EXHIBIT 10.7
AMENDMENT NO. 2 TO CREDIT FACILITIES
AND REIMBURSEMENT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT FACILITIES AND REIMBURSEMENT
AGREEMENT (this "Agreement") is made and entered into as of this
7th day of March, 1995 among:
PROFFITT'S, INC., a Tennessee corporation having its principal
place of business in Alcoa, Tennessee (the "Borrower"); and
Each lender executing and delivering a signature page hereto
(hereinafter such lenders may be referred to individually as a
"Lender" or collectively as the "Lenders"); and
NATIONSBANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United
States of America ("NationsBank"), in its capacity as agent for the
Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent have entered
into a Credit facilities and Reimbursement Agreement dated as of
March 31, 1994 (the "Credit Agreement"), pursuant to which the
Lenders agree to make certain Advances to the Borrower;
WHEREAS, the Borrower, the Lenders and the Agent amended the
Credit Agreement pursuant to Amendment No. 1 to Credit Facilities
and Reimbursement Agreement dated as of November 15, 1994; and
WHEREAS, the Borrower has requested that the Credit Agreement
be amended in the manner set forth herein and the Agent and the
Lenders are willing to agree to such amendment;
NOW, THEREFORE, in consideration of the mutual covenants and
the fulfillment of the conditions set forth herein, the parties
hereto do hereby agree as follows:
1. Definitions. Any capitalized terms used herein without
definition shall have the meaning set forth in the Credit
Agreement.
2. Amendment. Subject to the terms and conditions set forth
herein, and in accordance with Section 11.06 of the Credit
Agreement, the Credit Agreement is hereby amended as follows:
(a) Section 7.20(i) is hereby amended and restated in
its entirety to read as follows:
7.20 New Subsidiaries. Simultaneously with the
acquisition or creation of any Subsidiary, or upon any
previously existing Persons becoming a Subsidiary, cause
to be delivered to the Agent for the benefit of the
Lenders each of the following:
(i) a Guaranty executed by such Subsidiary, with
appropriate insertions of identifying information
and such other changes to which the Agent may
consent in its discretion; provided, however under
the transaction dated as of March 7, 1995, between
the Borrower and the shareholders of Parks
Enterprises, Inc. ("PEI") by which the Borrower
agrees to purchase 100% of the shares of stock of
PEI (the "PEI Transaction"), the liability of
Parks-Belk Company with respect to the Guarantor's
Obligations (as defined in the Guaranty) shall be
limited to the maximum aggregate amount at any time
outstanding of Indebtedness for Money Borrowed
advanced to Parks-Belk Company by the Borrower or
any other Subsidiary; provided further, however,
that upon the expiration of the six month period
immediately following the PEI Transaction, if
Parks-Belk's liability under such Guaranty shall be
limited in the manner provided in the immediately
preceding clause or otherwise, there shall be an
Event of Default under the Credit Agreement;
(b) Section 8.02 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
8.02 Consolidated Current Ratio. Permit at any time
the ratio of Consolidated Current Assets to Consolidated
Current Liabilities to be less than 2.00 to 1.00;
provided, however, that during the August 15 through
November 15 of each of the Borrower's Fiscal Years, such
ratio shall not be less than 1.60 to 1.00.
(c) Section 8.04 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
8.04 Consolidated Fixed Charge Ration. Permit at
any time during any Four-Quarter Period of the Borrower
ending during the periods set forth below, the
Consolidated Fixed Charge Ratio for such Four Quarter
Period to be equal to or less than the ratios set forth
opposite the respective periods below:
Period Ratio
Closing Date through July 28, 1995 1.50 to 1.00
July 29, 1995 through January 2, 1996 1.55 to 1.00
January 3, 1996 through May 3, 1996 1.60 to 1.00
May 4, 1996 and thereafter 1.75 to 1.00
(d) Section 8.06 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
8.06 Consolidated Funded Indebtedness to EBITDA.
Permit at any time the ratio of Consolidated Funded
Indebtedness to Consolidated EBITDA to be equal to or
greater than the following ratios set forth opposite the
following periods below:
Period Ratio
Closing Date through January 27, 1995 4.50 to 1.00
January 28, 1995 3.50 to 1.00
January 29, 1995 through July 28, 1995 3.90 to 1.00
July 29, 1995 through October 27, 1995 3.70 to 1.00
October 28, 1995 through February 2, 1996 3.60 to 1.00
February 3, 1996 through May 3, 1996 3.50 to 1.00
May 4, 1996 and thereafter 3.00 to 1.00
3. Representations and Warranties. In order to induce the
Agent and the Lenders to enter into this Agreement, the Borrower
represents and warrants to the Agent and the Lenders as follows:
(a) The representations and warranties made by Borrower
in Article VI of the Credit Agreement are true and correct on
and as of the date hereof;
(b) There has been no material adverse change in the
condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole, since the date of the most
recent financial reports of the Borrower received by the Agent
and the Lenders under Section 7.01(a) of the Credit Agreement,
other than changes in the ordinary course of business;
(c) The business and properties of the Borrower and its
Subsidiaries, taken as a whole, are not, and since the date of
the most recent financial report of the Borrower and its
Subsidiaries received by the Agent and the Lenders under
Section 7.01(a) of the Credit Agreement, have not been
adversely affected in any substantial way as the result of any
fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo, riot, activities of
armed forces, war or acts of God or the public enemy, or
cancellation or loss of any major contracts; and
(d) No event has occurred and is continuing which
constitutes, and no condition exists which upon the
consummation of the transaction contemplated hereby would
constitute, a Default or an Event of Default on the part of
the Borrower under the Credit Agreement.
4. Conditions Precedent. The effectiveness of this
Agreement is subject to the receipt by the parties hereto of the
following:
(a) The Agent shall have received:
(i) eight (8) counterparts of this Agreement duly
executed by all signatories hereto;
(ii) copies of all additional agreements,
instruments and documents which the Agent may reasonably
request, such documents, when appropriate, to be
certified by appropriate governmental authorities.
(b) All proceedings of the borrower relating to the
matters provided for herein shall be satisfactory to the
Lenders, the Agent and their counsel.
5. Waiver. In accordance with Section 11.06 of the Credit
Agreement, Borrower's violation of the negative covenant contained
in Section 8.07(v) will be waived by the Lenders and Agent in
connection with the PEI Transaction; provided that the parties
hereto further agree as follows:
(i) this waiver does not constitute an amendment or
modification to the Credit Agreement;
(ii) this waiver is only for the Borrower's violation of
Section 8.07(v) in connection with the PEI Transaction and
does not constitute a waiver of any other violation of the
Borrower of the Credit Agreement or any other violation of the
Borrower of Section 8.07(v) of the Credit Agreement; and
(iii) the Borrower will use its best efforts to bring
itself into full compliance with Section 8.07(v) of the Credit
Agreement as soon as possible.
6. Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to
the subject matter hereof and supersedes any prior negotiations and
agreements among the parties relative to such subject matter. No
promise, condition, representation or warranty, express or implied,
not herein set forth shall bind any party hereto, and not one of
them has relied on any such promise, condition, representation or
warranty. Each of the parties hereto acknowledges that, except as
in this Agreement otherwise expressly stated, no representations,
warranties or commitments, express or implied, have been made by
any party to the other. None of the terms or conditions of this
Agreement may be changed, modified, waived or canceled orally or
otherwise, except by writing, signed by all the parties hereto,
specifying such change, modification, waiver or cancellation of
such terms or conditions, or of any proceeding or succeeding breach
thereof.
7. Full Force and Effect of Agreement. Except as hereby
specifically amended, modified, waived or supplemented, the Credit
Agreement and all other Loan Documents are hereby confirmed and
ratified in all respects and shall remain in full force and effect
according to their respective terms.
8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument.
9. Governing Law. This Amendment Agreement shall in all
respects be governed by the laws and judicial decisions of the
state of Tennessee.
10. Enforceability. Should any one or more of the provisions
of this Agreement be determined to be illegal or unenforceable as
to one or more of the parties hereto, all other provisions
nevertheless shall remain effective and binding on the parties
hereto.
11. Credit Agreement. All references in any of the Loan
Documents to the Credit Agreement shall mean the Credit Agreement
as amended and waived hereby.
12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the Borrower, the Lenders
and the Agent and their respective successors, assigns, and legal
representatives; provided, however, that the Borrower, without the
prior consent of the Agent, may not assign any rights, powers,
duties, or obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers,
all as of the day and year first above written.
BORROWER:
ATTEST: PROFFITT'S, INC.
By: /s/ Brian J. Martin By: /s/ James E. Glasscock
Name: Brian J. Martin Name: James E. Glasscock
Title:Assistant Secretary Title: Senior Vice President and
Chief Financial Officer
(CORPORATE SEAL)
LENDERS:
NATIONSBANK OF TEXAS,
NATIONAL ASSOCIATION
By:
Name:
Title:
FIRST AMERICAN NATIONAL BANK
By:
Name:
Title:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
Name:
Title:
TRUST COMPANY BANK
By:
Name:
Title:
By:
Name:
Title:
DEPOSIT GUARANTY NATIONAL BANK
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Name:
Title:
AGENT:
NATIONSBANK OF TEXAS, NATIONAL
ASSOCIATION, as Agent for the Lenders
By:
Name:
Title: