EXHIBIT 10a
SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
dated as of April 30, 2002
among
STEIN MART, INC.
as Borrower
THE LENDERS PARTY HERETO
and
SUNTRUST BANK
as Administrative Agent
FLEET NATIONAL BANK
as Syndication Agent
FIRST UNION NATIONAL BANK
as Documentation Agent
================================================================================
SUNTRUST ROBINSON HUMPHREY CAPITAL MARKETS,
A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
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SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
--------------------------
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (this "Second
Amendment") is made and entered into as of April 30, 2002, by and among STEIN
MART, INC., a Florida corporation (the "Borrower"), the several banks and other
financial institutions from time to time party hereto (the "Lenders"), and
SUNTRUST BANK, in its capacity as Administrative Agent for the Lenders (the
"Administrative Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to that certain Revolving Credit Agreement, dated as of June 28, 2001,
as amended by that certain First Amendment to Revolving Credit Agreement, dated
as of November 9, 2001 (as amended, the "Existing Credit Agreement");
WHEREAS, pursuant to the Existing Credit Agreement, the Lenders
severally, to the extent of their respective Commitments on a ratable basis up
to the total of each Lender's Commitment, established for the Borrower a
$135,000,000 senior revolving credit facility with a $10,000,000 swingline and a
$10,000,000 letter of credit sub-facility thereunder, all upon the terms and
conditions, and subject to the limitations, set forth in the Existing Credit
Agreement;
WHEREAS, the Borrower, as of the end of the fiscal year ended February
2, 2002, was not in compliance with a certain financial covenant contained in
the Existing Credit Agreement, in particular that covenant contained in Section
6.2 (Fixed Charge Coverage Ratio), and such non-compliance would have
constituted an Event of Default under the Existing Credit Agreement if not
waived by the Lenders and the Administrative Agent as provided herein;
WHEREAS, the Borrower has requested the Lenders and the Administrative
Agent (a) to waive the Borrower's non-compliance with the foregoing financial
covenant for the fiscal year ended February 2, 2002 (but for no future fiscal
period) and the Event of Default arising from such non-compliance, and (b) to
amend the foregoing financial covenant, as well as certain other covenants
contained in the Existing Agreement, and the Lenders and the Administrative
Agent have agreed to do so, but only upon the terms and conditions set forth
herein; and
WHEREAS, the parties hereto have consulted with, and obtained the
representation and advice of, their respective legal counsel with regard to the
terms and conditions of this Second Amendment, and each party has had the
opportunity to participate fully in the drafting of this Second Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower, the Required Lenders and the
Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.1 Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, the following terms as used in this Second
Amendment, including the preamble and recitals, have the meanings set forth
below:
"Amended Credit Agreement" shall mean the Existing Credit
Agreement, as further amended hereby.
"Effective Date" shall have the meaning assigned to such term
in Article IV.
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Section 1.2 Other Definitions. Unless otherwise defined herein,
capitalized terms used herein (including the above recitals) and not defined
herein shall have the meanings assigned to such terms in the Existing Credit
Agreement.
ARTICLE II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
---------------------------------------
Except as otherwise set forth in Section 2.15, effective as of the
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Article II as follows:
Section 2.1 Amendment to Section 1.1 - Definitions. Section 1.1 -
Definitions of "ARTICLE I - DEFINITIONS; CONSTRUCTION" of the Existing Credit
Agreement is hereby amended to delete the definitions of the terms "Applicable
Margin", "Applicable Percentage" and "Loan Documents" in their entirety and to
insert the following new definitions for such terms in their place:
"Applicable Margin" shall mean, as of any date, with respect
to all Eurodollar Borrowings and Base Rate Borrowings outstanding on
such date, the percentage per annum designated in the "Pricing Grid"
attached hereto as Schedule I as applicable to Eurodollar Borrowings or
Base Rate Borrowings, as the case may be, based on the Borrower's ratio
of Consolidated Adjusted Debt to Consolidated EBITDAR. The Applicable
Margin for Eurodollar Borrowings shall initially be 1.875% and the
Applicable Margin for Base Rate Borrowings shall initially be .875%;
provided, however, that upon delivery to the Administrative Agent of
the financial statements required by Section 5.1(a) or (b) and the
compliance certificate required by Section 5.1(c) for the fiscal
quarter ending May 4, 2002 and for each fiscal quarter thereafter, the
Applicable Margin shall be reset to the percentage designated in
Schedule I based on the Borrower's ratio of Consolidated Adjusted Debt
to Consolidated EBITDAR for the preceding four fiscal quarter period
then ending, measured quarterly, such Applicable Margin being effective
as of the second Business Day following the date that the
Administrative Agent receives such financial statements and
certificate; provided further, however, that if at any time the
Borrower shall have failed timely to deliver such financial statements
and certificate, the Applicable Margin for Eurodollar Borrowings shall
be 2.25% and the Applicable Margin for Base Rate Borrowings shall be
1.25% until such time as such financial statements and certificate are
delivered, at which time the Applicable Margin shall be determined as
provided above.
"Applicable Percentage" shall mean, as of any date, with
respect to the commitment fee, the percentage per annum designated in
the "Pricing Grid" attached hereto as Schedule I based on the
Borrower's ratio of Consolidated Adjusted Debt to Consolidated EBITDAR.
The Applicable Percentage shall initially be 0.40%; provided, however,
that upon delivery to the Administrative Agent of the financial
statements required by Section 5.1(a) or (b) and the compliance
certificate required by Section 5.1(c) for the fiscal quarter ending
May 4, 2002 and for each fiscal quarter thereafter, the Applicable
Percentage shall be reset to the percentage designated in Schedule I
based on the Borrower's ratio of Consolidated Adjusted Debt to
Consolidated EBITDAR for the preceding four fiscal quarter period then
ending, measured quarterly, such Applicable Percentage being effective
as of the second Business Day following the date that the
Administrative Agent receives such financial statements and
certificate; provided further, however, that if at any time the
Borrower shall have failed timely to deliver such financial statements
and certificate, the Applicable Percentage shall be 0.50% until such
time as such financial statements and certificate are delivered, at
which time the Applicable Percentage shall be determined as provided
above.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes (if any), the LC Documents, all Notices of Borrowing and
Borrowing Availability Certificates, the Subsidiary Guarantee
Agreement, the Indemnity and Contribution Agreement, the Security
Agreement and any and all other instruments, agreements, documents and
writings executed in connection with any of the foregoing.
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Section 2.2 Amendment to Section 1.1 - Definitions. Section 1.1 -
Definitions of "ARTICLE I - DEFINITIONS; CONSTRUCTION" of the Existing Credit
Agreement is hereby amended to insert the following new definitions for "Cash
Dividend and Redemption Conditions", "Collateral", "Collateral Exceptions,"
"Excess Availability", "Excess Borrowing Availability" and "Security Agreement":
"Cash Dividend and Redemption Conditions" shall have the
meaning set forth in Section 7.5.
"Collateral" shall mean a collective reference to the
"Collateral" which is identified in, and at any time will be covered
by, the Security Agreement.
"Collateral Exceptions" shall mean (a) Permitted Encumbrances,
(b) the following which are not in the aggregate material as to the
Collateral taken as a whole: (i) goods in transit, (ii) goods located
outside of the United States, and (iii) goods located in a jurisdiction
which has not adopted the UCC (as that term is defined in the Security
Agreement) or a version thereof, and (c) any Lien of the Administrative
Agent for the benefit of the Lenders on any bank accounts, balances and
deposits of the Borrower which has not been perfected by an appropriate
control agreement or other permitted method of perfection under the UCC
(unless such Bank accounts, balances and deposits are being held by the
Administrative Agent).
"Excess Availability" shall mean, for any period, the
Aggregate Revolving Commitments minus the sum of outstanding Borrowings
and LC Exposure.
"Excess Borrowing Availability" shall mean, for any period,
the Borrowing Availability minus the sum of outstanding Borrowings and
LC Exposure.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit F, made by the Borrower in favor
of the Administrative Agent for the benefit of the Lenders.
Section 2.3 Amendment to Section 2.3 - Procedure for Revolving
Borrowings. The first sentence of Section 2.3 - Procedure for Revolving
Borrowings of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the Existing
Credit Agreement is hereby amended to delete such sentence in its entirety and
to insert the following new sentence in its place:
The Borrower shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of each
Revolving Borrowing, substantially in the form of Exhibit 2.3 attached
hereto (a "Notice of Revolving Borrowing"), (a) prior to 11:00 a.m. on
the requested date of each Base Rate Borrowing and (b) prior to 11:00
a.m. three (3) Business Days prior to the requested date of each
Eurodollar Borrowing.
Section 2.4 Amendment to Section 2.5(a) - Procedure for Swingline
Borrowing, Etc. The first sentence of Section 2.5(a) - Procedure for Swingline
Borrowing of "ARTICLE II - AMOUNT AND TERMS OF THE COMMITMENTS" of the Existing
Credit Agreement is hereby amended to delete such sentence in its entirety and
to insert the following new sentence in its place:
The Borrower shall give the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing) of each
Swingline Borrowing ("Notice of Swingline Borrowing") prior to 11:00
a.m. on the requested date of each Swingline Borrowing.
Section 2.5 Amendment to Section 2.6(a) - Funding of Borrowings. The
first sentence of Section 2.6(a) - Funding of Borrowings of "ARTICLE II - AMOUNT
AND TERMS OF THE COMMITMENTS" of the Existing Credit Agreement is hereby amended
to delete such sentence in its entirety and to insert the following new sentence
in its place:
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Each Lender will make available each Loan to be made by it
hereunder on the proposed date thereof by wire transfer in immediately
available funds by 1:00 p.m. to the Administrative Agent at the Payment
Office; provided, that Swingline Loans will be made as set forth in
Section 2.5.
Section 2.6 Amendment to Section 2.11(b) - Optional Prepayments. The
first sentence of Section 2.11(b) - Optional Prepayments of "ARTICLE II - AMOUNT
AND TERMS OF THE COMMITMENTS" of the Existing Credit Agreement is hereby amended
to delete such sentence in its entirety and to insert the following new sentence
in its place:
The Borrower shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, without premium or
penalty, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent no later
than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00
a.m. not less than three (3) Business Days prior to any such
prepayment, (ii) in the case of any prepayment of any Base Rate
Borrowing, 11:00 a.m. on the date of such prepayment, and (iii) in the
case of Swingline Borrowings, prior to 11:00 a.m. on the date of such
prepayment.
Section 2.7 Addition of New Section 4.16 - Security Agreement. "ARTICLE
IV - REPRESENTATIONS AND WARRANTIES" of the Existing Credit Agreement is hereby
amended to add the following new Section 4.16 - Security Interest:
Section 4.16 Security Interest. Upon the execution and
delivery of the Security Agreement and the filing of a financing
statement with the Florida Secured Transactions Registry, the
Administrative Agent shall have a valid, perfected first priority and
enforceable Lien on the Collateral except for the Collateral
Exceptions.
Section 2.8 Addition of New Section 5.12 - Security Agreement. "ARTICLE
V - AFFIRMATIVE COVENANTS" of the Existing Credit Agreement is hereby amended to
add the following new Section 5.12 - Security Agreement:
Section 5.12 Security Agreement. The Borrower (a) will grant
the Administrative Agent a valid, perfected first priority (except for
the Collateral Exceptions) and enforceable Lien on the Collateral as
security for the Obligations by executing an agreement reasonably
acceptable to the Administrative Agent and substantially in the form of
Exhibit F, and (b) will deliver simultaneously therewith any documents
and other items reasonably requested by the Administrative Agent in
connection therewith to properly evidence and perfect such Lien.
Section 2.9 Addition of New Section 5.13 - Further Assurances. "ARTICLE
V - AFFIRMATIVE COVENANTS" of the Existing Credit Agreement is hereby amended to
add the following new Section 5.13 - Further Assurances:
Section 5.13 Further Assurances. The Borrower will make,
execute, endorse, acknowledge and deliver any amendments, modifications
or supplements hereto and restatements hereof and any other agreements,
instruments or documents, and take any and all such actions, as may
from time to time be reasonably requested by the Administrative Agent
or the Required Lenders to perfect and maintain the validity and
priority of the Liens granted pursuant to the Security Agreement and to
effect, confirm or further assure or protect and preserve the
interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Loan Documents (including,
without limitation, any and all instruments necessary or appropriate to
effect the pledge of the Collateral to the Administrative Agent for the
benefit of the Lenders).
Section 2.10 Amendment to Section 6.1 - Consolidated Adjusted Debt to
Consolidated EBITDAR Ratio. Section 6.1 - Consolidated Adjusted Debt to
Consolidated EBITDAR Ratio of "ARTICLE VI
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FINANCIAL COVENANTS" of the Existing Credit Agreement is hereby amended to
delete such Section in its entirety and to insert the following new Section 6.1
in its place:
Section 6.1 Consolidated Adjusted Debt to Consolidated EBITDAR
Ratio. The Borrower and its Subsidiaries will have, as of the end of
each fiscal quarter of the Borrower, commencing with the fiscal quarter
ending June 30, 2001, a Consolidated Adjusted Debt to Consolidated
EBITDAR Ratio of not greater than:
-------------------------------------- --------------------------------
Fiscal Quarter Required Ratio
-------------------------------------- --------------------------------
The fiscal quarters ending on June
30, 2001, September 29, 2001 and 3.25:1.0
February 2, 2002
-------------------------------------- --------------------------------
Each fiscal quarter ending after
February 2, 2002 and on or prior to 3.75:1.0
November 2, 2002
-------------------------------------- --------------------------------
Each fiscal quarter ending after
November 2, 2002 3.25:1.0
-------------------------------------- --------------------------------
in each case, calculated on a rolling four-quarter basis as to
Consolidated EBITDAR.
Section 2.11 Amendment to Section 6.2 - Fixed Charge Coverage Ratio.
Section 6.2 - Fixed Charge Coverage Ratio of "ARTICLE VI FINANCIAL COVENANTS" of
the Existing Credit Agreement is hereby amended to delete such Section in its
entirety and to insert the following new Section 6.2 in its place:
Section 6.2 Fixed Charge Coverage Ratio. The Borrower and its
Subsidiaries will have, as of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending June 30, 2001, a
Fixed Charge Coverage Ratio of not less than:
-------------------------------------- --------------------------------
Fiscal Quarter Required Ratio
-------------------------------------- --------------------------------
The fiscal quarters ending on June
30, 2001, September 29, 2001 and 2.00:1.0
February 2, 2002
-------------------------------------- --------------------------------
Each fiscal quarter ending after
February 2, 2002 and on or prior to 1.50:1.0
November 2, 2002
-------------------------------------- --------------------------------
Each fiscal quarter ending after
November 2, 2002 1.75:1.0
-------------------------------------- --------------------------------
in each case, calculated on a rolling four-quarter basis as to
Consolidated EBITDAR.
Section 2.12 Amendment to Section 7.5 - Restricted Payments. Section
7.5 - Restricted Payments of "ARTICLE VII - NEGATIVE COVENANTS" of the Existing
Credit Agreement is hereby amended to delete such Section in its entirety and to
insert the following new Section 7.5 in its place:
Section 7.5 Restricted Payments. The Borrower will not, and
will not permit its Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any dividend on any class of its
stock, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption,
retirement, defeasance or other acquisition of, any shares of common
stock or Indebtedness subordinated to the Obligations of the Borrower
or any options, warrants, or other rights to purchase such common stock
or such Indebtedness, whether now or hereafter outstanding (each, a
"Restricted Payment"), except for (a) dividends payable by
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the Borrower solely in shares of any class of its common stock, (b)
Restricted Payments made by any Subsidiary to the Borrower or to
another Subsidiary and (c) cash dividends paid on, and cash
redemptions of, the common stock of the Borrower which from the
Closing Date through December 29, 2001 do not exceed $22,500,000
(provided, that the sum of all Restricted Payments in fiscal year 2001
do not exceed $26,000,000). Commencing on May 5, 2002, cash dividends
paid on, and cash redemptions of, the common stock of the Borrower
shall not exceed 15% of Consolidated Net Income (if greater than $0)
earned during the immediately preceding fiscal quarter, provided, that
(i) no Default or Event of Default has occurred and is continuing at
the time such dividend is paid or redemption is made, and (ii) if
Restricted Payments in any fiscal quarter are less than permitted in
such fiscal quarter, the excess permitted amount for such fiscal
quarter may be carried forward to the next succeeding fiscal quarter,
provided further, that if (i) the Borrower's Fixed Charge Coverage
Ratio for the fiscal quarter ending on November 2, 2002 shall not be
less than 1.75:1.00, calculated on a rolling four-quarter basis as to
Consolidated EBITDAR, as reflected in the compliance certificate
required by Section 5.1(a) for such fiscal quarter, (ii) the Borrower
shall have Excess Availability of not less than 15% of its Aggregate
Revolving Commitments at each point in time through December 15, 2002,
and (iii) the Borrower shall have Excess Borrowing Availability of not
less than 15% of its Borrowing Availability at each point in time
through December 15, 2002 (collectively, the "Cash Dividend and
Redemption Conditions"), then as of December 16, 2002, cash dividends
paid on, and cash redemptions of, the common stock of the Borrower may
be increased to 25% of Consolidated Net Income (if greater than $0)
earned during the immediately preceding fiscal quarter, provided
further, however, that if the Cash Dividend and Redemption Conditions
are not satisfied, then cash dividends shall not exceed $750,000 per
fiscal quarter commencing with the fiscal quarter in which the Cash
Dividend and Redemption Conditions are not satisfied.
Section 2.13 Redesignation of Existing Section 8.1(o) as Section 8.1(p)
and Addition of New Section 8.1(o). Section 8.1(o) - Events of Default of
"ARTICLE VIII - EVENTS OF DEFAULT" of the Existing Agreement is hereby
redesignated as Section 8.1(p) and said Section is hereby amended to add the
following new Section 8.1(o):
(o) any material provision of the Security Agreement shall for
any reason cease to be valid and binding on, or enforceable against,
the Borrower or shall cease to give the Administrative Agent the Liens,
rights, powers and privileges purported to be created thereby in favor
of the Administrative Agent for the benefit of the Lenders, or the
Borrower shall so state in writing, or the Borrower shall seek to
terminate the Security Agreement in violation of the terms thereof or
any of its covenants and agreements thereunder; or
Section 2.14 Amendment to Section 10.2(b)(vii) - Waiver; Amendments.
Section 10.2(b)(vii) - Waiver; Amendments of "ARTICLE X - MISCELLANEOUS" of the
Existing Credit Agreement is hereby amended by deleting the term "collateral" in
Section 10.2(b)(vii) and substituting the term "Collateral" in its place.
Section 2.15 Amendment to Schedule I - Pricing Grid. The Existing
Credit Agreement is hereby amended to insert the following new Schedule I -
Pricing Grid:
[Pricing Grid appears on next page]
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SCHEDULE I
PRICING GRID
- --------------------------------------------------------------------------------
Consolidated Adjusted Applicable Margin Applicable Percentage
Debt to EBITDAR (per annum) (per annum)
- --------------------- ------------------ ---------------- ----------------------
Base Eurodollar Commitment
Rate Fee
- --------------------- ------------------ ---------------- ----------------------
<3.00x 0.75% 1.75% 0.375%
- --------------------- ------------------ ---------------- ----------------------
=>3.00x to <3.25x 0.875% 1.875% 0.40%
- --------------------- ------------------ ---------------- ----------------------
=>3.25x to <3.50x 1.00% 2.00% 0.40%
- --------------------- ------------------ ---------------- ----------------------
=>3.50x 1.25% 2.25% 0.50%
- --------------------- ------------------ ---------------- ----------------------
Notwithstanding any other provisions of this Second Amendment,
the new Pricing Grid set forth above shall be effective and applicable
on and after February 2, 2002.
ARTICLE III
CONSENT AND WAIVER OF COVENANT VIOLATION
----------------------------------------
Section 3.1 Consent and Waiver. Under the terms and conditions of
Section 6.2 - Fixed Charge Coverage Ratio of "ARTICLE VI - FINANCIAL COVENANTS"
of the Existing Credit Agreement, the Borrower and its Subsidiaries were
required to have, as of the end of each fiscal quarter of the Borrower,
commencing with the fiscal quarter ending June 30, 2001, a Fixed Charge Coverage
Ratio of not less than 2.0:1.0, calculated on a rolling four-quarter basis as to
Consolidated EBITDAR. The Borrower acknowledges and agrees that the Borrower and
its Subsidiaries were not in compliance with this covenant as at fiscal quarter
end February 2, 2002 and, as a result thereof, the Borrower has requested that
the Lenders waive such covenant non-compliance for such period. In consideration
of the covenants and agreements set forth in this Second Amendment, the
Administrative Agent and the Lenders, pursuant to Section 10.2(b) of the
Existing Credit Agreement, hereby agree, effective retroactively to February 2,
2002, upon the Effective Date, to waive the Borrower's non-compliance with the
Fixed Charge Coverage Ratio covenant set forth in Section 6.3 of the Existing
Credit Agreement for the fiscal quarter ended February 2, 2002; provided, that
the Borrower shall be in full compliance with the Fixed Charge Coverage Ratio
covenant (as modified as set forth in Section 2.11) for each fiscal quarter
ending after February 2, 2002.
Section 3.2 No Future Waiver. The waiver set forth in Section 3.1 is a
one-time waiver, applicable only to the Borrower's non-compliance with the Fixed
Charge Coverage Ratio covenant set forth in Section 6.2 of the Existing Credit
Agreement for the fiscal quarter ended February 2, 2002, and shall not be
construed to be (a) a waiver as to future compliance with Section 6.2 of the
Amended Credit Agreement, (b) a waiver of any Default or Event of Default that
may now or hereafter exist, or (c) an amendment of or modification to the
Existing Credit Agreement. The Administrative Agent and the Lenders hereby
reserve all of their rights, powers and remedies under the Amended Credit
Agreement, after giving effect to this Second Amendment, and applicable law.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
---------------------------
This Second Amendment shall be and become effective as of the date
hereof (the "Effective Date") when all of the conditions set forth in this
Article IV shall have been satisfied, as reasonably determined by the
Administrative Agent, and thereafter, this Second Amendment shall be known, and
may be referred to, as the "Second Amendment":
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Section 4.1 Approval by Required Lenders. The Required Lenders shall
have approved the modifications and amendments set forth in this Second
Amendment, such approval to be evidenced by such Required Lenders' execution of
counterparts of this Second Amendment as set forth in Section 4.2.
Section 4.2 Execution of Counterparts. The Administrative Agent shall
have received (including by telecopy) counterparts of this Second Amendment that
shall have been duly executed on behalf of the Borrower, the Administrative
Agent and the Required Lenders.
Section 4.3 Legal Details, Etc. All documents executed or submitted
pursuant hereto shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel prior to or by the time of closing. Prior
to or by the time of closing, the Administrative Agent and its counsel shall
have received all information, legal opinions and other documents, and such
counterpart originals or such certified or other copies of such originals as the
Administrative Agent or its counsel may reasonably request, and all legal
matters incident to the transactions contemplated by this Second Amendment shall
be reasonably satisfactory to the Administrative Agent and its counsel.
Section 4.4 Payment of Waiver/Modification Fee. The Borrower shall have
paid to the Administrative Agent a waiver/modification fee in connection with
this Second Amendment in an amount equal to 0.25% multiplied by the aggregate
Commitments, such fee being for the account of each Consenting Lender (as
defined below) and payable pro rata based on the ratio of such Consenting
Lender's Commitment to the aggregate of all such Consenting Lenders'
Commitments; provided, that such fee shall be payable only to those Lenders
(each, a "Consenting Lender," and collectively, the "Consenting Lenders") that
shall have returned (including via telecopy addressed to C. William Buchholz at
904-632-2874 with delivery of original to follow as required by Section 5.5)
executed signature pages to this Second Amendment on or before the close of
business on May 13, 2002, as directed by the Administrative Agent.
Section 4.5 Payment of Other Fees and Expenses. The Borrower shall have
paid all reasonable out-of-pocket costs and expenses of the Administrative
Agent, including the reasonable fees, charges and disbursements of counsel for
the Administrative Agent, in connection with the preparation, execution and
delivery of this Second Amendment.
Section 4.6 Receipt of Documentation. The Administrative Agent (or its
counsel) shall have received the following, each of which shall be in form and
substance reasonably satisfactory to the Administrative Agent (and its counsel):
(a) a duly executed Security Agreement substantially in
the form of Exhibit F attached to this Second Amendment;
(b) a certificate of the Secretary or Assistant Secretary of
each Loan Party, attaching and certifying copies of its bylaws and of
the resolutions of its boards of directors, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party
and certifying the name, title and true signature of each officer of
such Loan Party executing the Loan Documents to which it is a party;
(c) certified copies of the articles of incorporation or other
charter documents of each Loan Party, together with certificates of
good standing or existence, as may be available from the Secretary of
State of the jurisdiction of incorporation of such Loan Party;
(d) a favorable written opinion of Kirschner & Legler, P.A.,
counsel to the Loan Parties, addressed to the Administrative Agent and
each of the Lenders, drafted in accordance with the Report on Standards
for Opinions of Florida Counsel for Business and Real Estate
Transactions (June 1997) and covering such matters relating to the Loan
Parties, the Loan Documents and the transactions contemplated therein
as the Administrative Agent or the Required Lenders shall reasonably
request including, without limitation, the validity, enforceability and
perfection of the Lenders' security interest in the Collateral;
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(e) certified copies of all consents, approvals,
authorizations, registrations or filings required to be made or
obtained by each Loan Party in connection with the Loans and any
transaction being financed with the proceeds of the Loans;
(f) if any of the Collateral is at any time located or stored
on any premises leased by the Borrower or in any warehouse not owned by
the Borrower, copies of waivers, in form approved by the Administrative
Agent, delivered to each landlord or warehouseman involved, together
with a letter from Borrower to such landlord or warehouseman requesting
such landlord or warehouseman to subordinate any existing or future
Lien of said landlord or warehouseman on the Collateral to the security
interest of the Administrative Agent for the benefit of Lenders in such
Collateral (the Borrower shall use reasonable efforts to obtain the
requested waivers, which shall not include making any burdensome
concessions to such landlord or warehouseman, but it shall not be a
requirement to the effectiveness of this Second Amendment that any such
landlord or warehouseman favorably respond to such request); and
(g) UCC searches in the appropriate filing offices for
perfection of security interests in inventory and accounts in the
jurisdictions of each of the locations specified on Schedule 4.14,
together with copies of all financing statements on file in such
jurisdictions (with all attachments) and evidence that no Liens exist
on the Collateral or any other assets or properties of any such Loan
Party (other than Liens permitted by Section 7.2), and judgment and tax
lien searches in the jurisdiction of the chief executive office and
state of incorporation or formation of each Loan Party.
Section 4.7 Filing of Financing Statement. The Borrower shall have
authorized the filing of, and Collateral Agent shall have filed, a financing
statement with the Florida Secured Transactions Registry to perfect a security
interest in the Collateral.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.1 Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that, after
giving effect to this Second Amendment, (a) the execution, delivery and
performance of this Second Amendment has been duly authorized by all requisite
action of the Borrower, corporate or otherwise, (b) no Default or Event of
Default exists under the Existing Credit Agreement or any of the other Loan
Documents, (c) all representations, warranties covenants and Agreements of each
Loan Party set forth in the Loan Documents are true and correct in all material
respects on and as of the date hereof (except for those which expressly relate
to an earlier date), (d) since the date of the most recent financial statements
of the Borrower described in Section 5.1(a) or (b) of the Existing Credit
Agreement, there has been no change which has had or could reasonably be
expected to have a Material Adverse Effect, and (e) the Loan Documents are
legal, valid and binding obligations of the respective Loan Parties and are
enforceable by the Administrative Agent and the Lenders, as applicable, against
such Loan Parties in accordance with their respective terms in all material
respects.
Section 5.2 Cross References. References in this Second Amendment
to any Section are, unless otherwise specified, to such Section of this Second
Amendment.
Section 5.3 Instrument Pursuant to Existing Credit Agreement. This
Second Amendment is a document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.
Section 5.4 Loan Documents. The Borrower hereby confirms and agrees
that the Loan Documents are, and shall continue to be, in full force and effect
and hereby ratify and approve in all respects their obligations thereunder,
except that, upon the effectiveness of, and on and after the date of this Second
Amendment, all references in each Loan Document to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Existing Credit
Agreement shall mean the Amended Credit Agreement.
{OR498371;5}
9
Section 5.5 Acknowledgment of Outstanding Obligations. The Loan Parties
hereby acknowledge, certify and agree that pursuant to the Existing Credit
Agreement, (i) Lenders have made Eurodollar Loans to the Borrower that are
outstanding as of the date hereof in the aggregate principal amount of
$50,000,000.00 and Base Rate Loans to the Borrower that are outstanding as of
the date hereof in the aggregate principal amount of $2,000,000.00, (ii) the
Administrative Agent has made Swingline Loans to the Borrower that are
outstanding as of the date hereof in the aggregate principal amount of
$10,000,000.00 and (iii) the Issuing Bank has issued Letters of Credit on
behalf of or for the account of the Borrower in the aggregate face amount of
$2,064,080.00; the Borrower's obligation to pay the outstanding amounts under
such Existing Agreement to the Lenders, the Administrative Agent and/or the
Issuing Bank is not subject to any defense, claim, counterclaim, setoff, right
of recoupment, abatement or other determination whatsoever; including without
limitation, any usury or lender liability claim or defense, arising out of the
Loans or the issuance of any Letter of Credit or any past relationship between
or among the Borrower, the Lenders, the Administrative Agent and/or the Issuing
Bank that can be asserted by the Borrower either to reduce or eliminate all or
any part of its liability for the Obligations or to seek affirmative relief or
damages of any kind or nature from the Lenders, the Administrative Agent and/or
the Issuing Bank. The Loan Parties further acknowledge that to the extent that
any such claim should in fact exist, including without limitation, any usury or
lender liability claim, it is being fully, finally, and irrevocably released.
The Loan Parties hereby acknowledge and agree that but for the execution of this
Agreement an Event of Default would have existed under the Existing Credit
Agreement as referenced in Section 3.1 hereof and that the Lenders and the
Administrative Agent were under no obligation whatsoever to restructure the
Loans or any of the Loan Documents. In consideration of the terms and conditions
of this Second Amendment, made at the Borrower's request, the Loan Parties on
behalf of themselves and their respective successors and assigns hereby fully,
finally and irrevocably release the Lenders, the Administrative Agent and the
Issuing Bank, and their respective officers, directors, affiliates,
subsidiaries, parents, representatives, agents, shareholders, attorneys,
employees, predecessors, successors and assigns (collectively, the "Released
Parties") from any and all defenses, counterclaims, offsets, cross-claims,
claims and demands of any kind or nature existing as of the date of this Second
Amendment, including without limitation, any usury or lender liability claims or
defenses, whether known or unknown, and whenever and howsoever arising, relating
to the Loans or the Letters of Credit, or any past relationship between the Loan
Parties and any of the Released Parties. In addition, the Loan Parties hereby
agree not to commence, join in, prosecute, or participate in any suit or other
proceeding in a position adverse to that of any of the Released Parties arising
directly or indirectly from any of the foregoing matters. The Loan Parties
further agree that, from and after the effective date hereof, the Loans and the
Letters of Credit are and shall continue to be governed by the terms and
provisions of the Existing Credit Agreement, as modified and amended by this
Second Amendment.
Section 5.6 Counterparts; Facsimile Signatures; Effectiveness of Second
Amendment. This Second Amendment may be executed in one or more counterpart
copies, each of which constitutes an original, but all of which, when taken
together, shall constitute one agreement binding upon all of the parties hereto.
Further, the parties may execute facsimile copies of this Second Amendment and
the facsimile signature of any such party shall be deemed an original and fully
binding on said party; provided, however, any party executing this Second
Amendment by facsimile signature agrees to promptly provide an original executed
copy of this Second Amendment to the Administrative Agent. Notwithstanding
execution of this Second Amendment by the Borrower, the Guarantor and each of
the Required Lenders party hereto, this Second Amendment shall not be or become
effective and binding upon the parties until executed and accepted by the
Administrative Agent in its capacity as such on behalf of the Lenders.
Section 5.7 Governing Law; Etc. This Second Amendment shall be governed
by and construed in accordance with the applicable terms and provisions of
Section 10.5 - Governing Law; Jurisdiction; Consent to Service of Process of
"ARTICLE X - MISCELLANEOUS" of the Existing Credit Agreement, which terms and
provisions are incorporated herein by reference.
Section 5.8 No Other Modifications. Except as hereby amended, no other
term, condition or provision of the Existing Credit Agreement shall be deemed
modified or amended, and this Second Amendment shall not be considered a
novation.
{OR498371;5}
10
Section 5.9 Successors and Assigns. This Second Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 5.10 Complete Agreement. This Second Amendment constitutes the
complete agreement between the parties hereto with regard to the matters set
forth herein and incorporates all prior discussions, agreements and
representations made in respect of such matters.
[Signatures follow on next page]
{OR498371;5}
11
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed [under seal in the case of the Borrower] by their
respective duly authorized officers as of the day and year first above written.
STEIN MART, INC.
By: /s/ James G. Delfs
-------------------------------
Name: James G. Delfs
Title: Chief Financial Officer
[SEAL]
SUNTRUST BANK
as Administrative Agent, as
Issuing Bank, as Swingline Lender
and as a Lender
By: /s/ C. William Buchholz
-------------------------------
Name: C. William Buchholz
Title: Director
Revolving Commitment: $30,000,000
Swingline Commitment: $10,000,000
{OR498371;5} S-1
FLEET NATIONAL BANK, as a Lender
By: /s/ Linda Alto
-------------------------------
Name: Linda Alto
Title: Director
Revolving Commitment: $25,000,000
{OR498371;5}
S-2
WACHOVIA BANK, N.A., as a Lender
(formerly known as First Union
National Bank)
By: /s/ Miriam Howard
-------------------------------
Name: Miriam Howard
Title: Vice President
Revolving Commitment: $25,000,000
{OR498371;5}
S-3
US BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Amanda Smith
-------------------------------
Name: Amanda Smith
Title: Assistant Vice President
Revolving Commitment: $10,000,000
{OR498371;5}
S-4
CAROLINA FIRST BANK, as a Lender
By: /s/ Charles D. Chamberlain
-------------------------------
Name: Charles D. Chamberlain
Title: Executive Vice President
Revolving Commitment: $10,000,000
{OR498371;5}
S-5
COMPASS BANK, as a Lender
By: /s/ Joseph D. Sistare III
-------------------------------
Name: Joseph D. Sistare III
Title: Vice President
Revolving Commitment: $10,000,000
{OR498371;5}
S-6
REPUBLIC BANK, as a Lender
By: /s/ Brigitta Lawton
-------------------------------
Name: Brigitta Lawton
Title: Senior Vice President
Revolving Commitment: $10,000,000
{OR498371;5}
S-7
ISRAEL DISCOUNT BANK LIMITED, as
a Lender
By: /s/ Roberto Munoz
-------------------------------
Name: Roberto Munoz
Title: First Vice President
Revolving Commitment: $7,500,000
{OR498371;5}
S-8
REGIONS BANK, as a Lender
By: /s/ Anthony D. Nigro
-------------------------------
Name: Anthony D. Nigro
Title: Vice President
Revolving Commitment: $7,500,000
{OR498371;5}
S-9
JOINDER OF GUARANTOR
--------------------
The undersigned, as Guarantor under that certain Subsidiary Guarantee
Agreement, dated as of June 28, 2001 (the "Guarantee"), in favor of the
Administrative Agent, on behalf of the Lenders, hereby acknowledges and consents
to, and agrees to be bound by, the foregoing modifications and amendments to the
Existing Credit Agreement as set forth in this Second Amendment and to each of
the other terms and conditions thereof, and agrees that its Guarantee shall
continue in full force and effect and binding upon and enforceable against the
undersigned in accordance with its terms from and after the date hereof. The
undersigned hereby further acknowledges and agrees that its obligations under
the Guarantee are not subject to any off-set, defense or counterclaim whatsoever
and hereby waives any and all defenses of any nature whatsoever, legal,
equitable or otherwise, which the undersigned may now have with respect to the
undersigned's obligations under said Guarantee.
Dated as of the 30th day of April, 2002.
STEIN MART BUYING CORP.
By: /s/ James G. Delfs
-------------------------------
Name: James G. Delfs
Title: Senior Vice President/
CFO
[SEAL]
{OR498371;5}
S-10
EXHIBIT F
SECURITY AGREEMENT dated as of April 30,
2002 (this "Agreement"), between STEIN MART,
INC., a Florida corporation (the "Debtor"),
and SUNTRUST BANK, a Georgia banking
corporation, as administrative agent (the
"Administrative Agent") for the Lenders as
defined in the Credit Agreement referred to
below (in such capacity, "Secured Party").
Reference is made to the Revolving Credit Agreement, dated as of June
28, 2001, as amended by that certain First Amendment to Revolving Credit
Agreement, dated as of November 9, 2001, and as further amended by that certain
Second Amendment to Revolving Credit Agreement, dated as of the date hereof (as
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Debtor, the lenders from time to time party thereto
(the "Lenders") and SunTrust Bank, a Georgia banking corporation, as
Administrative Agent for the Lenders, swingline lender and issuing bank (in such
capacity, the "Issuing Bank"). Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to Debtor, and the Issuing Bank
has agreed to issue Letters of Credit for the account of Debtor, pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The obligations of the Lenders to continue to make Loans and of the
Issuing Bank to continue to issue Letters of Credit are conditioned on, among
other things, the execution and delivery by Debtor of a Security Agreement in
the form hereof. As consideration therefor and in order to induce the Lenders to
continue to make Loans and the Issuing Bank to continue to issue Letters of
Credit, Debtor is willing to execute this Security Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. Definitions. As used in this Agreement, the following
terms have the following meanings (and terms not defined herein shall have the
same meaning as assigned to them in the Credit Agreement):
"Account" means any "account," as such term is defined in Chapter 679
of the UCC, and, in any event, shall include, without limitation, any right of
the Debtor to payment of a monetary obligation, whether or not earned by
performance, (i) for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of, (ii) for services rendered or to be
rendered, or (iii) arising out of the use of a credit or charge card or
information contained on or for use with the card.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Collateral Exceptions" shall have the meaning assigned to such term in
the Credit Agreement.
"Inventory" means all "inventory," as such term is defined in Chapter
679 of the UCC, and, in any event, shall include, without limitation, each of
the following, (a) all goods, merchandise or personal property, wherever
located, held by Debtor for sale or lease or to be furnished under a contract of
service, (b) all raw materials, work-in-process and finished goods, (c)
inventory covered by a warehouse receipt, bill of lading or other negotiable or
non-negotiable document and (d) all goods that have been returned to,
repossessed by, or stopped in transit by the Debtor.
"Obligations" means and includes the "Obligations" as such term is
defined in the Credit Agreement.
"Proceeds" means any "proceeds," as such term is defined in Chapter 679
of the UCC and, in any event, shall include, but not be limited to, (a) any and
all proceeds of any insurance, indemnity, warranty, or guaranty payable to
Debtor from time to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to Debtor from time to
time in connection with any requisition, confiscation, condemnation, seizure,
{OR498808;3} F-1
or forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting, or purporting to act, for or on behalf of any
Governmental Authority), and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Revised Article 9" means Revised Article 9 of the Uniform Commercial
Code included in the 1998 official text of the Uniform Commercial Code as
approved by the American Law Institute in 1998 and the National Conference of
Commissioners on Uniform State Laws in 1999.
"UCC" shall mean the Florida Uniform Commercial Code as set forth in
Chapters 671 through 680, Florida Statutes, as the same may be amended from time
to time.
SECTION 1.2. Other Definitional Provisions. References to "Sections,"
"subsections," "Exhibits," and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All references
to statutes and regulations shall include any amendments of the same and any
successor statutes and regulations. References to particular sections of the UCC
should be read to refer also to parallel sections of the Uniform Commercial Code
as enacted in each state or other jurisdiction where any portion of the
Collateral is or may be located. Terms used herein, which are defined in the
UCC, unless otherwise defined herein or in the Credit Agreement, shall have the
meanings determined in accordance with the UCC.
ARTICLE II
SECURITY INTEREST
-----------------
SECTION 2.1. Security Interest. As collateral security for the prompt
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), Debtor hereby pledges and assigns to
Secured Party, and grants to Secured Party a continuing lien on and security
interest in, all of Debtor's right, title, and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located
(collectively, the "Collateral"):
(a) all Accounts;
(b) all Inventory;
(c) to the extent not encumbered above, all of the right, title and
interest of Debtor in and to the goods or other property represented by or
securing the Accounts;
(d) all rights of Debtor as an unpaid lienor, including stoppage in
transit, replevin and reclamation;
(e) all monies, bank accounts, balances, credits, deposits,
collections, drafts, bills, notes, securities, and other property of every kind
and nature (whether tangible or intangible) now owned or hereafter acquired by
Debtor, including without limitation, all such property at any time in the
actual or constructive possession of (or in transit to) Secured Party or its
correspondents or agents in any capacity or for any purpose;
(f) all books, records, ledger cards and other property relating to (a)
through (e) above, including computer programs, tapes and related software
(subject, however, to Debtor's right to obtain copies of same from time to time
upon request); and
(g) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing clauses (a) through (f).
{OR498808;3} 2
Notwithstanding anything to the contrary contained in this Agreement, the
Obligations secured under this Agreement shall not exceed an aggregate amount
equal to the greatest amount that would not render Debtor's indebtedness,
liabilities or obligations under this Agreement subject to avoidance under
Sections 544, 548 or 550 of the Federal Bankruptcy Code or subject to being set
aside or annulled under any applicable state law relating to fraud on creditors;
provided, however, that, for purposes of the immediately preceding clause, it
shall be presumed that the Obligations secured hereunder do not equal or exceed
any aggregate amount which would render Debtor's indebtedness, liabilities or
obligations under this Agreement subject to being so avoided, set aside or
annulled, and the burden of proof to the contrary shall be on the party
asserting to the contrary. Subject to but without limiting the generality of the
foregoing sentence, the provisions of this Agreement are severable and, in any
legally binding action or proceeding involving any state corporate law or any
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights and general principles of equity, if the
indebtedness, liabilities or obligations of Debtor hereunder would otherwise be
held or determined to be void, invalid or unenforceable on account of the amount
of its indebtedness, liabilities or obligations under this Agreement, then,
notwithstanding any other provision of this Agreement to the contrary, the
amount of such indebtedness, liabilities or obligations shall, without any
further action by Debtor, Secured Party or any other Person, be automatically
limited and reduced to the greatest amount which is valid and enforceable as
determined in such action or proceeding.
SECTION 2.2. Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights or remedies hereunder shall not release Debtor from any of its
duties or obligations under such documentation, (c) Secured Party shall not have
any obligation under any of such documentation included in the Collateral by
reason of this Agreement, and (d) Secured Party shall not be obligated to
perform any of the obligations of Debtor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 2.3. Authorization. Debtor hereby irrevocably authorizes
Secured Party at any time and from time to time to file in any jurisdiction any
initial financing statements, continuation statements and amendments thereto
that (a) indicated the Collateral, and (b) contain any other information
required by part 5 of Revised Article 9 of the state or jurisdiction for the
sufficiency or filing office acceptance of any financing statement or amendment,
including whether Debtor is an organization, the type of organization, any
organization identification number or federal employee identification number
issued to Debtor. Debtor agrees to furnish any such information to Secured Party
promptly upon request. Debtor also ratifies its authorization for Secured Party
to have filed in any jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.
SECTION 2.4. Waiver. DEBTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED UNDER APPLICABLE LAW, ALL OF ITS RIGHT, IF ANY, TO FILE ANY
CORRECTION STATEMENT, AMENDMENT OR TERMINATION FINANCING STATEMENT WITH ANY
JURISDICTION RELATING TO THE COLLATERAL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce Secured Party and the Lenders to enter into this Agreement
and the Credit Agreement, Debtor represents and warrants as follows:
SECTION 3.1. Location of Inventory; Third Parties in Possession. All of
the Inventory is located at the places specified in Schedule 3.1 or is in
transit. Schedule 3.1 correctly identifies the landlords, mortgagees or
warehousemen, if any, of each location identified in Schedule 3.1. Except for
the Persons identified on Schedule 3.1, no Person other than Debtor and Secured
Party has possession of any of the Collateral other than common carriers and
Persons operating storage facilities while goods are in the process of delivery
from the supplier thereof. Except as set forth above in this Section 3.1, none
of the Collateral has been located in any location within the past four months
other than as set forth on Schedule 3.1 for Debtor.
{OR498808;3} 3
SECTION 3.2. Office Locations; Fictitious Names; Tax I.D. Number. The
principal place of business and the chief executive office of Debtor is
identified on Schedule 3.1. Schedule 3.1 also sets forth all other places where
Debtor keeps its books and records and all other locations where Debtor has a
place of business. Debtor does not do business and has not done business during
the past five (5) years under any trade name or fictitious business name except
as disclosed on Schedule 3.2. Debtor's United States federal income tax
identification number and state organizational identification number is set
forth on Schedule 3.2.
SECTION 3.3. Ownership. Debtor is the absolute owner of the Collateral
free and clear of all Liens and security interests whatsoever except for the
security interest granted Secured Party by this Agreement and except for the
Collateral Exceptions.
SECTION 3.4 Priority. That by virtue of this Agreement and the
perfection of said security interest in accordance with the provisions of this
Agreement, and the execution and delivery of any lien waiver or subordination
agreements, if applicable, Secured Party has a valid, enforceable, perfected and
first priority security interest in the Collateral except for the Collateral
Exceptions.
ARTICLE IV
COVENANTS
---------
Debtor covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment under the Credit
Agreement, Debtor will perform and observe each of the following covenants:
SECTION 4.1. Accounts. Debtor shall, in accordance with its customary
business practices, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing
under such Accounts. Without the prior written consent of Secured Party, Debtor
shall not, except in the ordinary course of business and in no event when any
Default exists, (a) grant any extension of time for any payment with respect to
any of the Accounts beyond sixty (60) days after such payment's due date, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof, (c) release, in whole or in part, any Person liable for payment
of any of the Accounts, (d) allow any credit or discount for payment with
respect to any Account other than trade or other customary discounts granted in
the ordinary course of business, or (e) release any Lien or guaranty securing
any Account unless the Account has been paid.
SECTION 4.2. Further Assurances; Exceptions to Perfection. At any time
and from time to time, upon the request of Secured Party, and at the sole
expense of Debtor, Debtor shall promptly execute and deliver all such further
agreements, documents, and instruments and take such further action as Secured
Party may reasonably deem necessary or appropriate to preserve and perfect its
security interest in the Collateral and carry out the provisions and purposes of
this Agreement or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, Debtor shall upon reasonable request by Secured
Party (a) execute and deliver to Secured Party such financing statements as
Secured Party may from time to time require, (b) take such action after a
Default as Secured Party may request from time to time, (c) deliver to Secured
Party all Collateral the possession of which is necessary to perfect the
security interest therein, duly endorsed and/or accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, and (d) execute and deliver to Secured Party such other
agreements, documents, and instruments as Secured Party may reasonably require
to perfect and maintain the validity, effectiveness, and priority of the Liens
intended to be created by this Agreement or any other Loan Document.
SECTION 4.3. Third Parties in Possession of Collateral. Except for the
Collateral Exceptions, Debtor shall not permit any third Person (including any
landlord, warehouseman, bailee, agent, consignee, or processor) to hold any
Collateral, unless Debtor shall: (i) notify such third Person of the security
interests created hereby; (ii) deliver to Secured Party copies of waivers, in
form approved by Secured Party, delivered to such Person, together with a letter
{OR498808;3} 4
from Debtor to such Person requesting such Person to subordinate any existing or
future Lien of said Person on the Collateral to the security interest of Secured
Party for the benefit of Lenders in the Collateral; and (iii) take all other
actions Secured Party reasonably deems necessary to perfect and protect its and
Debtor's interests in such Collateral pursuant to the requirements of the UCC of
the applicable jurisdiction where such landlord, warehouseman, bailee,
consignee, agent, processor, or other third Person is located (including the
filing of financing statements in the proper jurisdictions naming the applicable
third Person as debtor and Debtor as secured party and notifying the third
Person's secured lenders of Debtor's interest in such Collateral before the
third Person receives possession of the Collateral in question).
SECTION 4.4. Corporate Changes. Debtor shall not change its name,
identity, corporate structure, its United States tax identification number or
state organizational identification number in any manner that might make any
financing statement filed in connection with this Agreement seriously misleading
unless Debtor shall have given Secured Party not less than thirty (30) days
prior written notice thereof and shall have taken all action reasonably deemed
necessary or desirable by Secured Party to protect its Liens with the perfection
and priority thereof required by the Loan Documents. Debtor shall not change its
principal place of business, chief executive office, or the place where it keeps
its books and records unless it shall have given Secured Party not less than
thirty (30) days prior written notice thereof and shall have taken all action
deemed necessary or desirable by Secured Party to cause its security interest in
the Collateral to be perfected with the priority required by the Loan Documents.
SECTION 4.5. Inventory. Debtor shall keep the Inventory at (or in
transit to) any of the locations specified on Schedule 3.1 for such Debtor
hereto or, upon not less than thirty (30) days prior written notice to Secured
Party, at such other places within the United States of America where all
actions required to perfect Secured Party's security interest in such Collateral
with the priority required by the Loan Documents shall have been taken.
SECTION 4.6. Warehouse Receipts Non-Negotiable. Debtor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
in respect of any portion of the Collateral, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
673.1041 of the UCC) unless such warehouse receipt or receipt in the nature
thereof is delivered to Secured Party.
SECTION 4.7 Maintenance and Use of Collateral. Debtor does hereby
further covenant with Secured Party as follows:
(a) That the Collateral will be used solely for business
purposes.
(b) That Debtor will defend the Collateral against the claims and
demands of all persons at any time claiming the same or any interest
therein.
(c) That Debtor has not and shall not grant to any Person other
than Secured Party a security interest or any other interest or claim
in the Collateral, except for the Collateral Exceptions.
(d) That there is not now and will not be filed in the future in
any jurisdiction any financing statement listing any Person other than
Secured Party as a secured party covering any or all of the Collateral
except for the Collateral Exceptions.
(e) That, except for the Collateral Exceptions, Debtor will not
permit any Liens or security interests other than Secured Party's
security interest, to attach to any of the Collateral, permit any of
the Collateral to be levied upon under legal process, permit anything
to be done that may impair the value of any of the Collateral or the
security intended to be afforded by this Agreement, or permit the
Collateral to be or to become a fixture (and it is expressly
covenanted, warranted and agreed that the Collateral, and any part
thereof, whether affixed to any realty or not, shall be and remain
personal property), or to become an accession to other goods or
property.
{OR498808;3} 5
(f) That Debtor will not sell, transfer, lease or otherwise
dispose of any of the Collateral or any interest therein or offer to
do so without the prior written consent of Secured Party; provided,
however, that as long as the Secured Party has not accelerated the due
date of the Obligations following an Event of Default, it may sell its
Inventory in the normal and ordinary course of its business.
(g) That except for matters not material to Debtor, Debtor will
not use the Collateral or permit the Collateral to be used in
violation of any statute or ordinance and Debtor shall further comply
with all statutes, regulations and ordinances applicable to the use or
its ownership of the Collateral and to its business.
(h) That Debtor will pay promptly when due all taxes and
assessments upon the Collateral or for its use or operation or upon
any note or notes or other writing evidencing the Obligations, or any
of them, or will contest such taxes and assessments by proper
proceeding in good faith.
(i) That during the term of this Agreement, Debtor shall cause to
be maintained on the Collateral insurance in an amount at least equal
to the amount of the Obligations and shall cause Secured Party to be
noted as a loss payee on said policies. At the request of Secured
Party, Debtor shall promptly deliver to Secured Party said policies of
insurance along with certificates reflecting Secured Party as a loss
payee and providing for not less than thirty (30) days notice to
Secured Party prior to expiration or cancellation of same, and Secured
Party shall be entitled to retain in its possession said policies or
certificates.
(j) That Debtor will maintain the Collateral in good condition
and repair in the ordinary course of its business and shall undertake
and perform such other functions as may be necessary to keep and
maintain the Collateral in good condition and repair.
ARTICLE V
RIGHTS OF SECURED PARTY
-----------------------
SECTION 5.1. Power of Attorney. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SECURED PARTY AND ANY
OFFICER OR AGENT THEREOF, WITH FULL POWER OF SUBSTITUTION, AS ITS TRUE AND
LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF
SUCH DEBTOR OR IN ITS OWN NAME, TO TAKE, AFTER THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND
ALL DOCUMENTS AND INSTRUMENTS WHICH SECURED PARTY AT ANY TIME AND FROM TIME TO
TIME DEEMS NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT AND, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, DEBTOR HEREBY GIVES SECURED PARTY THE
POWER AND RIGHT ON BEHALF OF DEBTOR AND IN ITS OWN NAME TO DO ANY OF THE
FOLLOWING AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, WITHOUT NOTICE TO, OR THE CONSENT OF, DEBTOR:
(a) to demand, sue for, collect, or receive, in the name of
Debtor or in Secured Party's own name, any money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title, or any other
instruments for the payment of money under the Collateral or any
policy of insurance;
(b) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(c) to notify post office authorities to change the address for
delivery of Debtor's mail to an address designated by Secured Party
and to receive, open, and dispose of mail addressed to Debtor;
{OR498808;3} 6
(d) (i) to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and
all monies due and to become due thereunder directly to Secured Party
or as Secured Party shall direct (Debtor agrees that if any Proceeds
of any Collateral (including payments made in respect of Accounts)
shall be received by Debtor while a Default exists, such Debtor shall
promptly deliver such Proceeds to Secured Party with any necessary
endorsements, and until such Proceeds are delivered to Secured Party,
such Proceeds shall be held in trust by such Debtor for the benefit of
Secured Party and shall not be commingled with any other funds or
property of such Debtor); (ii) to receive payment of and receipt for
any and all monies, claims and other amounts due and to become due at
any time in respect of or arising out of any Collateral; (iii) to sign
and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
proxies, stock powers, verifications, and notices in connection with
accounts and other documents relating to the Collateral; (iv) to
commence and prosecute any suit, action, or proceeding at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in
respect of any Collateral; (v) to defend any suit, action, or
proceeding brought against such Debtor with respect to any Collateral;
(vi) to settle, compromise, or adjust any suit, action, or proceeding
described above and, in connection therewith, to give such discharges
or releases as Secured Party may deem appropriate; (vii) to exchange
any of the Collateral for other property upon any merger,
consolidation, reorganization, recapitalization, or other readjustment
of the issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer Agent, registrar,
or other designated agency upon such terms as Secured Party may
determine; (viii) to add or release any guarantor, indorser, surety,
or other party to any of the Collateral; (ix) to renew, extend, or
otherwise change the terms and conditions of any of the Collateral;
(x) to make, settle, compromise, or adjust any claims under or
pertaining to any of the Collateral (including claims under any policy
of insurance); and (xi) to sell, transfer, pledge, convey, make any
agreement with respect to, or otherwise deal with any of the
Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's
option and such Debtor's expense, at any time, or from time to time,
all acts and things which Secured Party deems necessary to protect,
preserve, maintain, or realize upon the Collateral and Secured Party's
security interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11
HEREOF. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Neither Secured Party nor any
Person designated by Secured Party shall be liable for any act or omission or
for any error of judgment or any mistake of fact or law, except any of the same
resulting from its or their gross negligence or willful misconduct. This power
of attorney is conferred on Secured Party solely to protect, preserve, maintain,
and realize upon its security interest in the Collateral. Secured Party shall
not be responsible for any decline in the value of the Collateral and shall not
be required to take any steps to preserve rights against prior parties or to
protect, preserve, or maintain any Lien given to secure the Collateral.
SECTION 5.2. Assignment by Secured Party. Secured Party and each Lender
may at any time assign or otherwise transfer all or any portion of their rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, to the extent
permitted by, and upon the conditions contained in, the Credit Agreement, and
such Person shall thereupon become vested with all the benefits thereof granted
to Secured Party or the Lenders, as applicable, herein or otherwise.
SECTION 5.3. Possession; Reasonable Care. Secured Party may, from time
to time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of Secured Party, of any or all of the Collateral that
Secured Party has a right to possess. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property, it being understood that
Secured Party shall not have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders, or
other matters relative to any Collateral, whether or not Secured Party has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
{OR498808;3} 7
ARTICLE VI
DEFAULT
-------
SECTION 6.1 Events of Default. The occurrence of one or more of the
following events shall constitute a default under this Agreement ("Events of
Default"):
(a) The occurrence of an Event of Default under the Credit
Agreement.
(b) The failure of Debtor to keep, observe or perform any term or
condition of this Agreement required hereunder to be kept, observed or
performed by Debtor which continues beyond any grace periods provided
herein.
SECTION 6.2. Rights and Remedies. If an Event of Default shall have
occurred and be continuing, Secured Party shall have the following rights and
remedies:
(a) In addition to all other rights and remedies granted to
Secured Party in this Agreement or in any other Loan Document or by
applicable law, Secured Party shall have all of the rights and
remedies of a secured party under the UCC (whether or not the UCC
applies to the affected Collateral). Without limiting the generality
of the foregoing, Secured Party may (i) without demand or notice to
Debtor or any other person, collect, receive, or take possession of
the Collateral or any part thereof and for that purpose Secured Party
may enter upon any premises on which the Collateral is located and
remove the Collateral therefrom or render it inoperable, and/or (ii)
sell, lease, or otherwise dispose of the Collateral, or any part
thereof, in one or more parcels at public or private sale or sales, at
Secured Party's offices or elsewhere, for cash, on credit, or for
future delivery, and upon such other terms as Secured Party may deem
commercially reasonable or otherwise as may be permitted by law.
Secured Party shall have the right at any public sale or sales, and,
to the extent permitted by applicable law, at any private sale or
sales, to bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) and become a purchaser of the Collateral
or any part thereof free of any right or equity of redemption on the
part of Debtor, which right or equity of redemption is hereby
expressly waived and released by such Debtor. Upon the request of
Secured Party, such Debtor shall assemble the Collateral and make it
available to Secured Party at any place designated by Secured Party
that is reasonably convenient to such Debtor and Secured Party. Debtor
agrees that Secured Party shall not be obligated to give more than
five (5) days prior written notice of the time and place of any public
sale or of the time after which any private sale may take place and
that such notice shall constitute reasonable notice of such matters.
Secured Party shall not be obligated to make any sale of Collateral if
it shall determine not to do so, regardless of the fact that notice of
sale of Collateral may have been given. Secured Party may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. Debtor
shall be liable for all reasonable expenses of retaking, holding,
preparing for sale, or the like, and all reasonable attorneys' fees,
legal expenses, and other costs and expenses incurred by Secured Party
in connection with the collection of the Obligations and the
enforcement of Secured Party's rights under this Agreement. Debtor
shall remain liable for any deficiency if the Proceeds of any sale or
other disposition of the Collateral applied to the Obligations are
insufficient to pay the Obligations in full. Secured Party may apply
the Collateral against the Obligations as provided in the Credit
Agreement. Debtor waives all rights of marshaling, valuation, and
appraisal in respect of the Collateral. Any cash held by Secured Party
as Collateral and all cash proceeds received by Secured Party in
respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of Secured Party,
be held by Secured Party as collateral for, and then or at any time
thereafter applied in whole or in part by Secured Party against, the
Obligations in the order permitted by the Credit Agreement. Any
surplus of such cash or cash proceeds and interest accrued thereon, if
any, held by Secured Party and remaining after payment in full of all
the Obligations shall be promptly paid over to Debtor or to whomsoever
may be lawfully entitled to receive such
{OR498808;3} 8
surplus; provided that Secured Party shall have no obligation to
invest or otherwise pay interest on any amounts held by it in
connection with or pursuant to this Agreement.
(b) Secured Party may cause any or all of the Collateral held by
it to be transferred into the name of Secured Party or the name or
names of Secured Party's nominee or nominees.
(c) Secured Party may exercise any and all rights and remedies of
Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of Debtor to demand or otherwise
require payment of any amount under, or performance of any provision
of, any of the Collateral.
(d) Secured Party may collect or receive all money or property at
any time payable or receivable on account of or in exchange for any of
the Collateral, but shall be under no obligation to do so.
(e) On any sale of the Collateral, Secured Party is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the opinion of Secured Party's counsel, in
order to avoid any violation of applicable law or in order to obtain
any required approval of the purchaser or purchasers by any applicable
Governmental Authority.
SECTION 6.3. Private Sales. Debtor recognizes that Secured Party may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States or in the Securities Act of 1933, as amended from time to time
(the "Securities Act") and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Collateral for their own account for investment and not with a view to the
distribution or resale thereof. Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall, to the extent permitted by law, be
deemed to have been made in a commercially reasonable manner. Neither Secured
Party nor the Lenders shall be under any obligation to delay a sale of any of
the Collateral for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States, under the Securities Act, or under any applicable
state securities laws, even if such issuer would agree to do so. Debtor further
agrees to do or cause to be done, to the extent that such Debtor may do so under
applicable law, all such other reasonable acts and things as may be necessary to
make such sales or resales of any portion or all of the Collateral valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees, or awards of any and all courts, arbitrators, or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Debtor's expense.
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.1. No Waiver; Cumulative Remedies. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
SECTION 7.2. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Debtor and Secured Party and their respective
successors and assigns, except that no Debtor may assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party, and Secured Party may not appoint a successor as Secured Party except in
accordance with the Credit Agreement.
{OR498808;3} 9
SECTION 7.3. Amendment; Entire Agreement. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS
AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY
THE PARTIES HERETO.
SECTION 7.4. Notices. All notices and other communications provided
for in this Agreement shall be given or made in accordance with the Credit
Agreement.
SECTION 7.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA AND APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
SECTION 7.6. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
SECTION 7.7. Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
SECTION 7.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
SECTION 7.9. Waiver of Bond. In the event Secured Party seeks to take
possession of any or all of the Collateral by judicial process, Debtor hereby
irrevocably waives any bonds and any surety or security relating thereto that
may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.
SECTION 7.10. Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 7.11. Termination. If all of the Obligations shall have been
paid and performed in full and all Commitments of Secured Party and the Lenders
shall have expired or terminated, Secured Party shall, upon the written request
of Debtor, execute and deliver to Debtor a proper instrument or instruments
acknowledging the release and termination of the security interests created by
this Agreement, and shall duly assign and deliver to Debtor, as applicable,
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of Secured Party and has not previously
been sold or otherwise applied pursuant to this Agreement; notwithstanding
anything to the contrary contained in this Agreement, if the payment of any
amount of the Obligations is rescinded, voided or must otherwise be refunded by
Secured Party or any Lender upon the insolvency, bankruptcy or reorganization of
the Debtor or any other Loan Party or otherwise for any reason whatsoever, then
the security interests created by this Agreement will be automatically
reinstated and become automatically effective and in full force and effect, all
to the extent that and as though such payment so rescinded, voided or otherwise
refunded had never been made and such release and termination of such security
interest had never been given.
{OR498808;3} 10
SECTION 7.12. Filing Fees and Documentary Stamp Taxes. Debtor shall pay
all costs of filing any financing statement and all other costs of perfecting
the security interest granted hereunder. Additionally, Debtor shall pay all
documentary stamps, intangible tax, as well as all other taxes and penalties due
on any notes evidencing any of the Obligations and Debtor further agrees to
indemnify and hold Secured Party harmless from and against any and all such
documentary stamps, intangible taxes and penalties.
SECTION 7.13. WAIVER OF JURY TRIAL. EACH PARTY HERETO HERBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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 THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.13.
[Signature follows on next page]
{OR498808;3} 11
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR:
STEIN MART, INC.
By: /s/ James G. Delfs
------------------------------
Name: James G. Delfs
Title: Chief Financial Officer
SECURED PARTY:
SUNTRUST BANK, as Administrative
Agent
By: /s/ C. William Buchholz
------------------------------
Name: C. William Buchholz
Title: Director
{OR498808;3} S-1