AMENDMENT NO. 4 TO CREDIT FACILITIES
AND REIMBURSEMENT AGREEMENT
THIS AMENDMENT NO. 4 TO CREDIT FACILITIES AND
REIMBURSEMENT AGREEMENT (this "Agreement") is made and entered into
as of this 3rd day of February, 1996 among:
PROFFITT'S, INC., a Tennessee corporation having its principal
place of business in Alcoa, Tennessee (the "Borrower"); and
Each lender executing and delivering a signature page hereto
(hereinafter such lenders may be referred to individually as a
"Lender" or collectively as the "Lenders"); and
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the
United States of America ("NationsBank"), in its capacity as agent
for the Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent have entered
into a Credit Facilities and Reimbursement Agreement dated as of
March 31, 1994, pursuant to which the Lenders agreed to make
certain Advances to the Borrower;
WHEREAS, the Borrower, the Lenders and the Agent amended the
Credit Agreement pursuant to Amendment No. 1 to Credit Facilities
and Reimbursement Agreement dated as of November 15, 1994,
Amendment No. 2 to Credit Facilities and Reimbursement Agreement
dated as of March 7, 1995 and Amendment No. 3 to Credit Facilities
and Reimbursement Agreement dated as of October 25, 1995 (as
amended, the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Credit Agreement
be amended in the manner set forth herein and the Agent and the
Lenders are willing to agree to such amendment;
NOW, THEREFORE, in consideration of the mutual covenants and
the fulfillment of the conditions set forth herein, the parties
hereto do hereby agree as follows:
1. Definitions. Any capitalized terms used herein without
definition shall have the meaning set forth in the Credit
Agreement.
2. Amendment. Subject to the terms and conditions set forth
herein, and in accordance with Section 11.06 of the Credit
Agreement, the Credit Agreement is hereby amended as follows:
(a) the definition of "Applicable Interest Addition" in
Section 1.01 is hereby amended to delete the table appearing at the
end thereof and to substitute in its place the following table:
Consolidated Funded Indebtedness/ Applicable
Consolidated EBITDA Ratio* Interest Addition
Greater than 3.50 to 1.00 1.25%
Greater than 2.50 to 1.00 and 1.00%
less than or equal to 3.50 to 1.00
Greater than 1.25 to 1.00 .75%
and less than or equal to 2.50 to 1.00
Less than or equal to 1.25 to 1.00 .50%
__________________________
* Commencing with the Borrower's fiscal quarter ending May 4,
1996, an adjustment to the Applicable Interest Addition will not
occur unless the ratio determined on the Determination Date for the
fiscal quarter then ended and the ratio determined on the previous
Determination Date each would result in an adjustment to the
Applicable Interest Margin.
(b) The definition of "Capital Expenditures" in Section
1.01 is hereby amended to amend and restate the proviso to clause
(iii) thereof to read in its entirety as follows:
provided, however, there shall be excluded from the
determination of Capital Expenditures (i) McRae's purchase of
certain real property as part of the Macco Acquisition and as set
forth in the Purchase Agreement and (ii) the acquisition by the
Borrower of all the stock of Younkers, Inc. ("Younkers") pursuant
to that certain Agreement and Plan of Merger among Proffitt's,
Inc., Baltic Merger Corporation and Younkers, Inc. dated as of
October 22, 1995 (the "Younkers Acquisition").
(c) Section 8.05 is hereby amended and restated to read
in its entirety as follows:
8.05 Capital Expenditures. Make or become committed to
make in any consecutive twelve month period Capital Expenditures
greater than $80,000,000 in the aggregate or greater than
$30,000,000 on any particular item or project.
(d) Section 8.07 (v), (vii), (viii), (x) and (xii) are
hereby amended and restated to read in their entirety as
follows:
(v) additional unsecured Indebtedness not to
exceed an aggregate outstanding amount of $15,000,000;
(vii) standby letters of credit in the aggregate
face amount not to exceed $40,000,000 issued to provide credit
enhancement for account receivable securitizations;
(viii) conveyances, notes, certificates of
participation or evidences of indebtedness associated with account
receivable securitizations;
(x) additional standby letters of credit in an
aggregate face amount not to exceed $20,000,000;
(xii) Indebtedness incurred directly by the
Borrower or any Subsidiary exclusively to finance machinery,
equipment, and other fixed assets purchased after the Closing Date
provided that such indebtedness (i) is secured, if at all, solely
by a Lien upon the items of property being acquired, (ii)
represents not less than 75% of the purchase price of the asset
financed, (iii) shall not be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time of
such refinancing and (iv) does not in the aggregate exceed the
principal amount of $60,000,000 incurred during any consecutive
twelve month period;
(e) Section 8.07 is further amended to add a new
subsection (xv) thereto which shall read in its entirety as
follows:
(xv) additional indebtedness not to exceed $0.00
of Younkers assumed by the Borrower in connection with the Younkers
Acquisition; provided, such Indebtedness (A) is recorded in the
financial books and records of Younkers prior to the Younkers
Acquisition and (B) was not incurred by Younkers in anticipation of
the Younkers Acquisition.
(f) Section 8.08 is amended to add the following new
Section 8.08 (ix), which shall read in its entirety as follows:
(ix) Liens granted in connection with that
certain $150,000,000 Credit Agreement dated October 27, 1993
between Younkers, Inc., the Lenders named therein, Chemical Bank as
Administrative Agent and the Co-Agents and Fronting Banks named
therein, as amended (the "Existing Younkers Credit") which secure
the inventory of Younkers, Inc. or the capital stock of Younkers
Credit Corporation (the "Existing Younkers Liens"); provided,
however, this exception to the otherwise applicable prohibition
against pledges, liens, charges and encumbrances as set forth in
Section 8.08 shall not apply upon the occurrence or failure of any
of the following: (a) the failure to terminate the Existing
Younkers Credit on or before April 30, 1996, or (b) the failure to
terminate all of the Existing Younkers Liens on or before April 30,
1996, or (c) the making of any draws, advances or other borrowings
under the Existing Younkers Credit.
(g) Section 8.09 as hereby amended and restated to read
in its entirety as follows:
8.09 Transfer of Assets
During any consecutive twelve (12) month period,
sell, lease, transfer or otherwise dispose of any assets of
Borrower or any Subsidiary, other than assets sold in the ordinary
course of business and accounts receivable transferred pursuant to
account receivable securitizations, which have an aggregate book
value in excess of five percent (5%) of the book value of the
consolidated total assets of the Borrower and its Subsidiaries.
3. Representations and Warranties. In order to induce the
Agent and the Lenders to enter into this Agreement, the Borrower
represents and warrants to the Agent and the Lenders as follows:
(a) The representations and warranties made by Borrower
in Article VI of the Credit Agreement are true and correct on and
as of the date hereof;
(b) There has been no material adverse change in the
condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole, since the date of the most recent
financial reports of the Borrower received by the Agent and the
Lenders under Section 7.01(a) of the Credit Agreement, other than
changes in the ordinary course of business;
(c) The business and properties of the Borrower and its
Subsidiaries, taken as a whole, are not, and since the date of the
most recent financial report of the Borrower and its Subsidiaries
received by the Agent and the Lenders under Section 7.01(a) of the
Credit Agreement, have not been adversely affected in any
substantial way as the result of any fire, explosion, earthquake,
accident, strike, lockout, combination of workers, flood, embargo,
riot, activities of armed forces, war or acts of God or the public
enemy, or cancellation or loss of any major contracts;
(d) No event has occurred and is continuing which
constitutes, and no condition exists which upon the consummation of
the transaction contemplated hereby would constitute, a Default or
an Event of Default on the part of the Borrower under the Credit
Agreement; and
(e) There currently is no outstanding indebtedness,
advances or other borrowings under the Existing Younkers Credit;
and
(f) Pursuant to that certain Agreement and Plan of
Merger dated January 19, 1996, filed with the office of the
Mississippi Secretary of State and effective as of January 24,
1996, MACCO Investments, Inc. has been merged into McRae's, Inc.
the surviving entity of this merger is McRae's, Inc., which has
assumed all liabilities and obligations of MACCO Investments, Inc.
4. Conditions Precedent. the effectiveness of this
Agreement is subject to the following:
(a) The Agent shall have received:
(i) eight (8) counterparts of this Agreement duly
executed by all signatories hereto;
(ii) payment of an amendment fee in the aggregate
amount of 1/8 of 1% of the Total Revolving Credit Commitment in
immediately available funds payable to the Lenders pro rata based
on their respective Applicable Commitment Percentages;
(iii) copies of all additional agreements,
instruments and documents which the Agent may reasonably request,
such documents, when appropriate, to be certified by appropriate
governmental authorities.
(b) The Younkers Acquisition shall have closed and be
effective and the Agent shall have received a certified copy of all
Articles of Merger filed in connection therewith as evidence
thereof.
(c) All proceedings of the Borrower relating to the
matters provided for herein shall be satisfactory to the Lenders,
the Agent and their counsel.
5. Younkers Acquisition Charges. The parties hereto agree
that certain one-time extraordinary charges incurred by the
Borrower as a result of the Younkers Acquisition (the
"Extraordinary Acquisition Charges") will be excluded from the
covenant compliance calculations contained in Sections 8.01-8.06 of
the Credit Agreement; provided, the Agent shall make the final
determination as to whether specific items qualify as Extraordinary
Acquisition Charges.
6. Effective Date. This Agreement shall be effective as of
the effective date of the Younkers Acquisition.
7. Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to
the subject matter hereof and supersedes any prior negotiations and
agreements among the parties relative to such subject matter. No
promise, condition, representation or warranty, express or implied,
not herein set forth shall bind any party hereto, and not one of
them has relied on any such promise, condition, representation or
warranty. Each of the parties hereto acknowledges that, except as
in this Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by
any party to the other. None of the terms or conditions of this
Agreement may be changed, modified, waived or canceled orally or
otherwise, except by writing, signed by all the parties hereto,
specifying such change, modification, waiver or cancellation of
such terms or conditions, or of any proceeding or succeeding breach
thereof.
8. Full Force and Effect of Agreement. Except as hereby
specifically amended, modified, waived or supplemented, the Credit
Agreement and all other Loan Documents are hereby confirmed and
ratified in all respects and shall remain in full force and effect
according to their respective terms.
9. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument.
10. Governing Law. This Amendment Agreement shall in all
respects be governed by the laws and judicial decisions of the
state of Tennessee.
11. Enforceability. Should any one or more of the provisions
of this Agreement be determined to be illegal or unenforceable as
to one or more of the parties hereto, all other provisions
nevertheless shall remain effective and binding on the parties
hereto.
12. Credit Agreement. All references in any of the Loan
Documents to the Credit Agreement shall mean the Credit Agreement
as amended hereby.
13. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the Borrower, the Lenders
and the Agent and their respective successors, assigns and legal
representatives; provided, however, that the Borrower, without the
prior consent of the Agent, may not assign any rights, powers,
duties or obligations hereunder.
14. Consent of Guarantors. Each of the Guarantors by their
execution and delivery hereof (i) consent and agree to the
amendments to the Credit Agreement set forth herein and (ii)
reaffirm their obligations set forth in each Guaranty.
(signatures on following pages)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers,
all as of the day and year first above written.
BORROWER:
ATTEST: PROFFITT, INC.
By:___________________ By:_________________________
Name:_________________ Name:_______________________
Title:________________ Title:______________________
(CORPORATE SEAL)
LENDERS:
NATIONSBANK OF TEXAS,
NATIONAL ASSOCIATION
By:_________________________
Name:_______________________
Title:______________________
FIRST AMERICAN NATIONAL BANK
By:_________________________
Name:_______________________
Title:______________________
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION
By:_________________________
Name:_______________________
Title:______________________
SUNTRUST BANK, ATLANTA
By:_________________________
Name:_______________________
Title:______________________
By:_________________________
Name:_______________________
Title:______________________
(Signature Page 1 of 2)
DEPOSIT GUARANTY NATIONAL BANK
By:_________________________
Name:_______________________
Title:______________________
HIBERNIA NATIONAL BANK
By:_________________________
Name:_______________________
Title:______________________
AGENT:
NATIONSBANK OF TEXAS,
NATIONAL ASSOCIATION,
as Agent for the Lenders
By:_________________________
Name:_______________________
Title:______________________
Acknowledged, agreed and consented to, this the 29th day of
January, 1996.
PROFFITT'S INVESTMENTS, INC.
PDS AGENCY, INC.
McRAE'S, INC.
McRAE'S OF ALABAMA, INC.
PARKS ENTERPRISES, INC.
PARKS-BELK COMPANY
By:_________________________
Name:_______________________
Title:______________________
(Signature Page 2 of 2)