Exhibit 10.1

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of October 2,
2006, and effective as of October 1, 2006 (the “Effective Date”), is made by and
between Saks Incorporated, a Tennessee corporation (“Seller”), and Belk, Inc., a
Delaware corporation (“Buyer”).

RECITALS

WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of
August 1, 2006, by and between Seller and Buyer (the “Purchase Agreement”),
Seller has agreed to sell, or cause to be sold, to Buyer the Shares, and Buyer
has agreed to purchase the Shares as provided therein; and

WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, Buyer and Seller desire that Seller provide Buyer with certain
transition services relating to the Business as set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:

1. Transition Services.

(a) During the term of this Agreement as set forth in Section 7 (the “Transition
Period”), and subject to the terms and conditions set forth herein, Seller shall
provide, or cause one or more of its Affiliates to provide, to Buyer (with
respect to the Business) each of the services specified on Annex A hereto (each
of the nine (9) categories described on Annex A, a “Service” and, collectively,
the “Services”) from the Effective Date and for the specific period of time
described on Annex A with respect to each such Service, which shall be provided
in a manner consistent in all material respects with that provided by Seller or
one or more of its Affiliates to the Business during the twelve (12) month
period immediately prior to the Effective Date. Buyer shall purchase and pay for
such Services as provided for herein. The quantity of each Service shall be that
which Buyer reasonably requires for the operation of the Business in the
ordinary course consistent in all material respects with the operation of the
Business during the twelve (12) month period immediately prior to the Effective
Date. The Services shall only be made available for, and Buyer shall only be
entitled to utilize the Services for the benefit of the stores operated by or in
development by the Companies immediately prior to the Effective Date. Annex B
hereto contains a description of each of the Services specified on Annex A.

(b) The fees payable by Buyer to Seller for each Service are set forth on Annex
A and are substantially consistent with the costs allocated by Seller to the
Business during the 12 month period immediately prior to the Effective Date;
provided, that, if, after the Effective Date, Seller upgrades or otherwise
changes any of the Services provided to its Affiliates, Seller shall provide
Buyer with prior written notice at least 30 days prior to such upgrade or change
to

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any Services. Seller shall offer such upgraded or changed Service to Buyer for a
fee at a rate equal to the fee rate Seller charges its Affiliates for such
upgraded or changed Service, and Annex A shall be amended to reflect such fees.
Buyer acknowledges that some of the Services to be provided hereunder require
instructions and information from Buyer, which Buyer shall provide to Seller in
sufficient time for Seller or its Affiliates to provide or procure such
Services. Buyer shall pay any additional costs or expenses resulting from any
failure of Buyer to provide such instructions or information.

(c) The parties shall cooperate and use commercially reasonable efforts to
obtain the consent of any licensors of Software or any other third party that
may be required in connection with the provision of any of the Services
hereunder; provided, however, that Seller shall have no obligation to pay money
or grant any accommodation to any third party in order to obtain any such
consents, except to the extent Buyer agrees to reimburse Seller for any such
payment made by Seller at the request of Buyer. If any such third party requires
a payment in order to make the Services available to Buyer hereunder, each party
shall promptly notify the other party of this additional cost and the parties
shall discuss any viable work-around solution. In any such case, Buyer shall
have the option to elect (i) to pay any amounts that are required to be paid to
any third party to obtain the consent of such third party in order to receive
the Services hereunder or (ii) to terminate any of the Services associated with
the required consent. Under the circumstances contemplated by clause (ii) of
this Section 1(c), Buyer shall not be required to pay the monthly residual cost
contemplated by Section 7(e).

(d) With respect to any error or defect in the provision of any Services, Seller
will, at Buyer’s request and to the extent practicable, use its commercially
reasonable efforts to correct such error or defect or re-perform such Services
as promptly as practicable without the payment of any further fees with respect
to such defective Services.

(e) On or before the fifteenth (15th) day of each month during the term of this
Agreement, Seller will prepare and deliver to Buyer one or more reports
reflecting the performance of Seller with respect to the target metrics set
forth in Annex C (the “Target Performance Metrics”) during the immediately
preceding month. Notwithstanding anything contained herein to the contrary, such
report or reports shall be provided for informational purposes only and, except
as otherwise expressly provided herein, Seller shall incur no liability for any
failure to meet such Target Performance Metrics.

2. Limitation on Services. Except as provided in Section 1(b), Seller shall have
no obligation to upgrade, enhance or otherwise modify any computer hardware,
Software or network environment currently used in the Business or to provide any
support or maintenance services for any computer hardware, Software or network
environment that has been upgraded, enhanced or otherwise modified from the
computer hardware, Software or network environments that is currently used in
the Business.

3. Additional Services. If Buyer reasonably determines that additional
transition services of the type previously provided by Seller to the Business
(“Additional Services”) are necessary to complete the transition, Seller will
consider in good faith providing such services to Buyer. Representatives of
Seller and Buyer will meet to discuss the terms and conditions (including cost)
upon which such Additional Services will be provided. Any such

 

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Additional Services mutually agreed to and the fees thereof shall be effective
as of the date of execution of an amendment to this Agreement by duly authorized
representatives of the parties hereto. It is understood and agreed that Seller
shall be under no obligation to provide or procure any such Additional Services
requested by Buyer.

4. Subcontractors. Seller may, directly or through one or more Affiliates, hire
or engage one or more subcontractors or other third parties (each, a
“Subcontractor”) to perform any or all of its obligations under this Agreement;
provided, that: (a) Seller remains ultimately responsible for ensuring that the
obligations with respect to the nature, quality and standards of care set forth
in Section 1 are satisfied with respect to any Service provided by any
Subcontractor; (b) the use of any Subcontractor will not increase any fees
payable by Buyer hereunder; (c) the use of any Subcontractor will not adversely
affect the quality or timeliness of delivery of any Service provided to Buyer
and (d) if Seller plans to use any company primarily engaged in the operation of
retail department stores as a Subcontractor for particular Services pursuant to
this Section 4, Seller shall provide Buyer with thirty (30) days’ prior written
notice of its intent to use such Subcontractor and Buyer may, in its sole
discretion, elect to terminate those Services rendered by such Subcontractor
pursuant to Section 8.

5. Title to Seller Equipment; Management and Control.

(a) All procedures, methods, systems, strategies, tools, equipment, facilities
and other resources (except for the assets of the Business and any other
procedures, methods, systems, strategies, tools, equipment, facilities and other
resources owned by Buyer) used by Seller, any of its Affiliates or any
Subcontractor in connection with the provision of Services hereunder
(collectively, the “Seller Equipment”) shall remain the property of Seller, its
Affiliates or such Subcontractor and, except as otherwise provided herein, shall
at all times be under the sole direction and control of Seller, its Affiliates
or such Subcontractor.

(b) Except as otherwise provided herein, management of, and control over, the
provision of the Services (including the determination or designation at any
time of the Seller Equipment, employees and other resources of Seller, its
Affiliates or any Subcontractor to be used in connection with the provision of
the Services) shall reside solely with Seller. Without limiting the generality
of the foregoing, all labor matters relating to any employees of Seller, its
Affiliates and any Subcontractor shall be within the exclusive control of such
parties, and Buyer shall take no action affecting, or have any rights with
respect to, such matters. Seller shall be solely responsible for the payment of
all salary and benefits and all income tax, social security taxes, unemployment
compensation, tax, workers’ compensation tax, other employment taxes or
withholdings and premiums and remittances with respect to employees of Seller
and its Affiliates used to provide Services.

(c) In connection with any obligations of Seller or any of its Affiliates to a
third party, Seller shall not permit any lien or other encumbrance to be placed
upon any assets or other materials owned by Buyer or any of its Affiliates that
are transported, shipped, warehoused or otherwise held in the custody of Seller
or any of its Affiliates on behalf of Buyer.

 

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6. Billing and Payment.

(a) Buyer shall promptly pay any bills and invoices that it receives from Seller
or any of its Affiliates for Services provided under this Agreement, subject to
receiving, if requested, any appropriate support documentation for such bills
and invoices. Such charges shall be billed at the end of each calendar month.
Unless otherwise provided herein or on Annex A, Buyer shall pay all invoices by
wire transfer of immediately available funds in accordance with the instructions
provided by Seller or any of its Affiliates (in writing to Buyer), as
applicable, not later than fifteen (15) days following receipt by Buyer of
Seller’s or any of its Affiliates’ invoice. Buyer shall not offset any amounts
owing to it by Seller or any of Seller’s Affiliates against amounts payable by
Buyer hereunder or under any other agreement or arrangement. Should Buyer
dispute any portion of any invoice, Buyer shall promptly notify Seller in
writing of the nature and basis of the dispute.

