
for the purpose of and is only engaged in (i) originating,
purchasing, acquiring, financing, servicing or collecting
accounts receivable obligations of customers of the
Borrower or its Subsidiaries, (ii) issuing or servicing
credit cards, engaging in other credit card operations or
financing accounts receivable obligations of customers of
the Borrower and its Subsidiaries, (iii) the sale or
financing of such accounts receivable and interests therein
and (iv) other activities incident thereto.
"Senior Indenture" means that certain Indenture dated
as of May 21, 1997 among the Borrower and The First
National Bank of Chicago, as trustee, as amended from time
to time thereafter.
"Senior Notes" means the 8.125% Senior Notes due 2004
of the Borrower in the aggregate principal amount of
$125,000,000 issued pursuant to the Senior Indenture.
"Single Employer Plan" means any employee pension
benefit plan covered by Title IV of ERISA and in respect of
which the Borrower or any Subsidiary is an "employer" as
described in Section 4001(b) of ERISA, which is not a
Multi-employer Plan.
"Solvent" means, when used with respect to any Person,
that at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an
orderly basis) is in excess of the total amount of its
liabilities, including, without limitation, Contingent
Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on
its business as conducted and as proposed to be
conducted.
"Stated Revolving Credit Termination Date" means
September 15, 1999, or such later date as the Borrower and
the Lenders shall agree in writing pursuant to Section 2.16
hereof.
"Stated Term Loan Termination Date" means
September 17, 2003.
"Subsidiary" means any corporation or other entity in
which more than 50% of its outstanding voting stock or more
than 50% of all equity interests is owned directly or
indirectly by the Borrower and/or by one or more of the
Borrower's Subsidiaries at or after the Closing Date, and
specifically includes Saks and each of its subsidiaries as
of the Closing Date; notwithstanding the foregoing, the
reference to "Subsidiary" or "Subsidiaries" in Sections
6.01(f)(iii), (g), (k), (l), (m), (o), or (r), Section
7.01(d), Section 7.09 (as applicable to Sections 7.02 and
7.05) and Sections 7.12, 7.13, 7.18, 8.04, 8.05, 8.06, 8.07
(other than 8.07 (viii)), 8.08, 8.09, 8.12 and 11.20 and in
the introductory paragraph of Article VIII to the extent
relating to any of the Sections of such Article referred to
above does not include any Securitization Subsidiary.
"Swap Agreement" means one or more agreements between
the Borrower and another Person, on terms mutually
acceptable to the Borrower and such Person, which
agreements create Rate Hedging Obligations.
"Synthetic Lease Indebtedness" means, with respect to
a Person that is a lessee under a synthetic lease, an
amount equal to (i) the aggregate purchase price of any
property that the lessor under such synthetic lease
acquired, through one or a series of related transactions,
and thereafter leased to such Person pursuant to such
synthetic lease less (ii) the aggregate amount of all
payments of fixed rent or other rent payments which reduce
such Person's obligation under such synthetic lease and
which are not the financial equivalent of interest.
Synthetic Lease Indebtedness of a Person shall also
include, without duplication, the amount of Synthetic Lease
Indebtedness of others to the extent guarantied by such
Person.
"Term Loans" has the meaning assigned to such term in
Section 2.16(a) hereof.
"Term Loan Termination Date" means the earliest of (i)
the Stated Term Loan Termination Date, or (ii) such date of
termination of Lenders' obligations pursuant to Section
9.01 hereof upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may voluntarily and
permanently terminate and pay in full all Revolving Credit
Outstandings, or (iv) the Five Year Facility Termination
Date.
"Total Combined Outstandings" means, as at any time of
determination, the sum of all Revolving Credit Outstandings
plus all Total Outstandings (as defined in the Five Year
Facility Credit Agreement).
"Total Facility Termination Date" has the meaning
assigned thereto in Section 11.09 hereof.
"Total Revolving Credit Commitment" means an amount
equal to $750,000,000, as reduced from time to time in
accordance with Sections 2.10 and 2.16 hereof.
"Type" means any type of Loan (i.e., a Base Rate Loan,
a Eurodollar Loan or a Competitive Bid Loan).
"Utilization Premium" means an additional interest
payment in an amount equal to 10 basis points per annum
calculated in accordance with Section 2.12(b) hereof.
"wholly owned" means, when used with respect to a
Subsidiary of the Borrower, that all of the outstanding
capital stock (excluding director qualifying shares) or
other comparable equity interest of such Subsidiary are
owned directly or indirectly by the Borrower.
"Year 2000 Compliant" has the meaning assigned thereto
in Section 6.01(u) hereof.
1.02 Accounting Terms. All accounting terms not
specifically defined herein shall have the meanings assigned to
such terms and shall be interpreted in accordance with Generally
Accepted Accounting Principles as in effect on the date of the
Audited Restated Financial Statements, which shall be the same
in all material respects as those accounting principles applied
in the preparation of the Combined Three Month Statements, and
applied on a Consistent Basis.
1.03 Terms Consistent. All of the terms defined in this
Agreement shall have such defined meanings when used in any of
the Loan Documents unless the context shall require otherwise.
All references to the Borrower, the Agent and any Lender shall
be deemed to include any successor or permitted assignee of any
thereof. All plural references and definitions shall have a
corresponding meaning in the singular, and all singular
references and definitions shall have a corresponding meaning in
the plural.
ARTICLE II
Revolving Credit Loans
2.01 Revolving Credit Loans.
(a) Revolving Credit Commitment. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to
make Revolving Credit Loans to the Borrower, from time to time
on a pro rata basis as to the total borrowing of Revolving
Credit Loans requested by the Borrower on any day determined by
such Lender's Applicable Commitment Percentage of the Total
Revolving Credit Commitment up to but not exceeding the
Revolving Credit Commitment of such Lender; provided, however,
that the Lenders will not be required and shall have no
obligation to make any Revolving Credit Loans (i) so long as a
Default or an Event of Default has occurred and is continuing or
(ii) if the maturity of the Revolving Credit Notes has been
accelerated as a result of an Event of Default. Within such
limits, the Borrower may borrow, repay and reborrow hereunder,
a Base Rate Loan on a Business Day and a Eurodollar Loan on a
Eurodollar Business Day, from the Closing Date until, but (as to
borrowings and reborrowings) not including, the Revolving Credit
Termination Date;
(b) Amounts. The aggregate unpaid principal amount of the
Revolving Credit Outstandings shall not exceed at any time an
amount equal to the Total Revolving Credit Commitment. Each
Revolving Credit Loan made, Converted or Continued shall be in
a principal amount of at least $5,000,000 (or the remaining
Total Revolving Credit Commitment if less), and, if greater than
$5,000,000, an integral multiple of $1,000,000.
(c) Loans and Rate Selection.
(i) An Authorized Representative shall give the Agent
(1) at least three (3) Eurodollar Business Days'
irrevocable telephonic notice of each Eurodollar Loan
(whether representing an additional borrowing hereunder or
the Conversion of borrowing hereunder from Base Rate Loans
to Eurodollar Loans or the Continuation of borrowing
hereunder of Eurodollar Loans) prior to 11:30 A.M.,
Charlotte, North Carolina time; and (2) irrevocable
telephonic notice of each Base Rate Loan representing an
additional borrowing hereunder or the Conversion of
borrowing hereunder from Eurodollar Loans to Base Rate
Loans prior to 11:30 A.M. Charlotte, North Carolina time on
the day of such proposed Base Rate Loan. Each such notice
shall specify the amount of the Loan, the Type of Loan, the
date of the Loan and, if a Eurodollar Loan, the Interest
Period to be used in the computation of interest. The
Authorized Representative shall provide the Agent written
confirmation of each such telephonic notice on the same day
by telefacsimile transmission in the form of a Borrowing
Notice, for additional Loans, or in the form attached
hereto as Exhibit K and incorporated herein by reference as
to selection or Conversion of interest rates as to
outstanding Loans, in each case with appropriate
insertions, but failure to provide such confirmation shall
not affect the validity of such telephonic notice. The
duration of the initial Interest Period for each Loan that
is a Eurodollar Loan shall be as specified in the initial
Borrowing Notice. The Borrower shall have the option to
elect the duration of subsequent Interest Periods and to
Convert the Loans in accordance with Section 2.11 hereof.
If the Agent does not receive a notice of election of
duration of an Interest Period or to Convert by the time
prescribed hereby and by Section 2.11 hereof, the Borrower
shall be deemed to have elected to Convert such Loan to (or
Continue such Loan as) a Base Rate Loan until the Borrower
notifies the Agent in accordance herewith and with Section
2.11.
. (ii) Notice of receipt of each Borrowing Notice shall
be provided by the Agent to each Lender by telephone with
reasonable promptness, but not later than 1:00 P.M.
Charlotte, North Carolina time on the same day as Agent's
receipt of such notice. The Agent shall provide each
Lender written confirmation of such telephonic confirmation
by telefacsimile transmission but failure to provide such
notice shall not affect the validity of such telephonic
notice.
(iii) Not later than 3:00 P.M., Charlotte, North
Carolina time on the date specified for each Loan, each
Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make the amount of the Loan
or Loans to be made by it on such day available to the
Agent, by depositing or transferring the proceeds thereof
in Dollars and in immediately available funds at the
Principal Office. The amount so received by the Agent
shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower not later than
3:30 P.M., Charlotte, North Carolina time by delivery of
the proceeds thereof to the Borrower's Account or otherwise
as shall be directed in the applicable Borrowing Notice by
the Authorized Representative.
2.02 Reserved.
2.03 Competitive Bid Loans. (a) In addition to
borrowings of Revolving Credit Loans, at any time prior to the
Revolving Credit Termination Date the Borrower may, as set forth
in this Section 2.03, request the Lenders to make offers to make
Competitive Bid Loans to the Borrower in Dollars. 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 2.03. The making
of a Competitive Bid Loan by any Lender shall not reduce such
Lender's available Revolving Credit Commitment except as a
result of such Competitive Bid Loan reducing the availability
under the Total Revolving Credit Commitment. Immediately after
giving effect to each Competitive Bid Loan, Revolving Credit
Outstandings shall not exceed the Total Revolving Credit
Commitment. Each Competitive Bid Loan may be repaid only on the
last day of the Interest Period with respect thereto unless such
payment is accompanied by the additional payment, if any,
required by Section 4.05.
(b) When the Borrower wishes to request offers from
Lenders to make Competitive Bid Loans, it shall give the Agent
(which shall promptly notify the Lenders) notice (a "Competitive
Bid Quote Request") to be received no later than 10:00 A.M. on
the Business Day immediately preceding the date of borrowing
proposed therein (or such other time and date as the Borrower
and the Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers from Lenders to make
Competitive Bid Loans for up to four (4) different Interest
Periods in a single notice; provided that the request for each
separate Interest Period shall be deemed to be a separate
Competitive Bid Quote Request for a separate borrowing (a
"Competitive Bid Borrowing") of one or more Competitive Bid
Loans from the Lenders. Each such Competitive Bid Quote Request
shall be substantially in the form of Exhibit D hereto and shall
specify as to each Competitive Bid Borrowing:
(i) the proposed date of such Competitive Bid
Borrowing, which shall be a Business Day;
(ii) the amount of such Competitive Bid Borrowing,
which shall be at least $5,000,000 (or a larger multiple of
$1,000,000) but shall not cause the limits specified in
Section 2.03(a) to be violated;
(iii) the duration of the Interest Period
applicable thereto; and
(iv) the date on which the Competitive Bid Quotes are
to be submitted if it is before the proposed date of
borrowing (the date on which such Competitive Bid Quotes
are to be submitted is called the "Quotation Date").
Except as otherwise provided in this Section 2.03(b), no
Competitive Bid Quote Request shall be given within five (5)
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 Competitive Bid Quote Request.
(c) (i) Each Lender may submit one or more Competitive
Bid Quotes, each containing an offer to make a Competitive
Bid Loan, in response to any Competitive Bid Quote Request;
provided that, if the Borrower's request under Section
2.03(b) specifies more than one Interest Period, such
Lender may make a single submission containing one or more
Competitive Bid Quotes for each such Interest Period. Each
Competitive Bid Quote must be submitted to the Agent not
later than 10:00 A.M. Charlotte, North Carolina time on the
Quotation Date (or such other time and date as the Borrower
and the Agent, with the consent of the Required Lenders,
may agree; the Agent shall promptly notify all Lenders of
such other agreed upon time and date); provided, that any
Competitive Bid 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 9:45
A.M. (or 15 minutes prior to such other agreed upon time)
Charlotte, North Carolina time on the Quotation Date.
Subject to the express provisions of this Agreement, any
Competitive Bid Quote so made shall be irrevocable except
with the consent of the Agent given at the instruction of
the Borrower.
(ii) Each Competitive Bid Quote shall be substantially
in the form of Exhibit F hereto and shall specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Competitive Bid
Loan for which such offer is being made, which
principal amount shall be at least $1,000,000 (or a
larger multiple of $1,000,000); provided that (x) the
aggregate principal amount of all Competitive Bid
Loans for which a Lender submits Competitive Bid
Quotes in response to a Competitive Bid Quote Request
may not exceed the principal amount of the Competitive
Bid Borrowing for the Interest Period for which offers
were requested, and (y) the limits specified in
Section 2.03(a) shall not be exceeded;
(C) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/10,000th of
1%) offered for each such Competitive Bid Loan (the
"Absolute Rate"); and
(D) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no
Competitive Bid Quote shall contain qualifying, conditional
or similar language or propose terms other than or in
addition to those set forth in the applicable Competitive
Bid Quote Request, and, in particular, no Competitive Bid
Quote may be conditioned upon acceptance by the Borrower of
all (or some specified minimum) of the principal amount of
the Competitive Bid Loan for which such Competitive Bid
Quote is being made.
(d) The Agent shall, as promptly as practicable after the
Competitive Bid Quote is submitted (but in any event not later
than 10:30 A.M. Charlotte, North Carolina time on the Quotation
Date), notify the Borrower of the terms (i) of any Competitive
Bid Quote submitted by a Lender that is in accordance with
Section 2.03(c) and (ii) of any Competitive Bid Quote that
amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Lender with respect to
the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Agent unless
such subsequent Competitive Bid Quote is submitted solely to
correct a manifest error in such former Competitive Bid Quote.
The Agent's notice to the Borrower shall specify (A) the
aggregate principal amount of the Competitive Bid Loans for
which Competitive Bid Quotes have been received and (B) the
respective principal amounts and Absolute Rates so offered by
each Lender (identifying the Lender that made each Competitive
Bid Quote).
(e) Not later than 11:00 A.M. Charlotte, North Carolina
time on the Quotation Date (or such other time and date as the
Borrower and the Agent, with the consent of the Required
Lenders, may agree), the Borrower shall notify the Agent of its
acceptance or nonacceptance of the Competitive Bid Quotes so
notified to it pursuant to Section 2.03(d) (and the failure of
the Borrower to give such notice by such time shall constitute
nonacceptance) and the Agent shall promptly notify each affected
Lender. In the case of acceptance, such notice shall specify
the aggregate principal amount of Competitive Bid Quotes for
each Interest Period that are accepted. The Borrower may accept
any Competitive Bid Quote in whole or in part (provided that any
Competitive Bid Quote accepted in part shall be at least
$1,000,000 or a larger multiple of $1,000,000); provided that:
(i) the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable
amount set forth in the related Competitive Bid Quote
Request;
(ii) the aggregate principal amount of each
Competitive Bid Borrowing shall be at least $5,000,000 (or
a larger multiple of $1,000,000) but shall not cause the
limits specified in Section 2.03(a) to be violated;
(iii) acceptance of Competitive Bid Quotes may be
made only in ascending order of Absolute Rates, beginning
with the lowest rate so offered; and
(iv) the Borrower may not accept any Competitive Bid
Quote where the Agent has correctly advised the Borrower
that such offer fails to comply with Section 2.03(c)(ii) or
otherwise fails to comply with the requirements of this
Agreement (including, without limitation, Section 2.03(a)).
If Competitive Bid Quotes are made by two or more Lenders with
the same Absolute Rates, for an aggregate principal amount that
is greater than the amount in respect of which Competitive Bid
Quotes are accepted for the related Interest Period (after
taking into account the acceptance of all Competitive Bid Quotes
with lower Absolute Rates, if any, offered by any Lender for
such related Interest Period), then the principal amount of
Competitive Bid Loans in respect of which such Competitive Bid
Quotes are accepted shall be allocated by the Borrower among
such Lenders as nearly as possible (in amounts of at least
$1,000,000) in proportion to the aggregate principal amount of
such Competitive Bid Quotes. Determinations by the Borrower of
the amounts of Competitive Bid Loans and the Absolute Rates as
provided in Section 2.03(e)(iii) shall be conclusive in the
absence of manifest error.
(f) Any Lender whose Competitive Bid Quote has been
accepted in accordance with Section 2.03(e) shall, not later
than 1:00 P.M. Charlotte, North Carolina time on the date
specified for the making of such Competitive Bid Loan, make the
amount of such Competitive Bid Loan as accepted by the Borrower
available to the Agent at the Principal Office in Dollars and in
immediately available funds, for the account of the Borrower.
The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the
Borrower on such date by depositing the same, in Dollars and in
immediately available funds, in the Borrower's Account or
otherwise as shall be directed by the Borrower.
2.04 Payment of Interest. (a) The Borrower shall pay
interest to the Agent at the Principal Office (i) for the
account of each Lender in the case of each Revolving Credit
Loan, on the outstanding and unpaid principal amount of each
Revolving Credit Loan made by such Lender for the period
commencing on the date of such Loan until such Loan shall be due
at the Adjusted Eurodollar Rate or the Base Rate, as elected or
deemed elected by the Borrower or otherwise applicable to such
Loan as herein provided, and (ii) for the account of each Lender
making a Competitive Bid Loan, on the outstanding and unpaid
principal amount of such Competitive Bid Loan for the period
commencing on the date of such Competitive Bid Loan until such
Competitive Bid Loan is paid in full at the applicable Absolute
Rate; provided, however, that if any Event of Default shall have
occurred and be continuing, all amounts outstanding hereunder
shall bear interest thereafter (i) in the case of a Eurodollar
Loan, at a rate of interest per annum which shall be two percent
(2%) above the Adjusted Eurodollar Rate for such Eurodollar Loan
until the end of the Interest Period during which such Event of
Default occurred, and thereafter at a rate of interest per annum
which shall be two percent (2%) above the Base Rate, (ii) or in
the case of a Competitive Bid Loan, at a rate of interest per
annum which shall be two percent (2%) above the applicable
Absolute Rate for such Competitive Bid Loan until the end of the
Interest Period during which such Event of Default occurred, and
thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, and (iii) in the case of a
Base Rate Loan, at a rate of interest per annum which shall be
two percent (2%) above the Base Rate, or in each of (i), (ii)
and (iii) above, the maximum rate permitted by applicable law,
whichever is lower, from the date such amount was due and
payable until the date such amount is paid in full; provided
further, it is expressly agreed that the imposition of an
additional or higher rate of interest as provided in this
Section 2.04 shall not constitute a penalty or forfeiture.
(b) Interest on the outstanding principal balance of each
Loan shall be computed on the basis of a year of 360 days and
calculated for the actual number of days elapsed. Interest on
each Loan shall be paid (i) quarterly in arrears on the first
Business Day of each February, May, August and November
commencing November 2, 1998, on each Base Rate Loan, (ii) on the
last day of the applicable Interest Period for each Fixed Rate
Loan and, for any Eurodollar Rate Loan having an Interest Period
longer than three months also on the last day of every third
month of such Interest Period, and (iii) upon payment or
prepayment in full of the principal amount of such Loan (or the
date such payment or prepayment is due if earlier).
2.05 Payment of Principal. All Revolving Credit
Outstandings shall be due and payable to the Agent for the
benefit of each Lender (or to the Lender making Competitive Bid
Loans in the case of Competitive Bid Outstandings) in full on
the Revolving Credit Termination Date, or earlier as herein
expressly provided. Competitive Bid Loans shall be due and
payable to the Agent for the benefit of the Lender making such
Competitive Bid Loan in full on the last day of the Interest
Period for such Loan. The principal amount of any Loan may be
prepaid in whole or in part at any time without penalty;
provided, however, in connection with the prepayment of a Fixed
Rate Loan, the Borrower shall pay to the Agent for the account
of the applicable Lenders the amount, if any, required under
Section 4.05 hereof. In the event that at any time Revolving
Credit Outstandings exceed the Total Revolving Credit
Commitment, the Borrower shall promptly repay an amount of the
Revolving Credit Outstandings equal to or greater than such
excess. All prepayments made by the Borrower shall be in the
amount of $5,000,000 or such greater amount which is an integral
multiple of $1,000,000, or such other amount as necessary to
comply with this Section 2.05 or with Section 2.10, together
with accrued and unpaid interest on the amounts paid.
2.06 Payments; Non-Conforming Payments. (a) Each payment
of principal (including any prepayment), interest and other
amounts to be made by the Borrower under this Agreement and
other Loan Documents shall be made to the Agent at the Principal
Office, for the account of each Lender's Applicable Lending
Office, in Dollars and in immediately available funds, without
setoff, deduction or counterclaim, before 1:30 P.M. Charlotte,
North Carolina time on the date such payment is due. With
respect to Competitive Bid Loans, each payment of principal and
payment of interest shall be made to the Agent, for the account
of the Applicable Lending Office of the Lender making such
Competitive Bid Loan, at the Principal Office in Dollars and in
immediately available funds before 1:30 p.m. Charlotte, North
Carolina, time on the date such payment is due. The Borrower
shall give the Agent prior telephonic notice of any payment of
principal, such notice to be given by not later than 11:30 A.M.
Charlotte, North Carolina time, on the date of such payment.
(b) The Agent shall deem any payment by or on behalf of
the Borrower hereunder that is not made both (i) in Dollars and
in immediately available funds and (ii) prior to 1:30 P.M.
Charlotte, North Carolina time on the date payment is due to be
a non-conforming payment. Any such payment shall not be deemed
to be received by the Agent until the time such funds become
available funds. Any non-conforming payment shall be deemed not
to have been made for purposes of Section 9.01(a) and (b)
hereof. The Agent shall give prompt notice to the Authorized
Representative and each of the Lenders (confirmed in writing) if
any payment is non-conforming. Interest shall continue to
accrue on any principal as to which a non-conforming payment is
made until such funds become available funds (but in no event
less than the period from the date of such payment to the next
succeeding Business Day) at the respective rates of interest per
annum specified in Section 2.04(a) in respect of late payments
of interest, from the date such amount was due and payable until
the date such amount is paid in full.
(c) In the event that any payment hereunder or under the
Notes becomes due and payable on a day other than a Business
Day, then such due date shall be extended to the next succeeding
Business Day unless provided otherwise under clause (a) (ii)
under the definition of "Interest Period"; provided, that
interest shall continue to accrue during the period of any such
extension.
2.07 Borrower's Account. The Borrower shall continuously
maintain the Borrower's Account for the purposes herein
contemplated.
2.08 Notes. (a) Revolving Credit Loans and Term Loans
made by each Lender shall be evidenced by, and be repayable with
interest in accordance with the terms of, the Revolving Credit
Note payable to the order of such Lender in the amount of its
Revolving Credit Commitment, which Revolving Credit Note shall
be dated the Closing Date or such later date pursuant to an
Assignment and Acceptance and shall be duly completed, executed
and delivered by the Borrower.
(b) Competitive Bid Loans made by each Lender shall be
evidenced by, and be repayable with interest in accordance with
the terms of, the Competitive Bid Note payable to the order of
such Lender, which shall be dated the Closing Date or such later
date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by the Borrower.
2.09 Pro Rata Payments. Except as otherwise provided
herein, (a) each payment and prepayment on account of the
principal of and interest on the Revolving Credit Loans and the
fees described in Section 2.12 hereof shall be made to the Agent
in the aggregate amount payable to the Lenders for the account
of the Lenders pro rata based on their Applicable Commitment
Percentages, (b) each payment on account of the principal of and
interest on a Competitive Bid Loan shall be made to the Agent
for the account of the respective Lender making such Competitive
Bid Loan, (c) all payments to be made by the Borrower for the
account of each of the Lenders on account of principal, interest
and fees, shall be made without set-off or counterclaim, and
(d) the Agent will promptly distribute such payments received to
the Lenders as provided for herein.
2.10 Reductions. The Borrower shall, by notice from an
Authorized Representative, have the right from time to time (but
not more frequently than once during each calendar quarter upon
not less than five (5) Business Days written notice to the
Agent) to reduce the Total Revolving Credit Commitment. The
Agent shall give each Lender, within one (1) Business Day,
telephonic notice (confirmed in writing) of such reduction.
Each such reduction shall be in the amount of $10,000,000 or
such greater amount which is in an integral multiple of
$5,000,000, and shall permanently reduce the Total Revolving
Credit Commitment and the Revolving Credit Commitment of each
Lender pro rata. Each reduction of the Total Revolving Credit
Commitment shall be accompanied by payment of the principal
amount of the Revolving Credit Outstandings to the extent that
the Revolving Credit Outstandings exceed the Total Revolving
Credit Commitment after giving effect to such reduction,
together with amounts required under Section 4.05.
2.11 Conversions and Elections of Subsequent Interest
Periods. The Borrower may:
(a) upon notice to the Agent on or before 11:30 A.M.
Charlotte, North Carolina time on any Business Day Convert all
or a part of Eurodollar Loans to Base Rate Loans on the last day
of the Interest Period for such Eurodollar Loans; and
(b) provided that no Default or Event of Default shall
have occurred and be continuing and subject to the limitations
set forth below and in Sections 4.01, 4.02 and 4.03 hereof, on
three (3) Eurodollar Business Days' notice to the Agent on or
before 11:30 A.M. Charlotte, North Carolina time:
(i) Continue Eurodollar Loans and elect a subsequent
Interest Period for all or a portion of Eurodollar Loans to
begin on the last day of the current Interest Period for
such Eurodollar Loans; or
(ii) Convert Base Rate Loans to Eurodollar Loans on
any Eurodollar Business Day.
Notice of any such Continuation or Conversion shall specify
the effective date of such Continuation or Conversion and, with
respect to Eurodollar Loans, the Interest Period to be
applicable to the Loan as Continued or Converted. Each
Continuation and Conversion pursuant to this Section 2.11 shall
be subject to the limitations on Eurodollar Loans set forth in
the definition of "Interest Period" herein and in Sections
2.01(a), (b) and (c) and Article IV hereof. All such
Continuations or Conversions of Loans shall be effected pro rata
based on the Applicable Commitment Percentages of the Lenders.
2.12 Facility Fees and Utilization Premium.
(a) Facility Fees. For the period beginning on the
Closing Date and ending on the Revolving Credit Termination Date
or, if any Revolving Credit Outstandings are converted into Term
Loans in accordance with Section 2.16(f) hereof, the Term Loan
Termination Date, the Borrower agrees to pay to the Agent, for
the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, the Applicable Facility Fee payable
quarterly in arrears on the amount of the Total Revolving Credit
Commitment. Such payments of fees provided for in this Section
2.12 (a) shall be due in arrears on the first Business Day of
each February, May, August and November, beginning November 2,
1998 to and on the Revolving Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to
make available any portion of its Revolving Credit Commitment
when requested, such Lender shall not be entitled to receive
payment of its pro rata share of such fee until such Lender
shall make available such portion. Such fee shall be calculated
on the basis of a year of 360 days for the actual number of days
elapsed.
(b) Utilization Premium. For the period beginning on the
Closing Date and ending on the Total Facility Termination Date,
the Borrower agrees to pay to the Agent, for the pro rata
benefit of the Lenders based on their Applicable Commitment
Percentages, an additional interest payment on each day on which
the amount of Total Combined Outstandings exceeds $750,000,000
in an amount equal to the Utilization Premium times the amount
of all Revolving Credit Outstandings less all Competitive Bid
Outstandings calculated on the basis of a year of 360 days.
Notwithstanding the foregoing, such additional interest payment
shall also be payable on the average daily amount of the
Revolving Credit Outstandings less all Competitive Bid
Outstandings during the period commencing on the Closing Date
and continuing until but excluding the date on which the
certificate is delivered to the Agent pursuant to Section
7.01(b)(ii) hereof immediately following the third fiscal
quarter of Fiscal Year 1998. Such additional interest payment
shall be payable in arrears on the first Business Day of each
February, May, August and November, beginning November 2, 1998.
2.13 Deficiency Loans. No Lender shall be responsible for
any default of any other Lender in respect to such other
Lender's obligation to make any Loan hereunder nor shall the
Revolving Credit Commitment of any Lender hereunder be increased
as a result of such default of any other Lender. Without
limiting the generality of the foregoing, in the event any
Lender shall fail to advance funds to the Borrower as herein
provided, the Agent may in its discretion, but shall not be
obligated to, advance under the applicable Note in its favor as
a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to
payments of principal of and interest on such deficiency advance
in the same manner and at the same interest rate or rates to
which such other Lender would have been entitled had it made
such advance under its applicable Note; provided, that upon
payment to the Agent from such other Lender of the entire
outstanding amount of each such deficiency advance, together
with accrued and unpaid interest thereon, from the most recent
date or dates interest was paid to the Agent by the Borrower on
each Loan comprising the deficiency advance at the interest rate
per annum for overnight borrowing by the Agent from the Federal
Reserve Bank, then such payment shall be credited against the
applicable Note of the Agent in full payment of such deficiency
advance and the Borrower shall be deemed to have borrowed the
amount of such deficiency advance from such other Lender as of
the most recent date or dates, as the case may be, upon which
any payments of interest were made by the Borrower thereon.
2.14 Use of Proceeds. The proceeds of the Loans shall be
used by the Borrower and its Subsidiaries to provide working
capital, to finance capital expenditures, to finance Permitted
Acquisitions and to provide for the general corporate purposes
of the Borrower and its Subsidiaries. None of such proceeds
will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other
purpose which might constitute any of the Loans under this
Agreement a "purpose credit" directly or indirectly secured by
margin stock within the meaning of Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board.
2.15 Additional Fees. In addition to any fees described
above, the Borrower agrees to pay to the Agent, NMS and
NationsBank such other fees as may be agreed to in a separate
writing or writings.
2.16 Revolving Credit Facility Extension and Term Loan
Option.
(a) With the consent of the Lenders (the "Consenting
Lenders") having seventy-five percent (75%) or more of the
aggregate Credit Exposures of all Lenders (any Lender not so
consenting being referred to as a "Non-Consenting Lender"), at
each Revolving Credit Extension Date the Borrower can elect to
extend the Stated Revolving Credit Termination Date for an
additional period of 364 days commencing on such Revolving
Credit Extension Date; provided, however, that in no event shall
the Stated Revolving Credit Termination Date be extended beyond
the earlier to occur of the Stated Term Loan Termination Date
and the Five Year Facility Termination Date.
(b) The Borrower shall notify the Lenders of its request
for such an extension by delivering to the Agent notice of such
request signed by an Authorized Representative not more than
sixty (60) days nor less than forty-five (45) days prior to the
applicable Revolving Credit Extension Date. Notice of receipt
of such request shall be provided by the Agent to the Lenders.
The Agent shall notify the Borrower in writing not later than
thirty (30) days nor more than forty-five (45) days prior to the
applicable Revolving Credit Extension Date of the decision of
the Lenders. Failure by any Lender to respond to a request for
an extension shall constitute a refusal of such Lender to give
its consent to such extension. Failure by the Agent to give
such notice to the Borrower as a result of not receiving the
consent of Lenders having seventy-five percent (75%) or more of
the aggregate Credit Exposures of all Lenders to such extension
shall constitute refusal by the Lenders to extend the Stated
Revolving Credit Termination Date.
(c) If less than all of the Lenders consent to any such
request which has been approved pursuant to subsection (a) of
this Section 2.16, the Borrower shall either (i) arrange not
less than fifteen (15) days prior to the Stated Revolving Credit
Termination Date (the "Replacement Lender Date") for one or more
Consenting Lenders, or for one or more other banks or financial
institutions complying with the requirements set forth in
Section 11.01 (any of the foregoing referred to as an "Assuming
Lender"), as of the Revolving Credit Extension Date to effect an
assignment of all of the Revolving Credit Commitment (along with
an equivalent pro rata portion of the Five Year Facility
Commitment) of one or more Non-Consenting Lenders in the manner
provided in Section 11.19(A) or (ii) payoff such Non-Consenting
Lender(s) in the manner provided for in Section 11.19(B). The
Borrower shall deliver written notice to the Agent and each
Consenting Lender of such arrangement with any Assuming Lender
not less than fifteen (15) days prior to the Stated Revolving
Credit Termination Date.
(d) On each Revolving Credit Extension Date, each Assuming
Lender shall become a Lender for all purposes under this
Agreement and the other Loan Documents without any further
acknowledgment by or the consent of the other Lenders; provided,
however, that the Agent shall have received not less than ten
(10) days prior to such Revolving Credit Extension Date an
Assignment and Acceptance, effective as of such Revolving Credit
Extension Date, from each Assuming Lender duly executed by such
Assuming Lender and the applicable Non-Consenting Lender with
respect to both the Revolving Credit Facility and the Five Year
Facility. The Total Revolving Credit Commitment on the
Revolving Credit Extension Date shall be equal to the sum,
without duplication, of the Revolving Credit Commitments of each
Assuming Lender and each Consenting Lender.
(e) If on any Revolving Credit Extension Date the Borrower
has not so elected to extend the Stated Revolving Credit
Termination Date then in effect, or if Consenting Lenders with
sufficient Credit Exposures have not consented to such
extension, then as of such Stated Revolving Credit Termination
Date, except as provided otherwise in, and subject to the
Borrower's compliance with the terms of, Section 2.16(f) below,
(i) the Total Revolving Credit Commitment shall be reduced to
zero, and (ii) all Revolving Credit Outstandings shall be due
and payable in full.
(f) If with respect to any Revolving Credit Extension Date
the Borrower does not so elect to extend the Stated Revolving
Credit Termination Date then in effect, or if Consenting Lenders
with sufficient Credit Exposures have not consented to such
extension, then not less than fifteen (15) days prior to the
Stated Revolving Credit Termination Date, the Borrower can elect
to convert any or all Revolving Credit Outstandings as of such
date into a term loan on such date in the original principal
amount equal to such Revolving Credit Outstandings. Revolving
Credit Outstandings so converted by the Borrower in accordance
with this Section 2.16 shall be referred to as the "Term Loans."
The Total Revolving Credit Commitment shall be permanently
reduced on the Stated Revolving Credit Termination Date to an
amount equal to the aggregate principal amount of the Term Loans
on such date. The Term Loans shall be repaid on the Term Loan
Termination Date. The Term Loans may be comprised of Base Rate
Loans and Eurodollar Rate Loans as the Borrower may elect in
accordance with the provisions of this Article II for Revolving
Credit Loans. The Term Loans shall bear interest on the same
terms as the Revolving Credit Loans prior to the conversion to
Term Loans until the Continuation or Conversion thereof pursuant
to Section 2.11 hereof. Amounts repaid or prepaid on the Term
Loans may not be reborrowed, and the Total Revolving Credit
Commitment shall be permanently reduced by any such amounts.
(g) If on the Stated Revolving Credit Termination Date the
Borrower does not so elect to convert all of Revolving Credit
Outstandings as of such date to Term Loans as described in (f)
above, then on the Stated Revolving Credit Termination Date, (i)
all Revolving Credit Outstandings as of such date which are not
so converted shall be due and payable in full and (ii) the Total
Revolving Credit Commitment shall be reduced to the amount, if
any, of Revolving Credit Outstandings so converted to Term
Loans.
ARTICLE III
[Reserved]
ARTICLE IV
Change in Circumstances
4.01 Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with
respect to any Fixed Rate Loans, its Note, or its
obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Note
in respect of any Fixed Rate Loans (other than taxes
imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office
or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar
requirement (other than the Reserve Requirement utilized in
the determination of the Adjusted Eurodollar Rate) relating
to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the
Revolving Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or on the London interbank
market any other condition affecting this Agreement or its
Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost
to such Lender (or its Applicable Lending Office) of making,
Converting into, Continuing, or maintaining any Fixed Rate Loans
or to reduce any sum received or receivable by such Lender (or
its Applicable Lending Office) under this Agreement or its Notes
with respect to any Fixed Rate Loans, then the Borrower shall
pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If
any Lender requests compensation by the Borrower under this
Section 4.01(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such
Lender to make or Continue Eurodollar Loans, or to Convert Base
Rate Loans into Loans of such Type, until the event or condition
giving rise to such request ceases to be in effect (in which
case the provisions of Section 4.04 shall be applicable);
provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or
in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or
not having the force of law) of any such Governmental Authority,
central bank, or comparable agency, has or would have the effect
of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such
adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy),
then from time to time upon demand the Borrower shall pay to
such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation
pursuant to this Section 4.01 for a period not greater than 180
days and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 4.01 shall furnish to the
Borrower and the Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be
conclusive when made in good faith and in the absence of
manifest error. In determining such amount, such Lender may use
any reasonable averaging and attribution methods. Any claim for
compensation under this Section 4.01 shall be made by the
applicable Lender within 180 days after the date on which the
officer of such Lender who has responsibility for compliance
with the obligations under this Agreement knows or has reason to
know of such Lender's right to any compensation under this
Section 4.01 or, if any such Lender fails to deliver such demand
within such 180-day period, such Lender shall only be entitled
to compensation under this Section 4.01 from and after the date
that is 180 days prior to the date such Lender delivers such
demand.
4.02. Limitation on Types of Loans. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(a) the Agent reasonably determines (which
determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Adjusted
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive) and notify the Agent
that the Adjusted Eurodollar Rate will not adequately and
fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof and
so long as such condition remains in effect, the Lenders shall
be under no obligation to make additional Eurodollar Loans,
Continue Eurodollar Loans, or to Convert Base Rate Loans into
Eurodollar Loans.
4.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to make, maintain, or
fund Eurodollar Loans hereunder, then such Lender shall promptly
notify the Borrower thereof and such Lender's obligation to make
or Continue Eurodollar Loans and to Convert Base Rate Loans into
Eurodollar Loans shall be suspended until such time as such
Lender may again make, maintain, and fund Eurodollar Loans (in
which case the provisions of Section 4.04 shall be applicable).
4.04 Treatment of Affected Loans. If the obligation of
any Lender to make a Eurodollar Loan or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 4.01, 4.02 or 4.03 hereof (such
Eurodollar Loans being herein called "Affected Loans"), such
Lender's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest
Period(s) for Affected Loans (or, in the case of a Conversion
required by Section 4.03 hereof, on such earlier date as such
Lender may specify to the Borrower with a copy to the Agent)
and, unless and until such Lender gives notice as provided below
that the circumstances specified in Section 4.01, 4.02 or 4.03
hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Affected Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made
or Continued instead as Base Rate Loans, and all Loans of
such Lender that would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall
remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the
Agent) that the circumstances specified in Section 4.01, 4.02 or
4.03 hereof that gave rise to the Conversion of such Lender's
Affected Loans pursuant to this Section 4.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans made by other Lenders, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders
holding Eurodollar Loans and by such Lender are held pro rata
(as to principal amounts, Types, and Interest Periods) in
accordance with their respective Revolving Credit Commitment.
4.05 Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender)
to compensate it for any loss, cost, or expense incurred by it
as a result of:
(a) any payment, prepayment, or Conversion of a Fixed
Rate Loan for any reason (including, without limitation,
the acceleration of the Loans pursuant to Section 9.01) on
a date other than the last day of the Interest Period for
such Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any
condition precedent specified in Section 5.02 to be
satisfied) to borrow, Convert, Continue, or prepay a Fixed
Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant
Borrowing Notice, prepayment, Continuation, or Conversion
under this Agreement.
4.06 Taxes. (a) Any and all payments by the Borrower to
or for the account of any Lender or the Agent hereunder or under
any other Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, (i) taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender (or its Applicable Lending Office) or
the Agent (as the case may be) is organized or any political
subdivision thereof (ii) any taxes (other than withholding
taxes) that would not be imposed but for a connection between
the Agent or a Lender and the jurisdiction imposing such taxes
(other than a connection arising solely by virtue of the
activities of the Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), (iii) any
withholding taxes payable with respect to payments hereunder or
under any other Loan Document under applicable law in effect on
the date hereof, and (iv) and taxes arising after the date
hereof solely as a result of or attributable to a Lender
changing its Applicable Lending Office after the date such
Lender becomes a party hereto (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable under this Agreement or any other
Loan Document to any Lender or the Agent, (i) the sum payable
shall be increased as necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 4.06) such Lender or
the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) the
Borrower shall furnish to the Agent, at its principal office,
the original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which
arise from any payment made under this Agreement or any other
Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section 4.06)
paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to
the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing
by the Borrower or the Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on payments
of interest or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a
trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other
form or certificate required by any taxing authority (including
any certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Lender is entitled
to an exemption from or a reduced rate of tax on payments
pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the
appropriate form pursuant to Section 4.06(d) (unless such
failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under Section 4.06(a) or 4.06(b) with respect to
Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the
Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section
4.06, then such Lender will agree to use reasonable efforts to
change the jurisdiction of its Applicable Lending Office so as
to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrower shall furnish to the Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 4.06 shall
survive the expiration or termination of this Agreement and
repayment in full of the Notes and all other Obligations and the
occurrence of the Total Facility Termination Date.
(i) Any Lender claiming additional amounts payable
pursuant to this Section 4.06 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to file any certificate or document requested by
the Borrower or to change the jurisdiction of its Applicable
Lending Office if the making of such filing or change would
avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole
judgment of such Lender, be disadvantageous to such Lender. The
Borrower shall promptly upon request by any Lender or the Agent
take all actions (including, without limitation, the completion
of forms and the provisions of information to the appropriate
taxing authorities) reasonably requested by such Lender or the
Agent to secure the benefit of any exemption from, or relief
with respect to, Taxes or Other Taxes in relation to any amounts
payable under this Agreement.
(j) In the event that an additional payment is made under
Section 4.06(a) or 4.06(c) for the account of any Lender and
such Lender, in its reasonable opinion, determines that it has
received or been granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it in
respect of or calculated with reference to the deduction or
withholding giving rise to such payment, such Lender shall, to
the extent that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment,
pay to the Borrower such amount as such Lender shall reasonably
determine to be attributable to such deduction or withholding
and as will leave such Lender (after such payment) in no better
or worse position than it would have been in if the Borrower had
not been required to make such deduction or withholding.
ARTICLE V
Conditions to Making Loans
5.01 Conditions of Initial Loan. The obligation of the
Lenders to make the initial Loan is subject to the following
conditions precedent:
(a) The Agent shall have received on the Closing Date, in
form and substance satisfactory to the Agent and Lenders, or
otherwise be satisfied as to, each of the following:
(i) executed originals of each of this Agreement, the
Notes and the other Loan Documents, and the Five Year
Facility Credit Agreement and the promissory notes and loan
documents referred to therein, together with all schedules
and exhibits thereto;
(ii) favorable written opinions of special counsel or
in-house counsel to the Borrower and the Guarantors dated
the Closing Date, addressed to the Agent and the Lenders
and satisfactory to the Agent, the Lenders and to Smith
Helms Mulliss & Moore, L.L.P., special counsel to the
Agent, substantially in the form of Exhibit L attached
hereto and incorporated herein by reference;
(iii) Organizational Action of the Borrower and
each of the Guarantors certified by its secretary or
assistant secretary or other appropriate official as of the
Closing Date, appointing (in the case of the Borrower) the
initial Authorized Representatives and approving and
adopting the Loan Documents to be executed by such Person,
and authorizing the execution and delivery thereof and the
incurrence of obligations thereunder;
(iv) specimen signatures of officers of the Borrower
and each Guarantor executing the Loan Documents on behalf
of such Person, certified by the secretary or assistant
secretary or other appropriate official of the Borrower or
Guarantor, as applicable;
(v) the Organizational Documents of the Borrower and
each Guarantor certified as of a recent date by the
Secretary of State or other appropriate Governmental
Authority of its jurisdiction of incorporation (or other
organization, as applicable);
(vi) the Operating Documents of the Borrower and each
Guarantor certified as of the Closing Date as true and
correct by the secretary or assistant secretary or other
appropriate official of the Person to whom such Operating
Documents relate;
(vii) certificates issued as of a recent date by
the Secretary of State or other appropriate Governmental
Authority of its jurisdiction of incorporation (or other
organization, as applicable) as to the due existence and,
if issued by such governmental authority, good standing of
the Borrower and each Guarantor therein;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate,
authority to conduct business under assumed name, issued in
respect of the Borrower and each Guarantor as of a recent
date by the Secretary of State or other appropriate
Governmental Authority of each jurisdiction in which the
failure to be qualified to do business or authorized so to
conduct business could reasonably be expected to have a
Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative of the Borrower in the form of Exhibit C
hereto;
(x) certificate of an Authorized Representative dated
the Closing Date demonstrating pro forma compliance with
the financial covenants contained in Sections 8.02 and
8.03, all as of May 2, 1998, substantially in the form of
Exhibit M attached hereto;
(xi) an initial Borrowing Notice;
(xii) all fees payable by the Borrower on the
Closing Date to the Agent, NationsBank, NMS and the
Lenders, including any upfront fee as agreed to in writing;
(xiii) historical pro forma consolidated financial
statements giving effect to the proposed combination with
Saks (the "Saks Acquisition") as set forth in the
Borrower's Registration Statement on Form S-4, Registration
No.333-60123, as filed with the Securities and Exchange
Commission on July 29, 1998 (the "Filing Date") as amended
by each amendment thereto (as so amended, the "Registration
Statement"), as well as the actual historical consolidated
financial statements of the Borrower and its Subsidiaries
incorporated by reference in such Registration Statement;
(xiv) certificate of an Authorized Representative
stating that all conditions precedent to the consummation
of the Saks Acquisition as set forth in the Agreement and
Plan of Merger dated as of July 4, 1998 (the "Saks
Acquisition Agreement") have been satisfied or waived;
(xv) fully executed copy of the Saks Acquisition
Agreement and other related documents, instruments and
agreements requested by the Agent, each certified as true
and complete by an Authorized Representative;
(xvi) evidence as to the termination of that
certain Credit Agreement among Saks, The Chase Manhattan
Bank, as Administrative Agent, and the other lenders party
thereto dated as of October 8, 1996 and repayment in full
of all obligations (other than the undrawn principal amount
of the letters of credit then outstanding listed on
Schedule 8.04 hereof) owing thereunder;
(xvii) a certificate of an Authorized
Representative as to the occurrence or truthfulness, as
applicable, of the matters set forth in Section 5.01(b)
hereof as of the Closing Date; and
(xviii) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby.
(b) Each of the following shall have occurred or be true:
(i) there shall not be any action, suit,
investigation or proceeding pending or threatened by,
before or otherwise involving any Governmental Authority or
other Person that could reasonably be expected to have a
material adverse effect on (x) the business, business
prospects, results of operations or condition (financial or
otherwise) of the Borrower or its Subsidiaries or (y) the
ability of the Borrower or its Subsidiaries to observe and
perform the covenants and agreements contained herein or in
any other Loan Document or the ability of any Lender to
receive the benefit of any remedy provided thereto under
any Loan Document or (z) any transaction contemplated
hereby;
(ii) consummation of the Saks Acquisition, which shall
not have a Material Adverse Effect; and
(iii) the Borrower and its Subsidiaries shall be
in compliance with respect to all existing financial
obligations.
(c) In the good faith judgment of the Agent and the
Lenders:
(i) there shall not have occurred a material adverse
change since the Filing Date in the business, business
prospects, results of operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a
whole or Saks and its Subsidiaries taken as a whole, or in
the facts and information regarding such entities as
represented to date;
(ii) the Agent and NMS shall have completed all due
diligence deemed necessary with respect to the business,
operations, financial condition and prospects of Saks and
its Subsidiaries; and
(iii) the Agent shall have received and reviewed,
with results satisfactory to the Agent and its counsel, all
information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements,
property ownership, and contingent liabilities of the
Borrower and its Subsidiaries.
5.02 Conditions of Loans. The obligations of the Lenders
to make any Loan are subject to the satisfaction of the
following conditions (which are not applicable as conditions
precedent to any Loan being Continued or Converted pursuant to
Section 2.11 hereof).
(a) the Agent shall have received a notice of such
borrowing or request if required by Article II hereof;
(b) the representations and warranties of the Borrower and
each Guarantor set forth in Article VI hereof and in each of the
other Loan Documents shall be true and correct in all material
respects on and as of the date of such Loan with the same effect
as though such representations and warranties had been made on
and as of such date, other than such representations and warran-
ties which expressly relate to an earlier date, except that the
representations and warranties set forth in Section 6.01(d) and
(e) shall be deemed to include and take into account the Saks
Acquisition and any merger or consolidation permitted under
Section 8.08 hereof, and except that the financial statements
referred to in Section 6.01(f)(i) shall be deemed to be those
financial statements most recently delivered to the Agent and
the Lenders pursuant to Section 7.01 hereof;
(c) at the time of each such Loan, no Default or Event of
Default shall have occurred and be continuing and the
Obligations shall not have been declared to be immediately due
and payable pursuant to Section 9.01(A)(ii) hereof; and
(d) immediately after giving effect to any Loan (i)
Revolving Credit Outstandings shall not exceed the Total
Revolving Credit Commitment and (ii) each Lender's Applicable
Commitment Percentage of Revolving Credit Loans shall not exceed
its Revolving Credit Commitment.
ARTICLE VI
Representations and Warranties
6.01 Representations and Warranties. The Borrower
represents and warrants to the Lenders and the Agent with
respect to itself and to its Subsidiaries (which representations
and warranties shall survive the delivery of the documents
mentioned herein and the making of Loans), that:
(a) Organization and Authority.
(i) the Borrower and each Subsidiary is a legal
entity duly organized or created and validly existing under
the laws of the jurisdiction of its incorporation or
creation;
(ii) the Borrower and each Subsidiary (1) has the
requisite power and authority to own its properties and
assets and to carry on its business as now being conducted,
and (2) is qualified to do business in each jurisdiction in
which its ownership or lease of property or the nature of
its business makes such qualification necessary and in
which failure so to qualify could reasonably be expected to
have a Material Adverse Effect;
(iii) the Borrower has the power and authority to
execute, deliver and perform this Agreement and the Notes,
and to borrow hereunder, and to execute, deliver and
perform each of the other Loan Documents to which it is a
party;
(iv) each Guarantor has the power and authority to
execute, deliver and perform the Guaranty and the other
Loan Documents to which it is a party; and
(v) each of the Loan Documents to which a Loan Party
is a party has been duly executed and delivered by such
Loan Party and is the legal, valid and binding obligation
or agreement, as the case may be, of such Loan Party,
enforceable against such Loan Party in accordance with its
terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally
and to the effect of general principles of equity which may
limit the availability of equitable remedies (whether in a
proceeding at law or in equity);
(b) Loan Documents. The execution, delivery and
performance by a Loan Party of each of the Loan Documents to
which such Loan Party is a party:
(i) have been duly authorized by all requisite
Organizational Action (including any required shareholder
approval) of such Loan Party required for the lawful
execution, delivery and performance thereof;
(ii) do not violate any provisions of (1) applicable
law, rule or regulation, (2) any order of any court or
other agency of government binding on the Borrower or any
Guarantor, or their respective properties, or (3) the
Organizational Documents or Operating Documents of such
Loan Party;
(iii) will not be in conflict with, result in a
breach of or constitute an event of default, or an event
which, with notice or lapse of time, or both, would
constitute an event of default, under any indenture,
agreement or other instrument to which any Loan Party is a
party, or by which the properties or assets of any Loan
Party are bound; and
(iv) will not result in the creation or imposition of
any Lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of any Loan Party
except any Liens in favor of the Agent and the Lenders
created by the Loan Documents;
(c) Solvency. Each Loan Party is Solvent after giving
effect to the Saks Acquisition and the transactions contemplated
by this Agreement and the other Loan Documents;
(d) Subsidiaries and Stockholders. Borrower has no
Subsidiaries other than those Persons listed as Subsidiaries in
Schedule 6.01(d) hereto (which Schedule includes all
Subsidiaries acquired in connection with the Saks Acquisition)
and Subsidiaries after the date hereof acquired or created in
compliance with Section 7.18 (if then applicable); Schedule
6.01(d) to this Agreement states as of the date hereof (i) with
respect to all wholly owned Subsidiaries, the names and owners
thereof and (ii) with respect to all non-wholly owned
Subsidiaries, the authorized and issued capitalization of each
such Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest
issued and outstanding of each such Subsidiary and the number
and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any
interest) of each such class of capital stock or equity interest
owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each Subsidiary have been
duly authorized and validly issued and are fully paid and non-
assessable; and Borrower and each such Subsidiary owns
beneficially and of record all the shares and other interests it
is listed as owning in Schedule 6.01(d) and all shares and other
interests for each of its wholly owned Subsidiaries, free and
clear of any Lien;
(e) Ownership Interests. Borrower owns no interest in any
Person other than as permitted under Section 8.07;
(f) Financial Condition.
(i) The Borrower has heretofore furnished to each
Lender (1) the audited income statement, balance sheet, and
statements of cash flow and changes in shareholders' equity
of the Borrower and its Subsidiaries (which do not give
effect to the Saks Acquisition) for the Fiscal Year ended
January 31, 1998 (the "Borrower's Audited Statements") and
(2) the unaudited pro forma condensed combined income
statements of the Borrower and its Subsidiaries (giving
effect to the Saks Acquisition) for the years ended
February 1, 1997 and January 31, 1998 and for the three-month
period ended May 2, 1998 and the unaudited pro forma
combined balance sheet of the Borrower and its Subsidiaries
as at May 2, 1998 (collectively, the "Combined Three Month
Statements"). Except as set forth therein, the Borrower's
Audited Statements present fairly, in all material
respects, the financial condition of the Borrower and its
Subsidiaries as of the Fiscal Year then ended and the
results of operations and changes in stockholders' equity
for the Fiscal Year then ended, all in conformity with
Generally Accepted Accounting Principles applied on a basis
consistent with prior periods. The Combined Three Month
Statements have been prepared by the Borrower and Saks,
based on their respective financial statements for such
periods and at such date together with available
information and certain assumptions which the Borrower
believes to be reasonable, and give pro forma effect to the
Saks Acquisition under the pooling-of-interest method of
accounting;
(ii) since the Filing Date, there has been no material
adverse change in the condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole or in
the businesses, properties and operations of the Borrower
and its Subsidiaries, considered as a whole, nor have such
businesses or properties, taken as a whole, been materially
adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of
workers, flood, embargo or act of God;
(iii) except as set forth in the financial
statements referred to in Section 6.01(f)(i) or in Schedule
6.01(f) or Schedule 6.01(j) attached hereto, or as
permitted under Section 8.04 hereof or any other provision
of this Agreement or any other Loan Document, neither
Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material indebtedness,
obligations, commitments or other liability contingent or
otherwise which remain outstanding or unsatisfied;
(g) Title to Properties. The Borrower and its
Subsidiaries have title to all their respective owned real and
personal properties, subject to no Liens of any kind, except for
(i) the Liens described in Schedule 6.01(g) attached hereto and
(ii) Liens permitted under Section 8.05 hereof;
(h) Taxes. Except as set forth in Schedule 6.01(h)
attached hereto, the Borrower and its Subsidiaries have filed or
caused to be filed all federal, state, local and foreign tax
returns which are required to be filed by them and except for
taxes and assessments being contested as permitted under Section
7.04, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by them, to the extent
that such taxes have become due;
(i) Other Agreements. Neither the Borrower nor any
Subsidiary is
(i) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which
could reasonably be expected to have a Material Adverse
Effect; or
(ii) in default in the performance, observance or
fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to
which the Borrower or any Subsidiary is a party, which
default has, or if not remedied within any applicable grace
period could reasonably be expected to have, a Material
Adverse Effect;
(j) Litigation. Except as set forth in Schedule 6.01(j)
attached hereto, there is no action, suit, litigation,
investigation or proceeding at law or in equity or by or before
any Governmental Authority pending, including without limitation
matters pertaining to labor, employment, wages, hours,
occupational safety and taxation, or, to the knowledge of the
Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any
properties or rights of the Borrower or any Subsidiary, an
adverse ruling or determination in which could reasonably be
expected to have a Material Adverse Effect;
(k) Margin Stock. Neither the Borrower nor any agent
acting in its behalf has taken or will take any action which
might cause this Agreement or any of the documents or
instruments delivered pursuant hereto to violate any regulation
of the Board or to violate the Securities Exchange Act of 1934,
as amended, or the Securities Act of 1933, as amended, or any
state securities laws, in each case as in effect on the date
hereof;
(l) Investment Company. Neither the Borrower nor any
Subsidiary is an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company
Act of 1940, as amended (15 U.S.C. Section 80a-1, et seq.). The
application of the proceeds of the Loans and repayment thereof
by the Borrower and the performance by the Borrower of the
transactions contemplated by this Agreement will not violate any
provision of said Act, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder, in each
case as amended from time to time;
(m) Patents, Etc. Except as set forth in Schedule 6.01(m)
attached hereto, the Borrower and its Subsidiaries own or have
the right to use, under valid license agreements or otherwise,
all material patents, licenses, franchises, trademarks,
trademark rights, trade names, trade name rights, trade secrets
and copyrights necessary to the conduct of their businesses as
now conducted, without known conflict with any patent, license,
franchise, trademark, trade secrets and confidential commercial
or proprietary information, trade name, copyright, rights to
trade secrets or other proprietary rights of any other Person,
except to the extent the failure to have such ownership or
rights could not reasonably be expected to have a Material
Adverse Effect;
(n) No Untrue Statement. Neither this Agreement nor any
other Loan Document or certificate or document executed and
delivered by or on behalf of any Loan Party in accordance with
or pursuant to any Loan Document contains any misrepresentation
or untrue statement of material fact or omits to state a
material fact necessary, in light of the circumstance under
which it was made, in order to make any such representation or
statement contained therein not misleading in any material
respect;
(o) No Consents, Etc. Except as set forth in Schedule
6.01(o) attached hereto, neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any
relationship between the Borrower or any Subsidiary and any
other Person, nor any circumstance in connection with the
execution, delivery and performance of the Loan Documents and
the transactions contemplated hereby is such as to require a
consent, approval or authorization of, or filing, registration
or qualification with, any Governmental Authority on the part of
the Borrower or any Subsidiary as a condition to the execution,
delivery and performance of, or consummation of the transactions
contemplated by, this Agreement or the other Loan Documents or
if so, such consent, approval, authorization, filing,
registration or qualification has been obtained or effected, as
the case may be;
(p) Benefit Plans.
(i) None of the employee benefit plans maintained at
any time by the Borrower or any Subsidiary or the trusts
created thereunder has engaged in a prohibited transaction
or violated any Foreign Benefit Law which could subject any
such employee benefit plan or trust to a material tax or
penalty on prohibited transactions imposed under Internal
Revenue Code Section 4975 or ERISA or under any Foreign
Benefit Law;
(ii) None of the employee benefit plans maintained at
any time by the Borrower or any Subsidiary which are
employee pension benefit plans and which are subject to
Title IV of ERISA or any Foreign Benefit Law or the trusts
created thereunder has been terminated so as to result in
a material liability of the Borrower under ERISA or under
any Foreign Benefit Law nor has any such employee benefit
plan of the Borrower or any Subsidiary incurred any
material liability to the Pension Benefit Guaranty
Corporation established pursuant to ERISA or any other
Person exercising similar duties and functions under any
Foreign Benefit Law, other than for required insurance
premiums which have been paid or are not yet due and
payable; neither the Borrower nor any Subsidiary has
withdrawn from or caused a partial withdrawal to occur with
respect to any Multi-employer Plan resulting in any
material assessed and unpaid withdrawal liability; the
Borrower and the Subsidiaries have made or provided for all
contributions in all material amounts to all such employee
pension benefit plans which they maintain and which are
required as of the end of the most recent fiscal year under
each such plan; neither the Borrower nor any Subsidiary has
incurred any material accumulated funding deficiency with
respect to any such plan, whether or not waived; nor has
there been any reportable event, or other event or
condition, which presents a material risk of termination of
any such employee benefit plan by such Pension Benefit
Guaranty Corporation or any other Person exercising similar
duties and functions under any Foreign Benefit Law;
(iii) The present value of all vested accrued
benefits under the employee pension benefit plans which are
subject to Title IV of ERISA or any Foreign Benefit Law,
maintained by the Borrower or any Subsidiary, did not, as
of the most recent valuation date for each such plan,
exceed by a material amount the then current value of the
assets of such employee benefit plans allocable to such
benefits;
(iv) To the knowledge of the Borrower based on its
actual knowledge and based on information, if any, that the
Lenders may provide to the Borrower from time to time, the
consummation of the Loans provided for in Article II will
not involve any prohibited transaction under ERISA or any
Foreign Benefit Law which is not subject to a statutory or
administrative exemption;
(v) To the best of the Borrower's knowledge, each
employee pension benefit plan subject to Title IV of ERISA
or any Foreign Benefit Law, maintained by the Borrower or
any Subsidiary, has been administered in accordance with
its terms in all material respects and is in compliance in
all material respects with all applicable requirements of
ERISA and other applicable laws, regulations and rules and
any applicable Foreign Benefit Law;
(vi) There has been no material withdrawal liability
incurred and unpaid with respect to any Multi-employer
Plan to which the Borrower or any Subsidiary is or was
a contributor;
(vii) As used in this Agreement, the terms
"employee benefit plan," "employee pension benefit plan,"
"accumulated funding deficiency," "reportable event," and
"accrued benefits" shall have the respective meanings
assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Code
Section 4975 and ERISA;
(viii) Neither the Borrower nor any Subsidiary has
any liability not disclosed on any of the financial
statements furnished to the Lenders pursuant to Section
7.01 hereof, contingent or otherwise, under any plan or
program or the equivalent for unfunded post-retirement
benefits, including pension, medical and death benefits,
which liability could reasonably be expected to have a
Material Adverse Effect;
(q) No Default. As of the date hereof, there does not
exist any Default or Event of Default hereunder;
(r) Environmental Matters. The Borrower and each
Subsidiary is in compliance with all applicable Environmental
Laws the failure of which to comply could reasonably be expected
to have a Material Adverse Effect and has been issued and
currently maintains all federal, state and local permits,
licenses, certificates and approvals the failure of which to
obtain or maintain could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any
Subsidiary has been notified of any material pending or
threatened action, suit, proceeding or investigation, and
neither the Borrower nor any Subsidiary is aware of any facts,
which (a) calls into question, or could reasonably be expected
to call into question, compliance by the Borrower or any
Subsidiary with any Environmental Laws, (b) seeks, or could
reasonably be expected to form the basis of a meritorious
proceeding, to suspend, revoke or terminate any license, permit
or approval necessary for the operation of the Borrower's or any
Subsidiary's business or facilities or for the generation,
handling, storage, treatment or disposal of any Hazardous
Materials, or (c) seeks to cause, or could reasonably be
expected to form the basis of a meritorious proceeding to cause,
any property of the Borrower or any Subsidiary to be subject to
any restrictions on ownership, use, occupancy or transferability
under any Environmental Law, in each case which could reasonably
be expected to have a Material Adverse Effect;
(s) RICO. Neither the Borrower nor any Subsidiary is
engaged in or has engaged in any course of conduct that could
subject any of their respective properties to any Lien, seizure
or other forfeiture under any criminal law, racketeer influenced
and corrupt organizations law, civil or criminal, or other
similar laws;
(t) Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all laws, rules and
regulations, and all applicable laws, rules and regulations
pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety
and taxation and all other valid requirements of any
Governmental Authority with respect to the conduct of its
business, the noncompliance with which could reasonably be
expected to have a Material Adverse Effect.
(u) Year 2000 Compliance. The Borrower has (i) initiated
a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected
by suppliers, vendors and customers) that could reasonably be
expected to be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer hardware and software
applications used by the Borrower or any of its Subsidiaries (or
material suppliers, vendors and customers) may be unable to
recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and time line for addressing the
Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based
on the foregoing, the Borrower believes that all computer
hardware and software applications (including those of its
suppliers, vendors and customers) that are material to its or
any of its Subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1,
2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have
a Material Adverse Effect.
ARTICLE VII
Affirmative Covenants
Until the occurrence of the Total Facility Termination
Date, unless the Required Lenders shall otherwise consent in
writing, the Borrower will:
7.01 Financial Reports, Etc. (a) as soon as practicable
and in any event within ninety-five (95) days after the end of
each Fiscal Year of the Borrower, deliver or cause to be
delivered to the Agent and each Lender (i) the consolidated
balance sheets of the Borrower and its Subsidiaries, in each
case with the notes thereto, the related consolidated statements
of operations, cash flow, and shareholders' equity and the
respective notes thereto for such Fiscal Year, setting forth in
the case of the consolidated statements comparative financial
statements for the preceding Fiscal Year, all prepared in
accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis and containing, with respect to the
consolidated financial reports, an opinion of
PriceWaterhouseCoopers LLP, or any other "Big 5" accounting firm
or other such independent certified public accountants of
recognized national standing selected by the Borrower and
approved by the Agent, which is unqualified and devoid of any
exception which is not acceptable to the Required Lenders; and
(ii) a certificate of an Authorized Representative as to the
existence or non-existence of any Default or Event of Default,
demonstrating compliance with Sections 8.01, 8.02 and 8.03 of
this Agreement as of the end of the most recent Fiscal Year for
which such covenant compliance is demonstrated, which
certificate shall be substantially in the form attached hereto
as Exhibit L and incorporated herein by reference;
(b) as soon as practicable and in any event within fifty
(50) days after the end of each quarterly period of each Fiscal
Year (except the last reporting period of the Fiscal Year), or
if an extension has been granted by the Securities and Exchange
Commission for the filing by the Borrower of its quarterly
report on Form 10-Q, then by the earlier of the date such Form
10-Q is actually filed and the last day of such extended time
period, but in no event later than sixty (60) days after the end
of such quarterly period for which such Form 10-Q is to be
filed, deliver to the Agent and each Lender (i) the consolidated
balance sheets of the Borrower and its Subsidiaries, in each
case as of the end of such reporting period, the related
consolidated statements of operations and cash flow for such
reporting period and for the period from the beginning of the
Fiscal Year through the end of such reporting period,
accompanied by a certificate of an Authorized Representative to
the effect that such financial statements present fairly, in all
material respects, the financial position of the Borrower and
its Subsidiaries as of the end of such reporting period and the
results of their operations and the changes in their financial
position for such reporting period, all of such interim
financial statements being prepared on a consolidated basis in
accordance with Generally Accepted Accounting Principles applied
on a Consistent Basis, subject to normal year-end audit
adjustments, and (ii) a certificate of an Authorized
Representative as to the existence or non-existence of any
Default or Event of Default and containing computations for such
quarter comparable to that required pursuant to Section
7.01(a)(ii);
(c) together with each delivery of the financial
statements required by Section 7.01(a)(i) hereof, deliver to the
Agent and each Lender a letter from the Borrower's accountants
specified in Section 7.01(a)(i) hereof stating that in
performing the audit necessary to render an opinion on the
financial statements delivered under Section 7.01(a)(i), they
obtained no knowledge of any Default or Event of Default by the
Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at
the date of such statement remains uncured); and if the
accountants have obtained knowledge of such Default or Event of
Default, a statement specifying the nature and period of
existence thereof;
(d) promptly upon their becoming available to the
Borrower, the Borrower shall deliver to the Agent and each
Lender a copy of (i) all regular or special reports or effective
registration statements which Borrower or any Subsidiary shall
file with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange, and (ii) any
proxy statement distributed by the Borrower to its shareholders,
bondholders or the financial community in general;
(e) promptly, and in any event within two (2) Business
Days, after the public announcement of any change in the Debt
Rating, deliver written notice to the Agent of such new Debt
Rating and the Debt Rating Date. The Borrower shall also
provide such additional evidence of such new Debt Rating as may
be requested by the Agent, including without limitation evidence
from either or both of S&P and Moody's (or such other
Alternative Rating Agency), as applicable, within ten (10)
Business Days of such request;
(f) no later than 75 calendar days following the
consummation of the Saks Acquisition, deliver to the Agent and
each Lender a copy of the Audited Restated Financial Statements;
and
(g) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information
regarding Borrower's and each Subsidiary's operations, business
affairs and financial condition as the Agent or such Lender may
reasonably request.
7.02 Maintain Properties. (i) Maintain all properties
necessary to its operations in good working order and condition
(ordinary wear and tear excepted) and make all needed repairs,
replacements and renewals as are necessary to conduct its
business in accordance with customary business practices and
(ii) preserve and protect its material patents, copyrights,
licenses, trademarks, trademark rights, trade names, trade name
rights, trade secrets and know-how necessary or useful in the
conduct of its operations.
7.03 Existence, Qualification, Etc. Do or cause to be
done all things necessary to preserve and keep in full force and
effect its existence and all material rights and franchises,
trade names, trademarks and permits, except to the extent
conveyed in connection with transactions permitted under
Sections 8.06 or 8.08 hereof, and maintain its license or
qualification to do business as a foreign corporation and good
standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or
qualification necessary and in which the failure so to qualify
could reasonably be expected to have a Material Adverse Effect.
7.04 Taxes. Pay all taxes, assessments, governmental
charges, claims for labor, supplies, rent and any other
obligation which, if unpaid, might become a Lien against any of
its properties except any of the foregoing being contested in
good faith by appropriate proceedings diligently conducted and
against which reserves sufficient under GAAP have been
established.
7.05 Insurance. (i) Maintain insurance with responsible
insurance carriers against loss or damage by fire and other
hazards as are customarily insured against by similar businesses
owning such properties similarly situated, (ii) maintain general
public liability insurance at all times with responsible
insurance carriers against liability on account of damage to
persons and property having such limits, deductibles, exclusions
and co-insurance and other provisions providing no less coverage
than insurance customarily carried by similar businesses owning
similar properties and conducting similar operations, and (iii)
maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if
self-insured for workers' compensation purposes).
7.06 True Books. Keep true books of record and account in
compliance with Generally Accepted Accounting Principles.
7.07 Right of Inspection. Permit any Lender or the Agent
(through their employees and other agents), at the expense of
such Lender or the Agent, as applicable, or at the reasonable
expense of the Borrower if a Default has occurred and is
continuing, to visit and inspect any of the properties (subject
to the rights of third party tenants in possession), corporate
books and financial reports of the Borrower and its
Subsidiaries, and to discuss their respective affairs, finances
and accounts with their principal officers and independent
certified public accountants, all at reasonable times, at
reasonable intervals and with reasonable prior notice.
7.08 Observe All Laws; Licenses. Comply in all material
respects with all laws, rules and regulations and all other
valid requirements of any Governmental Authority with respect to
the conduct of its business, including without limitation
Environmental Laws, the noncompliance with which could
reasonably be expected to have a Material Adverse Effect.
Borrower shall also obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as
currently conducted and as contemplated by the Loan Documents
and with respect to which the failure to so obtain and maintain
could reasonably be expected to have a Material Adverse Effect.
7.09 Covenants Extending to Subsidiaries. Cause each of
its Subsidiaries to do with respect to itself, its business and
its assets, each of the things required of the Borrower in
Sections 7.02 through 7.08, inclusive.
7.10 Officer's Knowledge of Default. Upon any Authorized
Representative of the Borrower obtaining knowledge of any
Default or Event of Default, promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action
the Borrower proposes to take with respect thereto and stating
that such notice is a "notice of default."
7.11 Suits or Other Proceedings. Upon any Authorized
Representative of the Borrower obtaining knowledge of any
litigation or other proceeding being instituted against the
Borrower or any Subsidiary, or any attachment, levy, execution
or other process being instituted against any assets of the
Borrower or any Subsidiary, in an aggregate amount greater than
$10,000,000 not otherwise covered by insurance, promptly deliver
to the Agent written notice thereof stating the nature and
status of such litigation, proceeding, levy, execution or other
process.
7.12 Notice of Discharge of Hazardous Material or
Environmental Complaint. Promptly provide to the Agent true,
accurate and complete copies of any and all written notices,
complaints, orders, directives, claims, or citations received by
the Borrower or any Subsidiary relating to any of the following,
in each case which could reasonably be expected to have a
Material Adverse Effect: (a) violation or alleged violation by
the Borrower or any Subsidiary of any applicable Environmental
Laws; (b) release or threatened release by the Borrower or any
Subsidiary, or by any Person handling, transporting or disposing
of any Hazardous Material on behalf of the Borrower or any
Subsidiary, or at any facility or property owned or leased or
operated by the Borrower or any Subsidiary, of any Hazardous
Material, except where occurring legally pursuant to a permit or
license or otherwise; or (c) liability or alleged liability of
the Borrower or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous
Materials.
7.13 Environmental Compliance. If the Borrower or any
Subsidiary shall receive any letter, notice, complaint, order,
directive, claim or citation from any Governmental Authority
alleging that the Borrower or any Subsidiary has violated any
applicable Environmental Law, released any Hazardous Material,
or is liable for the costs of cleaning up, removing, remediating
or responding to a release of Hazardous Materials, in each case
the violation or occurrence of which could reasonably be
expected to have a Material Adverse Effect, the Borrower shall
promptly (and in any event within the time period permitted and
to the extent required by the applicable Environmental Law or by
the applicable Governmental Authority responsible for enforcing
such Environmental Law) remove or remedy, or cause the
applicable Subsidiary to remove or remedy, such violation or
release or satisfy such liability.
7.14 Year 2000 Notice. Notify the Agents and the Lenders
in the event the Borrower discovers or determines that any
computer application (including those of its suppliers, vendors
and customers) that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000
Compliant by September 30, 1999, except to the extent that such
failure could not reasonably be expected to result in a Material
Adverse Effect.
7.15 Further Assurances. At its cost and expense, upon
request of the Agent, duly execute and deliver or cause another
Loan Party to duly execute and deliver, to the Agent such
further instruments, documents, certificates, and agreements,
and do and cause another Loan Party to do such further acts
that may be reasonably necessary or advisable in the reasonable
opinion of the Agent to carry out the provisions and purposes of
this Agreement and the other Loan Documents.
7.16 Benefit Plans. Comply in all material respects with
all requirements of ERISA and any Foreign Benefit Law applicable
to it and furnish to the Agent as soon as possible and in any
event (i) within thirty (30) days after the Borrower knows or
has reason to know that any reportable event or other event
under any Foreign Benefit Law with respect to any employee
benefit plan maintained by the Borrower or any Subsidiary which
could give rise to termination or the imposition of any material
tax or penalty has occurred, written statement of an Authorized
Representative describing in reasonable detail such reportable
event or such other event and any action which the Borrower or
applicable Subsidiary proposes to take with respect thereto,
together with a copy of the notice of such reportable event
given to the Pension Benefit Guaranty Corporation or to any
other applicable Person exercising similar duties and functions
under any Foreign Benefit Law or a statement that said notice
will be filed with the annual report of the United States
Department of Labor with respect to such plan if such filing has
been authorized, (ii) promptly after receipt thereof, a copy of
any notice that the Borrower or any Subsidiary may receive from
the Pension Benefit Guaranty Corporation or from any other
Person exercising similar duties and functions under any Foreign
Benefit Law relating to the intention of the Pension Benefit
Guaranty Corporation or any such Person to terminate any
employee benefit plan or plans of the Borrower or any Subsidiary
or to appoint a trustee to administer any such plan, (iii)
within 10 days after a filing with the Pension Benefit Guaranty
Corporation pursuant to Section 412(n) of the Code or with any
Person pursuant to any Foreign Benefit Law of a notice of
failure to make a required installment or other payment with
respect to a plan, a certificate of an Authorized Representative
setting forth details as to such failure and the action that the
Borrower or its affected Subsidiary, as applicable, proposes to
take with respect thereto, together with a copy of such notice
given to the Pension Benefit Guaranty Corporation or to such
Person, and (iv) promptly after the incurrence thereof and in
any event within 10 days, notice of withdrawal by the Borrower
or any Subsidiary from any Multi-employer Plan which withdrawal
could reasonably result in a material withdrawal liability.
7.17 Continued Operations. Continue at all times to
conduct its business and engage principally in a line or lines
of business similar to the business substantially as conducted
on the Closing Date by the Borrower and its Subsidiaries
(subject to the right to dispose of assets in transactions
permitted under Section 8.06 hereof).
7.18 New Subsidiaries.
(a) Subject to subsection (c) below, not later than forty-five
(45) Business Days following the acquisition or creation of
any Material Subsidiary (other than a Foreign Subsidiary), or
upon any previously existing Person becoming a Material
Subsidiary (other than a Foreign Subsidiary), cause to be
delivered to the Agent for the benefit of the Lenders each of
the following:
(i) a Guarantor Joinder Agreement executed by such
Subsidiary, with appropriate insertions of identifying
information and such other changes to which the Agent may
consent in its discretion;
(ii) an opinion of counsel to such Subsidiary dated as
of the date of delivery of the Guarantor Joinder Agreement
provided in the foregoing clause (i) and addressed to the
Agent and the Lenders, in form and substance substantially
similar to the opinions of counsel to the Guarantors
delivered on the Closing Date to the Lenders pursuant to
Section 5.01 hereof; and
(iii) current copies of the Organizational
Documents and Operating Documents of such Subsidiary,
minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors (or
other comparable group of individuals performing a similar
function), or appropriate committees thereof (and, if
required by such Organizational Documents or Operating
Documents or by applicable laws, of the shareholders) of
such Subsidiary authorizing the actions and the execution
and delivery of documents described in clause (i) of this
Section 7.18 and evidence satisfactory to the Agent
(confirmation of the receipt of which will be provided by
the Agent to the Lenders) that such Subsidiary is Solvent
as of such date and after giving effect to the Guaranty.
(b) Subject to subsection (c) below, not later than forty-five
(45) Business Days following the acquisition or creation of
a Foreign Subsidiary which is a Material Subsidiary, or upon any
previously existing Person becoming a Foreign Subsidiary which
is a Material Subsidiary, cause to be delivered to the Agent for
the benefit of the Lenders each of the following:
(i) a pledge agreement (the "Pledge Agreement") to be
entered into by the Borrower or Subsidiary owning any or
all of the capital stock or other ownership interest of
such Foreign Subsidiary (the "Pledgor") in form and
substance acceptable to the Agent pledging 65% of all such
capital stock or ownership interests (the "Pledged Stock");
(ii) the certificates evidencing the Pledged Stock
together with duly executed stock powers or powers of
assignment in blank affixed thereto;
(iii) an opinion of counsel to the Pledgor dated
as of the date of delivery of the Pledge Agreement provided
in the foregoing clause (i) and addressed to the Agent and
the Lenders as to matters regarding the enforceability of
such Pledge Agreement and the status of such Pledged Stock
in form and substance acceptable to the Agent; and
(iv) the items referred to in (a)(iii) above with
respect to the Pledgor.
(c) This Section shall be of no further force or effect if
the Guaranty has been terminated in accordance with Section
11.20 hereof.
ARTICLE VIII
Negative Covenants
Until the occurrence of the Total Facility Termination
Date, unless the Required Lenders shall otherwise consent in
writing, the Borrower will not, nor will it permit any
Subsidiary to:
8.01 Consolidated Net Worth. Permit Consolidated Net
Worth at any time to be less than (A) the amount equal to
ninety percent (90%) of the Borrower's Consolidated Net Worth as
of November 1, 1998 after completion of the Saks Acquisition
plus (B) an amount equal to one hundred percent (100%) of the
Net Proceeds of each sale of capital stock or other equity
interest (including those instruments and securities
exchangeable, convertible or exercisable into capital stock or
other equity interests at such time as such instruments are
recognizable in Consolidated Net Worth in accordance with GAAP)
in the Borrower or any Subsidiary after November 1, 1998 plus
(C) an amount equal to the sum of fifty percent (50%) of
Consolidated Net Income of the Borrower and its Subsidiaries
(without deduction for any negative Consolidated Net Income) for
each full fiscal quarter ending after November 1, 1998.
8.02 Consolidated Fixed Charge Ratio. Permit, at the end
of any Four-Quarter Period of the Borrower, the Consolidated
Fixed Charge Ratio for such Four-Quarter Period to be equal to
or less than 1.50 to 1.00.
8.03 Consolidated Funded Total Indebtedness to
Consolidated EBITDA. Permit, at the end of any Four-Quarter
Period of the Borrower, the ratio of Consolidated Funded Total
Indebtedness to Consolidated EBITDA for such Four-Quarter Period
to be greater than 3.50 to 1.00.
8.04 Indebtedness. (a) Incur, create, assume or permit to
exist any Indebtedness, howsoever evidenced, except
(i) All Indebtedness existing as of the date hereof
(including Indebtedness of Saks and its Subsidiaries as of
the date hereof, other than Indebtedness incurred in
anticipation of the Saks Acquisition and Indebtedness which
must be repaid pursuant to Section 5.01(a)(xvi)) and set
forth in Schedule 8.04 attached hereto and incorporated
herein by reference and any extension, renewal or
refinancing thereof that does not increase the principal
amount thereof from that existing immediately prior to such
extension, renewal or refinancing; and that does not result
in an interest rate which is greater than the market rate
generally available to companies similarly situated to the
Borrower for similar transactions; provided, none of the
instruments and agreements evidencing or governing such
Indebtedness (including extensions, renewals and
refinancings thereof) shall be amended, modified or
supplemented after the Closing Date (nor shall any new or
other documents be entered into which are effective) to
change any terms of repayment, subordination with respect
to the Obligations, restrictions against incurring Liens or
Indebtedness, rights of conversion, put or exchange,
mandatory prepayment, reduction in commitment or addition
of or adverse change in any borrowing base with respect to
such Indebtedness from such terms and rights as in effect
on the Closing Date unless such amendments, modifications
or supplements (or new or other documents) would not
reasonably be expected to have an adverse effect on the
Borrower, or its creditworthiness with respect to its
Obligations;
(ii) Indebtedness owing to the Agent or any Lenders in
connection with this Agreement, any Note or other Loan
Document;
(iii) Indebtedness consisting of Rate Hedging
Obligations permitted under Section 8.13 hereof;
(iv) The endorsement of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business;
(v) Indebtedness incurred directly by the Borrower or
any Subsidiary exclusively to finance machinery, equipment
and other fixed assets purchased after the Closing Date and
Indebtedness incurred after the Closing Date and secured by
the Borrower's or any Subsidiary's real property (including
without limitation, Indebtedness secured in connection
with any tax retention operating leases and synthetic
leases), provided that such Indebtedness (i) is secured, if
at all, solely by a Lien permitted in accordance with
Sections 8.05(iii) or (vii) hereof, as applicable, (ii)
shall not be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of
such refinancing and (iii) does not, at the time of
incurrence, in the aggregate during any consecutive twelve
month period for the Borrower and all Subsidiaries exceed
a principal amount equal to five percent (5%) of
Consolidated Net Worth (calculated as of the most recent
fiscal period with respect to which the Agent shall have
received the Required Financial Information);
(vi) Indebtedness of any Subsidiary owing to the
Borrower or a Subsidiary and Indebtedness of the Borrower
owing to a Subsidiary;
(vii) Additional Indebtedness of the Borrower and
its Subsidiaries, including without limitation Indebtedness
related to commercial and documentary letters of credit,
standby letters of credit, or otherwise, provided that (i)
the affirmative and negative covenants and events of
default contained in the documents evidencing such
additional Indebtedness are not materially more restrictive
than those contained in the Loan Documents, (ii) neither a
Default nor Event of Default exists at the time such
additional Indebtedness is incurred or would result from
the incurrence of such additional Indebtedness and (iii) in
the event such additional Indebtedness matures or requires
any principal payment, including pursuant to acceleration,
or mandatory prepayment or redemption, on or prior to the
Total Facility Termination Date, the aggregate amount
outstanding of such additional Indebtedness which is due
(either at maturity or as a principal payment) prior to the
Total Facility Termination Date shall not at any time (as
determined by the face amount of such Indebtedness where
applicable) exceed fifteen percent (15%) of Consolidated
Total Assets (calculated as of the most recent fiscal
period with respect to which the Agent shall have received
the Required Financial Information); and
(viii) Any guaranty of Indebtedness of the Borrower
or any Guarantor which is permitted to be incurred pursuant
to this Section 8.04.
(b) Permit at any time the amount of Indebtedness of all
Subsidiaries (excluding Securitization Subsidiaries and Saks
REMIC Subsidiaries) in the aggregate to exceed ten percent (10%)
of Consolidated Net Worth (calculated as of the most recent
fiscal period with respect to which the Agent shall have
received the Required Financial Information); provided, prior to
the Borrower's achievement of an Investment Grade Rating and the
release of the Guaranty pursuant to Section 11.20, this
limitation shall only apply to Subsidiaries (other than
Securitization Subsidiaries and Saks REMIC Subsidiaries) which
are not Guarantors.
8.05 Liens. Incur, create or permit to exist any Lien
with respect to any property or assets now owned or hereafter
acquired by the Borrower or any of its Subsidiaries, other than
(i) Liens existing as of the date hereof and as set
forth in Schedule 6.01(g) attached hereto;
(ii) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet
due or which are being contested in good faith by
appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with
Generally Accepted Accounting Principles;
(iii) Liens in respect of purchase money Indebtedness
in connection with the acquisition of machinery, equipment
and other fixed assets permitted to be incurred pursuant to
Section 8.04(v) hereof; provided that (a) the original
principal balance of the Indebtedness secured by such Lien
constitutes not less than 75% and not more than 100% of the
purchase price of the property acquired and (b) such Lien
extends only to the property acquired with the proceeds of
the indebtedness so secured;
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
Liens imposed by law or created in the ordinary course of
business and in existence less than 120 days from the date
of creation thereof for amounts not yet due or which are
being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate
reserves or other appropriate provisions are being
maintained in accordance with Generally Accepted Accounting
Principles;
(v) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety
bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of
social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other
similar obligations or arising as a result of progress
payments under government contracts;
(vi) easements (including, without limitation,
reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other
restrictions, charges or encumbrances (whether or not
recorded), which do not interfere materially with the
ordinary conduct of the business of the Borrower or any
Subsidiary and which do not materially detract from the
value of the property to which they attach or materially
impair the use thereof by the Borrower or any Subsidiary;
(vii) Liens on real property securing Indebtedness
permitted under Section 8.04(v) hereof;
(viii) Liens on specific items of inventory of the
Borrower or any Subsidiary granted to secure reimbursement
obligations incurred with respect to documentary letters of
credit issued in connection with the purchase of such
inventory; provided such liens at all times remain
unperfected and no such lien attaches to inventory not
acquired with the credit support of such documentary letter
of credit; and
(ix) Liens arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any
Lien permitted by this Section 8.05 to the extent such
Liens are attached to the same property previously
encumbered as collateral for such Indebtedness or for any
other previously existing Indebtedness so refinanced,
extended, renewed or refunded at such time.
8.06 Transfer of Assets. Other than as permitted in
Section 8.08 hereof, sell, lease, transfer or otherwise dispose
of any assets (including without limitation capital stock or
similar ownership interests transferred by way of merger or
other consolidation) of the Borrower or any Subsidiary during
any Fiscal Year unless the sum of (i) the aggregate book value
of such assets to be so disposed and previously disposed during
such Fiscal Year plus (ii) the book value of the total assets of
each Subsidiary party to a merger during such Fiscal Year in
which the survivor is not or does not become a Subsidiary and
which is otherwise permitted under Section 8.08(ii) hereof plus
(iii) the book value of assets allocated or to be distributed
during such Fiscal Year to a Person other than the Borrower or
a wholly owned Subsidiary in the event of a dissolution of a
Subsidiary which is not wholly owned by the Borrower and which
is otherwise permitted under Section 8.12(iii) hereof, in the
aggregate for (i), (ii) and (iii) does not exceed fifteen
percent (15%) of the book value of the Consolidated Total Assets
as at the last day of the immediately preceding Fiscal Year;
provided, however, such determination shall be made on a
noncumulative basis, with the effect that the amount of assets
not disposed of in one Fiscal Year may not be carried forward
and disposed of in a subsequent Fiscal Year and such
determination shall be made with respect to the Audited Restated
Financial Statements until delivery of the audited financial
statements pursuant to Section 7.01(a) for Fiscal Year 1998.
The foregoing limitation shall not apply to any of the
following: (a) sales of assets in the ordinary course of
business; (b) transfers of assets among the Borrower and its
Subsidiaries, including transfers of accounts receivable to a
Securitization Subsidiary, subject to compliance with Section
7.18 hereof after giving effect to any such transfer; and (c)
sales of assets with respect to which the Net Proceeds are
applied within 180 days of receipt thereof to make Permitted
Acquisitions or to acquire, construct or improve properties, or
capital assets, in each case, to be used in a line or lines of
business consistent with the terms of Section 7.17 hereof.
8.07 Investments; Acquisitions. Purchase, own, invest in
or otherwise acquire, directly or indirectly, any stock or other
securities of, or all or substantially all of the assets of, or
make or permit to exist any interest whatsoever in, any other
Person or otherwise make any Acquisition or permit to exist any
loans or advances to any Person, except that Borrower and its
Subsidiaries may maintain investments or invest in:
(i) Eligible Securities;
(ii) investments existing as of the date hereof;
(iii) accounts receivable arising and trade credit
granted in the ordinary course of business and any
securities received in satisfaction or partial satisfaction
thereof in connection with accounts of financially troubled
Persons to the extent reasonably necessary in order to
prevent or limit loss;
(iv) loans and advances to and investments in
Subsidiaries which are Guarantors;
(v) loans and advances to its officers, directors and
employees for travel expenses incurred in the ordinary
course of business without limitation and for any other
business purpose in an aggregate principal amount at any
time outstanding not to exceed $25,000,000;
(vi) other investments in an aggregate amount at any
time outstanding not to exceed 5% of Consolidated Net Worth
(calculated as of the most recent fiscal period with
respect to which the Agent shall have received the Required
Financial Information);
(vii) Permitted Acquisitions and other mergers
permitted in Section 8.08 hereof; and
(viii) Securitization Subsidiaries of the Borrower
in an aggregate amount not to exceed 10% of Consolidated
Net Worth (calculated as of the most recent fiscal period
with respect to which the Agent shall have received the
Required Financial Information); provided further,
investments made in Securitization Subsidiaries on or
prior to the date hereof and the retained earnings of
Securitization Subsidiaries as of the date hereof and
subsequent thereto may be transferred between
Securitization Subsidiaries or between the Borrower and a
Securitization Subsidiary without limitation.
