EXHIBIT 10.2
FIRST AMENDMENT AND WAIVER
TO
CREDIT AGREEMENT AND SECOND
AMENDMENT TO SECURITY AGREEMENT
This First Amendment and Waiver to
Credit Agreement and Second Amendment to Security Agreement (the
“Amendment and Waiver”) is made as of the 6th day of
June, 2005 by and among
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SAKS
INCORPORATED., a corporation organized under the laws of the State
of Tennessee, having a place of business at 750 Lakeshore Parkway,
Birmingham, Alabama 35211;
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the LENDERS
party hereto; and
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FLEET RETAIL
GROUP, INC., as Agent for the Lenders, a Delaware corporation,
having a place of business at 40 Broad Street, Boston,
Massachusetts 02109; and
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CITICORP NORTH
AMERICA, INC., as Syndication Agent; and
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WACHOVIA BANK,
NATIONAL ASSOCIATION, JPMORGAN CHASE BANK and GENERAL ELECTRIC
CAPITAL CORPORATION, as Co-Documentation Agents
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in consideration of the mutual covenants herein
contained and benefits to be derived herefrom.
WITNESSETH
WHEREAS, the Borrower, the Agent,
the Lenders, the Syndication Agent, and the Co-Documentation Agents
have entered into an Amended and Restated Credit Agreement dated as
of November 26, 2003 (as amended and in effect, the
“Credit Agreement”); and
WHEREAS, the Borrower and certain of
its subsidiaries have granted a security interest in the Collateral
to the Agent, for the benefit of the Lenders under the Credit
Agreement pursuant to a Security Agreement dated as of
November 20, 2001 (as amended and in effect, the
“Security Agreement); and
WHEREAS, the Borrower, the Agent and
the Majority Lenders have entered into a letter agreement dated
April 13, 2005 pursuant to which the Agent and the Majority
Lenders have, subject to the terms of that letter, waived any Event
of Default which might arise or has arisen by virtue of the
Borrower’s failure to deliver the annual financial statements
for the Borrower’s Fiscal Year ending January 29, 2005;
and
WHEREAS, the Borrower has advised
the Agent, the Lenders, the Syndication Agent, and the
Co-Documentation Agents that the Borrower intends to sell its
businesses (the
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“Businesses”) known as McRae’s
and Proffitts and substantially all of the assets related thereto;
and
WHEREAS, the Borrower has requested
that the Agent release its Lien on the Collateral to be included in
the sale of the Businesses; and
WHEREAS, the sale of the Businesses
without the consent of the Majority Lenders would violate
Section 7.8 of the Credit Agreement, resulting in an Event of
Default under Section 9.1(c) of the Credit Agreement;
and
WHEREAS, the Borrower, the Agent,
the Lenders, the Syndication Agent and the Co-Documentation Agents
have agreed to amend certain provisions of the Credit Agreement as
set forth herein in order to, among other things, permit the sale
of the Businesses; and
WHEREAS, the Borrower has notified
the Agent, the Lenders, the Syndication Agent and the
Co-Documentation Agents that the Borrower expects that it will fail
to deliver within 50 days of the fiscal quarter ending on or about
April 30, 2005 the unaudited consolidated balance sheet,
income statements, cash flow statements and related financial
information required by Section 5.2(b) of the Credit Agreement
(the “First Quarter ‘05 Financials”), which would
result in an Event of Default under the Credit Agreement;
and
WHEREAS, the Borrower has requested
that the Agent and the Majority Lenders waive, and the Agent and
the Majority Lenders are willing to waive, on the terms and
conditions set forth herein, any Event of Default which may arise
by virtue of the Borrower’s failure to deliver such First
Quarter ‘05 Financials.
NOW THEREFORE, it is hereby agreed
as follows:
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1.
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Definitions. All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the
Credit Agreement.
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2.
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Amendments
to Credit Agreement .
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a.
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The provisions
of Annex A to the Credit Agreement are hereby amended as
follows:
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i.
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By adding the
following definition in proper alphabetical order:
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“
McRae’s and Proffitts Sale ” means the sale and
disposition of the business and related assets of McRae’s and
Proffitts substantially on the terms set forth in the Asset
Purchase Agreement between Saks Incorporated and Belk, Inc. dated
as of April 28, 2005.
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ii.
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By deleting the
definition of “Permitted Asset Sales” in its entirety
and substituting the following in its stead:
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“
Permitted Asset Sales ” means (a) the
McRae’s and Proffitts Sale, and (b) other sales and
dispositions of assets that are deemed appropriate by the Borrower
on a Market Basis not exceeding $50,000,000 in any Fiscal Year or
$250,000,000 in the aggregate after the Closing Date (excluding any
sales or dispositions under clause (a) hereof), provided,
however , that if sales or dispositions described in the
preceding clause (b) in any Fiscal Year are less than
$50,000,000, then, subject to the aggregate limitations on sales or
dispositions above, the amount of Permitted Asset Sales in the
immediately succeeding Fiscal Year may be increased by an amount
equal to fifty percent (50%) of the difference between
$50,000,000 and the actual amount of sales or dispositions in the
preceding Fiscal Year , further provided that, exclusive of
sales and dispositions described in clause (a) hereof, in no
event will Permitted Asset Sales exceed $75,000,000 in any Fiscal
Year.
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iii.
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By adding the
following at the end of th
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