(b) If Buyer fails to pay the full amount of any invoice (except to the extent
of any invoiced amounts reasonably disputed by Buyer in good faith and of which
dispute Buyer has notified Seller in accordance with the requirements of this
Agreement) within thirty (30) days after the relevant payment date, such failure
shall be considered a material breach of this Agreement and if at any time the
aggregate amount of such overdue unpaid invoices (except to the extent of any
invoiced amounts reasonably disputed by Buyer in good faith and of which dispute
Buyer has notified Seller in accordance with the requirements of this Agreement)
exceeds $250,000, Seller may, without liability, suspend its obligations
hereunder to provide any and all of the Services to Buyer until such time as
such invoices have been paid in full (except to the extent of any invoiced
amounts reasonably disputed by Buyer in good faith and of which dispute Buyer
has notified Seller in accordance with the requirements of this Agreement). The
remedy provided to Seller by this Section 6(b) shall be without limitation of
any other applicable provisions of this Agreement, including Sections 6(d) and
7.

(c) All charges and fees to be paid by Buyer to Seller and its Affiliates under
this Agreement are exclusive of any applicable taxes required by law to be
collected from Buyer (including withholding, sales, use, excise or services
taxes, which may be assessed on the provision of the Services hereunder). If a
withholding, sales, use, excise or services tax is assessed on the provision of
any of the Services provided under this Agreement, Buyer shall pay directly,
reimburse or indemnify Seller and its Affiliates for such tax. The parties shall
cooperate with each other in determining the extent to which any tax is due and
owing under the circumstances, and shall provide and make available to each
other any resale certificate, information regarding out-of-state use of
materials, services or sale, and other exemption certificates or information
reasonably requested by the other party.

(d) All payments required to be made pursuant to this Agreement shall bear
interest from and including the date fifteen (15) days after such payment is due
to but excluding the date of payment at an annual rate equal to the average
daily one-month LIBOR rate in effect during the period, plus 150 basis points
(except to the extent of any invoiced amounts reasonably disputed by Buyer in
good faith in accordance with this Agreement, in which case no late fee shall be
payable by Buyer in respect of any portion of such disputed amount resolved in
Buyer’s favor). Such interest shall be payable at the same time as the payment
to which it relates.

 

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(e) Throughout the Transition Period and for one year thereafter, no more than
once during each six month period, Seller shall, subject to Seller’s site
safety, confidentiality and security procedures, provide to such auditors
(including third-party auditors and Buyer’s internal audit staff) as Buyer may
designate in writing, access to: (i) any facility at which the Services are
being performed; (ii) appropriate Seller management personnel and
Subcontractors; and (iii) the data and records (and other documentation
reasonably requested by Buyer) maintained by Seller with respect to the Services
solely for the purpose of: (A) performing its tax filings and reports, end of
the month, end of fiscal quarter and end of fiscal year financial closing
process, and to prepare the related financial statements and accounting reports,
or to revise any financial statements and accounting reports for any prior
periods; (B) performing audits and inspections of Buyer and its businesses
(including any audits necessary to enable Buyer to meet its applicable
regulatory requirements, including Section 404 of the Sarbanes-Oxley Act of 2002
(“SOA”)); (C) enabling Buyer’s auditors to attest to and report on the
assessment of Buyer’s management as to the effectiveness of its internal control
structure and procedures for financial reporting relating to the Services within
the meaning of Section 404 of the SOA; or (D) demonstrating to any third party
as reasonably necessary Buyer’s compliance with applicable laws or regulations.
The scope of such audits may include, without limitation, to the extent
reasonably necessary, (x) Seller’s practices and procedures, (y) the adequacy of
general controls (e.g., organizational controls, input/output controls, system
modification controls, processing controls, system design controls and access
controls) and security practices and procedures, and (z) the adequacy of
disaster recovery and back-up procedures. Any such audits will be conducted at
Buyer’s expense.

7. Term of Agreement; Termination.

(a) This Agreement shall commence on the Effective Date and shall continue
(unless sooner terminated pursuant to the terms hereof) for the period during
which Seller is providing Services hereunder, or such shorter period as may be
specified on Annex A with respect to any particular Service. In the event that
Buyer desires to renew any Services beyond the date at which they terminate
pursuant to Section 1(a), Buyer shall notify Seller of such desire to renew any
such Services at least sixty (60) days prior to the expiration of the initial
service period for such Services as set forth on Annex A. Buyer shall be
entitled to renew any particular Service in monthly increments for a renewal
period not to exceed 50% of the initial service period set forth on Annex A;
provided, however, that with respect to information technology Services, the
renewal period shall be identical to the initial service period. Neither Seller
nor any of its Affiliates shall be obligated to provide Services on behalf of
Buyer following the expiration or earlier termination of this Agreement or any
particular Service.

(b) Buyer may terminate this Agreement at any time upon thirty (30) days’ prior
written notice to Seller in the event of a material breach of this Agreement by
Seller. If Seller cures the breach within thirty (30) days following receipt of
such notice, this Agreement shall remain in full force and effect.

(c) Seller may terminate this Agreement at any time upon thirty (30) days’ prior
written notice to Buyer in the event of a material breach of this Agreement by
Buyer. If Buyer cures the breach within thirty (30) days following receipt of
such notice, this Agreement shall remain in full force and effect; provided,
that if such breach relates to the non-payment by

 

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Buyer of any fees or expenses under Section 6, then termination under this
Section 7(c) shall be effective fifteen (15) days from the date of receipt of
notice of breach from Seller unless all unpaid fees or expenses have been paid
in full within such 15-day period (except to the extent of any invoiced amounts
reasonably disputed by Buyer in good faith and of which dispute Buyer has
notified Seller in accordance with the requirements of this Agreement).

(d) Buyer may terminate this Agreement by written notice to Seller upon a Change
in Control of Seller at any time within 60 days following the Change in Control.
Any such termination shall be effective upon Seller’s receipt of Buyer’s
termination notice unless otherwise agreed by the parties. A “Change in Control”
means the occurrence of any of the following events: (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (“the Exchange Act”)) becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Seller
representing fifty percent (50%) or more of the total voting power represented
by Seller’s then outstanding voting securities; (ii) the consummation of the
sale or disposition by Seller of all or substantially all of Seller’s assets to
an unaffiliated third party (excluding, for the avoidance of doubt, a
sale-leaseback transaction or similar financing transaction); or (iii) the
consummation of a merger or consolidation of Seller with any other entity, other
than a merger or consolidation which would result in the voting securities of
Seller outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of Seller or such surviving entity or
its parent outstanding immediately after such merger or consolidation.

(e) Notwithstanding any other provision in this Agreement to the contrary,
(i) if this Agreement is terminated for any reason, Buyer shall remain liable
for the payment of fees and expenses accruing for the period prior to
termination even though such fees may not become due until after termination and
(ii) if this Agreement is terminated by Seller or any particular Service is
terminated by Buyer pursuant to Section 8, Buyer shall remain liable for 50% of
the monthly fees associated with all of the Services (in the case of a
termination of the Agreement) or 50% of the monthly fees associated with any
particular Service (in the case of a partial termination pursuant to Section 8),
in each case as specified on Annex A, from the termination date through the end
of the initial service period or the renewal period, as the case may be.
Further, in the event of termination of this Agreement pursuant to this
Section 7, Sections 5(a), 6(a), 6(c)-(d), 7, 9-11, 13, 14 and 16 through 25
shall continue in full force and effect.

(f) Provided that Buyer has met and continues to meet its obligations set forth
in Section 6, prior to the termination of this Agreement, Seller shall cooperate
with Buyer as reasonably requested by Buyer to effect an orderly transition of
the Services provided hereunder and shall use commercially reasonable efforts to
assist Buyer to complete the transition as promptly as practicable. In addition,
Seller will facilitate and support Buyer in the conversion of all necessary
systems from Seller’s systems to Buyer’s systems, including support of the
mapping and transferring of files. The parties agree to cooperate in good faith
and to use their commercially reasonable efforts to mutually develop a
conversion plan to effect the orderly transition of the Services from Seller’s
systems to Buyer’s systems. In connection therewith, the parties will in good
faith consider modifications to the initial service periods. Buyer agrees to pay
Seller for such conversion services on the basis of Seller’s direct costs,
administrative support costs and costs associated with special requests.

 

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8. Partial Termination. Subject to Section 7(e), Buyer may terminate any or all
of the Services, effective as of the last day of an accounting month of Seller,
at any time prior to the expiration of the period specified on Annex A
(including any renewal period) upon at least sixty (60) days’ prior written
notice to Seller. As soon as reasonably practicable following receipt of any
such notice, Seller shall advise Buyer in writing as to whether termination of
such Services shall reasonably require the termination or partial termination
of, or otherwise affect the provision of, any other Services. If such is the
case, Buyer may withdraw its termination notice in writing within five (5) days
of being so advised by Seller. Otherwise, such termination shall be final.

9. Cost Adjustment Factor. The fee for each Service specified on Annex A may be
increased every six months during the Service Period to pass along the
Business’s proportionate share, on the basis of the Business’s relative
utilization of the affected Service(s), of increases (if any) to the core costs
(including, but not limited to payroll, utilities, health and welfare benefits,
third party service contracts and materials) of providing such Services. Seller
will provide advance notice and reasonable support documentation to Buyer of any
such fee increase.

10. Certain Advance Payments. Any obligations or liabilities of Buyer that would
require an out-of-pocket expenditure from Seller or its Affiliates in order for
Seller to perform the Services (e.g., payroll and accounts payable, to the
extent Buyer directs Seller and Seller agrees to pay such amounts from accounts
of Seller or its Affiliates) shall be advanced to Seller by Buyer in a manner
specified in a notice to Buyer from Seller from time to time, it being
understood that Seller shall have no obligation to make or commit to make any
such expenditure until such time as the applicable advance has been received by
Seller.

11. Confidentiality. Each party shall, and shall cause each of its Affiliates
and each of its and their officers, directors and employees to, hold all
information relating to the business of the other party disclosed to it by
reason of this Agreement (the “Confidential Information”) confidential, and
shall not disclose or permit to be disclosed any such Confidential Information
to any third party unless legally required to disclose such information;
provided, however, that to the extent that a Person receiving Confidential
Information hereunder may receive the written advice of outside counsel that
disclosure of any Confidential Information is required in order that such Person
not commit a violation of law, such Person: (a) to the extent not inconsistent
with such Person’s obligation to disclose, will give the other party hereto
prompt notice of such request so that such party may seek an appropriate
protective order: (b) may only disclose such information if it shall first have
used commercially reasonable efforts to, and, if practicable, shall have
afforded the other party the opportunity to, obtain an appropriate protective
order or other satisfactory assurance of confidential treatment for the
information required to be so disclosed; and (c) if such protective order or
other remedy is not obtained, or the other party waives such Person’s compliance
with the provisions of this Section 11, shall only furnish that portion of the
Confidential Information which is legally required to be so disclosed. As used
herein, “Confidential Information” does not include any information that: (i) is
or becomes generally available to the public or the retail industry other than
as a result of a

 

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disclosure by the party receiving the Confidential Information in violation of
this Agreement; (ii) was available to the receiving party on a non-confidential
basis prior to its disclosure by the disclosing party; (iii) becomes available
to the receiving party from a Person other than the disclosing party or its
Affiliates who is not, to the receiving party’s knowledge, subject to any
legally binding obligation to keep such information confidential; or (iv) such
party demonstrates is or was independently developed by or on behalf of such
party without the direct or indirect use of any of the other party’s
Confidential Information. In the event Buyer terminates this Agreement upon the
occurrence of a Change in Control pursuant to Section 7(d), Seller shall, at the
request of Buyer, promptly redeliver to Buyer all copies of documents containing
Confidential Information of Buyer and will promptly destroy all memoranda,
notes, writings and other material (in any format, including, without
limitation, electronic) prepared by Seller or any of its officers, directors,
employees or advisors based upon, in whole or in part, any Confidential
Information of Buyer. In addition, Seller will certify to Buyer its compliance
with this Section 11.

12. Third Party Non-Disclosure Agreements. To the extent that any third party
proprietor of information or Software to be disclosed or made available to Buyer
in connection with performance of the Services hereunder requires a specific
form of non-disclosure agreement as a condition of its consent to use of the
same for the benefit of Buyer or to permit Buyer access to such information or
Software, Buyer shall execute (and shall cause Buyer’s employees to execute, if
required) any such form in substantially the same form executed by Seller (if
required).

13. Limitation of Liability; Disclaimer; Indemnity.

(a) Neither party nor any of their respective Affiliates shall be liable to the
other party, its Affiliates or any third party for any special, incidental,
consequential (including loss of revenues or profits), exemplary or punitive
damages arising from any claim relating to this Agreement or any of the Services
to be provided hereunder or the performance of or failure to perform such
party’s obligations under this Agreement, whether such claim is based on
warranty, contract, tort (including negligence or strict liability) or
otherwise, all of which are hereby excluded by agreement of the parties
regardless of whether or not any party to this Agreement has been advised of the
possibility of such damages. In addition, neither party nor any of their
respective Affiliates shall be liable to the other party, its Affiliates or any
third party for any direct damages arising from any claim relating to this
Agreement or any of the Services to be provided hereunder or the performance of
or failure to perform such party’s obligations under this Agreement, except to
the extent that such direct damages are caused by the fraud, negligence or
willful misconduct of such party or its respective Affiliates. EXCEPT AS
SPECIFICALLY SET FORTH HEREIN, SELLER SPECIFICALLY DISCLAIMS ALL WARRANTIES OF
ANY KIND, EXPRESS OR IMPLIED, ARISING OUT OF OR RELATED TO THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR
PURPOSE AND NON-INFRINGEMENT. Notwithstanding the foregoing, Seller’s cumulative
aggregate liability to Buyer and its Affiliates under this Agreement shall not
exceed the amount of fees paid by Buyer to Seller pursuant to this Agreement
during the six (6) months prior to the date of such failure; provided, that, if
the date of such failure occurs prior to the first 6-month anniversary of the
date of this Agreement, Seller’s aggregate liability shall not exceed an amount
equal to the good faith estimate of the fees

 

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to be paid during the first six (6) months of this Agreement unless such failure
arises from fraud or willful misconduct of Seller, which estimate shall be based
on the aggregate amount of fees received by Seller pursuant hereto at the time
of such failure. Notwithstanding anything contained herein to the contrary, the
limitations set forth in this Section 13(a) shall not apply with respect to any
breach of Section 11.

(b) Buyer shall indemnify Seller and each of its Affiliates against all Losses
attributable to any third party claims arising from or relating to the provision
of Services under this Agreement to the extent that such Losses arise from the
fraud, negligence or willful misconduct of Buyer, any of its Affiliates or any
of their respective employees, officers or directors.

(c) Seller shall indemnify Buyer and each of its Affiliates against all Losses
attributable to any third party claims arising from or relating to the provision
of Services under this Agreement to the extent that such Losses arise from the
fraud, negligence or willful misconduct of Seller, any of its Affiliates or any
of their respective employees, officers or directors.

(d) All claims for indemnification pursuant to this Section 13 shall be made in
accordance with the procedures set forth in Sections 10.3 and 10.5 of the
Purchase Agreement.

14. Relationship of Parties. Except as specifically provided herein, neither
party shall: (a) act or represent or hold itself out as having authority to act
as an agent or partner of the other party; or (b) in any way bind or commit the
other party to any obligations or agreement. Nothing contained in this Agreement
shall be construed as creating a partnership, joint venture, agency, trust,
fiduciary relationship or other association of any kind, each party being
individually responsible only for its obligations as set forth in this
Agreement. The parties’ respective rights and obligations hereunder shall be
limited to the contractual rights and obligations expressly set forth herein on
the terms and conditions set forth herein.

15. Force Majeure. If Seller, any of its Affiliates or any Subcontractor is
prevented from or delayed in complying, either totally or in part, with any of
the terms or provisions of this Agreement by reason of fire, flood, storm,
strike, walkout, lockout or other labor trouble or shortage, delays by
unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or
components, any law, order, proclamation, regulation, ordinance, demand, seizure
or requirement of any governmental authority, riot, civil commotion, war,
rebellion, acts of terrorism, nuclear accident or other causes beyond the
reasonable control of any such Person or other acts of God, or acts, omissions
or delays in acting by any governmental or military authority or Buyer, then
upon notice to Buyer, the affected provisions and/or other requirements of this
Agreement shall be suspended during the period of such disability and Seller
shall have no liability to Buyer, it Affiliates or any other Person in
connection therewith. Seller and Buyer shall make commercially reasonable
efforts to remove such disability within thirty (30) days after giving notice of
such disability; provided, however, that nothing in this Section 15 will be
construed to require the settlement of any strike, walkout, lockout or other
labor dispute on terms which, in the reasonable judgment of Seller, are contrary
to its interest. It is understood that the settlement of a strike, walkout,
lockout or other labor dispute will be entirely within the discretion of Seller.
If Seller is unable to provide any of the Services due to such a disability,

 

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each party shall use their commercially reasonable efforts to cooperatively seek
a solution that is mutually satisfactory. In addition, upon becoming aware of a
disability causing a delay in performance or preventing performance of any
obligations of Seller under this Agreement, Buyer shall have the right, but not
the obligation, to engage subcontractors to perform such obligations for the
duration of the period during which such disability delays or prevents the
performance of such obligation by Seller.

16. Notices. All notices or other communications required or permitted hereunder
shall be in writing and shall be delivered personally, by facsimile or sent by
private courier or by registered or certified mail, and shall be deemed given
when so delivered personally, by facsimile or by private courier or, if mailed,
two business days after the mailing, as follows:

If to Buyer, to:

Belk, Inc.

2801 West Tyvola Road

Charlotte, North Carolina 28217

Facsimile: (704) 357-1883

Attention: Ralph A. Pitts

with a copy to:

King & Spalding LLP

1180 Peachtree Street

Atlanta, Georgia 30309

Facsimile: (404) 572-5100

Attention: John D. Capers, Jr.

If to Seller, to:

Saks Incorporated

750 Lakeshore Parkway

Birmingham, Alabama 35211

Facsimile: (205) 940-4468

Attention: Executive Vice President and General Counsel

with a copy to:

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Facsimile: (312) 853-7036

Attention: Michael S. Sigal and Gary D. Gerstman

 

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or to such other address as such party may indicate by a notice delivered to the
other party hereto.

17. Successors and Assigns. The rights of either party under this Agreement
shall not be assignable by such party hereto (except by operation of law in
connection with a merger involving, or sale of substantially all of the assets
of, such party) without the prior written consent of the other party. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon any Person other
than the parties and successors and assigns permitted by this Section 17 any
right, remedy or claim under or by reason of this Agreement.

18. Entire Agreement; Amendments. This Agreement and the annexes referred to
herein and the documents delivered pursuant hereto contain the entire
understanding of the parties hereto with regard to the subject matter contained
herein or therein, and supersede all other prior representations, warranties,
agreements, understandings or letters of intent between or among any of the
parties hereto (it being understood, however, that the Purchase Agreement and
agreements contemplated thereby set forth certain additional understandings
between Seller and Buyer regarding their relationship after the Closing Date).
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the parties
hereto.

19. Partial Invalidity. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.

20. Waivers. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the party or parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently authorized
for the purposes of this Agreement if, as to any party, it is authorized in
writing by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

21. Execution in Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original instrument, but all
of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by each of the parties
hereto and delivered to Seller and Buyer.

 

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22. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of New York.

23. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

24. Interpretation. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings given to such terms in the Purchase Agreement.
For purposes of this Agreement: (a) the words “include,” “includes” and
“including” shall be deemed to be followed by the words “without limitation”;
(b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,”
“hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless
the context otherwise requires, references herein (i) to Sections mean the
Sections of this Agreement and (ii) to an agreement, instrument or other
document means such agreement, instrument or other document as amended,
supplemented and modified from time to time to the extent permitted by the
provisions thereof and by this Agreement. Headings of Sections are inserted for
convenience of reference only and shall not be deemed a part of or to affect the
meaning or interpretation of this Agreement. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting an instrument or causing any
instrument to be drafted.

25. Annexes. Annex A and Annex B shall be construed with and as an integral part
of this Agreement to the same extent as if it was set forth verbatim herein.

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed as of the date set forth above, all effective as of the Effective Date.

 

SAKS INCORPORATED By:  

/s/ Charles J. Hansen

Name:   Charles J. Hansen Title:   Executive Vice President and General Counsel
BELK, INC. By:  

/s/ Ralph A. Pitts

Name:   Ralph A. Pitts Title:   Executive Vice President and General Counsel

Signature Page

to

Transition Services Agreement