8.08 Merger or Consolidation. Consolidate with or merge
into any other Person, or permit any other Person to merge into
it; provided, however, subject to compliance with the other
terms and conditions of this Agreement, including without
limitation Sections 7.18 and 8.06 hereof after giving effect to
any of the following transactions, (i) any Subsidiary of the
Borrower may merge into or consolidate with the Borrower or any
other Subsidiary, (ii) any Subsidiary may merge into another
Person whereby such other Person is the surviving corporation
and (iii) in connection with any Permitted Acquisition, any
Person may merge with the Borrower or any Subsidiary if the
Borrower or such Subsidiary, as applicable, shall be the
surviving corporation.
8.09 Transactions with Affiliates. Other than
transactions permitted under Section 8.07 hereof, enter into any
transaction (or series of related transactions) after the
Closing Date, with, or for the benefit of, any Affiliate of the
Borrower or any officer or director of the Borrower or any
Subsidiary (each, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and is for the
purchase or sale of goods or receipt or delivery of services on
terms that are no less favorable to the Borrower or the
Subsidiary, as the case may be, than those which could have been
obtained in a comparable transaction at such time from Persons
who do not have such a relationship or (ii) such Affiliate
Transaction is with a wholly owned Subsidiary (other than a
Foreign Subsidiary) of the Borrower.
8.10 Benefit Plans. With respect to all employee pension
benefit plans maintained by the Borrower or any Subsidiary:
(i) terminate any of such employee pension benefit
plans so as to incur any material liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA
or to any other Person exercising similar duties and
functions under any Foreign Benefit Law;
(ii) allow or suffer to exist any prohibited
transaction involving any of such employee pension benefit
plans or any trust created thereunder which would subject
the Borrower or a Subsidiary to a material tax or material
penalty or other material liability (a) on prohibited
transactions imposed under Internal Revenue Code Section
4975 or ERISA or (b) under any Foreign Benefit Law;
(iii) fail to pay to any such employee pension
benefit plan any material contribution which it is
obligated to pay under the terms of such plan;
(iv) allow or suffer to exist any material accumulated
funding deficiency, whether or not waived, with respect to
any such employee pension benefit plan;
(v) allow or suffer to exist any occurrence of a
reportable event or any other event or condition, which
presents a material risk of termination by the Pension
Benefit Guaranty Corporation, or to any other Person
exercising similar duties and functions under any Foreign
Benefit Law, of any such employee pension benefit plan that
is a Single Employer Plan, which termination could result
in any material liability (a) to the Pension Benefit
Guaranty Corporation or (b) under any Foreign Benefit Law;
or
(vi) incur any material withdrawal liability with
respect to any Multi-employer Plan.
8.11 Fiscal Year. Change its Fiscal Year.
8.12 Dissolution, etc. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any
proceedings seeking any such winding up, liquidation or
dissolution, except in connection with (i) the merger or
consolidation of Subsidiaries into each other or into the
Borrower permitted under Section 8.08, (ii) the dissolution of
Subsidiaries wholly owned by the Borrower or by another wholly
owned Subsidiary or (iii) the dissolution of a Subsidiary which
is not wholly owned by the Borrower so long as the Borrower
remains in compliance with Section 8.06 after giving effect to
such dissolution.
8.13 Rate Hedging Obligations. Incur any Rate Hedging
Obligations or enter into any agreements, arrangements, devices
or instruments relating to Rate Hedging Obligations, except in
connection with the management of interest rate fluctuation
risks of the Borrower and its Subsidiaries and in no event shall
any Rate Hedging Obligation be incurred for speculative
purposes.
ARTICLE IX
Events of Default and Acceleration
9.01 Events of Default. If any one or more of the
following events (herein called "Events of Default") shall occur
for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), that is
to say:
(a) if default shall be made in the due and punctual
payment of the principal of any Loan when and as the same shall
be due and payable whether pursuant to any provision of Article
II hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees or
other amounts payable to the Lenders or the Agent under the Loan
Documents on the date on which the same shall be due and
payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 7.07, 7.10,
7.18 or Article VIII hereof; or
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than
as described in clauses (a), (b) or (c) above) and such default
shall continue for thirty (30) or more days after the earlier of
receipt of notice of such default by the Authorized
Representative from the Agent or the Borrower becomes aware of
such default, or if a default shall be made in the performance
or observance of, or shall occur under, any covenant, agreement
or provision contained in any of the other Loan Documents
(beyond any applicable grace period, if any, contained therein),
or if any Loan Document ceases to be in full force and effect
(other than in accordance with its terms in the absence of
default or by reason of any action by the Agent or any Lender),
or if without the written consent of the Agent and the Lenders,
this Agreement or any other Loan Document shall be disaffirmed
or shall terminate, be terminable or be terminated or become
void or unenforceable for any reason whatsoever (other than in
accordance with its terms in the absence of default or by reason
of any action by the Agent or any Lender); or
(e) if a default shall occur, which is not waived, (i) in
the payment of any principal, interest, premium or other amounts
with respect to any Indebtedness for Money Borrowed (other than
the Loans) or Rate Hedging Obligations of the Borrower or of any
Subsidiary which Indebtedness is in an amount (which amount for
Rate Hedging Obligations shall be equal to the market exposure
thereunder on the date of default) not less than $20,000,000 in
the aggregate outstanding and includes without limitation any
of the Consolidated Subordinated Debt, and such default shall
continue for more than the period of grace, if any, therein
specified or (ii) in the performance, observance or fulfillment
of any term or covenant contained in any agreement or instrument
under or pursuant to which any such Indebtedness for Money
Borrowed, including without limitation any of the Consolidated
Subordinated Debt and the Senior Notes, or Rate Hedging
Obligations, may have been issued, created, assumed, guaranteed
or secured by the Borrower or any Subsidiary, and as a result of
such default the holder of any such Indebtedness, including
without limitation any of the Consolidated Subordinated Debt and
the Senior Notes, may accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of
fact by the Borrower or any Guarantor contained herein or any
other Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent or any Lender by or
on behalf of the Borrower or any Guarantor pursuant to or in
connection with this Agreement or the other Loan Documents, or
otherwise, shall be false or misleading in any material respect
when given or made; or
(g) if the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) shall be
unable to pay its debts generally as they become due; file a
petition to take advantage of any insolvency, reorganization,
bankruptcy, receivership or similar law, domestic or foreign;
make an assignment for the benefit of its creditors; commence a
proceeding for the appointment of a receiver, trustee,
liquidator or conservator of itself or of the whole or any
substantial part of its property; file a petition or answer
seeking reorganization or arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or
statute, federal, state or foreign; or
(h) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver,
trustee, liquidator or conservator of the Borrower or any
Material Subsidiary (or any Securitization Subsidiary or any
Saks REMIC Subsidiary that would otherwise qualify as a Material
Subsidiary) or of the whole or any substantial part of its
properties and such order, judgment or decree continues unstayed
and in effect for a period of sixty (60) days, or approve a
petition filed against the Borrower or any Material Subsidiary
(or any Securitization Subsidiary or any Saks REMIC Subsidiary
that would otherwise qualify as a Material Subsidiary) seeking
reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state or foreign country,
province or other political subdivision, which petition is not
dismissed within sixty (60) days; or if, under the provisions of
any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the
Borrower or any Material Subsidiary (or any Securitization
Subsidiary or any Saks REMIC Subsidiary that would otherwise
qualify as a Material Subsidiary) or of the whole or any
substantial part of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced
against the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) any proceeding
or petition seeking reorganization, arrangement or similar
relief under the federal bankruptcy laws or any other applicable
law or statute of the United States of America or any state or
foreign country, province or other political subdivision which
proceeding or petition remains undismissed for a period of sixty
(60) days; or if the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) takes any
action to indicate its consent to or approval of any such
proceeding or petition; or
(i) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies
liability) is in excess of $20,000,000 is rendered against the
Borrower or any Subsidiary, or (ii) there is any attachment,
injunction or execution against any of the Borrower's or any
Subsidiary's properties for any amount in excess of $1,000,000,
and such judgment, attachment, injunction or execution remains
unpaid, unstayed, undischarged, unbonded or undismissed for a
period of sixty (60) days; or
(j) if the Borrower or any Material Subsidiary (or any
Securitization Subsidiary or any Saks REMIC Subsidiary that
would otherwise qualify as a Material Subsidiary) shall, other
than as permitted under Section 8.06 hereof or in the ordinary
course of business (as determined by past practices), suspend
(other than for a period not to exceed twenty (20) days by
reason of force majeure) all or any part of its operations
material to the conduct of the business of the Borrower or such
Material Subsidiary (or any Securitization Subsidiary or any
Saks REMIC Subsidiary), taken as a whole; or
(k) if (i) the Borrower or any Subsidiary shall engage in
any prohibited transaction (as described in Section 8.10(ii)
hereof), which is not subject to a statutory or administrative
exemption, involving any employee pension benefit plan of the
Borrower or any Subsidiary and thereby incur any material tax,
material penalty or other material liability, (ii) any material
accumulated funding deficiency (as referred to in Section
8.10(iv) hereof), whether or not waived, shall exist with
respect to any Single Employer Plan, (iii) a reportable event
(as referred to in Section 8.10(v) hereof) (other than a
reportable event for which the statutory notice requirement to
the Pension Benefit Guaranty Corporation has been waived by
regulation) shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be
appointed to administer or to terminate, any Single Employer
Plan, which reportable event or institution or proceedings is,
in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Single Employer Plan for
purposes of Title IV of ERISA, and in the case of such a
reportable event, the continuance of such reportable event shall
be unremedied for sixty (60) days after notice of such
reportable event pursuant to Section 4043(a), (c) or (d) of
ERISA is given, as the case may be, and shall result in the
incurrence of a material liability to any Governmental Authority
(iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, and such termination results in a material
liability of the Borrower or any Subsidiary to such Single
Employer Plan or the Pension Benefit Guaranty Corporation, or
(v) the Borrower or any Subsidiary shall withdraw from a Multi-
employer Plan for purposes of Title IV of ERISA, and, as a
result of any such withdrawal, the Borrower or any Subsidiary
shall incur a material withdrawal liability to such Multi-employer Plan; or
(l) if there shall occur any "Event of Default" as defined
in any of the Loan Documents or as defined in the Five Year
Facility Credit Agreement; or
(m) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (except for the Proffitt's Inc.
401(k) Retirement Plan) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person will be deemed to have "beneficial ownership" of
all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the
passage of time or the occurrence of an event or condition),
directly or indirectly, of more than 20% of the total voting
power of the then outstanding voting capital stock of the
Borrower;
then, and in any such event and at any time thereafter, if such
Event of Default or any other Event of Default shall have not
been waived,
(A) either or both of the following actions may
be taken: (i) the Agent may, and at the direction of
the Required Lenders shall, declare any obligation of
the Lenders to make further Loans terminated,
whereupon the obligation of each Lender to make
further Loans, hereunder shall terminate immediately,
and (ii) the Agent shall at the direction of the
Required Lenders, at their option, declare by notice
to the Borrower any or all of the Obligations to be
immediately due and payable, and the same, including
all interest accrued thereon and all other obligations
of the Borrower to the Agent and the Lenders, shall
forthwith become immediately due and payable without
presentment, demand, protest, notice or other
formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that
notwithstanding the above, if (I) there shall occur an
Event of Default under clause (g) or (h) above, then
the obligation of the Lenders to make Loans hereunder
shall automatically terminate and automatically any
and all of the Obligations shall be immediately due
and payable without the necessity of any action by the
Agent or the Required Lenders or notice by the Agent
or the Lenders or to the Borrower or any other Person
or (II) if the Obligations shall immediately become
due and payable pursuant to (ii) above, then the
obligation of the Lenders to make Loans and issue
Letters of Credit hereunder shall automatically
terminate without the necessity of any action by the
Agent or the Required Lenders or notice by the Agent
or the Lenders or to the Borrower or any other Person;
and
(B) the Agent and the Lenders shall have all of
the rights and remedies available under the Loan
Documents or under any applicable law.
9.02 Agent to Act. In case any one or more Events of
Default shall occur and not have been waived, the Agent shall,
at the direction of the Required Lenders, proceed to protect and
enforce their rights or remedies either by suit in equity or by
action at law, or both, whether for the specific performance of
any covenant, agreement or other provision contained herein or
in any other Loan Document, or to enforce the payment of the
Obligations or any other legal or equitable right or remedy.
9.03 Cumulative Rights. No right or remedy herein
conferred upon the Lenders or the Agent is intended to be
exclusive of any other rights or remedies contained herein or in
any other Loan Document, and every such right or remedy shall be
cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute, or otherwise.
9.04 No Waiver. No course of dealing between the Borrower
and any Lender or the Agent or any failure or delay on the part
of any Lender or the Agent in exercising any rights or remedies
under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or
partial exercise of any rights or remedies shall operate as a
waiver or preclude the exercise of any other rights or remedies
hereunder or of the same right or remedy on a future occasion.
9.05 Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes and
Obligations has been accelerated pursuant to Article IX hereof,
all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts
payable by the Borrower hereunder shall be applied by the Agent
in the following order:
(i) amounts due to the Agent and the Lenders pursuant
to Sections 2.12, 11.06 and 11.11 hereof;
(ii) amounts due to NationsBank, NMS and the Agent
pursuant to Section 2.15 hereof;
(iii) payments of interest on Revolving Credit
Loans, to be applied for the ratable benefit of the
Lenders, and payments of interest on Competitive Bid Loans
to be applied to the applicable Competitive Bid Loan
Lender;
(iv) payments of principal on Revolving Credit Loans,
to be applied for the ratable benefit of the Lenders, and
payments of principal on Competitive Bid Loans to be
applied to the applicable Competitive Bid Loan Lender;
(v) payment of Obligations owed a Lender or Lenders
pursuant to Swap Agreements on a pro rata basis according
to amounts owed;
(vi) payments of all other amounts due under this
Agreement, if any, to be applied for the ratable benefit of
the Lenders; and
(vii) any surplus remaining after application as
provided for herein, to the Borrower or otherwise as may be
required by applicable law.
ARTICLE X
The Agent
10.01. Appointment, Powers, and Immunities. Each Lender
hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Agreement and the other Loan Documents with
such powers and discretion as are specifically delegated to the
Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this
sentence and in Section 10.05 and the first sentence of Section
10.06 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, agents): (a) shall
not have any duties or responsibilities except those expressly
set forth in this Agreement and shall not be a trustee or
fiduciary for any Lender; (b) shall not be responsible to the
Lenders for any recital, statement, representation, or warranty
(whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan
Document, or any other document referred to or provided for
therein or for any failure by any Loan Party or any other Person
to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or
agreements by any Loan Party or the satisfaction of any
condition or to inspect the property (including the books and
records) of any Loan Party or any of its Subsidiaries or
affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document;
and (e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct. The
Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
10.02. Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice, instrument, writing, or
other communication (including, without limitation, any thereof
by telephone or telecopy) believed by it to be genuine and
correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel for any Loan Party),
independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until the
Agent receives and accepts an Assignment and Acceptance executed
in accordance with Section 11.01 hereof. As to any matters not
expressly provided for by this Agreement, the Agent shall not be
required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions
shall be binding on all of the Lenders; provided, however, that
the Agent shall not be required to take any action that exposes
the Agent to personal liability or that is contrary to any Loan
Document or applicable law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason
of taking any such action.
10.03. Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of
Default unless the Agent has received written notice from a
Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the
occurrence of a Default or Event of Default, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall
(subject to Section 10.02 hereof) take such action with respect
to such Default or Event of Default as shall reasonably be
directed by the Required Lenders, provided that, unless and
until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event
of Default as it shall deem advisable in the best interest of
the Lenders.
10.04. Rights as Lender. With respect to its Revolving
Credit Commitment and the Loans made by it, NationsBank (and any
successor acting as Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual
capacity. NationsBank (and any successor acting as Agent) and
its affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of
its Subsidiaries or affiliates as if it were not acting as
Agent, and NationsBank (and any successor acting as Agent) and
its affiliates may accept fees and other consideration from any
Loan Party or any of its Subsidiaries or affiliates for services
in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 11.11
hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective
Applicable Commitment Percentages, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees), or
disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including
by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action
taken or omitted by the Agent under any Loan Document provided
that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation
of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or
expenses payable by the Borrower under Section 11.11, to the
extent that the Agent is not promptly reimbursed for such costs
and expenses by the Borrower. The agreements contained in this
Section 10.05 shall survive payment in full of the Loans, the
Obligations and all other amounts payable under this Agreement.
10.06. Non-Reliance on Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Loan Parties and their Subsidiaries and decision
to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in
taking or not taking action under the Loan Documents. Except
for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any
Loan Party or any of its Subsidiaries or affiliates that may
come into the possession of the Agent or any of its affiliates.
10.07. Resignation of Agent. The Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under
the laws of the United States of America having combined capital
and surplus of at least $100,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring
Agent's resignation hereunder as Agent, the provisions of this
Article X shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as Agent.
ARTICLE XI
Miscellaneous
11.01 Assignments and Participations.
(a) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion
of its Loans, its Notes, and its Revolving Credit Commitment);
provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) each such assignment by a Lender shall (A) be of
an equal percentage of all of its rights and obligations under
both the Revolving Credit Facility and the Five Year Facility,
(B) be of a constant, and not varying, percentage of all of its
rights and obligations under this Agreement and its Notes, and
under the Five Year Facility Credit Agreement and the promissory
notes issued thereunder and (C) result in the assigning Lender
having an equivalent Applicable Commitment Percentage under both
the Revolving Credit Facility and the Five Year Facility and the
assignee Lender having an equivalent Applicable Commitment
Percentage under both the Revolving Credit Facility and the Five
Year Facility;
(iii) except in the case of an assignment to
another Lender or an assignment of all of a Lender's rights and
obligations under this Agreement and under the Five Year
Facility Credit Agreement, any partial assignment of a Lender's
Revolving Credit Commitment and its Five Year Facility
Commitment shall be in an aggregate amount at least equal to
$10,000,000 or an integral multiple of $5,000,000 in excess
thereof;
(iv) except in the case of an assignment of all of a
Lender's rights and obligations under this Agreement, no Lender
shall make any assignment that would result in the sum of its
Revolving Credit Commitment and its Five Year Facility
Commitment being less than $15,000,000;
(v) in the event a Lender assigns all of its
Revolving Credit Commitment, such assignment must include all of
its Competitive Bid Loans; and
(vi) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance, together with any Note subject to such assignment
and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of such assignment, have the obligations, rights,
and benefits of a Lender hereunder and the assigning Lender
shall, to the extent of such assignment, relinquish its rights
and be released from its obligations under this Agreement;
provided, the assigning Lender shall be entitled to
reimbursement from the Borrower with respect to amounts payable
pursuant to Sections 4.01, 4.05, 4.06, 11.06 and 11.11 in
connection with events prior to such assignment; provided
further, to the extent the Borrower makes any such payments to
the assigning Lender, the Borrower shall not be required to also
pay the assignee such amounts. Upon the consummation of any
assignment pursuant to this Section, the assignor, the Agent and
the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee.
If the assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section
4.06.
(b) The Agent shall maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitment of,
and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject
to such assignment and payment of the processing fee, the Agent
shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more
Persons in a portion of its rights, obligations or rights and
obligations under this Agreement (including all or a portion of
its Commitment or its Loans); provided, however, that (i) such
Lender s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Article
IV and the right of setoff contained in Section 11.04, and (iv)
the Borrower shall continue to deal solely and directly with
such Lender in connection with such Lender s rights and
obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower
relating to its Loans and its Notes and to approve any
amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which
interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment
of interest on such Loans or Notes, or extending its Revolving
Credit Commitment).
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Note to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its
obligations hereunder.
(f) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants
(including prospective assignees and participants), subject,
however, to the provisions of Section 11.03 hereof.
(g) The Borrower may not assign any rights, powers, duties
or obligations under this Agreement or the other Loan Documents
without the prior written consent of all the Lenders.
11.02 Notices. All notices shall be in writing, except as
to telephonic notices expressly permitted or required herein,
and written notices shall be delivered by hand delivery,
telefacsimile, overnight courier or certified or registered
mail. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on
which delivered to such party (against (except as to telephonic
or telefacsimile notice) receipt therefor) at the address set
forth below or such other address as such party shall specify to
the other parties in writing:
(a) if to the Borrower:
Saks Incorporated
750 Lakeshore Parkway
Birmingham, AL 35211
Attention: Treasurer
Telephone: (205) 940-4732
Telefacsimile: (205) 940-4098
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: Paul Cushing
Telephone: (404) 881-7000
Telefacsimile: (404) 881-4777
(b) if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mr. Herbert Boyd, Agency Services
Telephone: (704) 388-3225
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, N.A.
600 Peachtree Street, N.E., 9th Floor
Atlanta, Georgia 30308-2213
Attention: Nancy Goldman
Telephone: 404-607-5539
Telefacsimile: 404-607-6467
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each
Assignment and Acceptance.
11.03 Confidentiality. The Agent and each Lender (each,
a "Lending Party") agrees to keep confidential any information
furnished or made available to it by the Borrower pursuant to
this Agreement and that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate
of any Lending Party, or any officer, director, employee, agent
or advisor of any Lending Party or any affiliate of any Lending
Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) that is or
becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in
connection with any litigation to which such Lending Party or
any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this
Section, to any actual or proposed participant or assignee.
11.04 Right of Setoff; Adjustments.
(a) Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its affiliates) is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by such Lender (or any of its affiliates) to or for the credit
or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing,
irrespective of whether such Lender shall have made any demand
under this Agreement or any of its Notes. Each Lender agrees
promptly to notify the Borrower after any such setoff and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender under
this Section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that
such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any
time receive any payment of all or part of the Loans (other than
Competitive Bid Loans) owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily
or involuntarily, by setoff, or otherwise), in a greater
proportion than any such payment to or collateral received by
any other Lender, if any, in respect of such other Lender's
Loans (other than Competitive Bid Loans) owing to it, or
interest thereon, such benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion
of each such other Lender's Loans (other than Competitive Bid
Loans) owing to it, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds
ratably with each of the Lenders; provided, however, that if all
or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from a
Lender pursuant to this Section 11.04 may, to the fullest extent
permitted by law, exercise all of its rights of payment
(including the right of setoff) with respect to such
participation as fully as if such Person were the direct
creditor of the Borrower in the amount of such participation.
11.05 Survival. All covenants, agreements,
representations and warranties made herein shall survive the
making by the Lenders of the Loans and the execution and
delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect until the occurrence of
the Total Facility Termination Date. Whenever in this
Agreement, any of the parties hereto is referred to, such
reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions
and agreements by or on behalf of the Borrower which are
contained in this Agreement, the Notes and the other Loan
Documents shall inure to the benefit of the successors and
permitted assigns of the Lenders or any of them.
11.06 Expenses. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Agent in connection with
the preparation, execution, delivery, administration,
modification, waiver and amendment of this Agreement, the other
Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees
and expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. The Borrower further
agrees to pay on demand all reasonable costs and expenses of the
Agent and of each of the Lenders, if any (including, without
limitation, reasonable attorneys' fees actually incurred and
expenses and the cost of internal counsel), in connection with
the enforcement, workout or preservation of any rights under
this Agreement and other Loan Documents (whether through
negotiations, legal proceedings, or otherwise) and the other
documents to be delivered hereunder.
11.07 Amendments and Waivers. Any provision of this
Agreement or any other Loan Document may be amended or waived
if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Required Lenders (and, if Article
X or the rights or duties of the Agent are affected thereby, by
the Agent); provided that no such amendment or waiver shall,
unless signed by all the Lenders, (i) increase the Revolving
Credit Commitments of the Lenders, (ii) reduce the principal of,
or rate of interest on, any Loan (other than a Competitive Bid
Loan, which shall require only the written consent or approval
by the applicable Lender for such Competitive Bid Loan) or any
fees or other amounts payable hereunder, including without
limitation accrued interest, (iii) postpone any date fixed for
the payment of any scheduled installment of principal of or
interest on any Loan or any fees or other amounts payable
hereunder or for termination of any Revolving Credit Commitment,
(iv) change the percentage of the Revolving Credit Commitments
or of the unpaid principal amount of the Notes, or the number of
Lenders or the amount of Credit Exposure, which shall be
required for the Lenders or any of them to take any action under
this Section or any other provision of this Agreement, (v)
release any Guarantor or (vi) amend or delete any provision of
this Section 11.07.
11.08 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and
delivered shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or
account for more than one such fully-executed counterpart.
11.09 Termination. At such date (the "Total Facility
Termination Date") as (a) all of the Revolving Credit
Commitments have been terminated, (b) none of the Lenders is
obligated any longer under this Agreement to make any Loans and
(c) all Obligations (other than liabilities of the Borrower to
any Lender under a Swap Agreement and obligations which survive
as provided in the following two sentences) have been paid and
satisfied in full, this Agreement shall terminate.
Notwithstanding the foregoing, the termination of this Agreement
shall not affect any rights of the Borrower, the Lenders or the
Agent or any obligation of the Borrower, the Lenders or the
Agent, arising prior to the effective date of such termination,
and all representations, warranties, covenants, waivers and
agreements contained herein shall continue until this Agreement
is so terminated, unless continuing thereafter as otherwise
provided herein. Without limitation of the foregoing, the
provisions of Sections 4.05, 4.06, 10.05, 11.06 and 11.11 shall
survive the occurrence of the Total Facility Termination Date
and the termination of this Agreement and the Loan Documents.
Notwithstanding the foregoing, if after receipt of any payment
pursuant to the Loan Documents of all or any part of the
Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to
be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement
shall continue in full force and the Borrower shall be liable
to, and shall indemnify and hold such Lender harmless for, the
amount of such payment surrendered until such Lender shall have
been finally and irrevocably paid in full. The provisions of
the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by
the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Lenders'
rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevoc-
able.
11.10 Governing Law. All documents executed pursuant to
the transactions contemplated herein, including, without
limitation, this Agreement and each of the Loan Documents shall
be deemed to be contracts made under, and for all purposes shall
be construed in accordance with, the internal laws and judicial
decisions of the State of Georgia. The Borrower hereby submits
to the jurisdiction and venue of the state and federal courts of
Georgia for the purposes of resolving disputes hereunder or for
the purposes of collection.
11.11 Indemnification. (a) The Borrower agrees to
indemnify and hold harmless the Agent and each Lender and each
of their affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation,
assessment and cleanup costs and reasonable attorneys',
consultants or other expert fees, expenses and disbursements )
that are incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection
with or relating to or by reason of (including, without
limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith)
the Loan Documents, any of the transactions contemplated herein,
the actual or proposed use of the proceeds of the Loans, the
violation of any Environmental Law by the Borrower or any
Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or the handling,
storage, transportation, treatment, emission, release, discharge
or disposal of any Hazardous Material by, on behalf or in
respect of the Borrower or any Subsidiary or on or with respect
to property owned or leased or operated by the Borrower or any
Subsidiary, except to the extent (i) such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful
misconduct or (ii) relating to actions or proceedings brought by
an Indemnified Party against another Indemnified Party not
arising from any action or inaction by the Borrower or any
Subsidiary or (iii) resulting from any claim brought by the
Borrower against any Lender for failure to fund under the
Revolving Credit Facility (including the failure to fund a
Competitive Bid Loan after the Borrower's acceptance of such
Lender's Competitive Bid Quote in accordance with Section 2.03
hereof) in accordance with this Agreement in which the Borrower
is the prevailing party. In the case of an investigation,
litigation or other proceeding to which the indemnity in this
Section 11.11 applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought
by the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. If and to the extent that
the foregoing undertaking may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law. The
Borrower further agrees not to assert any claim against the
Agent, any Lender, any of their affiliates, or any of their
respective directors, officers, employees, attorneys, agents,
and advisers, on any theory of liability for special, indirect,
consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the
proceeds of the Loans. Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 11.11
shall survive the occurrence of the Total Facility Termination
Date.
(b) If a claim is to be made by a party entitled to
indemnification under this Section 11.11 against the Borrower,
the Indemnified Party shall give written notice to the Borrower
promptly after the Indemnified Party receives actual notice of
any claim, action, suit, loss, cost, liability, damage or
expense incurred or instituted for which the indemnification is
sought. If requested by Borrower in writing, and so long as no
Default or Event of Default shall have occurred and be
continuing, such Indemnified Party shall contest at the expense
of the Borrower the validity, applicability and/or amount of
such suit, action, or cause of action to the extent such contest
may be conducted in good faith on legally supportable grounds.
If any lawsuit or enforcement action is filed against any
Indemnified Party, written notice thereof shall be given to the
Borrower as soon as practicable (and in any event within 20 days
after the service of the citation or summons). Notwithstanding
the foregoing, the failure so to notify the Borrower as provided
in this Section will relieve the Borrower from liability
hereunder only if and to the extent that such failure results in
the forfeiture by the Borrower of any substantive rights or
defenses. The Indemnified Party shall control the defense and
investigation of such lawsuit or action and to employ and engage
counsel of its own choice to handle and defend the same, at the
Borrower's cost, risk and expense; provided, however, that the
Borrower may, at its own cost participate in the investigation,
trial and defense of such lawsuit or action and any appeal
arising therefrom. If the Borrower has acknowledged to the
Indemnified Party its obligation to indemnify hereunder, the
Indemnified Party, so long as no Default or Event of Default
shall have occurred and be continuing, shall not settle such
lawsuit or enforcement action without the prior written consent
of the Borrower and, if the Borrower has not so acknowledged its
obligation, the Indemnified Party shall not settle such lawsuit
or enforcement action without giving twenty (20) days' prior
written notice of such settlement and its terms to the Borrower.
11.12 Headings and References. The headings of the
Articles and Sections of this Agreement are inserted for
convenience of reference only and are not intended to be a part
of, or to affect the meaning or interpretation of this
Agreement. Words such as "hereof", "hereunder", "herein" and
words of similar import shall refer to this Agreement in its
entirety and not to any particular Section or provisions hereof,
unless so expressly specified. As used herein, the singular
shall include the plural, and the masculine shall include the
feminine or a neutral gender, and vice versa, whenever the
context requires.
11.13 Severability. If any provision of this Agreement or
the other Loan Documents shall be determined to be illegal or
invalid as to one or more of the parties hereto, then such
provision shall remain in effect with respect to all parties, if
any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain
effective and binding on the parties hereto.
11.14 Entire Agreement. This Agreement, together with the
other Loan Documents, constitutes the entire agreement between
the parties with respect to the subject matter hereof and
supersedes all previous proposals, negotiations,
representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.
11.15 Agreement Controls. In the event that any term of
any of the Loan Documents other than this Agreement conflicts
with any term of this Agreement, the terms and provisions of
this Agreement shall control.
11.16 Usury Savings Clause. Notwithstanding any other
provision herein, the aggregate interest rate charged under any
of the Notes, including all charges or fees in connection
therewith deemed in the nature of interest under Georgia law,
shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any
time exceeds the Highest Lawful Rate (as defined below), the
outstanding amount of the Loans made hereunder shall bear
interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would
have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In
addition, if and when the Loans made hereunder are repaid in
full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in
effect, then to the extent permitted by law, the Borrower shall
pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would
have been paid if the Highest Lawful Rate had at all times been
in effect. Notwithstanding the foregoing, it is the intention
of the Lenders and the Borrower to conform strictly to any
applicable usury laws. Accordingly, if any Lender contracts
for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such
excess shall be canceled automatically and, if previously paid,
shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to the
Borrower. As used in this paragraph, the term "Highest Lawful
Rate" means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or
received under the laws applicable to suc Lender which are
presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow
a higher maximum non-usurious interest rate than applicable laws
now allow.
11.17 Reserved.
11.18 Waiver of Jury Trial. EXCEPT AS PROHIBITED BY LAW,
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS.
11.19 Removal of Lenders. If (a) a Lender requests
compensation pursuant to Sections 4.01(a) or (b) or Section 4.06
and the Required Lenders are not also doing the same, (b) the
obligation of a Lender to make Eurodollar Loans or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 4.01(a) or Section 4.03 but the
obligation of the Required Lenders shall not have been suspended
under such Sections, (c) any Lender refuses or otherwise fails
to consent to any waiver, amendment or other modification of any
Loan Document which (i) requires the unanimous written consent
of all Lenders under Section 11.07 and (ii) has been approved in
writing by the Required Lenders, then, so long as there does not
then exist any Default or Event of Default, or (d) any Lender is
a Non-Consenting Lender, then the Borrower may either (A) demand
that such Lender (the "Affected Lender"), and upon such demand
the Affected Lender shall promptly, assign its Revolving Credit
Commitment and its Five Year Facility Commitment and all of its
Loans and Five Year Facility Loans to another Eligible Assignee
identified by the Borrower and willing to become a Lender
hereunder and under the Five Year Facility Credit Agreement
subject to and in accordance with the provisions of Section
11.01(a) for a purchase price equal to the aggregate principal
balance of Loans and Five Year Facility Loans then owing to the
Affected Lender plus any accrued but unpaid interest thereon,
accrued but unpaid fees owing to the Affected Lender and any
amounts owing the Affected Lender under Section 4.05 hereunder
and Section 4.05 under the Five Year Facility Credit Agreement,
or (B) pay to the Affected Lender the aggregate principal
balance of Loans and Five Year Facility Loans then owing to the
Affected Lender plus any accrued but unpaid interest thereon,
accrued but unpaid fees owing to the Affected Lender, any
amounts owing the Affected Lender under Section 4.05 hereunder
and Section 4.05 under the Five Year Facility Credit Agreement
and any other amounts agreed by the Borrower to be owing to the
Affected Lender, whereupon the Affected Lender shall no longer
be a party hereto or to the Five Year Facility Credit Agreement
or have any rights or obligations hereunder or thereunder or
under any of the other Loan Documents (including such documents
as defined in the Five Year Credit Facility Agreement) and the
Total Revolving Credit Commitment shall immediately and
permanently be reduced by an amount equal to the amount of the
Affected Lender's Revolving Credit Commitment and the Total
Revolving Credit Commitment (as defined in the Five Year
Facility Credit Agreement) shall immediately and permanently be
reduced by an amount equal to the amount of the Affected
Lender's Five Year Facility Commitment. Each of the Agent and
the Affected Lender shall reasonably cooperate in effectuating
the replacement of an Affected Lender under this Section 11.19,
but at no time shall the Agent or the Affected Lender be
obligated in any way whatsoever to initiate any such
replacement. The exercise by the Borrower of its rights under
this Section 11.19 shall be at the Borrower's sole cost and
expense.
11.20 Guaranty Terminations. Upon the satisfaction of
each of the following conditions, the Guaranty shall upon
delivery to the Agent of the written request of the Borrower
automatically terminate and be of no further force or effect and
each Guarantor thereunder shall be automatically,
unconditionally and fully released and discharged from all of
its obligations and liabilities under or in respect thereof
without any action by the Borrower, any Subsidiary, the Agent
(other than its written approval of the release terms as
contemplated in condition (b) below) or any Lender: (a) the
achievement of an Investment Grade Rating by the Borrower and
(b) each Subsidiary of the Borrower shall be released
(simultaneously with, or prior to, the effectiveness of this
Section 11.20) on terms reasonably satisfactory to the Agent
from its guaranty obligations of any other Indebtedness for
Money Borrowed of the Borrower (other than such guarantees which
together with all other Subsidiary Indebtedness (after giving
effect to the termination of the Guaranty) in the aggregate do
not exceed the maximum amount of Subsidiary Indebtedness then
permitted under Section 8.04(b) hereof). In addition, any
Pledge Agreement delivered pursuant to Section 7.18 shall
automatically terminate and be of no further force or effect
simultaneously with the termination of the Guaranty. The Agent
shall promptly deliver to the Borrower any stock certificates
and stock powers delivered to the Agent in connection with any
such Pledge Agreement.
[Signatures on following pages.]
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be made, executed and delivered by their duly
authorized officers as of the day and year first above written.
SAKS INCORPORATED
By:
Name:
Title:
ATTEST:
_________________________
_________________________
NATIONSBANK, N.A., as
Administrative Agent for the
Lenders
By:
Name:
Title: _________ Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
as Co-Syndication Agent and as a
Lender
By:
Name:
Title:
Lending Office:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260-0060
Attention: Patricia Merritt
Vice President
Telephone: (212) 648-0332
Telefacsimile: (212) 648-5939
Wire Transfer Instructions:
Morgan Guaranty Trust Company of New York
New York, New York
ABA# 021-000-238
For Credit to: Loan Department
A/C: 999-99-090
Attention: Corporate
Processing - Mod 02
Reference: Proffitt's, Inc.
THE CHASE MANHATTAN BANK,
as Co-Syndication Agent and as a
Lender
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
The Chase Manhattan Bank
270 Park Avenue, 48th Floor
New York, New York 10017
Attention: Barry Bergman
Telephone: (212) 270-0203
Telefacsimile: (212) 270-5646
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA No.: 021-000021
Attention: John Knapp, Loan
Services Dept.
Reference: CITIBANK, N.A.,
as Documentation Agent and as a
Lender
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
Citicorp Securities
399 Park Avenue - 12/19
New York, New York 10022
Attention: Gregory Frenzel
Assistant Vice President - Banker
Telephone: (212) 559-6422
Telefacsimile: (212) 793-7585
Wire Transfer Instructions:
Citibank, N.A.
399 Park Avenue
New York, New York 10022
ABA No.: 021000089
Account No.: 4063-2387
Attention: Debby Freidland
Reference: Saks Incorporated
NATIONSBANK, N.A.
By:
Name:
Title: _______ Vice President
Lending Office: NationsBank, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mr. Herbert Boyd,
Agency Services
Telephone: (704) 388-3225
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, N.A.
ABA# 053000196
Reference: Saks Incorporated
Account No.: 136621-2250600
Attention: CCS/Agency Services
NATIONAL CITY BANK, KENTUCKY
By:
Name:
Title: Vice President
Lending Office: National City Bank, Kentucky
101 South 5th Street
8th Floor
Louisville, Kentucky 40202
Attention: Mr. Kevin L.
Anderson,
Vice President
Telephone: (502) 581-7894
Telefacsimile: (502) 581-5122
Wire Transfer Instructions:
National City Bank Kentucky
101 South 5th Street
Louisville, Kentucky 40202
ABA# 083-000-056
Reference: Saks Incorporated
Account No.: 5737553042
Attention: Ms. Etta Moore,
Commercial Loan Operations
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office: SouthTrust Bank, N.A.
420 N. 20th Street
11th Floor
Birmingham, Alabama 35203
Attention: Mr. Alex Morton
Assistant Vice
President
Telephone: (205) 254-4990
Telefacsimile: (205) 254-8270
Wire Transfer Instructions:
SouthTrust Bank, N.A.
420 N. 20th Street
Birmingham, Alabama 35203
ABA# 062000080
Account No.: 131009
Reference: Saks Incorporated
Attention: Ms. Tracey
Crawford
(ext. 5446)
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
Name:
Title: Senior Vice President
Lending Office: First Tennessee
Bank National Association
165 Madison Ave.
6th Floor Main Office
Memphis, Tennessee 38103
Attention: Mr. Jim Chapman
Telephone: (901) 523-4273
Telefacsimile: (901) 523-4633
Wire Transfer Instructions:
First Tennessee Bank National
Association
Memphis, Tennessee
ABA# 084000026
Account No.: 114174 6870
Reference: Proffitt's,
Inc./Saks,
Incorporated.
Attention: Ms. Deborah Johnson
ext. 4188
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
Lending Office: The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Mr. Patrick M.
Brown
Relationship
Manager
Telephone: (404) 877-1506
Telefacsimile: (404) 888-8998
Wire Transfer Instructions:
The Bank of Nova Scotia
New York Agency
One Liberty Plaza
New York, New York 10006
ABA# 026002532
For Further Credit to:
The Bank of Nova Scotia - Atlanta Agency
Account No.: 0606634
Attention: Atlanta/Houston
Loan Operations
Reference: Saks Incorporated
HIBERNIA NATIONAL BANK
By:
Name:
Title: Assistant Vice President
Lending Office: Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Mr. Christopher B.
Pitre
Vice President
Telephone: (504) 533-2878
Telefacsimile: (504) 533-5344
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA# 065000090
Account No.: 0520-36615
Reference: Proffitt's Inc.
Attention: National Accounts
FIRST AMERICAN NATIONAL BANK
By:
Name:
Title:
Lending Office: First American National Bank
6000 Poplar Ave.
Suite 300
Memphis, Tennessee 38119
Attention: Mr. William R.
Stutts
Senior Vice
President
Telephone: (901) 762-5675
Telefacsimile: (901) 762-5665
Wire Transfer Instructions:
First American National Bank
490 Metroplex Drive
Nashville, Tennessee 37211
ABA# 064000017
Account No.: 1002295498
Reference: Saks Incorporated
Attention: Frenisa Joy
NORWEST BANK IOWA, NATIONAL
ASSOCIATION
By:
Name:
Title: Vice President
Lending Office: Norwest Bank
Iowa, National Association
M.S. 4019
666 Walnut
Des Moines, Iowa 50309
Attention: Mr. Randall R.
Stromley
Vice President
Telephone: (515) 245-3249
Telefacsimile: (515) 245-3128
Wire Transfer Instructions:
Norwest Bank Iowa, N.A.
Des Moines, Iowa
ABA# 073000228
Account No.: 970656
Reference: Proffitt's,
Inc./Saks Incorporated
Attention: Cheryl Hansen or
Brian Jones
THE FIRST NATIONAL BANK OF
CHICAGO
By:
Name:
Title:
Lending Office: The First National Bank
of Chicago
One First National Plaza
Suite 0086
Chicago, Illinois 60670
Attention: Ms. Debora Oberling
Telephone: (312) 732-4644
Telefacsimile: (312) 732-1117
Wire Transfer Instructions:
The First National Bank of
Chicago
Chicago, Illinois
ABA# 071000013
Account No.: 7521-7653
DCS Incoming Clearing
Account
Reference: Saks Incorporated
Attention: Rosario Guzman
CREDIT LYONNAIS ATLANTA AGENCY
By:
Name:
Title: Vice President
Credit Lyonnais Atlanta Agency
303 Peachtree St., N.E., Suite 4400
Atlanta, Georgia 30308
Attention: Christina Earnshaw
Vice President
Telephone: (404) 524-3700
Telefacsimile: (404) 584-5249
Wire Transfer Instructions:
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
ABA#0260-0807-3
Account No.: 01-24173.0001.00
Credit: Credit Lyonnais Atlanta
Agency
Reference: Saks Incorporated
Attention: Loan Servicing
THE BANK OF NEW YORK
By:
Name:
Title:
Lending Office:
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Paula D. Regan
Vice President
Telephone: (212) 635-7867
Telefacsimile: (212) 635-1481/1483
Wire Transfer Instructions:
Base Rate Loans: The Bank of New York
101 Barclay Street
ABA: 021000018
Commercial Loan Servicing Department
GLA No.: 111556
Reference: Saks Incorporated
ie: principal, interest, fees
EuroDollar Loans: The Bank of New York
101 Barclay Street
ABA: 021000018
Eurodollar/Cayman Funding Area
GLA No.: 111556
Reference: Saks Incorporated
ie: principal, interest
U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
Lending Office:
U.S. Bank National Association
601 Second Avenue South, Mail Stop MPFP0510
Minneapolis, Minnesota 55402
Attention: Michael J. Reymann
Telephone: (612) 973-4549
Telefacsimile: (612) 973-0821
Wire Transfer Instructions:
U.S. National Bank Association
601 Second Avenue South
Minneapolis, Minnesota 55402
ABA #: 091000022
Attention: Commercial Loan
Service Center
Account No.: 30000472160600
Reference: for Proffitt's,
Inc.
A/C No.: 1735056807
UNION BANK OF CALIFORNIA, N.A.
By:
Name:
Title:
Lending Office:
Union Bank of California, N.A.
350 California St., 6th Floor
San Francisco, California 94104
Attention: Susan Biba
Vice President
Telephone: (415) 705-5097
Telefacsimile: (415) 705-5093
Wire Transfer Instructions:
Union Bank of California, N.A.
1980 Saturn Street
Monterey Park, California 91755
ABA No.: 1220-0049-6
Account No.: 070196431
Attention: Commercial Loan
Operations
Reference: Saks Incorporated
WACHOVIA BANK, N.A.
By:
Name:
Title:
Lending Office:
Wachovia Bank, N.A.
MCGA 3940
191 Peachtree Street, NE, 29th Floor
Atlanta, Georgia 30303
Attention: Lanny Nixon
Vice President
Telephone: (404) 332-4884
Telefacsimile: (404) 332-5016
Wire Transfer Instructions:
Wachovia Bank, N.A.
191 Peachtree Street, NE
Atlanta, Georgia 30303-17517
ABA# 061000010
Account No.: 18-800-621
Attention: Margery Pace
Reference: Saks Inc.
ABN AMRO BANK NV
By:
Name:
Title:
Lending Office:
ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 625
Chicago, Illinois 60603
Attention: Credit
Administration
Telephone: (312) 904-8835
Telefacsimile: (312) 904-8840
With a copy to: ABN AMRO Bank N.V.
1 Ravinia Drive, Suite 1200
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA# 026009580
Account No.: 650-001-1789-41
Attention: Chicago CPU
Ref: Proffits/Saks Inc.
BANKBOSTON, N.A.
By:
Name:
Title:
Lending Office:
BankBoston, N.A.
100 Federal Street
Retail & Apparel Division
Mail Stop 01-09-05
Boston, Massachusetts 02110
Attention: Ms. Kathleen A.
Dimock
Vice President
Telephone: (617) 434-3830
Telefacsimile: (617) 434-6685
Wire Transfer Instructions:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
ABA# 011 000 390
Attention: Commercial Loan
Services
Admin. 57
Reference: Saks Incorporated
FIFTH THIRD BANK
By:
Name:
Title:
Lending Office: Fifth Third Bank
38 Fountain Square Plaza
Maildrop 109054
Cincinnati, Ohio 45263
Attention: Anne M. Koch,
Officer
Telephone: (513) 579-4110
Telefacsimile: (513) 579-5226
Wire Transfer Instructions:
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
ABA# 042000314
Account No.: 72876175
Attention: Anne Koch
Reference: Saks Incorporated
BANK OF MONTREAL
By:
Name:
Title:
Lending Office:
Bank of Montreal
115 South La Salle Street
Chicago, Illinois 60603
Attention: Sheila C. Weimer
Telephone: (312) 750-6044
Telefacsimile: (312) 750-3702
Wire Transfer Instructions:
Harris Trust & Savings Bank
Chicago, Illinois
ABA# 071000288
Account No.: 124-856-6
Attention: Client Services
Reference: Saks Incorporated
MELLON BANK, N.A.
By:
Name:
Title:
Lending Office:
Mellon Bank
1 Mellon Bank Center
Room 4525
Pittsburgh, Pennsylvania 15258
Attention: Richard Schaich
Telephone: (412) 234-4420
Telefacsimile: (412) 236-1914
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania
ABA# 043000261
Account No.: 990873800
Attention: Jodi Stewart
Reference: Saks Incorporated
FIRST UNION NATIONAL BANK
By:
Name: Jeff Fisher
Title:
By:
Name:
Title:
Lending Office:
First Union National Bank
999 Peachtree Street, 9th Floor
Atlanta, Georgia 30309
Telephone: (404) 827-7580
Telefacsimile: (404) 225-4255
Attention: Wes Burton
Wire Transfer Instructions:
First Union National Bank
Jacksonville, Florida
ABA No.: 063000021
Attention: Janie Cusack
Reference: Saks Incorporated
(Proffitt's, Inc.)
Account Name: Commercial Loans
Account No.: GL145916 2008
STAR BANK, N.A.
By:
Name:
Title:
Lending Office:
Star Bank, N.A.
425 Walnut Street ML 8160
Cincinnati, Ohio 45201
Attention: Richard W.
Neltner, Vice President
Telephone: (513) 632-4073
Telefacsimile: (513) 632-2068
Wire Transfer Instructions:
Star Bank, N.A.
ABA# 042-000-013
Account No.: 990-189 3
Reference: Saks Incorporated
Attention: Cathy Siegel, Loan
Operations
AMSOUTH BANK
By:
Name: David A. Simmons
Title: Senior Vice President
Lending Office:
AmSouth Bank
1900 Fifth Avenue North
7th Floor
Birmingham, Alabama 35203
Attention: David A. Simmons
Telephone: (205) 326-5924
Telefacsimile: (205) 801-0157
Wire Transfer Instructions:
AmSouth Bank
ABA# 062000019
Account No.: 001102450400100
Reference: Saks Incorporated
Attention: Wendy Fields
MERCANTILE BANK NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office:
Mercantile Bank
One Mercantile Center
7th & Washington
St. Louis, Missouri 63166
Attention: Lisa Voland
Telephone: (314) 418-2513
Telefacsimile: (314) 418-8162
Wire Transfer Instructions:
Mercantile Bank
St. Louis, Missouri
ABA# 081000210
Account No.: 140117-939
Attention: Commercial Loan
Operations
Reference:
__________________________________________________________________
SUPPLEMENTAL INDENTURE
Dated as of September 17, 1998
Between
SAKS HOLDINGS, INC., as Issuer
and
BANKERS TRUST COMPANY, as Trustee
__________________________________________________________________
SUPPLEMENTAL INDENTURE
This Supplemental Indenture (this "Supplemental Indenture") is
dated as of September 17, 1998 between SAKS HOLDINGS, INC., a
corporation duly organized and existing under the laws of the State
of Delaware (the "Company"), and BANKERS TRUST COMPANY, as trustee
(the "Trustee"). All capitalized terms used herein but not defined
shall have the meanings set forth in the Indenture (as defined
herein).
RECITALS
The Company has issued its 5 1/2% Convertible Subordinated Notes
due September 15, 2006 (the "Securities") under the Indenture dated
as of September 25, 1996 (as amended, supplemented or otherwise
modified through the date hereof, the "Indenture") between the
Company and the Trustee.
Pursuant to the Agreement and Plan of Merger dated as of July
4, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Merger Agreement") among the Company, Saks
Incorporated, a Tennessee corporation ("Saks Incorporated"), and
Fifth Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of Saks Incorporated (the "Merger Sub"), the Merger Sub
merged with and into the Company, with the Company being the
surviving corporation (the "Merger").
As a consequence of the Merger, each share of the Company's
common stock, par value $0.01 per share ("Company Common Stock"),
issued and outstanding immediately prior to the Effective Time (as
defined in the Merger Agreement), was converted into 0.82 shares of
common stock, par value $0.10 per share, of Saks Incorporated
("Saks Common Stock") as of the Effective Time.
Following the consummation of the Merger, the Company became,
and continues to be, a wholly owned subsidiary of Saks
Incorporated.
Section 901 of the Indenture provides that, without the
consent of any Holders, the Company and the Trustee may enter into
one or more indentures supplemental to the Indenture to, among
other things, make provision with respect to the conversion rights
of Holders pursuant to the requirements of Section 1311 of the
Indenture and the repurchase obligations of the Company pursuant to
the requirements of Section 1405 of the Indenture.
The Company has requested that the Trustee join in the
execution and delivery of this Supplemental Indenture to comply
with Sections 1311 and 1405 of the Indenture.
All actions on the part of the Company and the Trustee
necessary to authorize the execution, delivery and performance of
this Supplemental Indenture and the Indenture, as supplemented
hereby, have been duly taken.
In consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is mutually covenanted and agreed for the
equal and ratable benefit of all Holders of the Securities as
follows:
ARTICLE ONE
AMENDMENTS OF THE INDENTURE
SECTION 1.1 Amendments of the Indenture Generally and
Article One. (a) The Indenture is hereby amended from and after
the Effective Time by replacing each reference in the Indenture to
"Company's Common Stock" and "Common Stock of the Company" with a
reference to "Common Stock."
(b) Article One of the Indenture is hereby amended as
follows:
(i) The definition of "Board of Directors" is amended by
adding the following at the end thereof:
"From and after the Effective Time, for purposes of Articles
One, Thirteen and Fourteen hereof, the term Company in this
definition shall be deemed to mean Saks Incorporated."
(ii) The definition of "Board Resolution" is amended by
adding the following at the end thereof:
"From and after the Effective Time, for purposes of Articles
One, Thirteen and Fourteen hereof, the term Company in this
definition shall be deemed to mean Saks Incorporated."
(iii) The definition of "Common Stock" is amended by
adding the following at the end thereof:
"From and after the Effective Time, 'Common Stock' means the
common stock, par value $0.10 per share, of Saks Incorporated
authorized at the Effective Time. Subject to the provisions
of Section 1311, shares issuable on conversion or repurchase
of Securities shall include only shares of Common Stock or
shares of any class or classes of common stock resulting from
any reclassification or reclassifications thereof; provided,
however, that if at any time there shall be more than one such
resulting class, the shares so issuable on conversion of
Securities shall include shares of all such classes, and the
shares of each such class then so issuable shall be
substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes
resulting from all such reclassifications."
(iv) The definition of "Subsidiary" is amended by adding
the following new sentence at the end thereof:
"From and after the Effective Time, for purposes of Articles
One, Thirteen and Fourteen hereof, the term Company in this
definition shall be deemed to mean Saks Incorporated."
(v) The following definitions shall be added to Section
101 of the Indenture in appropriate alphabetical order:
"'Effective Time' shall have the meaning set forth in the
Merger Agreement."
"'Fifth Merger Corporation' shall mean Fifth Merger
Corporation, a Delaware corporation and a wholly-owned
subsidiary of Saks Incorporated."
"'Merger Agreement' shall mean the Agreement and Plan of
Merger dated as of July 4, 1998 among the Company, Fifth
Merger Corporation and Saks Incorporated (formerly known as
Proffitt's, Inc.), pursuant to which Fifth Merger Corporation
merged with and into the Company, with the Company being the
surviving corporation, as such Agreement and Plan of Merger
may be amended, supplemented or otherwise modified from time
to time."
"'Saks Incorporated' shall mean Saks Incorporated, a
Tennessee corporation, and its successors."
ARTICLE TWO
SECTION 2.2 Amendments of Article Two. Section 2.03 of the
Indenture is hereby amended by replacing the phrase "at an initial
Conversion Rate of 24.0601 shares of Common Stock for each $1,000
principal amount of Securities (or at the then current adjusted
Conversion Rate if an adjustment has been made as provided in the
Indenture)" in the first proviso of the second paragraph thereof
with the following:
"at an initial Conversion Rate of 24.0601 shares of common
stock of the Company for each $1,000 principal amount of
Securities (or, subject to adjustments for events subsequent
to the Effective Time (which adjustments shall be as nearly
equivalent as practicable to the adjustments set forth in
Article Thirteen of the Indenture), the Holder of each
Security Outstanding following the Effective Time shall have
the right, during the period such Security shall be
convertible as specified in Section 1301 of the Indenture, to
convert such Security only into the number of shares of Common
Stock receivable upon the Effective Time by a holder of the
number of shares of the Company's common stock into which such
Security might have been converted immediately prior to the
Effective Time."
SECTION 2.3 Amendment and Restatement of Article Thirteen.
Article Thirteen of the Indenture shall be deleted in its entirety,
and the following shall be inserted in lieu thereof:
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the
provisions of this Article Thirteen, at the option of
the Holder thereof, any Security may be converted at
any time into fully paid and non-assessable shares
(calculated as to each conversion to the nearest
1/100th of a share) of Common Stock at the Conversion
Rate, determined as hereinafter provided, in effect at
the time of conversion. Such conversion right shall
expire at the close of business on September 15, 2006,
subject, in the case of conversion of any Global
Security, to any Applicable Procedures. In case a
Security or portion thereof is called for redemption
at the election of the Company or the Holder thereof
exercises his right to require the Company to
repurchase a Security or portion thereof, such
conversion right in respect of such Security, shall
expire (a) at the close of business on the Redemption
Date, in the case of a Security called for redemption,
and (b) at the close of business on the Repurchase
Date, in the case of a Security tendered for
repurchase, in each case unless the Company defaults
in making the payment due upon redemption or
repurchase, as the case may be, and in each case
subject as aforesaid to any Applicable Procedures with
respect to any Global Security.
Prior to the Effective Time the rate at which
shares of Common Stock would have been delivered upon
conversion was initially 24.0601 shares of Common
Stock for each $1,000 principal amount of Securities
(subject to adjustment as provided in Article Thirteen
to the Indenture, as it existed prior to the Effective
Time). From and after the Effective Time, the holder
of each Outstanding Security shall have the right
during the period such Security shall be convertible
as specified in the preceding paragraph of this
Section 1301, to convert such Security into the number
of shares of Common Stock that a holder of shares of
the Company's common stock would have received in
connection with the Merger if such holder held the
number of shares of the Company's common stock into
which such Security was convertible immediately prior
to the Effective Time. The number of shares of Common
Stock such holder would have received for each $1,000
principal amount of Securities converted shall be
referred to herein as the "Conversion Rate". The
Conversion Rate shall be extended to the sixth decimal
place. The Conversion Rate shall be adjusted in
certain instances as provided in this Article
Thirteen.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege,
the Holder of any Security to be converted shall
surrender such Security, duly endorsed or assigned to
the Company or in blank, at any office or agency of
the Company maintained for that purpose pursuant to
Section 1002 (any city in which any Conversion Agent
is located being called herein a "Place of
Conversion"), accompanied by a duly signed conversion
notice substantially in the form set forth in Section
205 stating that the Holder elects to convert such
Security or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be
converted. Each Security surrendered for conversion
(in whole or in part) during the period from the close
of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the
case of any Security or portion thereof which has been
called for redemption on a Redemption Date, or which
is repurchasable on a Repurchase Date, occurring, in
either case, within such period) be accompanied by
payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on
the principal amount of such Security (or part
thereof, as the case may be) being surrendered for
conversion. The interest so payable on such Interest
Payment Date with respect to any Security (or portion
thereof, if applicable) which has been called for
redemption on a Redemption Date, or is repurchasable
on a Repurchase Date, occurring, in either case,
during the period from the close of business on any
Regular Record Date next preceding any Interest
Payment Date to the opening of business on such
Interest Payment Date, which Security (or portion
thereof, if applicable) is surrendered for conversion
during such period, shall be paid to the Holder of
such Security being converted in an amount equal to
the interest that would have been payable on such
Security if such Security had ben converted as of the
close of business on such Interest Payment Date. The
interest so payable on such Interest Payment Date in
respect of any Security (or portion thereof, as the
case may be) which has not been called for redemption
on a Redemption Date, or is not eligible for
repurchase on a Repurchase Date, occurring, in either
case, during the period from the close of business on
any Regular Record Date next preceding any Interest
Payment Date to the opening of business on such
Interest Payment Date, which Security (or portion
thereof, as the case may be) is surrendered for
conversion during such period, shall be paid to the
Holder of such Security as of such Regular Record
Date. Interest payable in respect of any Security
surrendered for conversion on or after an Interest
Payment Date shall be paid to the Holder of such
Security as of the next preceding Regular Record Date,
notwithstanding the exercise of the right of
conversion. Except as provided in this paragraph and
subject to the last paragraph of Section 307, no cash
payment or adjustment shall be made upon any
conversion on account of any interest accrued from the
Interest Payment Date next preceding the conversion
date, in respect of any Security (or part thereof, as
the case may be) surrendered for conversion, or on
account of any dividends on the Common Stock issued
upon conversion. The Company's delivery to the Holder
of the number of shares of Common Stock (and cash in
lieu of fractions thereof, as provided in this
Indenture) into which a Security is convertible will
be deemed to satisfy the Company's obligation to pay
the principal amount of the Security.
Securities shall be deemed to have been converted
immediately prior to the close of business on the day
of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such
time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the
record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the
conversion date, the Company shall issue (or cause to
be issued) and deliver to the Trustee, for delivery to
the Holder, a certificate or certificates for the
number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any
fraction of a share, as provided in Section 1303.
In the case of any Security which is converted in
part only, upon such conversion the Company shall
execute and the Trustee shall authenticate and deliver
to the Holder thereof, at the expense of the Company,
a new Security or Securities of authorized
denominations in an aggregate principal amount equal
to the unconverted portion of the principal amount of
such Security. A Security may be converted in part,
but only if the principal amount of such Security to
be converted is any integral multiple of $1,000 and
the principal amount of such security to remain
outstanding after such conversion is equal to $1,000
or any integral multiple of $1,000 in excess thereof.
SECTION 1303. Fractions of Shares.
No fractional shares of Common Stock shall be
issued upon conversion of any Security or Securities.
If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number
of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or
specified portions thereof) so surrendered. Instead
of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security
or Securities (or specified portions thereof), the
Company shall calculate and pay a cash adjustment in
respect of such fraction (calculated to the nearest
1/100th of a share) in an amount equal to the same
fraction of the Closing Price Per Share at the close
of business on the day of conversion.
SECTION 1304. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to
adjustments from time to time as follows:
(1) In case Saks Incorporated shall pay or
make a dividend or other distribution on any class of
its capital stock payable in shares of Common Stock,
the Conversion Rate in effect at the opening of
business on the day following the date fixed for the
determination of shareholders entitled to receive such
dividend or other distribution shall be increased by
dividing such Conversion Rate by a fraction of which
the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date
fixed for such determination and the denominator shall
be the sum of such number of shares and the total
number of shares constituting such dividend or other
distribution, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall
not include shares held in Saks Incorporated's
treasury but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of
shares of Common Stock. Saks Incorporated will not
pay any dividend or make any distribution on shares of
Common Stock held in its treasury.
(2) In case Saks Incorporated shall issue
rights, options or warrants to all holders of its
Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share
less than the current market price per share
(determined as provided in paragraph (8) of this
Section 1304) of the Common Stock on the date fixed
for the determination of stockholders entitled to
receive such rights, options or warrants, the
Conversion Rate in effect at the opening of business
on the day following the date fixed for such
determination shall be increased by dividing such
Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed
for such determination plus the number of shares of
Common Stock which the aggregate of the offering price
of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at
such current market price and the denominator shall be
the number of shares of Common Stock outstanding at
the close of business on the date fixed for such
determination plus the number of shares of Common
Stock so offered for subscription or purchase, such
increase to become effective immediately after the
opening of business on the day following the date
fixed for such determination. For the purposes of this
paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in
Saks Incorporated's treasury but shall include shares
issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. Saks
Incorporated will not issue any rights, options or
warrants in respect of shares of Common Stock held in
its treasury.
(3) In case outstanding shares of Common
Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the
day upon which such subdivision becomes effective
shall be proportionately increased, and, conversely,
in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common
Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such
combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may
be, to become effective immediately after the opening
of business on the day following the day upon which
such subdivision or combination becomes effective.
(4) In case Saks Incorporated shall, by
dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares
of any class of capital stock, or other property
(including securities, but excluding (i) any rights,
options or warrants referred to in paragraph (2) of
this Section, (ii) any dividend or distribution paid
exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this
Section and (iv) any merger or consolidation to which
Section 1311 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date
fixed for the determination of stockholders entitled
to receive such distribution by a fraction of which
the numerator shall be the current market price per
share (determined as provided in paragraph (8) of this
Section 1304) of the Common Stock on the date fixed
for such determination (the "Reference Date") less the
then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the
Trustee) on the Reference Date of the portion of the
assets, shares or evidences of indebtedness so
distributed applicable to one share of Common Stock
and the denominator shall be the current market price
per share of the Common Stock on the Reference Date,
such adjustment to become effective immediately prior
to the opening of business on the day following the
Reference Date.
(5) In case Saks Incorporated shall, by
dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any cash that is
distributed as part of a distribution referred to
paragraph (4) of this Section) in an aggregate amount
that, combined together with (I) the aggregate amount
of any other cash distributions to all holders of its
Common Stock made exclusively in cash within the 12
months preceding the date of payment of such
distribution and in respect of which no adjustment
pursuant to this paragraph (5) has been made and (II)
the aggregate of any cash plus the fair market value
(as determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution) of consideration payable in respect
of any tender offer by Saks Incorporated or any of its
subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the
date of payment of such distribution and in respect of
which no adjustment pursuant to paragraph (6) of this
Section 1304 has been made (the "combined cash and
tender amount"), exceeds 10% of the product of the
current market price per share (determined as provided
in paragraph (8) of this Section 1304) of the Common
Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such
distribution times the number of shares of Common
Stock outstanding on such date (the "aggregate current
market price"), then, and in each such case,
immediately after the close of business on such date
for determination, the Conversion Rate shall be
adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date
fixed for determination of the stockholders entitled
to receive such distribution by a fraction (i) the
numerator of which shall be equal to the current
market price per share (determined as provided in
paragraph (8) of this Section) of the Common Stock on
the date fixed for such determination less a amount
equal to the quotient of (x) the excess of such
combined cash and tender amount over 10% of such
aggregate current market price divided by (y) the
number of shares of Common Stock outstanding on such
date for determination and (ii) the denominator of
which shall be equal to the current market price per
share (determined as provided in paragraph (8) of this
Section 1304) of the Common Stock on such date for
determination.
(6) In case a tender offer made by Saks
Incorporated or any Subsidiary for all or any portion
of the Common Stock shall expire and such tender offer
or exchange (as amended upon the expiration thereof)
shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having
a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution) that combined
together with (I) the aggregate of the cash plus the
fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration
of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange
offer by Saks Incorporated or any Subsidiary for all
or any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment
pursuant to this paragraph (6) has been made and (II)
the aggregate amount of any cash distributions to all
holders of the Common Stock within 12 months
preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant
to paragraph (5) of this Section has been made (the
"combined tender and cash amount") exceeds 10% of the
product of the current market price per share of the
Common Stock (determined as provided in paragraph (8)
of this Section 1304) as of the last time (the
"Expiration Time") tenders or exchanges could have
been made pursuant to such tender or exchange offer
(as it may be amended) times the number of shares of
Common Stock outstanding (including any tendered or
exchanged shares) as of the Expiration Time, then, and
in each such case, immediately prior to the opening of
business on the day after the date of the Expiration
Time, the Conversion Rate shall be adjusted so that
the same shall eual the rate determined by dividing
the Conversion Rate immediately prior to close of
business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to
(A) the product of (I) the current market price per
share of the Common Stock (determined as provided in
paragraph (8) of this Section 1304) on the date of the
Expiration Time multiplied by (II) the number of
shares of Common Stock outstanding (including any
tendered or exchanged shares) on the date of the
Expiration Time less (B) the combined tender and cash
amount, and (ii) the denominator of which shall be
equal to the product of (A) the current market price
per share of the Common Stock (determined as provided
in paragraph (8) of this Section 1304) as of the
Expiration Time multiplied by (B) the number of shares
of Common Stock outstanding (including any tendered or
exchanged shares) as of the Expiration Time less the
number of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares
deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock
into securities other than Common Stock (other than
any reclassification upon a consolidation or merger to
which Section 1311 applies) shall be deemed to involve
(a) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution"
and "the date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a
subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding
immediately prior to such reclassification into the
number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the
case may be, and "the day upon which such subdivision
or combination becomes effective" within the meaning
of paragraph (3) of this Section 1304).
(8) For the purpose of any computation
under paragraphs (2), (4), (5) or (6) of this Section
1304, the current market price per share of Common
Stock on any date shall be calculated by Saks
Incorporated and be deemed to be the average of the
daily Closing Prices Per Share for the five
consecutive Trading Days selected by Saks Incorporated
commencing not more than 10 Trading Days before, and
ending not later than, the earlier of the day in
question and the day before the "ex" date with respect
to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term
"'ex' date", when used with respect to any issuance or
distribution, means the first date on which the Common
Stock trades regular way in the applicable securities
market or on the applicable securities exchange
without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate
shall be required unless such adjustment (plus any
adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease
of at least one percent in such rate; provided,
however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be
carried forward and taken into account in any
subsequent adjustment. All calculations under this
Article shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(10) The Company may make such increases in
the Conversion Rate, for the remaining term of the
Securities or any shorter term, in addition to these
required by paragraphs (1), (2), (3), (4), (5) and (6)
of this Section 1304, as it considers to be advisable
in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any
dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax
purposes. The Company shall have the power to resolve
any ambiguity or correct any error in this paragraph
(10) and its actions in so doing shall, absent
manifest error, be final and conclusive.
SECTION 1305. Notice of Adjustments of Conversion
Rate.
Whenever the Conversion Rate is adjusted as
herein provided:
(1) the Company shall compute the adjusted
Conversion Rate in accordance with Section 1304 and
shall prepare a certificate signed by the principal
accounting or financial officer of the Company setting
forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment
is based, and such certificate shall promptly be filed
with the Trustee and with each Conversion Agent; and
(2) a notice stating that the Conversion
Rate has been adjusted and setting forth the adjusted
Conversion Rate shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice
shall be provided by the Company, or the Company shall
cause such notice to be provided by the Trustee to,
all Holders in accordance with Section 106.
Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any
such certificate or the information and calculations
contained therein, except to exhibit the same to any
Holder of Securities desiring inspection thereof at
its office during normal business hours.
SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) Saks Incorporated shall declare a
dividend (or any other distribution) on its Common
Stock payable (i) otherwise than exclusively in cash
or (ii) exclusively in cash in an amount that would
require any adjustment pursuant to Section 1304; or
(b) Saks Incorporated shall authorize the
granting to the holders of its Common Stock generally
of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or
of any other rights; or
(c) of any reclassification of the Common
Stock, or of any consolidation, merger or share
exchange to which Saks Incorporated is a party and for
which approval of any stockholders of Saks
Incorporated is required, or of the conveyance, sale,
transfer or lease of all or substantially all of the
assets of Saks Incorporated; or
(d) of the voluntary or involuntary
dissolution, liquidation or winding up of Saks
Incorporated; or
(e) Saks Incorporated or any Subsidiary
shall commence a tender offer for all or a portion of
the outstanding shares of Common Stock (or shall amend
any such tender offer);
then the Company shall cause to be filed, or the
Company shall cause the Trustee to cause to be filed,
at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002, and
the Company shall cause to be provided, or the Company
shall cause the Trustee to cause to be provided, to
all Holders in accordance with Section 106, at least
20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record,
expiration or effective date hereinafter specified, a
notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution,
rights, options or warrants, or, if a record is not to
be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be
determined, (y) the date on which the right to make
tenders under such tender offer expires or (z) the
date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is
expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock
for securities, cash or other property deliverable
upon such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution,
liquidation or winding up. Neither the failure to give
such notice or the notice referred to in the following
paragraph nor any defect therein shall affect the
legality or validity of the proceedings described in
clauses (a) through (e) of this Section 1306. If at
the time the Trustee shall not be a Conversion Agent,
a copy of such notice shall also forthwith be filed by
the Company with the Trustee.
The preceding paragraph to the contrary
notwithstanding, the Company shall cause to be filed,
or the Company shall cause the Trustee to cause to be
filed, at each office or agency maintained for the
purpose of conversion of Securities pursuant to
Section 1002, and the Company shall cause to be
provided, or the Company shall cause the Trustee to
cause to be provided, to all Holders in accordance
with Section 106, notice of any tender offer by Saks
Incorporated or any Subsidiary for all or any portion
of the Common Stock on or after the time that such
notice of tender offer is provided to the public
generally.
SECTION 1307. Saks Incorporated to Reserve Common
Stock.
Saks Incorporated shall at all times reserve and
keep available, free from preemptive rights, out of
its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the
full number of shares of Common Stock then issuable
upon the conversion of all Outstanding Securities.
SECTION 1308. Taxes on Conversions.
Except as provided in the next sentence, the
Company will pay any and all taxes and duties that may
be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not however, be
required to pay any tax or duty which may be payable
in respect of (i) income of the Holder or (ii) any
transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the
Holder of the Security or Securities to be converted,
and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has
established to the satisfaction of the Company that
such tax or duty has been paid.
SECTION 1309. Covenant as to Common Stock.
The Company agrees that all shares of Common
Stock which may be delivered upon conversion of
Securities will be newly issued shares and, upon such
delivery, will have been duly authorized and validly
issued and will be fully paid and nonassessable and,
except as provided in Section 1308, the Company will
pay all taxes, liens and charges with respect to the
issue thereof.
SECTION 1310. Cancellation of Converted Securities.
All Securities delivered for conversion
shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee, which shall dispose
of the same as provided in Section 309.
SECTION 1311. Provision in Case of Consolidation,
Merger or Sale of Assets.
In case of any consolidation or merger of
Saks Incorporated with or into any other Person, any
merger of another Person with or into Saks
Incorporated (other than a merger which does not
result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock)
or any conveyance, sale, transfer or lease of all or
substantially all of the assets of Saks Incorporated,
the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the
case may be, shall execute and deliver to the Trustee
a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right
thereafter, during the period such Security shall be
convertible as specified in Section 1301, to convert
such Security only into the kind and amount of
securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer
or lease by a holder of the number of shares of Common
Stock into which such Security might have been
converted immediately prior to such consolidation,
merger, conveyance, sale, transfer or lease, assuming
such holder of Common Stock (i) is not a Person with
which Saks Incorporated consolidated or merged with or
into or which merged into or with Saks Incorporated or
to which such conveyance, sale, transfer or lease was
made, as the case may be ("Constituent Person"), or an
Affiliate of a Constituent Person and (ii) failed to
exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property
receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (provided that if
the kind or amount of securities, cash and other
property receivable upon such consolidation, merger,
conveyance, sale, transfer, or lease is not the same
for each share of Common Stock held immediately prior
to such consolidation, merger, conveyance, sale,
transfer or lease by others than a Constituent Person
or an Affiliate thereof and in respect of which such
rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this
Section 1311 the kind and amount of securities, cash
and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease by the
holders of each Non-electing Share shall be deemed to
be the kind and amount so receivable per share by a
plurality of the Non-electing Shares). Such
supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of
such supplemental indenture, shall be as nearly
equivalent as may be practicable to the adjustments
provided for in this Article. The above provisions of
this Section 1311 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers
or leases. Notice of the execution of such a
supplemental indenture shall be given by the Company,
or the Company shall cause the Trustee to give such
notice, to the Holder of each Security as provided in
Section 106 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any
Conversion Agent shall be under any responsibility to
determine the correctness of any provisions contained
in any such supplemental indenture relating either to
the kind or amount of shares of stock or other
securities or property or cash receivable by Holders
of Securities upon the conversion of their Securities
after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but
may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in
relying upon, an opinion of Counsel with respect
thereto, which the Company shall cause to be furnished
to the Trustee upon request.
SECTION 1312. Responsibility of Trustee for
Conversion Provisions.
The Trustee, subject to the provisions of Article
Six, and any Conversion Agent shall not at any time be
under any duty or responsibility to any Holder of
Securities to determine whether any facts exist which
may require any adjustment of the Conversion Rate, or
with respect to the nature or extent of any such
adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture
provided to be employed, in making the same, or
whether a supplemental indenture need be entered into.
Neither the Trustee, subject to the provisions of
Article Six, nor any Conversion Agent shall be
accountable with respect to the validity or value (or
the kind or amount) of any Common Stock, or of any
other securities or property or cash, which may at any
time be issued or delivered upon the conversion of any
Security; and it or they do not make any
representation with respect thereto. Neither the
Trustee, subject to the provisions of Article Six, nor
any Conversion Agent shall be responsible for any
failure of the Company to make or calculate any cash
payment or to issue, transfer or deliver any shares of
Common Stock or share certificates or other securities
or property or cash upon the surrender of any Security
for the purpose of conversion; and the Trustee,
subject to the provisions of Article Six, and any
Conversion Agent shall not be responsible for any
failure of the Company to comply with any of the
covenants of the Company contained in this Article.
SECTION 2.4 Amendment and Restatement of Article
Fourteen. Article Fourteen of the Indenture shall be deleted
in its entirety, and the following shall be inserted in lieu
thereof:
ARTICLE FOURTEEN
Repurchase of Securities at the Option of the
Holder Upon a Change of Control
SECTION 1401. Right to Require Repurchase.
In the event that a Change of Control (as
hereinafter defined) shall occur, then each Holder
shall have the right, at the Holder's option, but
subject to the provisions of Section 1402, to require
the Company to repurchase, and upon the exercise of
such right the Company shall repurchase, all of such
Holder's Securities, or any portion of the principal
amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof, on the date (the
"Repurchase Date") that is 45 days after the date of
the Company Notice (as defined in Section 1403) at a
purchase price equal to 100% of the principal amount
of the Securities to be repurchased plus interest
accrued to the, Repurchase Date (the "Repurchase
Price"); provided, however, that installments of
interest on Securities whose Stated Maturity is on or
prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of
business on the relevant Record Date according to
their terms and the provisions of Section 307. Such
right to require the repurchase of the Securities
shall not continue after a discharge of the Company
from its obligations with respect to the Securities in
accordance with Article Four, unless a Change of
Control shall have occurred prior to such discharge.
At the option of the Company, the Repurchase Price may
be paid (i) subject to the provisions of Section
1402(B) in cash, or (ii) subject to the fulfillment by
the Company of the conditions set forth in Section
1402(A), by delivery of shares of Common Stock having
a fair market value equal to the Repurchase Price;
provided, however, that failure of the Company to pay
the Repurchase Price on the Repurchase Date either in
cash or by delivery of shares of Common Stock shall
constitute an Event of Default for purposes of Section
501(1) hereof notwithstanding the Company's inability
to comply with the provisions of or satisfy any
conditions set forth in Section 1402. Whenever in this
Indenture (including Sections 202, 301, 501(l) and
508) there is a reference, in any context, to the
principal of any Security as of any time, such
reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security
to the extent that such Repurchase Price is, was or
would be so payable at such time, and express mention
of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the
Repurchase Price in those provisions of this Indenture
when such express mention is not made; provided,
however, that for the purposes of Article Twelve such
reference shall be deemed to include reference to the
Repurchase Price only to the extent the Repurchase
Price is payable in cash.
SECTION 1402. Conditions to the Company's Election to
Pay the Repurchase
Price in Common Stock or Cash.
(A) The Company may elect to pay the Repurchase
Price by delivery of shares of Common Stock pursuant
to Section 1401 if and only if the following
conditions shall have been satisfied:
(i) The shares of Common Stock deliverable
in payment of the Repurchase Price shall have a fair
market value as of the Repurchase Date of not less
than the Repurchase Price. For purposes of this
Section 1402, the fair market value of shares of
Common Stock shall be determined by the Company and
shall be equal to 95% of the average of the Closing
Prices Per Share for the five consecutive Trading Days
ending on and including the third Trading Day
immediately preceding the Repurchase Date;
(ii) The shares of Common Stock deliverable
in payment of the Repurchase Price are, or shall have
been, approved for quotation on the NASDAQ National
Market or are, or shall have been, listed on a
national securities exchange, in either case, prior to
the Repurchase Date; and
(iii) All shares of Common Stock deliverable
in payment of the Repurchase Price shall be issued out
of Saks Incorporated's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued
and fully paid and nonassessable and free of any
preemptive rights.
If all of the conditions set forth in this
Section 1402(A) are not satisfied in accordance with
the terms thereof, the Repurchase Price shall be paid
by the Company only in cash.
(B) The Company may elect to pay the Repurchase
Price in cash if and only if on or prior to the
Repurchase Date there shall not remain any amounts
outstanding under the Amended and Restated Credit
Agreement and all Commitments (as defined therein)
shall have terminated or expired.
SECTION 1403. Notices; Method of Exercising
Repurchase Right, Etc.
(a) Unless the Company shall have
theretofore called for redemption all of the
Outstanding Securities or unless all of the
Outstanding Securities shall have theretofore been
converted in accordance with Article Thirteen, on or
before the 30th day after the occurrence of a Change
of Control, the Company or, at the request and expense
of the Company on or before the 15th day after such
occurrence, the Trustee, shall give to all Holders, in
the manner provided in Section 106, notice (the
"Company Notice") of the occurrence of the Change of
Control and of the repurchase right set forth herein
arising as a result thereof. The Company shall also
deliver a copy of such notice of a repurchase right to
the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right
must be exercised,
(3) the Repurchase Price, and whether the
Repurchase Price shall be paid by the Company in cash or by
delivery of shares of Common Stock,
(4) a description of the procedure which a
Holder must follow to exercise a repurchase right, and
the place or places where such Securities are to be
surrendered for payment of the Repurchase Price and
accrued interest, if any,
(5) that on the Repurchase Date the
Repurchase Price, including accrued interest, if any,
will become due and payable upon each such Security
designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after
said date,
(6) the Conversion Rate then in effect, the
date on which the right to convert the principal
amount of the Securities to be repurchased will
terminate and the place or places where such
Securities may be surrendered for conversion, and
(7) the place or places that the form of
certificate required by Section 203 shall be
delivered, and the form of such certificate.
No failure of the Company to give the foregoing
notices or defect therein shall limit any Holder's
right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of
Securities.
If any of the foregoing provisions or other
provisions of this Article Fourteen are inconsistent
with applicable law, such law shall govern.
(b) To exercise a repurchase right, a
Holder shall deliver to the Trustee or any Paying
Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's
exercise of such right, which notice shall set forth
the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is
to be repurchased in part, the portion of the
principal amount thereof to be repurchased and the
name of the Person in which the portion thereof to
remain Outstanding after such repurchase is to be
registered) and a statement that an election to
exercise the repurchase right is being made thereby,
and in the event that the Repurchase Price shall be
paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or
certificates for shares of Common Stock shall be
issued, and (ii) the Securities with respect to which
the repurchase right is being exercised. Such written
notice shall be irrevocable, except that the right of
the Holder to convert the Securities with respect to
which the repurchase right is being exercised shall
continue until the close of business on the Repurchase
Date.
(c) In the event a repurchase right shall
be exercised in accordance with the terms hereof, the
Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash or
shares of Common Stock, as provided above, for payment
to the Holder on the Repurchase Date or, if shares of
Common Stock are to be paid, as promptly after the
Repurchase Date as practicable, together with accrued
and unpaid interest to the Repurchase Date payable
with respect to the Securities as to which the
purchase right has been exercised; provided, however,
that installments of interest that mature on or prior
to the Repurchase Date shall be payable in cash to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of
business on the relevant Regular Record Date according
to the terms and provisions of Section 307.
(d) If any Security (or portion thereof)
surrendered for repurchase shall not be so paid on the
Repurchase Date, the principal amount of such Security
(or portion thereof, as the case may be) shall, until
paid, bear interest to the extent permitted by
applicable law from the Repurchase Date at the rate of
5 1/2% per annum, and each Security shall remain
convertible into Common Stock until the principal of
such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(e) Any security which is to be repurchased
only in part shall be surrendered to the Trustee
(with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and make available
for delivery to the Holder of such Security without
service charge, a new Security or Securities,
containing identical terms and conditions, each in an
authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion
of the principal of the Security so surrendered.
(f) Any issuance of shares of Common Stock
in respect of the Repurchase Price shall be deemed to
have been effected immediately prior to the close of
business on the Repurchase Date and the Person or
Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have
become on the Repurchase Date the holder or holders of
record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date
when the stock transfer books of Saks Incorporated
shall be closed shall constitute the Person or Persons
in whose name or names the certificate or certificates
for such shares are to be issued as the record holder
or holders thereof for all purposes at the opening of
business on the next succeeding day on which such
stock transfer books are open. No payment or
adjustment shall be made for dividends or
distributions on any Common Stock issued upon
repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares shall be issued
upon repurchase of Securities. If more than one
Security shall be repurchased from the same Holder and
the Repurchase Price shall be payable in shares of
Common Stock, the number of full shares which shall be
issuable upon such repurchase shall be computed on the
basis of the aggregate principal amount of the
Securities so repurchased. Instead of any fractional
share of Common Stock which would otherwise be
issuable on the repurchase of any Security or
Securities, the Company will deliver to the applicable
Holder its check for the current market value of such
fractional share. The current market value of a
fraction of a share is determined by multiplying the
current market price of a full share by the fraction,
and rounding the result to the nearest cent. For
purposes of this Section, the current market price of
a share of Common Stock is the Closing Price Per Share
of the Common Stock on the Trading Day immediately
preceding the Repurchase Date.
(h) Any issuance and delivery of
certificates for shares of Common Stock on repurchase
of Securities shall be made without charge to the
Holder of Securities being repurchased for such
certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the
securities represented thereby; provided, however,
that the Company shall not be required to pay any tax
or duty which may be payable in respect of (i) income
of the Holder or (ii) any transfer involved in the
issuance or delivery of certificates for shares of
Common Stock in a name other than that of the Holder
of the Securities being repurchased, and no such
issuance or delivery shall be made unless and until
the Person requesting such issuance or delivery has
paid to the Company the amount of any such tax or duty
or has established, to the satisfaction of the
Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase
shall be delivered to the Trustee, the Paying Agent or
any other agents (as shall be set forth in the Company
Notice) to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided
in Section 309.
SECTION 1404. Certain Definitions.
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be
determined in accordance with Rule 13d-3, as in effect
on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to
the Exchange Act;
(b) a "Change of Control" shall be deemed to
have occurred at the time, after the original issuance
of the Securities, of:
(i) the acquisition by any Person of
beneficial ownership, directly or indirectly, through
a purchase, merger or other acquisition transaction or
series of transactions, of shares of capital stock of
Saks Incorporated entitling such Person to exercise
50% or more of the total voting power of all shares of
capital stock of Saks Incorporated entitled to vote
generally in the elections of directors (any shares of
voting stock of which such person or group is the
beneficial owner that are not then outstanding being
deemed outstanding for purposes of calculating such
percentage), other than any such acquisition by Saks
Incorporated, any Subsidiary of Saks Incorporated or
any employee benefit plan of Saks Incorporated
existing at the Effective Time; or
(ii) any consolidation or merger of Saks
Incorporated with or into any other Person, any merger
of another Person into Saks Incorporated, or any
conveyance, sale, transfer, or lease of all or
substantially all of the assets (other than (a) any
such transaction (x) which does not result in any
reclassification, conversion, exchange or cancellation
of outstanding shares of Common Stock, and
(y) pursuant to which the holders of 50% or more of
the total voting power of all shares of capital stock
of Saks Incorporated entitled to vote generally in
elections of directors immediately prior to such
transaction have the entitlement to exercise, directly
or indirectly, 50% or more of the total voting power
of all shares of capital stock of the continuing or
surviving corporation entitled to vote generally in
elections of directors of the continuing or surviving
corporation immediately after such transaction and (b)
a merger which is effected solely to change the
jurisdiction of incorporation of Saks Incorporated and
results in a reclassification, conversion or exchange
of outstanding shares of Common Stock into solely
shares of common stock);
provided, however, that a Change of Control shall not
be deemed to have occurred if the Closing Price Per
Share on any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the
later of the date of the Change of Control or the date
of the public announcement of the Change of Control
(in the case of a Change of Control under Clause (i)
above) or the period of 10 consecutive Trading Days
ending immediately prior to the date of the Change of
Control (in the case of a Change of Control under
Clause (ii) above) shall equal or exceed 105% of the
Conversion Price in effect on each such Trading Day.
(c) the term "Conversion Price" shall equal
$1,000 divided by the Conversion Rate; and
(d) for the purposes of Section 1404(b)(i),
the term "Person" shall include any syndicate or group
which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act, as in effect on the date
of the original execution of this Indenture.
SECTION 1405. Consolidation, Merger, Etc.
In the case of any conveyance, sale, transfer,
lease, or merger, to which Section 1311 applies, in
which the Common Stock is changed or exchanged as a
result into the right to receive shares of stock and
other securities or property or assets (including
cash) which includes shares of Common Stock or common
stock of another person that are, or upon issuance
will be, traded on a United States national securities
exchange or approved for trading on an established
automated over-the-counter trading market in the
United States and such shares constitute at the time
such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such shares
of stock and other securities, property and assets
(including cash) (as determined by the Company, which
determination shall be conclusive and binding), then
the person formed by such consolidation or resulting
from such merger or combination or which acquires the
properties or assets (including cash) of the Company,
as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date
of execution of such supplemental indenture) modifying
the provisions of this Indenture relating to the right
of Holders to cause the Company to repurchase the
Securities following a Change of Control, including
without limitation the applicable provisions of this
Article Fourteen and the definitions of the Common
Stock and Change of Control, as appropriate, and such
other related definitions set forth herein as
determined in good faith by the Company (which
determination shall be conclusive and binding), to
make such provisions apply to the common stock and the
issuer thereof if different from the Company and
Common Stock (in lieu of the Company and the Common
Stock).
This instrument may be executed in any number of
counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts
shall together constitute but one and the same
instrument.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1 Effectiveness. This Supplemental
Indenture shall become effective as of the Effective Time
when, and only when, counterparts hereof shall have been duly
executed and delivered by the Company and the Trustee.
SECTION 3.2 Ratification of Indenture. Except as
expressly amended, supplemented and otherwise modified hereby,
the Indenture continues in full force and effect and is in all
respects ratified, confirmed and preserved.
SECTION 3.3 Governing Law. This Supplemental
Indenture shall be governed by and construed in accordance
with the laws of the State of New York. This Supplemental
Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended and shall, to the extent applicable,
be governed by such provisions.
SECTION 3.4 Counterparts. This Supplemental Indenture
may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, and all of
which shall together constitute but one and the same
instrument.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date
first above written.
SAKS HOLDINGS, INC.
By:
Name: Brian J. Martin
Title: Executive Vice
President
Attest:
Name: Charles J. Hansen
Title:Assistant Secretary
BANKERS TRUST COMPANY,
as trustee
By:
Name:
Title:
Attest:
Title:
