SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
SAKS INCORPORATED
as Borrower,
BANK OF AMERICA, N. A.,
as Administrative Agent,
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
August 26, 1999
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Co-Book Manager
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
and
CHASE SECURITIES, INC.
and
SALOMON SMITH BARNEY INC.,
as Co-Book Managers
TABLE OF CONTENTS
Page
----
ARTICLE I - Definitions and Terms
1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Accounting Terms . . . . . . . . . . . . . . . . . . . . 26
1.03 Terms Consistent . . . . . . . . . . . . . . . . . . . . 26
ARTICLE II - Revolving Credit Loans
2.01 Revolving Credit Loans . . . . . . . . . . . . . . . . . 27
2.02 Swing Line . . . . . . . . . . . . . . . . . . . . . . . 29
2.03 Competitive Bid Loans. . . . . . . . . . . . . . . . . . 30
2.04 Payment of Interest. . . . . . . . . . . . . . . . . . . 33
2.05 Payment of Principal . . . . . . . . . . . . . . . . . . 34
2.06 Payments; Non-Conforming Payments. . . . . . . . . . . . 34
2.07 Borrower's Account . . . . . . . . . . . . . . . . . . . 35
2.08 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.09 Pro Rata Payments. . . . . . . . . . . . . . . . . . . . 35
2.10 Reductions . . . . . . . . . . . . . . . . . . . . . . . 36
2.11 Conversions and Elections of Subsequent Interest Periods 36
2.12 Facility Fees and Utilization Premium. . . . . . . . . . 37
2.13 Deficiency Loans . . . . . . . . . . . . . . . . . . . . 37
2.14 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 38
2.15 Additional Fees. . . . . . . . . . . . . . . . . . . . . 38
2.16 Intraday Funding . . . . . . . . . . . . . . . . . . . . 38
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 . . . . . . . . . . . . . 54
ARTICLE VII - Affirmative Covenants
7.01 Financial Reports, Etc.. . . . . . . . . . . . . . . . . 61
7.02 Maintain Properties. . . . . . . . . . . . . . . . . . . 62
7.03 Existence, Qualification, Etc. . . . . . . . . . . . . . 62
7.04 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.05 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 62
7.06 True Books . . . . . . . . . . . . . . . . . . . . . . . 63
7.07 Right of Inspection. . . . . . . . . . . . . . . . . . . 63
7.08 Observe All Laws; Licenses . . . . . . . . . . . . . . . 63
7.09 Covenants Extending to Subsidiaries. . . . . . . . . . . 63
7.10 Officer's Knowledge of Default . . . . . . . . . . . . . 63
7.11 Suits or Other Proceedings . . . . . . . . . . . . . . . 63
7.12 Notice of Discharge of Hazardous Material or
Environmental Complaint . . . . . . . . . . . . . . . . . 63
7.13 Environmental Compliance . . . . . . . . . . . . . . . . 64
7.14 Year 2000 Notice . . . . . . . . . . . . . . . . . . . . 64
7.15 Further Assurances . . . . . . . . . . . . . . . . . . . 64
7.16 Benefit Plans. . . . . . . . . . . . . . . . . . . . . . 64
7.17 Continued Operations . . . . . . . . . . . . . . . . . . 65
7.18 New Subsidiaries . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VIII - Negative Covenants
8.01 Consolidated Net Worth . . . . . . . . . . . . . . . . . 67
8.02 Consolidated Fixed Charge Ratio. . . . . . . . . . . . . 67
8.03 Consolidated Funded Total Indebtedness to Consolidated
EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . 67
8.05 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.06 Transfer of Assets . . . . . . . . . . . . . . . . . . . 70
8.07 Investments; Acquisitions. . . . . . . . . . . . . . . . 70
8.08 Merger or Consolidation. . . . . . . . . . . . . . . . . 71
8.09 Transactions with Affiliates . . . . . . . . . . . . . . 71
8.10 Benefit Plans. . . . . . . . . . . . . . . . . . . . . . 72
8.11 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . 72
8.12 Dissolution, etc.. . . . . . . . . . . . . . . . . . . . 72
8.13 Rate Hedging Obligations . . . . . . . . . . . . . . . . 72
ARTICLE IX - Events of Default and Acceleration
9.01 Events of Default. . . . . . . . . . . . . . . . . . . . 74
9.02 Agent to Act . . . . . . . . . . . . . . . . . . . . . . 77
9.03 Cumulative Rights. . . . . . . . . . . . . . . . . . . . 77
9.04 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . 78
9.05 Allocation of Proceeds . . . . . . . . . . . . . . . . . 78
ARTICLE X - The Agent
10.01. Appointment, Powers, and Immunities. . . . . . . . . . 79
10.02. Reliance by Agent. . . . . . . . . . . . . . . . . . . 79
10.03. Defaults . . . . . . . . . . . . . . . . . . . . . . . 79
10.04. Rights as Lender . . . . . . . . . . . . . . . . . . . 80
10.05. Indemnification. . . . . . . . . . . . . . . . . . . . 80
10.06. Non-Reliance on Agent and Other Lenders. . . . . . . . 80
10.07. Resignation of Agent . . . . . . . . . . . . . . . . . 81
ARTICLE XI - Miscellaneous
11.01 Assignments and Participations. . . . . . . . . . . . . 82
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 83
11.03 Confidentiality . . . . . . . . . . . . . . . . . . . . 85
11.04 Right of Setoff; Adjustments. . . . . . . . . . . . . . 85
11.05 Survival. . . . . . . . . . . . . . . . . . . . . . . . 86
11.06 Expenses. . . . . . . . . . . . . . . . . . . . . . . . 86
11.07 Amendments and Waivers. . . . . . . . . . . . . . . . . 86
11.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . 86
11.09 Termination . . . . . . . . . . . . . . . . . . . . . . 87
11.10 Governing Law . . . . . . . . . . . . . . . . . . . . . 87
11.11 Indemnification . . . . . . . . . . . . . . . . . . . . 87
11.12 Headings and References . . . . . . . . . . . . . . . . 89
11.13 Severability. . . . . . . . . . . . . . . . . . . . . . 89
11.14 Entire Agreement. . . . . . . . . . . . . . . . . . . . 89
11.15 Agreement Controls. . . . . . . . . . . . . . . . . . . 89
11.16 Usury Savings Clause. . . . . . . . . . . . . . . . . . 89
11.17 Reserved. . . . . . . . . . . . . . . . . . . . . . . . 90
11.18 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . 90
11.19 Removal of Lenders. . . . . . . . . . . . . . . . . . . 90
11.20 Guaranty Terminations.. . . . . . . . . . . . . . . . . 91
11.21 Special Funding Option.. . . . . . . . . . . . . . . . . 91
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. . . . . . . . . . . .D-1
EXHIBIT E [Reserved] . . . . . . . . . . . . . . . .E-1
EXHIBIT F Form of Competitive Bid Quote. . . . . . .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 . . . . . .I-1
EXHIBIT J Form of Competitive Bid Notes. . . . . . .J-1
EXHIBIT K Form of Swing Line Note. . . . . . . . . .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
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of August 26, 1999 (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
BANK OF AMERICA, N. A., a national banking association
organized and existing under the laws of the United States of
America ("Bank of America"), 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, the Agent and certain of the Lenders
are party to that certain Amended and Restated Credit Agreement
dated as of September 17, 1998 (the "Existing Credit Agreement");
and
WHEREAS, the Borrower has requested that the Lenders amend
and restate the Existing Credit Agreement; and
WHEREAS, the Lenders and the Agent are willing to amend and
restate the Existing Credit Agreement and to continue to make
certain credit 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.
"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 (the "Debt Rating Date") and continuing
until, but not including, the immediate next Debt Rating Date:
Applicable
Interest
Addition
(Eurodollar
Level Debt Rating spread)
----- ----------- ---------
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% at Level III; 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% at
Level II.
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% at Level IV); 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.
"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.
"BAS" means Banc of America Securities LLC, a Delaware
limited liability company.
"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.
"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.
"Collateral Agent" means Bank of America, N.A. in its
capacity as collateral agent for the benefit of the secured
parties under the Intercreditor Agreement.
"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 financial statements of the
Borrower referred to in Section 6.01(f)(1).
"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 Acquisition by the Borrower
of Saks effective September 17, 1998 (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 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 (iii)
without duplication, 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. ?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 number 919266 issued for the
account of the Borrower on December 4, 1996 by Bank of
America, N.A. (successor in interest to 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.
"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.
"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).
"Intercreditor Agreement" means an Intercreditor
Agreement to be entered into by the Collateral Agent and the
Secured Parties in connection with any pledge of capital
stock required under Section 7.18(b) providing pari passu
security interests and pro rata application of proceeds to
the Secured Parties , as amended, supplemented or replaced
from time to time.
"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, there shall be not more
than fifteen (15) 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 fifteen
(15) Interest Periods in effect on any day for all
Fixed Rate Loans hereunder; 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, Bank of
America, 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 Bank of
America with respect to the Existing Letters of Credit.
"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 unaudited consolidated financial statements
of the Borrower and its Subsidiaries for and as of the
fiscal quarter ended May 1, 1999) (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.
"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 (or any affiliate of
any Lender) which arise under a Swap Agreement covering all
or a portion of any Revolving Credit Outstandings, 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 Bank of America as its
prime rate, which rate may not be the lowest rate of
interest charged by Bank of America to its customers.
"Principal Office" means the office of the Agent at
Bank of America, N.A., presently located at Independence
Center, 101 N. Tryon Street, 15th Floor, NC1-001-15-04,
Charlotte, North Carolina, 28255 Attention: 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 Outstandings" means, at any time of
determination, the aggregate principal amount of all
Revolving Credit Loans and Competitive Bid Loans
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 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 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.
"Secured Parties" means all of (a) the Agent and the
Lenders hereunder and (b) the "Agent" and the "Lenders" as
defined in the 364 Day Facility Credit Agreement.
"Securitization Subsidiary" means Saks Credit
Corporation, Saks Transitional Credit Corporation, National
Bank of the Great Lakes, SFA Finance Company II and any
other present or future Subsidiary (including any credit
card bank) of the Borrower 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, Bank
of America 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 Credit Agreement" means that certain
Credit Agreement among the Borrower, the Agent, the Co-
Syndication Agents, the Documentation Agent and the Lenders
of even date, as amended, modified, supplemented, refinanced
or replaced from time to time.
"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 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.
"Total Swing Line Commitment" means an amount equal to
$50,000,000.
"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 consolidated financial statements of the Borrower and its
Subsidiaries referred to in Section 6.01(f)(i) for the Fiscal
Year ended January 30, 1999.
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 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 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, 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 or the provisions of Section 2.16, 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 (i) such
defaulting Lender shall not be entitled to receive payments of
principal, interest or fees with respect to such deficiency
advance until such deficiency advance (together with interest
thereon as provided in clause (ii)) shall be paid by such Lender
and (ii) 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
Federal Funds Rate, 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, BAS and Bank of
America such other fees for their own account as may be agreed
to in a separate writing or writings.
2.16 Intraday Funding.
Without limiting the provisions of Section 2.13, unless the
Borrower or any Lender has notified the Agent not later than
12:00 Noon of the Business Day before the date any payment
(including in the case of Lenders any Loan) to be made by it is
due, that it does not intend to remit such payment, the Agent
may, in its discretion, assume that Borrower or each Lender, as
the case may be, has timely remitted such payment in the manner
required hereunder and may, in its discretion and in reliance
thereon, make available such payment (or portion thereof) to the
Person entitled thereto as otherwise provided herein. If such
payment was not in fact remitted to the Agent in the manner
required hereunder, then:
(i) if the Borrower failed to make such payment, each
Lender shall forthwith on demand repay to the Agent the
amount of such assumed payment made available to such
Lender, together with interest thereon in respect of each
day from and including the date such amount was made
available by the Agent to such Lender to the date such
amount is repaid to the Agent at the Federal Funds Rate; and
(ii) if any Lender failed to make such payment after
the Agent has provided the corresponding amount to the
Borrower, the Agent shall be entitled to recover such
corresponding amount forthwith upon the Agent?s demand
therefor, the Agent promptly shall notify the Borrower, and
the Borrower shall promptly pay an amount equal to such
payment to the Agent in immediately available funds upon
receipt of such demand.
The Agent also shall be entitled to recover interest on such
payment amount in respect of each day from the date an amount
equal to such payment was made available by the Agent to the
Borrower to the date an amount equal to such payment is recovered
by the Agent, (A) from such Lender at a rate per annum equal to
the daily Federal Funds Rate or (B) from the Borrower, at a rate
per annum equal to the interest rate applicable to the Loan which
includes an amount equal to such payment. Until the Agent shall
recover an amount equal to such payment, together with interest
thereon, an amount equal to such payment shall constitute a
deficiency advance within the meaning of Section 2.13. Nothing
herein shall be deemed to relieve any Lender from its obligation
to fulfill its commitments hereunder or to prejudice any rights
which the Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
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, 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, 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) a certificate of the secretary or assistant
secretary of the Borrower and each Guarantor as to the
absence of any change to the Organizational Documents or
Operating Documents of the Borrower and each Guarantor
since September 17, 1998 or February 18, 1999, respectively,
(the date certified copies were last delivered to the
Agent).
(vi) 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;
(vii) 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;
(viii) notice of appointment of the initial
Authorized Representative of the Borrower in the form of
Exhibit C hereto;
(ix) certificate of an Authorized Representative dated
the date hereof demonstrating compliance with the financial
covenants contained in Sections 8.02 and 8.03, all as of May
1, 1999 substantially in the form of Exhibit N attached
hereto;
(x) all fees payable by the Borrower on the date
hereof to the Agent, Bank of America, BAS and the Lenders,
including any upfront fee as agreed to in writing;
(xi) 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
(xii) 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) 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 January 30, 1999 in the business, business
prospects, results of operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a
whole, or in the facts and information regarding such
entities as represented to date; and
(ii) 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 and after taking into
account 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 solely for the purpose of the
representation and warranty contained in such Section 6.01(f)(i)
but not for the purpose of any cross reference to such Section
6.01(f)(i) or to the financial statements described therein
contained in any other provision of Section 6.01(f)(i) or
elsewhere in this Agreement;
(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) any
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 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 consolidated income statement,
balance sheet, and statements of cash flow and changes in
shareholders' equity of the Borrower and its Subsidiaries
for the Fiscal Year ended January 30, 1999 and the notes
thereto and (2) the unaudited interim consolidated income
statement, balance sheet and statements of cash flow in
each case without notes, for and as of the three- month
period ending May 1, 1999. Except as set forth therein,
such financial statements present fairly, in all material
respects, the financial condition of the Borrower and its
Subsidiaries as of the Fiscal Year and interim period then
ended and the results of operations for the Fiscal Year and
interim period then ended, all in conformity with Generally
Accepted Accounting Principles applied on a basis consistent
with prior periods, subject to, in the case of the interim
period then ended, full footnote disclosure and year and
audit adjustments;
(ii) since January 30, 1999, 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. ? 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; and
(f) 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 Collateral
Agent for the benefit of the Secured Parties each of the
following:
(i) a pledge agreement (the "Pledge Agreement") to be
entered into by the Borrower or Subsidiary (excluding any
Foreign 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
Collateral Agent pledging (a) all such capital stock owned
by the Borrower or such Subsidiary but not in excess of 65%
of all such capital stock or ownership interests of such
Foreign Subsidiary entitled to vote in the election of
directors (or persons performing similar functions) and (b)
100% of all other 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 Collateral
Agent and the Secured Parties as to matters regarding the
enforceability of such Pledge Agreement and the status of
such Pledged Stock in form and substance acceptable to the
Collateral 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
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, enforcement, 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 September 17, 1998
and Indebtedness incurred after September 17, 1998 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 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);
(viii) Any guaranty of Indebtedness of the Borrower
or any Guarantor which is permitted to be incurred pursuant
to this Section 8.04; and
(ix) Indebtedness outstanding under the 364 Day
Facility Credit Agreement.
(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. 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 September 17,
1998 and the retained earnings of Securitization
Subsidiaries as of September 17, 1998 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 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 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 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 Bank of
America, BAS 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, Bank of America (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. Bank of America (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
Bank of America (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 the
occurrence of the Total Facility Termination Date.
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 be of a
constant, and not varying, percentage of all of its rights and
obligations under this Agreement and its Notes; 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, any partial assignment of a
Lender's Revolving Credit Commitment shall be in an 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 its Revolving
Credit 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) 940-4708
Telefacsimile: (205) 940-4709
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 Bank of America in its capacity
as the initial Issuing Bank:
Bank of America, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 388-6483
Telefacsimile: (704) 386-9923
with a copy to:
Bank of America, N.A.
100 North Tryon Street, 16th Floor
NC1-007-16-11
Charlotte, North Carolina 28255
Attention: Mr. William G. Manley
Telephone: (704) 386-6642
Telefacsimile: (704) 388-8268
(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 or increase the Total Revolving Credit
Commitment, (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
(or an affiliate of any Lender) under a Swap Agreement covering
all or any portion of Revolving Credit Outstandings 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 such 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, or (d) any Lender shall fail on
two or more occasions during any twelve-month period to make the
payment required by it under Section 2.16, each of which failure
shall have resulted in the Borrower making a payment to the Agent
pursuant to the terms of Section 2.16, 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 all of its Loans to another
Eligible Assignee identified by the Borrower and willing to
become a Lender hereunder 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 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, or (B) pay to
the Affected Lender the aggregate principal balance of 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 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 have any rights or obligations
hereunder or thereunder or under any of the other Loan Documents
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. 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.
11.21 Special Funding Option.
(a) Notwithstanding anything to the contrary contained
herein, any Lender (for purposes of this Section 11.21, a
"Granting Lender") may grant to a special purpose funding vehicle
(for the purposes of this Section 11.21, an "SPC") the option to
make, on behalf of such Granting Lender, all or a portion of the
Loans which such Granting Lender is obligated to make (a "Funding
Obligation") hereunder, such option to be exercisable in the sole
discretion of the SPC, provided, however, that
(i) such Granting Lender?s obligations under this
Agreement and the Loan Documents shall remain unchanged,
including without limitation the indemnification obligations
of the Granting Lender pursuant to Section 10.05 hereof;
(ii) such Granting Lender shall remain solely
responsible to the other parties hereto for the performance
of all Funding Obligations;
(iii) the Borrower and the Lenders shall continue
to deal solely and directly with such Granting Lender in
connection with such Granting Lender?s rights and
obligations under this Agreement; the Agent shall continue
to deal directly with the Granting Lender as agent for the
SPC with respect to distribution of payment of principal,
interest and fees, notices of Conversion and Continuation
and all other matters;
(iv) such Granting 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 provisions of this Agreement;
(v) the granting of such option shall not constitute
an assignment to or participation of such SPC of or in the
Granting Lender?s Revolving Credit Commitment and
Obligations owing thereto;
(vi) such SPC shall not become a Lender nor acquire any
rights hereunder as a result of the granting of such option;
(vii) such SPC shall not become obligated or
committed to make Loans as a result of the granting of such
option; and
(viii) if such SPC elects not to exercise such
option or otherwise fails to make all or any part of any
Loan, the Granting Lender shall retain its Funding
Obligation and be obligated to make the entire Loan or any
portion of such Loan not made by such SPC.
(b) Advances made by an SPC hereunder shall be deemed to
satisfy the Funding Obligation and utilize the Revolving Credit
Commitment of the Granting Lender as if, and to the same extent,
such Loans were made by such Granting Lender.
(c) Each party hereto agrees that no SPC shall be liable
for any indemnity or payment under this Agreement for which a
Granting Lender would otherwise be liable so long as, and to the
extent that, the Granting Lender provides such indemnity or makes
such payment.
(d) In addition to the requirements of Section 11.07, this
section may not be amended without the prior written consent of
each Granting Lender, all or part of whose Loans are being funded
by an SPC at the time of such Amendment.
[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:
_________________________
_________________________
BANK OF AMERICA, N.A., as
Administrative Agent for the
Lenders
By:
Title: Managing Director
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: Robert
Bottamedi
Vice President
Telephone: (212) 648-
1349
Telefacsimile: (212) 648-
5018
Wire Transfer Instructions:
Morgan Guaranty Trust Company of
New York
New York, New York
ABA# 021-000-238
For Credit to: Loan Dept.
A/C#999-99-090
Attention: Corporate
Processing - Mod 02
Reference: Saks 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 K.
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:
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
Vice President
Telephone: (212) 559-
6422
Telefacsimile: (212) 793-
7585
Wire Transfer Instructions:
Citibank, N.A.
New York, New York
ABA No.: 021000089
Account No.: 4063-2387
Attention: Debby
Freidland
Reference: Saks
Incorporated
BANK OF AMERICA, N.A.
By:
Name: Bill Manley
Title: Managing Director
Lending Office:
Bank of America, N.A.
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Ms. Kelly
Weaver
Agency Services
Telephone: (704)
388-6483
Telefacsimile: (704)
409-0014
Wire Transfer Instructions:
Bank of America, N.A.
ABA# 053000196
Reference: Saks
Incorporated
Account No.: 136621-
2250600
Attention: CCS/Agency
Services
NATIONAL CITY BANK
By:
Name: Terri L. Cable
Title: Senior Vice President
Lending Office:
National City Bank
1900 E. 9th Street
Cleveland, Ohio 44114
Attention: Ms. Terri
L. Cable
Telephone: (216) 575-
3354
Telefacsimile: (216) 222-
0003
Wire Transfer Instructions:
National City Bank
Cleveland, Ohio
ABA# 041000124
Reference: Saks
Incorporated
Account No.: 151804
Attention:
Commercial Loan
Operations
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office:
SouthTrust Bank, National
Association
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, National
Association
Birmingham, Alabama
ABA# 062000080
Account No.: 131009
Reference: Saks
Incorporated #5183349
Attention: Natalie
Johnson
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
Name:
Title: Senior Vice President
Lending Office:
First Tennessee Bank National
Association
165 Madison Ave.
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.:
Reference: Saks,
Incorporated.
Attention:
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:
Lending Office:
Hibernia National Bank
313 Carondelet Street
New Orleans, Louisiana 70130
Attention: Ms. Angela
Bentley
Portfolio Manager
Telephone: (504)
533-2319
Telefacsimile: (504)
533-5344
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA# 065000090
Account No.: 0520-36615
Reference: Saks
Incorporated
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.
Jonathan C. Tutor
Vice President
Telephone: (901) 762-
5684
Telefacsimile: (901) 762-5665
Wire Transfer Instructions:
First American National Bank
Nashville, Tennessee
ABA# 064000017
Account No.: 1002295498
Account Name: Commercial Loan
Clearing Account
Reference: Saks
Incorporated
Attention: Shirley
Gray
NORWEST BANK IOWA, NATIONAL
ASSOCIATION
By:
Name: Randall R. Stromley
Title: Vice President
Lending Office:
Norwest Bank Iowa, National
Association
MAC N8200-026
666 Walnut Street
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, National
Association
Des Moines, Iowa
ABA# 073000228
Account No.: 970656
Reference: Saks
Incorporated
Attention: Lisa
Torgerson
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
L. Oberling
Telephone: (312)
732-4644
Telefacsimile: (312)
732-1117
Wire Transfer Instructions:
The First National Bank of Chicago
Chicago, Illinois
ABA# 071000013
Account No.: 4811-5286-
0000
LSZ Incoming 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: David
Cawrse
Telephone: (404)
524-3700
Telefacsimile: (404)
584-5249
Wire Transfer Instructions:
ABA#
Account No.:
Credit:
Reference: Saks
Incorporated
Attention:
THE BANK OF NEW YORK
By:
Name: Howard F. Bascom, Jr.
Title: Vice President
Lending Office:
The Bank of New York
One Wall Street
New York, New York 10286
Attention: Howard F.
Bascom, Jr.
Vice President
Telephone: (212)
635-7894
Telefacsimile: (212)
635-1481
Wire Transfer Instructions:
Base Rate Loans: The Bank of New York
101 Barclay St., Commercial Loan
Servicing Dept.
ABA: 021000018
GLA No.: #111556
Reference: Saks
Incorporated
ie: principal, interest, fees
EuroDollar Loans: The Bank of New
York
101 Barclay St., Eurodollar/Cayman
Funding Area
ABA: #021000018
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
Minneapolis, Minnesota
ABA #: 091000022
Attention: Commercial
Loan Service Center
Account No.:
30000472160600
Reference: for Saks
Incorporated
A/C No.:
1735064729
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: J. William
Bloore
Vice President
Telephone: (415)
705-5041
Telefacsimile: (415)
705-7085
Wire Transfer Instructions:
Union Bank of California, N.A.
ABA No.: 122-000-496
Account No.: 070196431
Account Name: Wire
Transfer Clearing
Attention: 192-
Note Center CLO
Reference: Saks
Inc.
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: William B.
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.: 18-171-498
Attention:
Reference: Saks Inc.
ABN AMRO BANK N.V.
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite
1500
Chicago, Illinois 60603
Attention: Credit
Administration
Telephone: (312) 992-
5110
Telefacsimile: (312)
992-5111
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
F/O ABN AMRO Bank, N.V., Chicago
Branch CPU
Account No.: 650-001-1789-41
Ref: CPU 00443697
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: Megan S. Heisel
Title: Assistant Cashier
Lending Office:
Fifth Third Bank
38 Fountain Square Plaza
Maildrop 109054
Cincinnati, Ohio 45263
Attention: Megan S.
Heisel
Telephone: (513)
744-8662
Telefacsimile: (513)
744-5947
Wire Transfer Instructions:
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
ABA# 042000314
Account No.: 72876175,
Commercial Loan
Operations
Attention: Jennifer
Pund
Reference: Saks
Incorporated
BANK
OF MONTREAL
By:
Name:
Title:
Lending Office:
Bank of Montreal
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Lynn
Durning
Telephone: (312)
750-6044
Telefacsimile: (312)
750-6057
Wire Transfer Instructions:
ABA# 071000288
Account No.: 124-856-6
Attention:
Reference: Saks
Incorporated
MELLON BANK, N.A.
By:
Name:
Title:
Lending Office:
Mellon Bank
1 Mellon Bank Center
Room 370
Pittsburgh, Pennsylvania 15258-
0001
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: Loan
Admin.
Reference: Saks
Incorporated
FIRST UNION NATIONAL BANK
By:
Name:
Title:
By:
Name:
Title:
Lending Office:
First Union National Bank
999 Peachtree Street, 9th Floor
Atlanta, Georgia 30309
Telephone: (404) 827-
7159
Telefacsimile: (404) 827-
7199
Attention: Rob Sevin
Wire Transfer Instructions:
First
Union National Bank
Jacksonville, Florida
ABA No.: 063000021
Attention: Cindy
Petry or Julie Alexander
Reference: Saks
Incorporated
Account Name: Commercial Loans
Account No.: GL145916
2008
FIRSTAR BANK, NATIONAL ASSOCIATION
f/k/a STAR BANK, N.A.
By:
Name:
Title:
Lending Office:
Firstar Bank, National Association
425 Walnut Street, ML 8160
Cincinnati, Ohio 45201
Attention: Richard W.
Neltner,
Senior Vice President
Telephone: (513)
632-4073
Telefacsimile: (513)
632-2068
Wire Transfer Instructions:
Firstar Bank, N.A.
ABA# 042-000-013
Account No.: 990-189 3,
Commercial Loans
Reference: Saks
Incorporated
Attention: Brenda
Leuthy, Commercial Loan
Operations
FLEET BANK, N.A.
By:
Name: Thomas J. Bullard
Title: Vice President
Lending Office:
Fleet Bank, N.A.
One Federal Street, Mail Stop:
MAOFD071
Boston, MA 02110-2010
Attention: Thomas J.
Bullard
Telephone: (617)
346-0146
Telefacsimile: (617)
346-0689
Wire Transfer Instructions:
Fleet Bank, N.A.
CLS WIRE CLEARING A/C
ABA# 011000138
Account No.: GL
1510351-03156
Reference: Saks
Incorporated
Attention: Dwayne
Nelson
AMSOUTH BANK
By:
Name: David A. Simmons
Title: Senior Vice President
Lending Office:
AmSouth Bank
1900 Fifth Avenue North
Birmingham, Alabama 35203
Attention: David A.
Simmons
Telephone: (205)
326-5924
Telefacsimile: (205)
801-0157
Wire Transfer Instructions:
AmSouth Bank
Birmingham, Alabama
ABA# 062000019
Account Name: Clearing House
Account
Account No.:
001102450802100
Reference: Saks
Incorporated
Attention: Carla
Moore
MERCANTILE BANK NATIONAL
ASSOCIATION
By:
Name:
Title:
Lending Office:
Mercantile Bank
One Mercantile Center
7th & Washington
St. Louis, Missouri 63101
Attention: Stephen M.
Reese
Telephone: (314)
418-2459
Telefacsimile: (314)
418-1963
Wire Transfer Instructions:
Mercantile Bank
St. Louis, Missouri
ABA# 081000210
Account No.: 140117-939
Attention: Commercial
Loan Operations
Reference:
EXHIBIT A
Commitments
Revolving Applicable
Credit Committment
Lender Commitment Percentage
- ------ ----------- ---------
Bank of America, N.A. $60,000,000
Morgan Guaranty Trust Company of
New York $50,000,000
The Chase Manhattan Bank $50,000,000
Citibank, N.A. $50,000,000
ABN AMRO Bank NV $20,000,000
The Bank of New York $37,500,000
The Bank of Nova Scotia $37,500,000
BankBoston, N.A. $37,500,000
Credit Lyonnais Atlanta Agency $37,500,000
The First National Bank of Chicago $37,500,000
First Union National Bank $37,500,000
Norwest Bank Iowa, National
Association $37,500,000
Wachovia Bank, N.A. $37,500,000
AmSouth Bank $20,000,000
Bank of Montreal $20,000,000
First American National Bank $20,000,000
Mellon Bank, N.A. $20,000,000
Union Bank of California, N.A. $20,000,000
U.S. Bank National Association $20,000,000
Fleet Bank, N.A. $17,500,000
Hibernia National Bank $15,000,000
First Tennessee Bank National
Association $12,500,000
Mercantile Bank National
Association $12,500,000
National City Bank $12,500,000
SouthTrust Bank, National
Association $12,500,000
Fifth Third Bank $10,000,000
Firstar Bank, N.A. $7,500,000
------------
Total Facility $750,000,000 100.000%
EXHIBIT B
Form of Assignment and Acceptance
Reference is made to that certain Second Amended and
Restated Credit Agreement (Five Year Facility) dated as of August
26, 1999 (the "Credit Agreement") among the Borrower, the
Lenders, the Agent and the Co-Agents. Terms defined in the
Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1
attached hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
without recourse and without representation or warranty except as
expressly set forth herein, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to the Assignor's
rights and obligations under the Credit Agreements and the other
Loan Documents as of the date hereof equal to the percentage
interest specified on Schedule 1 of all outstanding rights and
obligations under each of the Credit Agreement and the other Loan
Documents. After giving effect to such sale and assignment, the
Assignee's Revolving Credit Commitment and the amount of the
Loans owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its
obligations under the Loan Documents or any other instrument or
document furnished pursuant thereto; and (iv) attaches the
promissory notes evidencing the Revolving Credit Loans held by
the Assignor and requests that the Agent exchange such promissory
notes for new promissory notes payable to the order of the
Assignee in an amount equal to the Revolving Credit Commitment
and assumed by the Assignee pursuant hereto and new promissory
notes payable to the Assignor in an amount equal to the
Revolving Credit Commitment retained by the Assignor, if any, as
specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial
statements referred to in Sections 6.01(f) and 7.01 thereof and
such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, any Co-Agent,
the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreements are
required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under
Section 4.06.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance and
recording by the Agent. The effective date for this Assignment
and Acceptance (the "Effective Date") shall be the date of
acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from
and after the Effective Date, the Agent shall make all payments
under the Credit Agreement and the Notes in respect of the
interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of
Georgia.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Principal amount of 364 Day Note payable to Assignee:
$_______
Principal amount of 364 Day Note payable to Assignor:
$_______
Applicable Commitment Percentage interest assigned:
________%
Assignee's Revolving Credit Commitment: $_______
Assignor's Revolving Credit Commitment after assignment:
$_______
Aggregate outstanding principal amount of Revolving
Credit Loans assigned: $_______
Aggregate outstanding principal amount of Competitive Bid
Loans
assigned: $_______
Assignor's outstanding principal amount of Revolving Credit
Loans
after assignment: $_______
Assignor's outstanding principal amount of Competitive Bid
Loans
after assignment: $_______
Principal amount of Revolving Credit Note payable to
Assignee: $_______
Principal amount of Revolving Credit Note payable to
Assignor: $_______
Effective Date (if other than date of acceptance by Agent):
_______, ____
[NAME OF ASSIGNOR], as Assignor
By:
Title:
Dated: , ____
[NAME OF ASSIGNEE], as Assignee
By:
Title:
Domestic Lending Office:
Eurodollar Lending Office:
Accepted [and Approved] *
this ___ day of ___________, ___
BANK OF AMERICA, N.A., As Administrative Agent
By:
Title:
[Approved this ____ day
of ____________, ____
SAKS INCORPORATED
By:
Title: ]
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to that certain Second Amended and
Restated Credit Agreement dated as of August 26, 1999 (the
"Credit Agreement") among Saks Incorporated (the "Borrower"), the
Lenders (as defined in the Credit Agreement), Bank of America,
N.A., as Administrative Agent for the Lenders ("Agent") and the
Co-Syndication Agents and Documentation Agent named therein.
Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Credit Agreements.
The Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the
Loan Documents, and hereby represents and warrants that (i) set
forth opposite each such individual's name is a true and correct
statement of such individual's office (to which such individual
has been duly elected or appointed), a genuine specimen signature
of such individual, (ii) each such individual has been duly
authorized by the Borrower to act as Authorized Representative
under the Loan Documents, and (iii) each such individual may be
notified by the Agent at the address set forth for the Borrower
in Section 11.02 of the Credit Agreements:
Name and Address Office Specimen Signature
Douglas E. Coltharp Executive Vice
_________________ President and Chief
_________________ Financial Officer
Scott A. Honnold Vice President
_________________ and Treasurer
_________________
James S. Scully Vice President and
_________________ Treasurer
_________________
Charles Hansen Senior Vice President
_________________
_________________
Borrower hereby revokes (effective upon receipt hereof by the
Agent) the prior appointment of ________________ as an Authorized
Representative.
This the ____ day of __________, ____.
SAKS INCORPORATED
By:
Title:
EXHIBIT D
Form of Borrowing Notice--Revolving Credit Loans and Swing Line
Loans and/or Competitive Bid Quote Request
To: Bank of America, N.A., as Administrative Agent
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, NC 28255
Telefacsimile: 704-386-9923
Attention: Mr. Herbert Boyd, Agency Services
Reference is hereby made to that certain Second Amended and
Restated Credit Agreement dated as of August 26, 1999 (the
"Agreement") among Saks Incorporated (the "Borrower"), the
Lenders (as defined in the Agreement), Bank of America, N.A., as
Administrative Agent for the Lenders ("Agent") and the Co-
Syndication Agents and Documentation Agent named therein.
Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
I. The Borrower through its Authorized Representative
hereby confirms its prior notice of borrowing given to the Agent
by telephone approximately at __________ __.m. on ____________,
_____ to the effect that Revolving Credit Loans or Swing Line
Loans of the type and amount set forth below be made on the date
indicated:
Type of Loan Interest Aggregate Date of Interest
(check one) Period(1) Amount(2) Loan(3) Rate(4)
Base Rate Loan ______
Eurodollar Loan ______
Swing Line Loan ______
II. Pursuant to Section 2.03(b) of the Agreement, the
Borrower hereby requests Competitive Bid Quote(s) for the
following proposed Competitive Bid Borrowing(s):
Interest Borrowing Quotation
Period (5) Amount(6) Date Date(7)
Competitive Bid
Borrowing ______
(1) For any Eurodollar Loan, one, two, three, six or nine months.
(2) Must be $5,000,000 or a multiple of $1,000,000 in excess thereof for
Revolving Credit Loans; must be $1,000,000 or a multiple of $100,000 in
excess thereof for Swing Line Loans.
(3) At least three (3) Eurodollar Business Days later if a Eurodollar
Loan; may be same Business Day in case of a Base Rate Loan or Swing Line
Loans.
(4) For Swing Line Loans only, as agreed between the Swing Line Lender
and the Borrower; the Swing Line Lender's receipt of this notice with any
interest rate set forth for a Swing Line Loan as to which it has not agreed
shall not be effective as to such rate selection nor evidence of any rate
selection. Upon the Swing Line Lender's written demand to Borrower for
repayment of outstanding Swing Line Loans, the outstanding balance of such
Swing Line Loans shall bear interest at the Base Rate and such indebtedness
shall be deemed to constitute a Base Rate Loan as of the date of such
demand.
(5) A period of not less than 7 days nor more than 120 days after the
making of the Competitive Bid Loan and ending on a Business Day.
(6) Each amount must be $5,000,000 or a larger multiple of $1,000,000.
(7) For use if an Absolute Rate is requested to be submitted before the
Borrowing Date.
The Borrower hereby requests that the proceeds of Revolving
Credit Loans or Swing Line Loans described in this Borrowing
Notice be made available to the Borrower as follows: [insert
transmittal instructions].
The undersigned hereby certifies with respect to its request
for a Revolving Credit Loan or a Swing Line Loan that:
1. No Default or Event of Default exists either now or
after giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in
Article VI of the Agreement and in the Loan Documents (other than
those expressly stated to refer to a particular date) are true
and correct as of the date hereof except that the representations
and warranties set forth in Section 6.01(d) and (e) of the
Agreement shall be deemed to include and take into account any
merger or consolidation permitted under Section 8.08 of the
Agreement and the reference to the financial statements in
Section 6.01(f)(i) of the Agreement shall be deemed to refer to
those financial statements most recently delivered to you
pursuant to Section 7.01 of the Agreement solely for the purpose
of the representation and warranty contained in such Section
6.01(f)(i) but not for the purpose of any cross reference to such
Section 6.01(f)(i) or to the financial statements described
therein contained in any other provision of Section 6.01(f) or
elsewhere in the Agreement; and
3. After giving effect to Loans requested hereby, (i) the
Total Outstandings will not exceed the Total Revolving Credit
Commitment and (ii) Swing Line Outstandings will not exceed the
Total Swing Line Commitment.
SAKS INCORPORATED
By:
Authorized Representative
EXHIBIT E
[Reserved]
EXHIBIT F
Form of Competitive Bid Quote
[Date]
TO: Bank of America, N.A., as Administrative Agent
ATTENTION: ________________, Agency Services
RE: Competitive Bid Quote to Saks Incorporated (the
"Borrower")
This Competitive Bid Quote is given in accordance with
Section 2.03(c) of that certain Second Amended and Restated
Credit Agreement dated as of August 26, 1999 (as amended,
modified and supplemented from time to time, the "Credit
Agreement") by and among the Borrower, the Lenders parties
thereto, Bank of America, N.A., as Administrative Agent and the
Co-Syndication Agents and Documentation Agent. Terms defined in
the Credit Agreement are used herein as defined therein.
In response to the Borrower's invitation dated __________,
______, we hereby make the following Competitive Bid Quote(s) on
the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Competitive Bid Loan(s) in the
following principal amount(s) for the following Interest
Period(s) and at the following rate(s):
Borrowing Quotation Interest
Date Date1 Amount2 Period3
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set
forth in the Credit Agreement, irrevocably obligates us to make
the Competitive Bid Loan(s) for which any offer(s) (is/are)
accepted, in whole or in part.
Very truly yours,
[INSERT NAME OF BANK]
By:
Name:
Title:
Dated: _____________
_________________________
1 As specified in the related Competitive Bid Quote Request,
for use if an Absolute Rate is requested to be submitted
before the Borrowing Date.
2 The principal amount offered for each Interest Period may
not exceed the principal amount of the Competitive Bid
Borrowing requested. Offers must be made for at least
$1,000,000 or an integral multiple of $1,000,000 in excess
thereof.
3 A period of not less than 7 days nor more than 120 days
after the making of the Competitive Bid Loan and ending on a
Business Day.
EXHIBIT G
Form of Guaranty Agreement
AMENDED AND RESTATED GUARANTY AGREEMENT
THIS AMENDED AND RESTATED GUARANTY AGREEMENT (the "Guaranty
Agreement" or the "Guaranty"), is made and entered into as of
this _____ day of ___________, 1999 by and between each of the
undersigned parties signatory hereto as "Guarantors," each other
Person which becomes a party hereto pursuant to a Guarantor
Joinder Agreement (as such terms are defined in the Credit
Agreement hereinafter described) (collectively, the "Guarantors"
and individually, each a "Guarantor"); and BANK OF AMERICA, N.A.,
a national banking association, as Administrative Agent (the
"Agent") for each of the lenders now or hereafter party to the
Credit Agreement (collectively, the "Lenders" and individually, a
"Lender");
W I T N E S S E T H:
WHEREAS, the Agent and the Lenders have agreed, pursuant to
the terms of that certain Second Amended and Restated Credit
Agreement dated as of August 26, 1999 (as amended, modified or
supplemented from time to time, the "Credit Agreement") among the
Agent, the Co-Syndication Agents and the Documentation Agent
(collectively, the "Co-Agents") and the Lenders named therein and
Saks Incorporated (the "Borrower"), 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 will include (A) a standby letter of
credit facility of $150,000,000, and (B) a swing line facility of
$50,000,000 (the "Credit Facility"); and
WHEREAS, all capitalized terms not otherwise defined herein
shall have the meanings therefor set forth in the Credit
Agreement; and
WHEREAS, each of the Guarantors is a direct or indirect
subsidiary of the Borrower; and
WHEREAS, it is a requirement under the Credit Agreement that
each Guarantor (including without limitation each Guarantor who
executes a Guarantor Joinder Agreement and becomes a party
hereto) guarantees to the Lenders payment of the Borrower's
Liabilities (as hereinafter defined); and
WHEREAS, each Guarantor will materially benefit from the
Credit Facility.
NOW, THEREFORE, in order to induce the Lenders to make
additional Loans and to induce the Issuing Bank to issue
additional Letters of Credit under the Credit Facility to or on
behalf of the Borrower, each Guarantor agrees as follows:
1. Guaranty. For all purposes of this Guaranty
Agreement, "Borrower's Liabilities" means: (a) the Borrower's
prompt payment in full, when due, by acceleration or otherwise,
or declared due and at all such times, of all Obligations under
each of the Credit Facility and the Credit Agreement heretofore,
now or at any time or times hereafter owing, arising, due or
payable (including without limitation interest accruing after the
filing of any bankruptcy or similar petition); and (b) the
Borrower's prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and
provision to be performed, observed or discharged by the Borrower
under the Credit Agreement and all other Loan Documents related
to the Credit Agreement. Each Guarantor (including without
limitation each Guarantor who executes a Guarantor Joinder
Agreement and becomes a party hereto) hereby jointly and
severally, unconditionally, absolutely, continually and
irrevocably guarantees to the Lenders payment and performance of
the Borrower's Liabilities. Each Guarantor's obligations to the
Lenders under this Guaranty Agreement are hereinafter
collectively referred to as the "Guarantor's Obligations";
provided, however, that the liability of each Guarantor with
respect to the Guarantor's Obligations shall be limited to an
aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any
comparable provisions of any state law.
Each Guarantor agrees that it is jointly and severally,
directly and primarily liable for the Borrower's Liabilities.
2. Payment. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal,
interest, premium, fee (including, but not limited to, loan fees
and attorneys' fees and expenses), amount payable pursuant to any
indemnity or otherwise, when and as the same shall become due,
whether according to its terms, by acceleration, or otherwise, or
upon the occurrence of any other Event of Default under the
Credit Agreement that has not been cured or waived, then each
Guarantor, upon demand thereof by the Agent or its successors or
assigns, will AS OF THE DATE OF AGENT'S DEMAND fully pay to the
Agent for the benefit of the Lenders, subject to any restriction
set forth in Section 1 hereof, an amount equal to all Guarantor's
Obligations then due and owing.
3. Unconditional Obligations. This is a guaranty of
payment and not of collection. The Guarantor's Obligations under
this Guaranty Agreement shall be joint and several, absolute and
unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, the Notes or any other
Loan Document or any other guaranty of the Borrower's
Liabilities, and shall not be affected by any action taken under
the Credit Agreement, the Notes or any other Loan Document, any
other guaranty of the Borrower's Liabilities, or any other
agreement between the Agent, the Co-Agents or the Lenders and the
Borrower or any other Person, in the exercise of any right or
power therein conferred, or by any failure or omission to enforce
any right conferred thereby, or by any waiver of any covenant or
condition therein provided, or by any acceleration of the
maturity of any of the Borrower's Liabilities, or by the release
or other disposal of any security for any of the Borrower's
Liabilities, or by the dissolution of the Borrower or the
combination or consolidation of the Borrower into or with another
entity or any transfer or disposition of any assets of the
Borrower or by any extension or renewal of the Credit Agreement,
the Notes or any other Loan Document related to the Credit
Agreement, in whole or in part, or by any modification,
alteration, amendment or addition of or to the Credit Agreement,
the Notes or any other Loan Document related to the Credit
Agreement, any other guaranty of the Borrower's Liabilities, or
any other agreement between the Agent, the Co-Agents or the
Lenders and the Borrower or any other Person, or by any other
circumstance whatsoever (with or without notice to or knowledge
of any Guarantor) which may or might in any manner or to any
extent vary the risks of any Guarantor, or might otherwise
constitute a legal or equitable discharge of a surety or
guarantor; it being the purpose and intent that this Guaranty
Agreement and the Guarantor's Obligations hereunder shall be
absolute, irrevocable and unconditional under any and all
circumstances and shall not be discharged except by payment as
herein provided.
4. Currency and Funds of Payment. Each Guarantor hereby
guarantees that the Guarantor's Obligations will be paid in
lawful currency of the United States of America and in
immediately available funds, regardless of any law, regulation or
decree now or hereafter in effect that might in any manner affect
the Borrower's Liabilities, or the rights of any Lender with
respect thereto as against the Borrower, or cause or permit to be
invoked any alteration in the time, amount or manner of payment
by the Borrower of any or all of the Borrower's Liabilities.
5. Events of Default. In the event that there shall occur
an Event of Default under either Credit Agreement, then
notwithstanding any collateral that the Lenders may possess from
Borrower, any Guarantor or any other guarantor of the Borrower's
Liabilities, or any other party, at the Agent's election and
without notice thereof or demand therefor, so long as such Event
of Default shall be continuing, the Guarantor's Obligations shall
automatically and immediately become due and payable.
6. Suits. Each Guarantor from time to time shall pay to
the Agent for the benefit of the Lenders, on demand, at the
Agent's place of business set forth in the Credit Agreement, the
Guarantor's Obligations as they become or are declared due, and
in the event such payment is not made forthwith, the Agent on
behalf of the Lenders may proceed to suit against any one or more
or all of the Guarantors and/or any other guarantor of the
Borrower's Liabilities. At the Agent's election, one or more and
successive or concurrent suits may be brought hereon by the Agent
against any one or more or all of the Guarantors, whether or not
suit has been commenced against the Borrower, any other guarantor
of the Borrower's Liabilities, or any other Person and whether or
not the Agent or any Lender has taken or failed to take any other
action to collect all or any portion of the Borrower's
Liabilities.
7. Set-Off and Waiver. Each Guarantor waives any right to
assert against the Agent and the Lenders as a defense,
counterclaim, set-off, or cross claim, any defense (legal or
equitable), or other claim which such Guarantor may now or at any
time or times hereafter have against the Borrower, without
waiving any additional defenses, set-offs, counterclaims or other
claims otherwise available to such Guarantor against any Person
other than the Agent or any Lender. If at any time or times
hereafter the Agent or any Lender employs counsel for advice or
other representation to enforce the Guarantor's Obligations that
arise out of a default hereunder or an Event of Default under
either Credit Agreement, then, in any of the foregoing events,
all of the reasonable attorneys' fees actually incurred and
arising from such services and all reasonable expenses, costs and
charges in any way or respect arising in connection therewith or
relating thereto shall be jointly and severally paid by the
Guarantors to the Agent, on demand.
8. Waiver; Subrogation.
Each Guarantor hereby waives notice of the following events
or occurrences: (i) the Agent's acceptance of this Guaranty
Agreement; (ii) the Lenders' heretofore, now or from time to time
hereafter loaning monies or giving or extending credit to or for
the benefit of the Borrower, whether pursuant to the Credit
Agreement or the Notes or any amendments, modifications, or
additions thereto, or alterations, substitutions, refinancings or
extensions thereof; (iii) the Agent, the Co-Agents, the Lenders
or the Borrower heretofore, now or at any time or times
hereafter, obtaining, amending, substituting for, releasing,
waiving or modifying the Credit Agreement, the Notes or any other
Loan Documents; (iv) presentment, demand, notices of default,
non-payment, partial payment and protest; (v) the Agent, the Co-
Agents or the Lenders heretofore, now or at any time or times
hereafter granting to the Borrower (or any other party liable to
the Lenders on account of the Borrower's Liabilities) any
indulgence or extensions of time of payment of the Borrower's
Liabilities; and (vi) the Agent or the Lenders heretofore, now or
at any time or times hereafter accepting from the Borrower or any
other Person, any partial payment or payments on account of the
Borrower's Liabilities or any collateral securing the payment
thereof or the Agent settling, subordinating, compromising,
discharging or releasing the same. Each Guarantor agrees that
the Agent, the Co-Agents and each Lender may heretofore, now or
at any time or times hereafter do any or all of the foregoing
events or occurrences in such manner, upon such terms and at such
times as the Agent, the Co-Agents and each Lender, in its sole
and absolute discretion, deems advisable, without in any way or
respect impairing, affecting, reducing or releasing such
Guarantor from the Guarantor's Obligations, and each Guarantor
hereby consents to each and all of the foregoing events or
occurrences.
Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantor's Obligations under this Guaranty
Agreement may be enforced by the Agent on behalf of the Lenders
upon demand by the Agent to such Guarantor without the Agent
being required, each Guarantor expressly waiving any right it may
have to require the Agent, to (i) prosecute collection or seek to
enforce or resort to any remedies against the Borrower or any
other guarantor of the Borrower's Liabilities, IT BEING EXPRESSLY
UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT
DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE AGENT,
AND THE PROVISIONS HEREOF ENFORCED BY THE AGENT, EFFECTIVE AS OF
THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING
UNDER THE CREDIT AGREEMENT, or (ii) seek to enforce or resort to
any remedies with respect to any security interests, liens or
encumbrances granted to the Agent by the Borrower or any other
Person on account of the Borrower's Liabilities or any guaranty
thereof. Neither the Agent nor any Lender shall have any
obligation to protect, secure or insure any of the foregoing
security interests, liens or encumbrances on the properties or
interests in properties subject thereto. The Guarantor's
Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Agent, any Co-Agent or any Lender's
failure or delay to do or take any of the acts, actions or things
described in this Guaranty Agreement including, without limiting
the generality of the foregoing, those acts, actions and things
described in this Section 8.
Each Guarantor further agrees with respect to this Guaranty
Agreement that such Guarantor shall have no right of subrogation,
reimbursement or indemnity whatsoever, nor any right of recourse
to security for the Borrower's Liabilities. In addition, each
Guarantor hereby waives and renounces any and all rights it has
or may have for subrogation, indemnity, reimbursement or
contribution against the Borrower for amounts paid under this
Guaranty Agreement. This waiver is expressly intended to prevent
the existence of any claim in respect to such reimbursement by
any Guarantor against the estate of the Borrower within the
meaning of Section 101 of the United States Bankruptcy Code, and
to prevent each Guarantor from constituting a creditor of the
Borrower in respect of such reimbursement within the meaning of
Section 547(b) of the United States Bankruptcy Code in the event
of a subsequent case involving the Borrower.
9. Effectiveness; Enforceability. This Guaranty
Agreement shall be effective as of the date of the initial Loan
under the Credit Agreement and shall continue in full force and
effect with respect to (a) a Credit Facility until the Total
Facility Termination Date of such Credit Facility has occurred
and the Agent gives each Guarantor written notice of that fact at
each Guarantor's address on the signature pages hereto and (b) a
Swap Agreement with a Lender until all liabilities of the
Borrower to such Lender under such Swap Agreement have been paid
and satisfied in full and such Lender gives each Guarantor
written notice of that fact at each Guarantor's address on the
signature pages hereto. This Guaranty Agreement shall be binding
upon and inure to the benefit of each Guarantor, the Agent and
the Lenders and their respective successors and assigns.
Notwithstanding the foregoing, no Guarantor may, without the
prior written consent of the Agent, assign any rights, powers,
duties or obligations hereunder. Any claim or claims that the
Agent and the Lenders may at any time or times hereafter have
against any Guarantor under this Guaranty Agreement may be
asserted by the Agent by written notice directed to any one or
more or all of the Guarantors at the address specified below.
Each Guarantor warrants and represents to the Agent for the
benefit of the Lenders that it is duly authorized to execute,
deliver and perform this Guaranty Agreement, that this Guaranty
Agreement has been duly executed and delivered and is legal,
valid, binding and enforceable against such Guarantor in
accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and
by general equitable principles; and that such Guarantor's
execution, delivery and performance of this Guaranty Agreement do
not violate or constitute a breach of any documents of corporate,
partnership or other similar type governance or agreement to
which such Guarantor is a party, or any applicable laws.
10. Expenses. Each Guarantor agrees to be liable for the
payment of all reasonable fees and expenses, including reasonable
attorney's fees, actually incurred by the Agent in connection
with the negotiation, preparation or enforcement of this Guaranty
Agreement.
11. Reinstatement. Each Guarantor agrees that this
Guaranty Agreement shall continue to be effective or be
reinstated, as the case may be, at any time payment received by
the Agent under either Credit Agreement or this Guaranty
Agreement is rescinded or must be restored for any reason.
12. Governing Law. This Guaranty Agreement shall be
governed by and construed in accordance with the internal laws
and judicial decisions of the State of Georgia.
13. Counterparts. This Guaranty Agreement may be executed
in any number of counterparts, each of which shall be deemed to
be an original as against any party whose signature appears
thereon, and all of which shall constitute one and the same
instrument.
14. Reliance. Each Guarantor represents and warrants to
the Agent for the benefit of the Lenders that: (a) such
Guarantor has adequate means to obtain from Borrower, on a
continuing basis, information concerning Borrower and Borrower's
financial condition and affairs; (b) such Guarantor is not
relying on the Agent, any Co-Agent or any Lender, its or their
employees, agents or other representatives, to provide such
information, now or in the future; (c) such Guarantor is
executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by
providing this Guaranty; (d) such Guarantor has relied solely on
the Guarantor's own independent investigation, appraisal and
analysis of Borrower and Borrower's financial condition and
affairs in deciding to provide this Guaranty and is fully aware
of the same; (e) such Guarantor has not depended or relied on the
Agent, any Co-Agent or any Lender, its or their employees, agents
or representatives, for any information whatsoever concerning
Borrower or Borrower's financial condition and affairs or other
matters material to such Guarantor's decision to provide this
Guaranty or for any counseling, guidance, or special
consideration or any promise therefor with respect to such
decision; (f) no consent, approval or authorization of, or
filing, registration or qualification with, any Governmental
Authority is required on the part of or on behalf of such
Guarantor as a condition to the execution, delivery, and
performance of, or consummation of the transactions contemplated
by, this Guaranty Agreement; and (g) the execution, delivery and
performance of this Guaranty Agreement by such Guarantor will not
(i) result in the creation or imposition of any Lien upon any of
the properties or assets of such Guarantor or (ii) 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 such Guarantor is a party, or by which
the properties or assets of such Guarantor are bound. Each
Guarantor agrees that neither the Agent nor any Co-Agent nor any
Lender has any duty or responsibility whatsoever, now or in the
future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs and that,
if such Guarantor receives any such information from the Agent,
any Co-Agent or any Lender, its or their employees, agents or
other representatives, such Guarantor will independently verify
the information and will not rely on the Agent, any Co-Agent or
any Lender, its or their employees, agents or other
representatives, with respect to such information.
15. CONSENT TO JURISDICTION AND VENUE; WAIVER OF JURY TRIAL
AND CERTAIN DAMAGES.
a. IN THE EVENT THAT ANY ACTION, SUIT OR OTHER PROCEEDING
IS BROUGHT AGAINST ANY GUARANTOR BY OR ON BEHALF OF THE LENDERS
TO ENFORCE THE OBSERVANCE OR PERFORMANCE OF ANY OF THE PROVISIONS
OF THIS GUARANTY AGREEMENT, INCLUDING WITHOUT LIMITATION THE
COLLECTION OF ANY AMOUNTS OWING HEREUNDER, EACH SUCH GUARANTOR
HEREBY IRREVOCABLY (i) CONSENTS TO THE EXERCISE OF JURISDICTION
OVER SUCH GUARANTOR AND ITS PROPERTY BY THE UNITED STATES
DISTRICT COURTS IN, AND THE COURTS OF THE STATE OF, GEORGIA, AND
(ii) WAIVES ANY OBJECTION SUCH GUARANTOR MIGHT NOW OR HEREAFTER
HAVE OR ASSERT TO THE VENUE OF ANY SUCH PROCEEDING IN ANY COURT
DESCRIBED IN CLAUSE (i) ABOVE.
b. 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 GUARANTY AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
c. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN PARAGRAPH (a) OF THIS SECTION 15 ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
16. Release of Guaranty. Notwithstanding any other term of
this Guaranty, this Guaranty shall automatically terminate and be
of no further force or effect upon (and subject to the terms of)
Section 11.20 of the Credit Agreement.
[Signatures on following page.]
IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the day and year first written above.
GUARANTORS:
MCRAE?S, INC.
MCRAE?S OF ALABAMA, INC.
PARISIAN, INC.
MCRAE?S STORES PARTNERSHIP
By: McRae's, Inc., as Managing
Partner
SAKS HOLDINGS, INC.
SAKS & COMPANY
SAKS FIFTH AVENUE, ATLANTA, INC.
SAKS FIFTH AVENUE - STAMFORD, INC.
SAKS FIFTH AVENUE, INC.
SAKS FIFTH AVENUE OF OHIO, INC.
SAKS FIFTH AVENUE - LOUISIANA, INC.
SAKS FIFTH AVENUE OF MISSOURI, INC.
SAKS FIFTH AVENUE OF TEXAS, INC.
SAKS SPECIALTY STORES, INC.
S.F.A. DATA PROCESSING, INC.
SFA FOLIO COLLECTIONS, INC.
SAKS FIFTH AVENUE DISTRIBUTION
COMPANY
SFA REAL ESTATE COMPANY
HERBERGER'S DEPARTMENT STORES, LLC
By: Saks Incorporated, as member
CARSON PIRIE HOLDINGS, INC.
SAKS DISTRIBUTION CENTERS, INC.
SAKS SHIPPING COMPANY, INC.
MCRAE'S STORES SERVICES, INC.
By:
Name:
Title:
Address:
750 Lakeshore Parkway
Birmingham, Alabama 35211
Attention: President
BANK OF AMERICA, N.A., as
Administrative Agent for the
Lenders
By:
Name:
Title:
Address:
Bank of America, N.A.
231 South LaSalle Street, 9th
Floor
Chicago, Illinois 60697
Attention: Bridget Garavalia,
Managing Director
Telephone: 312-828-1259
Telefacsimile: 312-828-_____
EXHIBIT H
Form of Guarantor Joinder Agreement
THIS GUARANTOR JOINDER AGREEMENT (the "Agreement"), dated as
of __________________, ____, is by and between
_________________________, a ____________________ (the
"Company"), and BANK OF AMERICA, N.A., in its capacity as
Administrative Agent under that certain Second Amended and
Restated Credit Agreement, dated as of August 26, 1999 (as the
same may be modified or amended from time to time, the "Credit
Agreement"), among Saks Incorporated (the "Borrower"), Bank of
America, N.A., as Administrative Agent (the "Agent"), the Lenders
party thereto and the Co-Syndication Agents and the Documentation
Agent named therein.
The Borrower is required by Section 7.18 of the Credit
Agreement or has otherwise elected to cause the Company to become
a "Guarantor".
This Agreement is delivered in connection with that certain
Amended and Restated Guaranty Agreement dated as of September 17,
1998 among the Guarantors from time to time party thereto and the
Agent for the benefit of the Lenders (the "Guaranty Agreement").
All defined terms in the Guaranty Agreement are incorporated
herein by reference. Capitalized terms not otherwise defined
herein or incorporated from the Guaranty Agreement shall have the
meaning assigned thereto in the Credit Agreement.
Accordingly, the Company hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Company hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Company will be
deemed to be a party to the Guaranty Agreement and a "Guarantor"
for all purposes of the Guaranty Agreement, and shall have all of
the obligations of a Guarantor thereunder as if it had executed
the Guaranty Agreement. The Company hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Guaranty Agreement,
including without limitation all of the undertakings and waivers
of a Guarantor set forth therein. Without limiting the
generality of the foregoing terms of this paragraph 1, the
Company, subject to the limitations set forth in Section 1 of the
Guaranty Agreement, hereby jointly and severally, together with
the other Guarantors, guarantees to the Agent and the Lenders, as
provided in such Section 1 of the Guaranty Agreement, the prompt
payment when due, by acceleration or otherwise, of the Borrower's
Liabilities.
2. This Agreement may be executed in two or more
counterparts and by the different parties hereto on separate
counterparts, each constituting an original, but all together
constituting one and the same instrument.
[Signatures follow]
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed by its authorized officer, and the Agent, for
the benefit of the Lenders, has caused the same to be accepted by
its authorized officer, as of the day and year first above
written.
[COMPANY]
By
Title
Acknowledged and accepted:
BANK OF AMERICA, N.A., as
Administrative Agent for the
Lenders
By
Title
EXHIBIT I
Form of Revolving Credit Notes
_______________1 Atlanta, Georgia
_____________, _________
FOR VALUE RECEIVED, SAKS INCORPORATED, a Tennessee
corporation (the "Borrower"), hereby promises to pay to the order
of ___________________________________2 (the "Lender"), in its
individual capacity, at the office of BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders (the "Agent"), located at
Independence Center, 15th Floor, 101 North Tryon Street, NC1-001-
15-04, Charlotte, North Carolina 28255 (or at such other place or
places as the Agent may designate) at the times set forth in that
certain Second Amended and Restated Credit Agreement dated as of
August 26, 1999 among the Borrower, the financial institutions
party thereto (collectively, the "Lenders"), the Co-Syndication
Agents and Documentation Agent named therein and the Agent (as
amended and supplemented and in effect from time to time, the
"Credit Agreement"; all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the
Credit Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of
[_________________________________________]3 DOLLARS
($__________)1 or, if less than such principal amount, the
aggregate unpaid principal amount of all Revolving Credit Loans
(other than Competitive Bid Loans) made by the Lender to the
Borrower pursuant to the Credit Agreement on the Revolving Credit
Termination Date or such earlier date as may be required pursuant
to the terms of the Credit Agreement, and to pay interest from
the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates provided in
Article II of the Credit Agreement. All or any portion of the
principal amount of Loans may be prepaid as provided in the
Credit Agreement.
This Note is one of the Revolving Credit Notes in the
aggregate principal amount of $750,000,000 referred to in the
Credit Agreement and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby
made for a more complete statement of the terms and conditions
upon which the Revolving Credit Loans evidenced hereby were or
are made and are to be repaid. Payment of all amounts due under
this Revolving Credit Note is guaranteed by each Guarantor
pursuant to the Guaranty until such time as the Guaranty is
terminated in accordance with Section 11.20 of the Credit
Agreement.
_______________________________
1 Insert Lender's Revolving Credit Commitment in Arabic numerals.
2 Insert name of Lender in capital letters.
3 Insert Lender's Revolving Credit Commitment in words.
If payment of all sums due hereunder is accelerated under
the terms of the Credit Agreement or under the terms of the other
Loan Documents executed in connection with the Credit Agreement,
the then remaining principal amount and accrued but unpaid
interest shall bear interest which shall be payable on demand at
the rates per annum set forth in Article II of the Credit
Agreement, or the maximum rate permitted under applicable law, if
lower, until such principal and interest have been paid in full.
Further, in the event of such acceleration, this Revolving Credit
Note, and all other Revolving Credit Obligations of the Borrower
to the Lender shall, subject to the terms and conditions of the
Loan Documents, become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which
are hereby waived by the Borrower.
In the event this Revolving Credit Note is not paid when due
at any stated or accelerated maturity, the Borrower agrees to
pay, in addition to the principal and interest, all costs of
collection, including reasonable attorneys' fees actually
incurred, and interest thereon at the rates set forth above.
The Credit Agreement provides for the acceleration of the
maturity of this Revolving Credit Note upon the occurrence of
certain events and for prepayments of Revolving Credit Loans upon
the terms and conditions specified therein.
Except as permitted by Section 11.01 of the Credit
Agreement, this Revolving Credit Note may not be assigned by the
Lender to any other Person.
This Revolving Credit Note shall be governed by, and
construed in accordance with, the law of the State of Georgia.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers
or otherwise, hereby waive to the full extent permitted by law
the benefits of all provisions of law for stay or delay of
execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment
be obtained and execution issued against any other of them and
returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction
of the debt evidenced by this instrument, or until any other
proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this
Note any collateral deposited by any of said Persons as security.
Protest, notice of protest, notice of dishonor, diligence or any
other formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving
Credit Note to be made, executed and delivered by its duly
authorized representative as of the date and year first above
written, all pursuant to authority duly granted.
SAKS INCORPORATED
ATTEST:
By:
Title:
EXHIBIT J
Form of Competitive Bid Notes
Atlanta, Georgia
______________, _____
FOR VALUE RECEIVED, SAKS INCORPORATED, a Tennessee
corporation (the "Borrower"), hereby promises to pay to the order
of _______________________________________________ (the
"Lender"), in its individual capacity, at the office of BANK OF
AMERICA, N.A., as Administrative Agent for the Lenders (the
"Agent"), located at One Independence Center, 101 North Tryon
Street, NC1-001-15-04, Charlotte, North Carolina 28255 (or at
such other place or places as the Agent may designate) at the
times set forth in the Second Amended and Restated Credit
Agreement dated as of August 26, 1999 among the Borrower, the
financial institutions party thereto (collectively, the
"Lenders"), the Co-Syndication Agents and the Documentation Agent
named therein and the Agent (as amended, supplemented or restated
and in effect from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Credit Agreement), in lawful
money of the United States of America, in immediately available
funds, the aggregate unpaid principal amount of all Competitive
Bid Loans made by the Lender to the Borrower pursuant to the
Credit Agreement, and to pay interest on the unpaid principal
amount of each such Competitive Bid Loan, in like money, at said
office, for the period commencing on the date of such Competitive
Bid Loan until such Competitive Bid Loan shall be paid in full,
on the dates and at the rates agreed to between the Lender and
the Borrower pursuant to the procedure provided in Article II of
the Credit Agreement. The date, amount, type, interest rate and
maturity date of each Competitive Bid Loan made by the Lender to
the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior
to any transfer of this Competitive Bid Note, endorsed by the
Lender on the schedule attached hereto or any continuation
thereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of
the Borrower to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Competitive
Bid Loans made by the Lender. All or any portion of the
principal amount of Competitive Bid Loans may be prepaid as
provided in the Credit Agreement.
This Note is one of the Competitive Bid Notes referred to in
the Credit Agreement and is issued pursuant to and entitled to
the benefits of the Credit Agreement to which reference is hereby
made for a more complete statement of the terms and conditions
upon which the Competitive Bid Loans evidenced hereby were or are
made and are to be repaid. Payment of all amounts due under this
Competitive Bid Note is guaranteed by each Guarantor pursuant to
the Guaranty until such time as the Guaranty is terminated in
accordance with Section 11.20 of the Credit Agreement.
If payment of all sums due hereunder is accelerated under
the terms of the Credit Agreement or under the terms of the other
Loan Documents executed in connection with the Credit Agreement,
the then remaining principal amount and accrued but unpaid
interest thereafter shall bear interest which shall be payable on
demand at the rates per annum set forth in Article II of the
Credit Agreement, or the maximum rate permitted under applicable
law, if lower, until such principal and interest have been paid
in full. Further, in the event of such acceleration, this
Competitive Bid Note, and all other Obligations of the Borrower
to the Lender shall, subject to the terms and conditions of the
Loan Documents, become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which
are hereby waived by the Borrower.
In the event this Competitive Bid Note is not paid when due
at any stated or accelerated maturity, the Borrower agrees to
pay, in addition to the principal and interest, all costs of
collection, including reasonable attorneys' fees and
disbursements, and interest due hereunder thereon at the rates
set forth above.
The Credit Agreement provides for the acceleration of the
maturity of this Competitive Bid Note upon the occurrence of
certain events and for the prepayments of Competitive Bid Loans
upon the terms and conditions specified therein.
Except as permitted by Section 11.01 of the Credit
Agreement, this Competitive Bid Note may not be assigned by the
Lender to another Person.
This Competitive Bid Note shall be governed by, and
construed in accordance with, the law of the State of Georgia.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers
or otherwise, hereby waive to the full extent permitted by law
the benefits of all provisions of law for stay or delay of
execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment
be obtained and execution issued against any other of them and
returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction
of the debt evidenced by this instrument, or until any other
proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this
Competitive Bid Note any collateral deposited by any of said
Persons as security. Protest, notice of protest, notice of
dishonor, dishonor, demand, diligence or any other formality are
hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Competitive
Bid Note to be made, executed and delivered by its duly
authorized representative as of the date and year first above
written, all pursuant to authority duly granted.
SAKS INCORPORATED
ATTEST:
By:
Name:
Title:
SCHEDULE OF COMPETITIVE BID LOANS
This Competitive Bid Note evidences Competitive Bid Loans
made under the within-described Credit Agreement to the Borrower,
on the dates, in the principal amounts, of the Types, bearing
interest at the rates and maturing on the dates set forth below,
subject to the payments and prepayments of principal set forth
below:
Date of Loan
Principal Amount of Loan
Interest Rate Maturity Date of Loan
Principal Amount Prepaid Payment Made By (Name of Borrower)
Unpaid Principal
Notation Made By
EXHIBIT K
Form of Swing Line Note
$50,000,000 Atlanta, Georgia
_______________, 199
FOR VALUE RECEIVED, SAKS INCORPORATED, a Tennessee
corporation (the "Borrower"), hereby promises to pay to the order
of BANK OF AMERICA, N.A., (the "Lender"), in its individual
capacity, at the office of BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders (the "Agent"), located at
Independence Center, 15th Floor, 101 North Tryon Street, NC1-001-
15-04, Charlotte, North Carolina 28255 (or at such other place or
places as the Agent may designate) at the times set forth in that
certain Second Amended and Restated Credit Agreement dated as of
August 26, 1999 among the Borrower, the financial institutions
party thereto (collectively, the "Lenders"), the Co-Syndication
Agents and the Documentation Agent named therein and the Agent
(as amended and supplemented and in effect from time to time, the
"Credit Agreement"; all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the
Credit Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of
FIFTY MILLION AND NO/100 DOLLARS ($50,000,000) or, if less than
such principal amount, the aggregate unpaid principal amount of
all Swing Line Loans made by the Lender to the Borrower pursuant
to the Credit Agreement on the Revolving Credit Termination Date
or such earlier date as may be required pursuant to the terms of
the Credit Agreement, and to pay interest from the date hereof on
the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates provided in Article II of
the Credit Agreement. All or any portion of the principal amount
of Swing Line Loans may be prepaid as provided in the Credit
Agreement.
This Note is the Swing Line Note referred to in the Credit
Agreement and is issued pursuant to and entitled to the benefits
of the Credit Agreement to which reference is hereby made for a
more complete statement of the terms and conditions upon which
the Swing Line Loans evidenced hereby were or are made and are to
be repaid. Payment of all amounts due under this Note is
guaranteed by each Guarantor pursuant to the Guaranty until such
time as the Guaranty is terminated in accordance with Section
11.20 of the Credit Agreement.
If payment of all sums due hereunder is accelerated under
the terms of the Credit Agreement or under the terms of the other
Loan Documents executed in connection with the Credit Agreement,
the then remaining principal amount and accrued but unpaid
interest shall bear interest which shall be payable on demand at
the rates per annum set forth in Article II of the Credit
Agreement, or the maximum rate permitted under applicable law, if
lower, until such principal and interest have been paid in full.
Further, in the event of such acceleration, this Note, and all
other Obligations of the Borrower to the Lender shall, subject to
the terms and conditions of the Loan Documents, become
immediately due and payable, without presentation, demand,
protest or notice of any kind, all of which are hereby waived by
the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to
the principal and interest, all costs of collection, including
reasonable attorneys' fees actually incurred, and interest
thereon at the rates set forth above.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and
for prepayments of Swing Line Loans upon the terms and conditions
specified therein.
Except as permitted by Section 11.01 of the Credit
Agreement, this Note may not be assigned by the Lender to any
other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of Georgia.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers
or otherwise, hereby waive to the full extent permitted by law
the benefits of all provisions of law for stay or delay of
execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment
be obtained and execution issued against any other of them and
returned satisfied or until it can be shown that the maker or any
other party hereto had no property available for the satisfaction
of the debt evidenced by this instrument, or until any other
proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this
Note any collateral deposited by any of said Persons as security.
Protest, notice of protest, notice of dishonor, diligence or any
other formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
made, executed and delivered by its duly authorized
representative as of the date and year first above written, all
pursuant to authority duly granted.
SAKS INCORPORATED
ATTEST:
______________________ By:
______________________ Title:
EXHIBIT L
Form of Interest Rate Selection Notice (Five Year Facility)
To: Bank of America, N.A., as Administrative Agent
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, NC 28255
Telefacsimile: 704-386-9923
Attention: _________________, Agency Services
Reference is hereby made to that certain Second Amended and
Restated Credit Agreement dated as of August 26, 1999 (the
"Credit Agreement") among Saks Incorporated (the "Borrower"), the
Lenders (as defined in the Credit Agreement), Bank of America,
N.A., as Administrative Agent for the Lenders ("Agent") and the
Co-Syndication Agents and the Documentation Agent named therein.
Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Credit Agreement.
The Borrower through its Authorized Representative hereby
confirms its prior notice of a selection of a Type of Loan and
Interest Period given to the Agent by telephone approximately at
__________ __.m. on _________________, _____ to the following
effect in respect of [check as applicable] Revolving Credit
Loans:
Type of Loan Interest Effective
(Check One) Period(1) Amount(2) Date(3)
Eurodollar Loan ______
Base Rate Loan ______
_______________________________
(1) For any Eurodollar Loan one, two, three or six months.
(2) Must be $5,000,000 or a multiple of $1,000,000 in excess thereof.
(3) At least three (3) Eurodollar Business Days after date of telephonic notice
if a Eurodollar Loan; may be same Business Day in case of a Base Rate Loan.
This the _____ day of ______________, _____.
SAKS INCORPORATED
By:
Authorized Representative
EXHIBIT M
Form of Opinion of Counsel to the Borrower and Counsel to the
Guarantors
[See attached]
EXHIBIT N
Form of Compliance Certificate
Bank of America, N.A., as Administrative Agent
Independence Center, 15th Floor
101 North Tryon Street
NC1-001-15-04
Charlotte, NC 28255
Telefacsimile: 704-386-9923
Attention: _______________, Agency Services
Reference is hereby made to that certain Second Amended and
Restated Credit Agreement dated as of August 26, 1999 (the
"Credit Agreement") among Saks Incorporated (the "Borrower"), the
Lenders (as defined in the Credit Agreement), Bank of America,
N.A., as Administrative Agent for the Lenders ("Agent") and the
Co-Syndication Agents and Documentation Agent named therein.
Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Credit Agreement.
The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you, in his or her capacity
as an officer of the Borrower and not in his or her individual
capacity, as of _________________________ [insert Determination
Date] as follows:
1. Calculations
A. Compliance with Section 8.01: Consolidated Net Worth
1. 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 less
$__________
2. The amount, if any, of (i) any upward adjustment
after the Closing Date due to the revaluation of
assets and (ii) intercompany items among the
Borrower and its Subsidiaries $__________
3. Consolidated Net Worth (A.1-A.2)$__________
Required: (i) $___________ ; plus
(ii) 100% of Net Proceeds of sale of capital
stock or other equity interest since
November 1, 1998; plus $__________
(iii) 50% of Consolidated Net Income (without
deduction for any negative Consolidated Net
Income) for each full fiscal quarter ending
after November 1, 1998; $__________
Total Requirement $__________
B. Compliance with Section 8.02. Consolidated
Fixed Charge Ratio for the Four-Quarter Period
most recently ended
1. Consolidated EBITDA:
(i) Consolidated Net Income, plus $__________
(ii) Consolidated Interest Expense, plus $__________
(iii)Income Taxes, plus $__________
(iv) Amortization and depreciation, plus $__________
(v) Excluded non-cash and other items $__________
Total $__________
2. Consolidated Financing Charges $__________
3. Lease, rental and all other payments made in connection
with operating leases and deducted in computing
Consolidated EBITDA $__________
4. B.1+B.2+B.3 $__________
5. Consolidated Fixed Charges:
(i) Consolidated Interest Expense, plus $__________
(ii) Lease, rental and all other payments made in
connection with operating leases and deducted in
computing Consolidated EBITDA, plus $__________
(iii)Consolidated Financing Charges $__________
Total $__________
6. Ratio of B.4. to B.5. ____ to 1.00
Required: Not less than 1.50 to 1.00:
C. Compliance with Section 8.03. Consolidated Funded Total
Indebtedness to Consolidated EBITDA for the Four-Quarter
Period most recently ended
1. Consolidated Funded Total Indebtedness $__________
2. Consolidated EBITDA for Four Quarter Period (See Total
for Line B.1): $__________
3. Ratio of C.1 to C.2 ___ to 1.00
Required: Not greater than: 3.50 to 1.00
2. No Default
A. To the best knowledge of the undersigned, on the date
hereof, no Default or Event of Default exists [or] the following
Defaults or Events of Default have occurred and are continuing:
B. If a Default or Event of Default has occurred and is
continuing, the Borrower proposes to take the following action
with respect to such Default or Event of Default:
3. Debt Rating on Rated Debt:
(i) _______:
(ii) _______:
(Insert names of rating agencies)
The undersigned Authorized Representative hereby certifies
that the information set forth above is true, correct and
complete as of the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate this
____ day of ____________.
SAKS INCORPORATED
By:
Authorized Representative
EXHIBIT O
Form of LC Account Agreement
LC ACCOUNT AGREEMENT
This LC ACCOUNT AGREEMENT (the "Agreement") is dated as of
___________, 1999, and made between SAKS INCORPORATED, a
Tennessee corporation (the "Pledgor") and BANK OF AMERICA, N.A.,
as Administrative Agent (in such capacity herein and together
with any successors in such capacity, the "Agent") for the
Lenders (the "Lenders") party to the Credit Agreement referenced
below.
RECITALS
WHEREAS, Pledgor, the Lenders, the Co-Syndication Agents and
the Documentation Agent named therein and the Agent have entered
into an Amended and Restated Credit Agreement (Five Year
Facility) dated as of the date hereof (said Credit Agreement, as
it may hereafter be amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with the
terms thereof and in effect, hereinafter referred to as the
"Credit Agreement");
WHEREAS, as a condition precedent to the Lenders'
obligations to make the Loans or the Issuing Bank's obligation to
issue Letters of Credit (as such terms are defined in the Credit
Agreement), the Pledgor is required to execute and deliver to the
Agent a copy of this Agreement on or before the Effective Time
(defined below);
NOW, THEREFORE, in consideration of the foregoing and the
agreements, provisions and covenants contained herein, the
Pledgor and the Agent hereby agree as follows:
Section 1. Capitalized terms used in this Agreement shall
have the following meanings:
"Cash Account" means the cash collateral account established
and maintained pursuant to Section 2 hereof.
"Collateral" means (a) all funds from time to time on
deposit in the Cash Account; (b) all Investments and all
certificates and instruments from time to time representing or
evidencing such Investments; (c) all notes, certificates of
deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Agent for or on behalf
of the Pledgor in substitution for or in addition to any or all
of the Collateral described in clause (a) or (b) above; (d) all
interest, dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Collateral
described in clause (a), (b) or (c) above; and (e) to the extent
not covered by clauses (a) through (d) above, all proceeds of any
or all of the foregoing Collateral.
"Effective Time" means the Closing Date as defined in the
Credit Agreement.
"Investments" means those investments, if any, made by the
Agent pursuant to Section 5 hereof.
"Secured Obligations" means (i) all Obligations of the
Pledgor now existing or hereafter arising under or in respect of
the Credit Agreement or the Notes (including, without limitation,
the Pledgor's obligations to pay principal and interest and all
other charges, fees, expenses, commissions, reimbursements,
indemnities and other payments related to or in respect of the
obligations contained in the Credit Agreement or the Notes) or
any documents or agreements related to the Credit Agreement or
the Notes; and (ii) without duplication, all obligations of the
Pledgor now or hereafter existing under or in respect of this
Agreement, including, without limitation, with respect to all
charges, fees, expenses, commissions, reimbursements, indemnities
and other payments related to or in respect of the obligations
contained in this Agreement.
Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Credit Agreement.
Section 2. Cash Account; Cash Collateralization of Letters
of Credit.
(i) At such time as there shall be deposited with the
Agent funds pursuant to this Agreement, the Agent shall
establish and maintain at its offices at Independence
Center, 15th Floor, 101 North Tryon Street, Charlotte, North
Carolina, in the name of the Agent and under the sole
dominion and control of the Agent, a cash collateral account
for the Pledgor designated as Bank of America/Saks Cash
Collateral Account (the "Cash Account").
(ii) In accordance with Article IX of the Credit
Agreement, in the event that an Event of Default has
occurred and is continuing and Pledgor is required to pay to
Agent an amount equal to the maximum amount remaining
undrawn, unpaid or at any time that may become payable under
the Letters of Credit, or in the event that, at the request
of the Agent and election of the Pledgor, such amounts have
previously been paid to the Agent for such purpose of being
cash collateral hereunder, the Agent shall, upon the later
to occur of receipt of any such amounts and the occurrence
and continuation of an Event of Default, exercise the
remedies set forth in Section 12 hereof. Any such amounts
received by the Agent shall be deposited in the Cash
Account. Upon a drawing under the Letters of Credit in
respect of which any amounts described above have been
deposited in the Cash Account, the Agent shall apply such
amounts to reimburse the Agent for the amount of such
drawing. In the event the Pledgor's Letters of Credit are
cancelled or expire or in the event of any permanent
reduction in the maximum amount available at any time for
drawing under such Letters of Credit (collectively, the
"Maximum Available Amount"), the Agent shall apply the
amount then in the Cash Account designated to reimburse the
Agent for any drawings under the Letters of Credit less the
Maximum Available Amount immediately after such
cancellation, expiration or reduction, if any, first, to the
cash collateralization of the Letters of Credit if the
Pledgor has failed to pay all or a portion of the maximum
amounts described above and, second, (a) so long as no Event
of Default has occurred and is continuing and so long as no
application of the Collateral shall be made within 25 days
of the expiration of the Pledgor?s Letters of Credit then
the Agent shall return to the Pledgor such excess amount not
applied to drawings and other amounts owing with respect to
Letters of Credit and (b) otherwise, the payment in full of
the outstanding Secured Obligations.
(iii) Any interest received in respect of
Investments of any amounts deposited in the Cash Account
pursuant to clause (ii) of this Section 2 shall be delivered
by the Agent to the Pledgor on the last Business Day of each
calendar month or, if earlier, upon cancellation or
expiration of or drawing of the Maximum Available Amount for
drawing under the Letters of Credit, as the case may be, in
respect of which such amounts were so deposited; provided,
however, that the Agent shall not deliver to the Pledgor any
such interest received in respect of Investments of any
amounts deposited in the Cash Account pursuant to this
Section 2 if an Event of Default has occurred and is
continuing or unless all outstanding Secured Obligations
have been indefeasibly paid in full in cash.
Section 3. Pledge; Security for Secured Obligations. The
Pledgor hereby grants and pledges to the Agent (for itself and on
behalf of the Lenders) a first priority lien and security
interest in, the Collateral, as collateral security for the
prompt payment in full when due, whether at stated maturity, by
acceleration or otherwise (including, without limitation, the
payment of interest and other amounts which would accrue and
become due but for the filing of a petition in bankruptcy or the
operation of the automatic stay under Section 362(a) of the
Bankruptcy Code), of all Secured Obligations.
Section 4. Delivery of Collateral. All certificates or
instruments, if any, representing or evidencing the Collateral
shall be delivered to and held by the Agent pursuant hereto and
shall be a suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably
satisfactory to the Agent. In the event any Collateral is not
evidenced by a certificate, a notation, reflecting title in the
name of the Agent or the security interest of the Agent, shall be
made in the records of the issuer of such Collateral or in such
other appropriate records as the Agent may require, all in form
and substance reasonably satisfactory to the Agent. The Agent
shall have the right, at any time and without notice to the
Pledgor, to transfer to or to register in the name of the Agent
or any of its nominees any or all of the Collateral. In
addition, the Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger
denominations.
Section 5. Investing of Amounts in the Cash Account;
Amounts held by the Agent. Cash held by the Agent in the Cash
Account shall not be invested or reinvested except as provided in
this Section 5.
(i) Except as otherwise provided in Section 12 hereof
and provided that the lien and security interest in favor of
the Lenders remains perfected, any funds on deposit in the
Cash Account shall be invested by the Agent so long as no
Default or Event of Default shall have occurred and be
continuing, in cash equivalents.
(ii) The Agent is hereby authorized to sell, and shall
sell, all or any designated part of the Collateral (A) so
long as no Default or Event of Default shall have occurred
and be continuing, upon the receipt of appropriate written
instructions from the Pledgor or (B) in any event if such
sale is necessary to permit the Agent to perform its duties
hereunder or under the Credit Agreement. The Agent shall
have no responsibility and the Pledgor hereby agrees to hold
the Agent and the Lenders harmless for any loss in the value
of the Collateral resulting from a fluctuation in interest
rates or otherwise. Any interest on securities constituting
part of the Collateral and the net proceeds of the sale or
payment of any such securities shall be held in the Cash
Account by the Agent.
Section 6. Representations and Warranties. In addition to
its representations and warranties made pursuant to Article VI of
the Credit Agreement, the Pledgor represents and warrants to the
Agent (for itself and on behalf of the Lenders), that the
following statements are true, correct and complete:
(i) At the time the Pledgor delivers the Collateral
(or any portion thereof) to the Agent, the Pledgor will be
the legal and beneficial owner of the Collateral free and
clear of any Lien except for the lien and security interest
created by this Agreement; and
(ii) The pledge and assignment of the Collateral
pursuant to this Agreement creates a valid and perfected
first priority security interest in the Collateral, securing
the payment of the Secured Obligations.
Section 7. Further Assurances. The Pledgor agrees that at
any time and from time to time, at its expense, it will promptly
execute and deliver to the Agent any further instruments and
documents, and take any further actions, that may be necessary or
that the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted
hereby or to enable the Agent to exercise and enforce its rights
and remedies hereunder with respect to the Collateral.
Section 8. Transfers and Other Liens. The Pledgor agrees
that it will not (a) sell or otherwise dispose of any of the
Collateral, or (b) create or permit to exist any Lien upon or
with respect to any of the Collateral, except for the lien and
security interest created by this Agreement.
Section 9. The Agent Appointed Attorney-in Fact. The
Pledgor hereby appoints the Agent as its attorney-in-fact, with
full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time during the
continuance of an Event of Default in the Agent's reasonable
discretion to take any action and to execute any instrument which
the Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instruments made
payable to the Pledgor representing any payment, dividend, or
other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same. In performing
its functions and duties under this Agreement, the Agent shall
act solely for itself and as the agent of the Lenders and the
Agent has not assumed nor shall be deemed to have assumed any
obligation towards or relationship of agency or trust with or for
the Pledgor.
Section 10. The Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, after notice to the
Pledgor, the Agent may itself perform, or cause performance of,
such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Pledgor under
Section 13 hereof.
Section 11. Standard of Care; No Responsibility For Certain
Matters. In dealing with the Collateral in its possession, the
Agent shall exercise the same care which it would exercise in
dealing with similar collateral property pledged by others in
transactions of a similar nature, but it shall not be responsible
for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not the Agent has or is
deemed to have knowledge of such matters, (b) taking any steps to
preserve rights against any parties with respect to any
Collateral (other than steps taken in accordance with the
standard of care set forth above to maintain possession of the
Collateral), (c) the collection of any proceeds, (d) any loss
resulting from Investments made pursuant to Section 5 hereof, or
(e) determining (x) the correctness of any statement or
calculation made by the Pledgor in any written or telex (tested
or otherwise) instructions, or (y) whether any deposit in the
Cash Account is proper.
Section 12. Remedies upon Default; Application of Proceeds.
If any Event of Default shall have occurred and be continuing:
(i) The Agent may exercise in respect of the
Collateral, in addition to other rights and remedies
provided for herein otherwise available to it, all the
rights and remedies of a secured party on default under the
applicable Uniform Commercial Code (the "Code") as in effect
at that time, and the Agent may, without notice except as
specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any
exchange or broker's board or at any of the Agent's offices
or elsewhere, for cash, on credit or for future delivery,
and at such price or prices, and upon such other terms as
the Agent may deem commercially reasonable. The Pledgor
agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Pledgor of the
time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any
sale of the Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(ii) In addition to the remedies set forth in part (i)
above and in accordance with the provisions of Section 2
hereof, any cash held by the Agent as Collateral and all
cash proceeds received by the Agent in respect of any sale
of, collection from, or other realization upon all or part
of the Collateral shall be applied (after payment of any
amounts payable to the Agent pursuant to Section 13 hereof)
by the Agent to cash collateralize the Pledgor's Letters of
Credit and thereafter to pay the Secured Obligations.
Section 13. Expenses. In addition to any payments of
expenses of the Agent pursuant to the Credit Agreement or any
Loan Document, the Pledgor agrees to pay promptly to the Agent
all the reasonable costs and expenses which the Agent may
actually incur in connection with (a) the custody or preservation
of, or the sale of, collection from, or other realization upon,
any of the Collateral, (b) the exercise or enforcement of any of
the rights of the Agent hereunder, or (c) the failure by the
Pledgor to perform or observe any of the provisions hereof.
Section 14. No Delay's Waiver, etc. No delay or failure on
the part of the Agent in exercising, and no course of dealing
with respect to, any power or right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the
Agent of any power or right hereunder preclude other or further
exercise thereof or the exercise of any other power or right.
The remedies herein provided are to the fullest extent permitted
by law cumulative and are not exclusive of any remedies provided
by law.
Section 15. Amendments, Etc. No amendment, modification,
termination or waiver of any provision of this Agreement, or
consent to any departure by the Pledgor therefrom, shall in any
event be effective without the written concurrence of the Agent.
Section 16. Notices. Except as otherwise specifically
provided herein, all notices which are to be sent to the Pledgor
or the Agent shall be given in accordance with the Credit
Agreement.
Section 17. Continuing Security Interest; Termination.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until
the Total Facility Termination Date shall have occurred, (b) be
binding upon the Pledgor, its successors and assigns, and (c)
inure to the benefit of the Agent, the Lenders and their
respective successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c) and subject to the
provisions of the Credit Agreement, any Lender may assign or
otherwise transfer any Note held by it to any other person or
entity, and such other person or entity shall thereupon become
vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. Upon the occurrence of the Total
Facility Termination Date, the Pledgor shall be entitled to the
return, upon its request and at its expense, of such of its
Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof.
Section 18. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF GEORGIA WITHOUT REGARD TO ANY
OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF GEORGIA. UNLESS OTHERWISE DEFINED HEREIN
OR IN THE CREDIT AGREEMENT, TERMS DEFINED IN ARTICLE 9 OF THE
CODE ARE USED HEREIN AS THEREIN DEFINED.
Section 19. CONSENT TO JURISDICTION. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF GEORGIA AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE PLEDGOR ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT TO
RIGHT OF APPEAL. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE PLEDGOR IN
THE COURTS OF ANY OTHER JURISDICTION.
Section 20. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns
of such party and all covenants, promises, and agreements by or
on behalf of the Pledgor or by and on behalf of the Agent shall
bind and inure to the benefit of the successors and assigns of
the Pledgor, the Agent and the Lenders.
Section 21. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by the different
parties on separate counterparts and each such counterpart shall
for all purposes be deemed an original, but all such counterparts
shall together constitute but one and the same Agreement. The
Pledgor and the Agent hereby acknowledge receipt of a true,
correct, and complete counterpart of this Agreement.
Section 22. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 23. Headings. The section headings in this
Agreement are inserted for convenience of reference and shall not
be considered a part of this Agreement or used in its
interpretation.
[signatures follow]
IN WITNESS WHEREOF, the Pledgor and the Agent have caused
this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date
first above written.
SAKS INCORPORATED
ATTEST:
By:
Name:
Title:
BANK OF AMERICA, N.A. , as
Administrative Agent for the
Lenders
By:
Name:
Title: Vice
President
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