SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended Commission file number
June 29, 1996 0-20052
STEIN MART, INC.
(Exact name of registrant as specified in its charter)
Florida 64-0466198
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1200 Riverplace Blvd., Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
(904) 346-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
At August 9, 1996, the latest practicable date, there were 22,498,579 shares
outstanding of Common Stock, $.01 par value.
<PAGE>
Stein Mart, Inc.
Index to Form 10-Q
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets at June 29, 1996, December 30,
1995 and July 1, 1995 3
Statement of Income for the three months and six months
ended June 29, 1996 and July 1, 1995 4
Statement of Cash Flows for the six months ended
June 29, 1996 and July 1, 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II - OTHER INFORMATION 11
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 12
2
<PAGE>
<TABLE>
Stein Mart, Inc.
Balance Sheet
(In Thousands)
<CAPTION>
June 29, December 30, July 1,
1996 1995 1995
----------- ------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 6,326 $ 15,141 $ 4,888
Trade and Other Receivables 1,213 1,311 1,533
Inventories 140,479 112,961 111,441
Prepaid Expenses and Other Current Assets 2,750 1,955 1,974
----------- ------------ -----------
Total Current Assets 150,768 131,368 119,836
Property and Equipment, Net 44,288 40,691 35,806
Other Assets 1,350 1,458 2,764
----------- ------------ -----------
Total Assets $ 196,406 $ 173,517 $ 158,406
=========== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:
Accounts Payable $ 39,323 $ 47,616 $ 32,630
Accrued Liabilities 14,064 14,622 10,058
Income Taxes Payable 3,448 5,445 2,055
----------- ------------ -----------
Total Current Liabilities 56,835 67,683 44,743
Notes Payable to Bank 28,527 1 21,830
Deferred Income Taxes 4,397 4,397 3,324
----------- ------------ -----------
Total Liabilities 89,759 72,081 69,897
Stockholders' Equity:
Preferred stock - $.01 par value; 1,000,000 shares
authorized; there are no shares outstanding
Common stock - $.01 par value; 50,000,000 shares authorized; 22,172,171
shares issued and outstanding at June 29, 1996; 22,365,584 shares issued
and outstanding at December 30, 1995 and 22,444,948 shares issued and
outstanding
at July 1, 1995 222 224 224
Paid-in Capital 34,220 36,155 37,018
Retained Earnings 72,205 65,057 51,267
----------- ------------ -----------
Total Stockholders' Equity 106,647 101,436 88,509
----------- ------------ -----------
Total Liabilities and Stockholders' Equity $ 196,406 $ 173,517 $ 158,406
=========== ============ ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
Stein Mart, Inc.
Statement of Income
(Unaudited)
(In Thousands Except Per Share Amounts)
<CAPTION>
For The For The
Three Months Ended Six Months Ended
-------------------------- --------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $ 149,400 $ 116,530 $ 257,917 $ 204,239
Cost of Merchandise Sold 106,597 83,377 190,234 152,023
---------- ---------- ---------- ----------
Gross Profit 42,803 33,153 67,683 52,216
Selling, General and Administrative Expenses 31,756 25,889 58,919 48,038
Other Income, Net 1,978 1,579 3,619 2,747
---------- ---------- ---------- ----------
Income From Operations 13,025 8,843 12,383 6,925
Interest Expense 383 271 665 420
---------- ---------- ---------- ----------
Income Before Income Taxes 12,642 8,572 11,718 6,505
Provision for Income Taxes 4,930 3,343 4,570 2,537
---------- ---------- ---------- ----------
Net Income $ 7,712 $ 5,229 $ 7,148 $ 3,968
========== ========== ========== ==========
Weighted Average Shares Outstanding 23,504 23,536 23,430 23,586
Net Income Per Share $ 0.33 $0.22 $ 0.31 $0.17
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
<TABLE>
Stein Mart, Inc.
Statement of Cash Flows
(Unaudited)
(In Thousands)
<CAPTION>
For The
Six Months Ended
-----------------------------------
June 29, 1996 July 1, 1995
------------- ------------
<S> <C> <C>
Cash Flow from Operating Activities:
Net Income $ 7,148 $ 3,968
Adjustments to Reconcile Net Income to Net Cash Used In
Operating Activities:
Depreciation and Amortization 3,129 2,415
(Increase) Decrease In:
Trade and Other Receivables 98 (533)
Inventories (27,518) (16,497)
Prepaid Expenses and Other Current Assets (795) (107)
Other Assets 108 97
Increase (Decrease) In:
Accounts Payable (8,293) (14,390)
Accrued Liabilities (558) (2,721)
Income Taxes Payable (1,997) (3,583)
------------- ------------
Net Cash Used in Operating Activities (28,678) (31,351)
------------- ------------
Cash Flows Used in Investing Activities:
Net Acquisition of Property and Equipment (6,726) (6,148)
------------- ------------
Cash Flows from Financing Activities:
Net Borrowings Under Notes Payable to Bank 28,526 21,829
Proceeds from Exercise of Stock Options and Related
Income Tax Benefits 689 88
Purchase of Common Stock (2,626) (824)
------------- ------------
Net Cash Provided By Financing Activities 26,589 21,093
------------- ------------
Net Decrease in Cash and Cash Equivalents (8,815) (16,406)
Cash and Cash Equivalents at Beginning of Year 15,141 21,294
------------- ------------
Cash and Cash Equivalents at End of Period $ 6,326 $ 4,888
============= ============
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 516 $ 281
Income Taxes Paid 6,254 6,067
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE>
STEIN MART, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month and six month periods are not necessarily indicative of the results
that may be expected for the entire year. For further information, refer to the
financial statements and footnotes thereto included in the Stein Mart, Inc.
annual report on Form 10-K for the year ended December 30, 1995.
NOTES PAYABLE TO BANK
In June 1996, the Company amended its revolving credit agreement to
increase the total amount available to $40 million, to extend the expiration
date to June 29, 1999 and to extend the expiration date of the letter of credit
facility to June 30, 1997. Interest is payable, at the Company's option, at
1.50% below the prime rate or at .5% over the London Inter-Bank Offering Rate
(LIBOR). An additional $10 million seasonal line of credit is available each
year from March 15 through June 30 and from September 15 through December 31.
COMMON STOCK REPURCHASE
In February 1996, the Board of Directors authorized the repurchase of an
additional 500,000 shares of the Company's common stock in the open market,
bringing the total repurchases authorized to 1,000,000 shares. During the six
months ended June 29, 1996, the Company repurchased 270,000 shares for
$2,626,000 and during the six months ended July 1, 1995, repurchased 72,500
shares for $824,000.
EARNINGS PER SHARE
Net income per share is computed by dividing net income by the weighted
average number of shares of common stock outstanding plus the common stock
equivalents related to stock options for each period.
6
<PAGE>
STEIN MART, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the three months ended June 29, 1996 compared with the three months ended
July 1, 1995:
Seven stores were opened during the second quarter this year, bringing to 109
the number of stores in operation this year compared to 89 stores in operation
at the end of the second quarter of 1995.
Net sales for the quarter ended June 29, 1996 were $149.4 million, a 28.2
percent increase over the $116.5 million for the second quarter of 1995.
Comparable store net sales increased 9.7 percent from the second quarter of
1995.
Gross profit for the quarter ended June 29, 1996 increased to $42.8 million, a
29.1 percent increase over the $33.2 million for the second quarter of 1995.
Gross profit as a percent of net sales increased 0.2 percent to 28.7 percent for
the second quarter this year from 28.5 percent for the second quarter last year.
This increase resulted primarily from leveraging of occupancy costs, partially
offset by slightly higher markdowns.
For the quarter ended June 29, 1996 selling, general and administrative expenses
were $31.8 million, or 21.3 percent of net sales, compared to $25.9 million, or
22.2 percent of net sales for the same 1995 quarter. The $5.9 million increase
in selling, general and administrative expenses is primarily due to the
additional stores in operation during the second quarter of 1996 as compared to
the number of stores in operation during the second quarter of 1995. The
decrease of 0.9 percent of sales resulted from leveraging of selling, general
and administrative expenses.
Other income, primarily from in-store leased shoe departments, increased to $2.0
million for the second quarter of 1996 compared to $1.6 million for the second
quarter of 1995. The increase resulted from the additional stores operated
during the quarter this year.
Interest expense was $383,000 for the second quarter of 1996 and $271,000 for
the second quarter of 1995. The $112,000 increase in interest expense resulted
from increased borrowings for working capital for the additional stores,
partially offset by lower interest rates than were in effect last year.
The effective tax rate of 39.0 percent remained constant for the second quarter
of both years.
Net income for the second quarter of 1996 was $7.7 million or $0.33 per share
compared to net income of $5.2 million or $0.22 per share for the second quarter
of 1995.
7
<PAGE>
STEIN MART, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (continued)
For the six months ended June 29, 1996 compared with the six months ended July
1, 1995:
Ten stores were opened during the first six months of 1996 and nine stores were
opened during the first six months of 1995.
Net sales for the first six months of 1996 were $257.9 million, a 26.3 percent
increase over sales of $204.2 million for the first six months of 1995.
Comparable store net sales for the first six months of 1996 increased by 6.8
percent from the first six months of 1995.
Gross profit for the first six months of 1996 was $67.7 million or 26.2 percent
of net sales compared to $52.2 million or 25.6 percent of net sales for the same
six month period of 1995. The increase in the gross profit percent resulted
primarily from a slight improvement in markup and leveraging of occupancy costs.
Selling, general and administrative expenses were $58.9 million or 22.8 percent
of net sales for the first six months of 1996 and $48.0 million or 23.5 percent
for the first six months of 1995. The $10.9 million increase in selling, general
and administrative expenses is primarily due to the additional stores in
operation during the first six months of 1996 as compared to the number of
stores in operation during the first six months of 1995. The decrease of 0.7
percent of sales resulted from leveraging of selling, general and administrative
expenses.
Other income, primarily from in-store leased shoe departments, increased to $3.6
million for the first half of 1996 compared to $2.7 million for the first half
of 1995. The increase resulted from the additional stores operated during the
first six months this year and from the fragrance department which became a
leased operation at the beginning of the second quarter of 1995.
Interest expense was $665,000 for the first half of 1996 and $420,000 for the
first half of 1995. The increase in interest expense resulted from increased
borrowings for working capital for the additional stores, partially offset by
lower interest rates than were in effect last year.
The effective tax rate of 39.0 percent remained constant for the first half of
both years.
Net income for the first six months of 1996 was $7.1 million or $0.31 per share
compared to net income of $4.0 million or $0.17 per share for the first six
months of 1995.
8
<PAGE>
<TABLE>
STEIN MART, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (continued)
The information in the following table is presented as a percentage of net sales
for the periods indicated:
<CAPTION>
Quarter Ended Six Months Ended
----------------------- -----------------------
6/29/96 7/1/95 6/29/96 7/1/95
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Merchandise Sold 71.3 71.5 73.8 74.4
-------- -------- -------- --------
Gross Profit 28.7 28.5 26.2 25.6
Selling, General and
Administrative Expenses 21.3 22.2 22.8 23.5
Other Income, Net 1.3 1.3 1.4 1.3
-------- -------- -------- --------
Income from Operations 8.7 7.6 4.8 3.4
Interest Expense 0.2 0.2 0.3 0.2
--------- -------- -------- --------
Income before Income Taxes 8.5 7.4 4.5 3.2
Provision for Income Taxes 3.3 2.9 1.7 1.3
-------- -------- -------- --------
Net Income 5.2% 4.5% 2.8% 1.9%
======== ======== ======== ========
</TABLE>
9
<PAGE>
STEIN MART, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $28.7 million and $31.4 million during
the first six months of 1996 and 1995, respectively. During the first half of
both years cash was used to acquire inventory for the additional stores in
operation and to reduce the net amount of current liabilities. Based on
historical cash flow results, operating activities are expected to produce
positive cash flow for the year ending December 28, 1996.
During the first six months of 1996 and 1995, cash flow used in investing
activities was $6.7 million and $6.1 million respectively, for acquisition of
fixtures, equipment, and leasehold improvements for new stores, information
system enhancements and improvements to existing stores. Total capital
expenditures for 1996 are projected to be approximately $15.0 million.
Cash flow from financing activities was $26.6 million for the first six months
of 1996 and $21.1 million for the first six months of 1995 which reflected in
both periods net borrowing under the Company's revolving credit agreement to
meet seasonal working capital requirements. Also during the first half of 1996,
cash was used to repurchase 270,000 shares of the Company's common stock for
$2.6 million and in last year's first half 72,500 shares were repurchased for
$0.8 million.
The Company believes that cash flow generated from operating activities,
combined with the revolving credit agreement and vendor credit, will be
sufficient to fund current and long-term capital expenditures and working
capital requirements.
SEASONALITY AND INFLATION
The Company's business is seasonal in nature with the fourth quarter, which
includes the Christmas selling season, historically accounting for the largest
percentage of the Company's net sales and operating income. During the last
three years, the fourth quarter accounted for approximately 37 percent of the
Company's annual net sales and 64 percent of the Company's income from
operations. Accordingly, selling, general and administrative expenses are
typically higher as a percentage of net sales during the first three quarters of
each year.
Inflation affects the costs incurred by the Company in the purchase of
merchandise, the leasing of its stores, and in certain components of its
selling, general and administrative expenses. The Company has been successful in
offsetting the effects of inflation through the control of expenses during the
past three years. However, there can be no assurance that inflation will not
have a material effect in the future.
10
<PAGE>
STEIN MART, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
The company held its 1996 annual meeting of stockholders on May 13,
1996. At the meeting all of the Company's directors were elected to
serve for one-year terms. The vote for each nominee for director was
as follows:
Votes
Name of Director Votes FOR Withheld
---------------- --------- --------
Jay Stein 19,627,822 59,923
John H. Williams, Jr. 19,636,725 51,020
Mason Allen 19,636,475 51,270
Robert D. Davis 19,635,525 52,220
Albert Ernest, Jr. 19,634,175 53,570
Mitchell W. Legler 19,635,222 52,523
James H. Winston 19,634,322 53,423
At the meeting, the shareholders also voted to approve
amending the Stein Mart Employee Stock Plan (the "Plan") to
increase the number of shares of Company Common Stock covered by
the Plan by 542,000 shares, from 2,458,000 to 3,000,000 shares.
The vote on the amendment was as follows: 18,659,528 shares
"for," 307,395 shares "against," and 549,561 shares "abstain,"
with 171,261 shares constituting broker non-votes.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10 - Documents Relating to Loan Agreement
a.) Fourth Amendment to Loan Agreement effective
June 4, 1996
b.) Renewal Promissory Note for $40,000,000 effective
June 4, 1996
c.) Seasonal Promissory Note for $10,000,000 effective
June 4, 1996
Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
June 29, 1996.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Stein Mart, Inc.
Date: August 9, 1996 /s/ John H. Williams, Jr.
-------------- ----------------------------------
John H. Williams, Jr.
President, Chief Operating Officer
/s/ James G. Delfs
----------------------------------
Senior Vice President,
Chief Financial Officer
12
EXHIBIT 10(a)
FOURTH AMENDMENT TO LOAN AGREEMENT
----------------------------------
THIS AMENDMENT is made as of the 4th day of June, 1996, by and between STEIN
MART, INC. (the "Borrower") and BARNETT BANK OF JACKSONVILLE, N.A. (the "Bank").
Recitals
The Borrower and the Bank entered into an Amended and Restated Loan
Agreement (as amended from time to time, the "Loan Agreement") dated as of June
29, 1993, pursuant to which the Bank has provided a credit facility to the
Borrower. The parties amended the Loan Agreement as of June 29, 1994, June 29,
1995 and September 20, 1995, and the parties wish to further amend the Loan
Agreement in accordance with the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. Article I of the Loan Agreement is hereby amended so that, from and
after the date hereof, such Article shall read as follows:
ARTICLE I
BORROWING AND PAYMENT
---------------------
1.01 REVOLVING CREDIT ADVANCES.
--------------------------
(a) REVOLVING LINE OF CREDIT. The Bank hereby establishes
in favor of the Borrower a revolving line of credit. The Borrower
shall be entitled to borrow, repay and reborrow funds from the
Bank in accordance with the terms hereof so long as the total
principal amount owed to the Bank under the revolving line of
credit does not exceed $40,000,000.00 (or such lesser amount as
is set forth herein) (the "Revolving Credit Amount") from the
date hereof through June 29, 1999. The Bank's obligation to make
advances under the revolving line of credit shall terminate on
June 29, 1999, or such earlier date as is set forth herein (the
"Revolving Credit Expiration Date"). This indebtedness shall be
evidenced by a promissory note dated June 4, 1996 (as amended,
extended or renewed from time to time, the "Revolving Note")
executed by the Borrower in favor of the Bank in the original
principal amount of $40,000,000.00. The Revolving Note shall bear
interest at the rate set forth therein and shall be payable as
set forth therein.
(b) ADVANCES. The Bank shall make all advances under the
Revolving Note by crediting the Borrower's account maintained
with the Bank. Each advance under the Revolving Note shall be
made by the Bank in an amount necessary to cover (i) all checks
and drafts of the Borrower presented to the Bank for payment and
13
<PAGE>
EXHIBIT 10(a)
properly chargeable to the Borrower, and (ii) all interest and
facility fees to be charged to the Borrower, with written
confirmation by the Bank of debits and credits to such account.
The Bank shall not be required to make any advance hereunder or
under the Revolving Note if as of the time of such advance: (i)
the Bank's obligation to make advances hereunder has terminated
or expired; (ii) a Default or Event of Default (as hereinafter
defined) has occurred; or (iii) any condition to the advance set
forth herein or in any other Loan Document (as hereinafter
defined) has not been satisfied.
(c) COMMITMENT FEE. The Borrower shall pay the Bank a
commitment fee on the daily average unused amount of the
revolving line of credit evidenced by the Revolving Note during
the term of the line of credit until the expiration or
termination of such line of credit at the rate of one-eighth of
one percent (0.125%) per annum (calculated on the basis of a 365
day year). The Borrower shall pay the fee quarterly in arrears
within 15 days after each September 30, December 31, March 31,
and June 30 during the term of the line of credit and on the
termination or expiration of the line of credit.
1.02 SEASONAL CREDIT ADVANCES.
------------------------
(a) SEASONAL LINE OF CREDIT. The Bank hereby establishes
in favor of the Borrower a seasonal line of credit. The Borrower
shall be entitled to borrow, repay and reborrow funds from the
Bank in accordance with the terms hereof under the seasonal line
of credit during each Seasonal Period (as defined herein). For
purposes hereof, a "Seasonal Period" shall mean: (i) each period
commencing on March 15 of each year and ending on June 30 of such
year; (ii) each period commencing on September 15 of each year
and ending on December 31 of such year; and (iii) such other
periods as the Bank may, upon request of the Borrower, designate
as Seasonal Periods by written notice to the Borrower. No
Seasonal Period shall in any event extend beyond or occur after
June 29, 1999, and the Borrower shall not in any event be
entitled to obtain advances under the seasonal line of credit on
or after June 30, 1999. The total principal amount owed to the
Bank under the seasonal line of credit shall not at any time
exceed $10,000,000.00 (or such lesser amount as is set forth
herein) during any Seasonal Period. This indebtedness shall be
evidenced by a promissory note dated June 4, 1996 (as amended,
extended or renewed from time to time, the "Seasonal Note")
executed by the Borrower in favor of the Bank in the original
principal amount of $10,000,000.00. The Seasonal Note shall bear
interest at the rate set forth therein and shall be payable as
set forth therein.
(b) ADVANCES.
--------
14
<PAGE>
EXHIBIT 10(a)
(i) The Bank shall make all advances under the
Seasonal Note by crediting the Borrower's account
maintained with the Bank. The Bank shall not be required
to make any advance hereunder or under the Seasonal Note
if as of the time of such advance: (aa) the Bank's
obligation to make advances hereunder has terminated or
expired; (bb) a Default or Event of Default (as
hereinafter defined) has occurred; or (cc) any condition
to the advance set forth herein or in any other Loan
Document (as hereinafter defined) has not been satisfied.
(ii) The parties agree that the Borrower shall not
be entitled to obtain any advances under the Seasonal Note
unless: (aa) the outstanding principal balance under the
Revolving Note, together with the face amount of
outstanding drafts accepted by the Bank pursuant to
Section 1.03 hereof, is $40,000,000; and (bb) all other
conditions to advances under the Seasonal Note have been
satisfied. The parties further agree that all principal
payments under the Revolving Note and the Seasonal Note
shall be applied first to the Seasonal Note for so long as
principal amounts are outstanding thereunder and then to
the Revolving Note.
(c) COMMITMENT FEE. The Borrower shall pay the Bank a
commitment fee on the daily average unused amount of the seasonal
line of credit evidenced by the Seasonal Note during each
Seasonal Period at the rate of one-eighth of one percent (0.125%)
per annum (calculated on the basis of a 365 day year). The
Borrower shall pay the fee quarterly in arrears within 15 days
after each September 30, December 31, March 31, and June 30
during the term of the line of credit and on the termination or
expiration of the line of credit.
1.03 ACCEPTANCES. Subject to the terms set forth herein and in
that certain Acceptance Credit Agreement dated June 29, 1992, as amended
or restated from time to time, between the Borrower and the Bank (as
amended or restated from time to time, the "Acceptance Agreement"),
prior to the Revolving Credit Expiration Date, the Bank shall from time
to time make available to the Borrower an acceptance facility pursuant
to which the Bank may accept drafts drawn upon it by the Borrower (each
an "Acceptance") pursuant to the Acceptance Agreement. The aggregate
face amount of outstanding drafts drawn by the Borrower and accepted by
the Bank pursuant to the Acceptance Agreement shall not at any one time
exceed $10,000,000.00. In addition, such aggregate face amount of
outstanding drafts, when combined with amounts outstanding under the
Revolving Note, shall not at any one time exceed the Revolving Credit
Amount. Upon any issuance of an Acceptance hereunder, and for so long as
such Acceptance is outstanding, the amount available for advances under
the Revolving Note shall be immediately reduced by the face amount of
such Acceptance. The Bank shall not be required to issue any Acceptance
which has a maturity date after the Revolving Credit Expiration Date.
Upon the Bank's payment of an Acceptance
15
<PAGE>
EXHIBIT 10(a)
upon maturity thereof, an advance under the Revolving Note shall be made
to the Bank to reimburse it for such payment. If any outstanding
Acceptance matures after the Revolving Credit Expiration Date or if
funds are not then available for advances under the Revolving Note, the
Borrower shall upon maturity reimburse the Bank for the face amount of
the Acceptance and for such other amounts as may be due in connection
therewith in accordance with the Acceptance Agreement. The parties
acknowledge that the Bank may at any time sell, rediscount or otherwise
dispose of any Acceptances discounted by it.
1.04 LETTERS OF CREDIT. The Bank hereby establishes a letter of
credit facility in an amount not to exceed $4,000,000.00 for the
issuance of standby and commercial letters of credit (the "Letters of
Credit"). From time to time prior to June 30, 1997, the Bank, upon the
Borrower's request, may issue Letters of Credit. The Borrower shall give
the Bank at least one business day's notice prior to requesting the
issuance of any Letter of Credit, and shall, with such request, fill out
an application in form acceptable to the Bank and execute such terms,
conditions and reimbursement agreements (each, a "Reimbursement
Agreement") concerning such Letter of Credit as the Bank may require.
The amount available under the letter of credit facility shall be
reduced by the face amount of outstanding Letters of Credit (together
with the amount of drafts under Letters of Credit no longer outstanding
for which the Bank has not been reimbursed). No Letter of Credit shall
be issued which could be drawn on after the Revolving Credit Expiration
Date. In the event of a draw on a Letter of Credit, an advance under the
Revolving Note or, if advances are available thereunder, under the
Seasonal Note, shall be made to the extent that amounts are then
available for borrowing under such notes to reimburse the Bank for such
draw. If any draw is made under any Letter of Credit after the Revolving
Credit Expiration Date or if funds are not then available for advances
under such notes, the Borrower shall immediately upon demand reimburse
the Bank for the amount of the draw together with interest thereon and
such other amounts as may be due under any applicable Reimbursement
Agreement. As to any Letter of Credit issued, the Borrower agrees to pay
the Bank upon demand any applicable fees assessed by the Bank in
connection therewith, including, without limitation, issuance fees and
negotiation fees. The Bank shall not in any event be required to issue a
Letter of Credit after the occurrence of a Default or Event of Default
hereunder.
1.05 OTHER DOCUMENTS AND RELATED TERMS. For purposes of this
Agreement, the following terms shall have the following meanings:
(a) "Indebtedness" shall mean all obligations of the
Borrower to the Bank now or hereafter due under the Note and the
other Loan Documents.
(b) "Loan Documents" shall mean and include this Loan
Agreement (as amended or restated from time to time), the
Revolving Note, the Seasonal Note, each Letter of Credit, each
Reimbursement Agreement, each Acceptance, the Acceptance
16
<PAGE>
EXHIBIT 10(a)
Agreement, the Insurance Assignments (as hereinafter defined) and
all documents related to the foregoing documents.
(c) "Note" shall mean each of and both of the Revolving
Note and the Seasonal Note.
(d) "Subsidiary" shall mean and include any partnership,
corporation or other entity if the Borrower at any time on or
after the date hereof directly or indirectly owns or controls a
majority of the equity or voting interests in such partnership,
corporation or entity.
2. Section 4.08 of the Loan Agreement is hereby amended so that, from
and after the date hereof, such section shall read as follows:
4.08 FINANCIAL COVENANTS. The Borrower and its Subsidiaries
shall comply at all times with the following financial covenants. Each
of the financial covenants shall be calculated on a consolidated basis
for the Borrower and its Subsidiaries.
(a) CASH FLOW COVERAGE. The Borrower's Cash Flow Coverage
Ratio shall not be less than 1.2 to 1 as of the first day of any
fiscal quarter. For purposes hereof, the Cash Flow Coverage Ratio
shall mean the Borrower's Adjusted Income (as defined herein)
divided by its Fixed Charges (as defined herein). This
computation will be made using a moving average of four fiscal
quarters which will include the fiscal quarter just ended
together with the three fiscal quarters immediately preceding
such quarter. For purposes hereof, the following terms shall have
the following meanings:
(i) "Adjusted Income" shall mean: (aa) the
Borrower's consolidated net income before interest, income
taxes, depreciation and amortization; plus (bb) the
Borrower's consolidated lease and rental expenses; less
(cc) the Borrower's consolidated unfunded capital
expenditures; and less (dd) all dividends paid by the
Borrower.
(ii) "Fixed Charges" shall mean all of the
following of the Borrower calculated on a consolidated
basis: (aa) current maturities of long term debt; (bb)
interest expenses; and (cc) lease and rental expenses.
(b) CURRENT RATIO. The ratio of the Borrower's
consolidated current assets to consolidated current liabilities
shall at no time be less than: (i) 2 to 1 at the end of each
fiscal quarter (other than the last quarter) during each fiscal
year of the Borrower; and (ii) 1.7 to 1 at the end of each fiscal
year of the Borrower. "Current assets" and "current liabilities"
shall have the following meanings:
17
<PAGE>
EXHIBIT 10(a)
(i) "Current assets" shall mean the aggregate
amount of all assets of an entity that may properly be
classified as current assets in accordance with generally
accepted accounting principles, not including, however,
(aa) any deferred assets, (bb) any prepaid items such as
insurance, taxes, interest, commissions, rents, royalties
and similar items, and (cc) any amounts owed to such
entity by officers, directors, employees, stockholders or
subsidiaries or other affiliates of such entity.
(ii) "Current liabilities" shall mean all
indebtedness of an entity payable on demand or within a
period of one year from the date of the creation thereof
(excluding any indebtedness renewable or extendible at the
option of the debtor, absolutely or conditionally, for a
period or periods extending to more than one year after
such date, whether or not actually so renewed or extended)
plus current maturities of long term debt.
(c) LEVERAGE. The Borrower shall not allow its ratio of
Debt to Tangible Net Worth to exceed: (i) 2.0 to 1 at the end of
each fiscal quarter (other than the last quarter) during each
fiscal year of the Borrower; or (ii) 1.5 to 1 at the end of each
fiscal year of the Borrower. "Tangible Net Worth" and "Debt"
shall have the following meanings:
(i) "Tangible Net Worth" shall mean the
aggregate of the following:
(aa) The gross book value as shown by the
books of the Borrower and its Subsidiaries, on a
consolidated basis, of all real and personal
property, including leasehold improvements, but
excluding: (1) any property located outside the
United States or its territorial possessions; (2)
all intangible personal property including, without
limitation, licenses, patents, patent applications,
copyrights, trademarks, trade names, good will,
going concern value, experimental or organizational
expense, treasury stock and unamortized discount;
and (3) all investments in or loans to any
shareholder, officer, director, employee or other
affiliate;
less the sum of the following items (bb), (cc) and
(dd);
(bb) all reserves for depletion,
depreciation and amortization of properties as
shown by the books of the Borrower or any
subsidiary and all other proper reserves which in
accordance with generally accepted accounting
principles should be set aside in connection with
the business of the Borrower or any Subsidiary;
18
<PAGE>
EXHIBIT 10(a)
(cc) all obligations which under generally
accepted accounting principles are shown or should
be shown on the balance sheet as liabilities; and
(dd) all increases in book value of any real
estate or tangible personal property of the
Borrower or any Subsidiary attributable to a
reappraisal or other write-up of assets.
(ii) "Debt" shall mean: (aa) any indebtedness or
liability for borrowed money and any other indebtedness or
liability, evidenced by notes, debentures, bonds or
similar obligations; and (bb) all other obligations which
under generally accepted accounting principles are shown
or should be shown on the Borrower's or any subsidiary's
balance sheet as liabilities.
3. The Borrower certifies that as of the date hereof: (a) all of its
representations and warranties in the Loan Agreement are true and correct as if
made on the date hereof; and (b) no Default or Event of Default has occurred
under the Loan Agreement. The Loan Agreement shall continue in full force and
effect except as modified herein.
DATED the day and year first above written.
STEIN MART, INC.
By: /s/ James G. Delfs
--------------------------------
Its: Senior Vice President/Chief Financial Officer
---------------------------------------------
BARNETT BANK OF JACKSONVILLE, N.A.
By: /s/ Pamela C. Fitch
--------------------------------
Its: Vice President
----------------------------
19
<PAGE>
EXHIBIT 10(a)
STATE OF GEORGIA
COUNTY OF Camden
The foregoing instrument was executed, acknowledged and delivered before
me this 4th day of June,1996, by James G. Delfs, the Senior Vice President/Chief
Financial Officer of Stein Mart, Inc., on behalf of the corporation, in Camden
County, Georgia.
/s/ Jo Myers Johnston
-------------------------------
Notary Public, State and County
aforesaid
Print Name: Jo Myers Johnston
My Commission Expires:
Notary Public, Camden County, Georgia
My Commission Expires Nov. 27, 1999
[Notary Seal]
STATE OF GEORGIA
COUNTY OF Camden
The foregoing instrument was executed, acknowledged and delivered before
me this 4th day of June , 1996, by Pamela C. Fitch , the Vice President of
Barnett Bank of Jacksonville, N.A., on behalf of the bank, in Camden County,
Georgia.
/s/ Jo Myers Johnston
Notary Public, State and County
aforesaid
Print Name: Jo Myers Johnston
My Commission Expires:
Notary Public, Camden County, Georgia
My Commission Expires Nov. 27, 1999
[Notary Seal]
20
<PAGE>
EXHIBIT 10(b)
RENEWAL PROMISSORY NOTE
$40,000,000.00 June 4, 1996
Camden County, Georgia
FOR VALUE RECEIVED, the undersigned, STEIN MART, INC., a Florida
corporation (the "Borrower"), hereby promises to pay to the order of BARNETT
BANK OF JACKSONVILLE, N.A. (the "Lender"), whose address is 50 North Laura
Street, Jacksonville, Florida 32202, the principal sum of Forty Million and
00/100 Dollars ($40,000,000.00), together with interest on the outstanding
principal balance hereof at the rate provided herein. This Note shall be
governed by the following provisions:
1. ADVANCES. During the period commencing on the date hereof and
continuing through June 29, 1999 (the "Revolving Period"), the loan evidenced by
this Note shall be a revolving loan. The Borrower may borrow, repay and reborrow
principal amounts hereunder during the Revolving Period subject to the terms
contained herein and in the Loan Agreement (as hereinafter defined).
Notwithstanding the foregoing, the outstanding principal balance hereof shall
not exceed $40,000,000.00 at any one time. The Borrower shall not be permitted
to obtain further advances hereunder from and after June 30, 1999.
2. PAYMENTS.
(a) The Borrower shall pay all accrued interest
hereunder on the first day of each July, October, January and April during the
term hereof.
(b) The Borrower shall repay principal hereunder in
quarterly installments on the first day of each July, October, January and
April, commencing on July 1, 1999, and continuing through April 1, 2003. Each
principal installment shall be equal to 1/16th of the outstanding principal
balance of this Note as of June 30, 1999.
(c) The Borrower shall pay all remaining outstanding
principal hereunder, together with all then accrued and unpaid interest, on
April 1, 2003.
3. INTEREST.
(a) Except as otherwise provided herein, interest shall
accrue on the outstanding principal balance of this Note at a daily rate that
shall be one and one-half percent (1.50%) per annum below the Prime Rate.
- -------------------------------------------------------------------
THIS NOTE RENEWS AND MODIFIES THAT CERTAIN PROMISSORY NOTE DATED JUNE
29, 1995, IN THE ORIGINAL PRINCIPAL AMOUNT OF $30,000,000.00 EXECUTED BY THE
BORROWER IN FAVOR OF THE LENDER.
21
<PAGE>
EXHIBIT 10(b)
The Prime Rate shall be the interest rate announced from time to time by Barnett
Banks, Inc. as its prime rate. For purposes of this Note, any change in the
Prime Rate shall be effective as of the Lender's opening of business on the
effective date of the change.
(b) Notwithstanding the foregoing, the Borrower may
elect to pay interest on all or a portion of the outstanding principal
hereunder for periods of one month, two months, three months, six months or
one year (each an "Interest Period") at an Adjusted Libor Rate (as defined
herein). The Borrower may make such election by delivering written notice
thereof to the Lender at least one business day before the commencement of the
Interest Period. The notice shall state: (i) the date upon which the Interest
Period shall commence (which shall not be a Saturday, Sunday or legal holiday);
(ii) whether such Interest Period shall be for one month, two months, three
months, six months or one year; and (iii) the aggregate principal amount which
shall bear interest at the Adjusted Libor Rate (which amount is referred to
herein as the "Libor Amount"). If the Borrower duly elects for interest to
accrue hereunder at the Adjusted Libor Rate, then interest shall accrue at
the Adjusted Libor Rate on the applicable Libor Amount during the applicable
Interest Period. Any election hereunder shall be irrevocable during the term of
the Interest Period, and no Interest Period elected hereunder shall extend
beyond the maturity of this Note or beyond any earlier date on which such Libor
Amount may be due. The Borrower shall not be entitled to have more than two
(2) interest rates in effect at any one time during the term of this Note. The
Adjusted Libor Rate shall be a daily rate that is one half of one percent(0.50%)
per annum over the Libor Rate (as defined herein). The Libor Rate applicable
to any Interest Period shall be the London Interbank Offered Rate for a period
of one month, two months, three months, six months or one year (as applicable)
which appears in the Money Rates section of The Wall Street Journal on the day
that is two London Banking Days (as defined herein) preceding the first
Banking Business Day (as defined herein) of the applicable Interest Period,
or, if such rate is not available, the offered rate for deposits in United
States dollars in the London Interbank market for such period which appears
on the Reuters Screen LIBO Page as of 11:00 a.m. (London time) on the day that
is two London Banking Days (as defined herein) preceding the first Banking
Business Day (as defined herein) of the applicable Interest Period. If at
least two such offered rates appear in The Wall Street Journal or on the
Reuters Screen LIBO Page, as the case may be, the rate will be the
arithmetic mean of such offered rates. The Lender may, in its discretion, use
any other publicly available index or reference rate showing rates offered for
United States dollar deposits in the London Interbank market as of the
applicable date. The Lender may, in its discretion, utilize rate quotations for
30, 60, 90, 180 or 365 day periods in lieu of quotations for substantially
equivalent monthly or annual periods. For purposes of this paragraph, the
following terms shall have the following meanings:
(i) "Business Banking Day" shall mean each day
other than a Saturday, a Sunday or any holiday on which
commercial banks in Jacksonville, Florida are closed for
business.
(ii) "London Banking Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
22
<PAGE>
EXHIBIT 10(b)
(c) All interest hereunder shall be calculated on the
basis of a 365-day year (based upon the actual number of days elapsed).
(d) The total liability of the Borrower and any
endorsers or guarantors hereof for payment of interest shall not exceed any
limitations imposed on the payment of interest by applicable usury laws. If
any interest is received or charged by any holder hereof in excess of that
amount, the Borrower shall be entitled to an immediate refund of the excess.
(e) Upon the occurrence of an Event of Default
hereunder, interest shall accrue at the Default Rate hereinafter set forth
notwithstanding the provisions of this Section.
4. PREPAYMENT. The Borrower shall be entitled to prepay this Note in
whole or in part at any time without penalty. Prepayments of principal after
termination of the Revolving Period shall be applied in the inverse order of
principal payments required hereunder. Notwithstanding the foregoing and any
other contrary provision set forth herein or in the Loan Agreement: (a) the
Borrower shall not be permitted to prepay any Libor Amount prior to the
expiration of any applicable Interest Period; and (b) any such Libor Amounts
shall not be repaid or reborrowed on a revolving basis during any applicable
Interest Period.
5. APPLICATION OF PAYMENTS. All payments hereunder shall be applied
first to the Lender's costs and expenses, then to fees authorized hereunder or
under the Loan Agreement, then to interest and then to principal.
6. DEFAULT. Any Event of Default under the Amended and Restated Loan
Agreement (the "Loan Agreement") between the Borrower and the Lender dated as of
June 29, 1993, as the same may be amended or restated from time to time, shall
be considered an "Event of Default" hereunder. If any Event of Default shall
occur, the Lender may, without notice to the Borrower (i) refuse to advance any
more funds hereunder or under the Loan Agreement; and (ii) declare the
outstanding principal of this Note, all interest thereon and all other amounts
payable under this Note or otherwise to be forthwith due and payable. Thereupon,
this Note, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower. Sixty (60) days
after the earlier to occur of (i) the date of a payment default hereunder which
has not been cured, or (ii) the date of an acceleration of all sums due
hereunder after the occurrence of an Event of Default, all outstanding principal
hereunder, and accrued and unpaid interest and other charges hereunder, shall
bear interest at the rate of either two percent (2%) per annum above the Prime
Rate until paid or, if such rate is usurious under the laws of Florida, then at
the highest legal rate permissible thereunder (the "Default Rate").
7. EXPENSES. All parties liable for the payment of this Note agree to
pay the Lender all costs incurred by it in connection with the collection of
this Note. Such costs include, without limitation, fees for the services of
counsel and legal assistants employed to collect this Note, whether or not suit
be brought, and whether incurred in connection with collection, trial, appeal or
otherwise.
23
<PAGE>
EXHIBIT 10(b)
All such parties further agree to indemnify and hold the Lender harmless against
liability for the payment of state documentary stamp taxes, intangible taxes or
other taxes (including interest and penalties, if any), excluding income or
service taxes of the Lender, which may be determined to be payable with respect
to this transaction.
8. SUBSTITUTE RATE. Anything herein to the contrary notwithstanding, if
the Lender is not, for any reason whatsoever, able to obtain rates to enable it
to determine the Adjusted Libor Rate, the Lender shall give the Borrower prompt
notice thereof. The Note shall thereafter accrue interest at the rate set forth
in Subsection 3(a) hereof.
9. CHANGE OF LAW. Notwithstanding any other provision herein, if any
applicable law, rule or regulation or the interpretation or administration
thereof makes it unlawful for the Lender to (i) honor any commitment it may have
hereunder to accrue interest at the Adjusted Libor Rate, then such commitment
shall terminate, or (ii) maintain any accrual of interest at the Adjusted Libor
Rate, then interest shall immediately upon notice from the Lender accrue at the
rate set forth in Subsection 3(a) hereof.
10. RENEWAL OBLIGATION. This Note is a renewal obligation as set forth
on the face hereof. Nothing set forth herein or otherwise shall impair the
Borrower's obligation to pay all accrued and unpaid interest under any note
renewed hereby, and all such interest shall be due and payable on July 1, 1996.
11. MISCELLANEOUS. The Borrower shall make all payments hereunder in
lawful money of the United States at the Lender's address set forth herein or at
such other place as the Lender may designate in writing. The remedies of the
Lender as provided herein shall be cumulative and concurrent, and may be pursued
singly, successively or together, at the sole discretion of the Lender and may
be exercised as often as occasion therefor shall arise. No act of omission or
commission of the Lender, including specifically any failure to exercise any
right, remedy or recourse, shall be effective, unless set forth in a written
document executed by the Lender, and then only to the extent specifically
recited therein. A waiver or release with reference to one event shall not be
construed as continuing, as a bar to, or as a waiver or release of any
subsequent right, remedy or recourse as to any subsequent event. This Note shall
be construed and enforced in accordance with Florida law and shall be binding on
the successors and assigns of the parties hereto. The term "Lender" as used
herein shall mean any holder of this Note. The Lender may, at its option, round
any or all fractional amounts under Section 3 upwards to the next higher 1/100
of 1%.
The Borrower hereby: (i) waives demand, notice of demand,
presentment for payment, notice of nonpayment or dishonor, protest, notice of
protest and all other notice, filing of suit and diligence in collecting this
Note; (ii) agrees to any substitution, addition or release of any party or
person primarily or secondarily liable hereon; and (iii) agrees that the Lender
shall not be required first to institute any suit, or to exhaust his, their or
its remedies against the Borrower or any other person or party to become liable
hereunder, or against any collateral in order to enforce payment of this Note.
24
<PAGE>
EXHIBIT 10(b)
This Note is the Revolving Note referred to in the Loan Agreement.
STEIN MART, INC.
By /s/ James G. Delfs
---------------------------------
Its Senior Vice President/Chief Financial Officer
---------------------------------------------
(CORPORATE SEAL)
STATE OF GEORGIA
COUNTY OF Camden
The foregoing instrument was executed, acknowledged and delivered before
me this 4th day of June, 1996, by James G.Delfs the Senior Vice President/
Chief Financial Officer of Stein Mart, Inc., a Florida corporation, on behalf
of the corporation, in Camden County, Georgia.
/s/ Jo Myers Johnston
---------------------------------
Notary Public, State and County
aforesaid
Print Name: Jo Myers Johnston
My Commission Expires:
Notary Public, Camden County, Georgia
My Commission Expires, Nov. 27, 1999
[Notary Seal]
25
<PAGE>
EXHIBIT 10(c)
SEASONAL PROMISSORY NOTE
$10,000,000.00 June 4, 1996
Camden County, Georgia
FOR VALUE RECEIVED, the undersigned, STEIN MART, INC., a Florida
corporation (the "Borrower"), hereby promises to pay to the order of BARNETT
BANK OF JACKSONVILLE, N.A. (the "Lender"), whose address is 50 North Laura
Street, Jacksonville, Florida 32202, the principal sum of Ten Million and 00/100
Dollars ($10,000,000.00), together with interest on the outstanding principal
balance hereof at the rate provided herein. This Note shall be governed by the
following provisions:
1. ADVANCES. During each Seasonal Period (as defined in the Loan
Agreement), the loan evidenced by this Note shall be a revolving loan. The
Borrower may borrow, repay and reborrow principal amounts hereunder during each
Seasonal Period subject to the terms contained herein and in the Loan Agreement
(as hereinafter defined). Notwithstanding the foregoing, the outstanding
principal balance hereof shall not exceed $10,000,000.00 at any one time. The
Borrower shall not be permitted to obtain further advances hereunder during any
period that is not a Seasonal Period. The Borrower shall not in any event be
entitled to obtain further advances hereunder from and after June 30, 1999.
2. PAYMENTS.
(a) The Borrower shall pay all outstanding principal
hereunder, together with all then accrued and unpaid interest, immediately
upon the expiration of each Seasonal Period.
(b) The Borrower shall pay all then outstanding
principal hereunder, together with all then accrued and unpaid interest, on
July 1, 1999.
3. INTEREST.
(a) Except as otherwise provided herein, interest shall
accrue on the outstanding principal balance of this Note at a daily
- ------------------------------------------------------------------------------
THIS PROMISSORY NOTE RENEWS AND MODIFIES THAT CERTAIN SEASONAL PROMISSORY NOTE
HAVING AN EFFECTIVE DATE OF SEPTEMBER 20, 1995, EXECUTED BY THE BORROWER IN
FAVOR OF THE LENDER IN THE ORIGINAL PRINCIPAL AMOUNT OF $10,000,000.00.
26
<PAGE>
EXHIBIT 10(c)
rate that shall be one and one-half percent (1.50%) per annum below the Prime
Rate. The Prime Rate shall be the interest rate announced from time to time by
Barnett Banks, Inc. as its prime rate. For purposes of this Note, any change in
the Prime Rate shall be effective as of the Lender's opening of business on the
effective date of the change.
(b) Notwithstanding the foregoing, the Borrower may
elect to pay interest on all or a portion of the outstanding principal
hereunder for periods of one month, two months or three months (each an
"Interest Period") at an Adjusted Libor Rate (as defined herein). The
Borrower may make such election by delivering written notice thereof to the
Lender at least one business day before the commencement of the Interest
Period. The notice shall state: (i) the date upon which the Interest Period
shall commence (which shall not be a Saturday, Sunday or legal holiday);
(ii) whether such Interest Period shall be for one month, two months or three
months; and (iii) the aggregate principal amount which shall bear interest
at the Adjusted Libor Rate (which amount is referred to herein as the "Libor
Amount"). If the Borrower duly elects for interest to accrue hereunder at the
Adjusted Libor Rate, then interest shall accrue at the Adjusted Libor Rate on
the applicable Libor Amount during the applicable Interest Period. Any
election hereunder shall be irrevocable during the term of the Interest Period,
and no Interest Period elected hereunder shall extend beyond the maturity
of this Note or beyond any earlier date on which such Libor Amount may be due.
The Borrower shall not be entitled to have more than two (2) interest rates in
effect at any one time during the term of this Note. The Adjusted Libor
Rate shall be a daily rate that is one half of one percent (0.50%) per
annum over the Libor Rate (as defined herein). The Libor Rate applicable
to any Interest Period shall be the London Interbank Offered Rate for a period
of one month, two months or three months (as applicable) which appears in the
Money Rates section of The Wall Street Journal on the day that is two
London Banking Days (as defined herein) preceding the first Banking Business Day
(as defined herein) of the applicable Interest Period, or, if such rate is not
available, the offered rate for deposits in United States dollars in the London
Interbank market for such period which appears on the Reuters Screen LIBO Page
as of 11:00 a.m. (London time) on the day that is two London Banking Days (as
defined herein) preceding the first Banking Business Day (as defined herein) of
the applicable Interest Period. If at least two such offered rates appear in The
Wall Street Journal or on the Reuters Screen LIBO Page, as the case may be, the
rate will be the arithmetic mean of such offered rates. The Lender may, in its
discretion, use any other publicly available index or reference rate showing
rates offered for United States dollar deposits in the London Interbank market
as of the applicable date. The Lender may, in its discretion, utilize rate
quotations for 30, 60 or 90 day periods in lieu of quotations for substantially
equivalent monthly periods. For purposes of this paragraph, the following terms
shall have the following meanings:
(I) "Business Banking Day" shall mean each day
other than a Saturday, a Sunday or any holiday on which
commercial banks in Jacksonville, Florida are closed for
business.
27
<PAGE>
EXHIBIT 10(c)
(ii) "London Banking Day" shall mean each day other
than a Saturday, a Sunday or any holiday on which commercial
banks in London, England are closed for business.
(c) All interest hereunder shall be calculated on the
basis of a 365-day year (based upon the actual number of days elapsed).
(d) The total liability of the Borrower and any
endorsers or guarantors hereof for payment of interest shall not exceed any
limitations imposed on the payment of interest by applicable usury laws. If
any interest is received or charged by any holder hereof in excess of that
amount, the Borrower shall be entitled to an immediate refund of the excess.
(e) Upon the occurrence of an Event of Default
hereunder, interest shall accrue at the Default Rate hereinafter set forth
notwithstanding the provisions of this Section.
4. PREPAYMENT. The Borrower shall be entitled to prepay this Note in
whole or in part at any time without penalty. Notwithstanding the foregoing and
any other contrary provision set forth herein or in the Loan Agreement: (a) the
Borrower shall not be permitted to prepay any Libor Amount prior to the
expiration of any applicable Interest Period; and (b) any such Libor Amounts
shall not be repaid or reborrowed on a revolving basis during any applicable
Interest Period.
5. APPLICATION OF PAYMENTS. All payments hereunder shall be applied
first to the Lender's costs and expenses, then to fees authorized hereunder or
under the Loan Agreement, then to interest and then to principal.
6. DEFAULT. Any Event of Default under the Amended and Restated Loan
Agreement (the "Loan Agreement") between the Borrower and the Lender dated as of
June 29, 1993, as the same may be amended or restated from time to time, shall
be considered an "Event of Default" hereunder. If any Event of Default shall
occur, the Lender may, without notice to the Borrower (i) refuse to advance any
more funds hereunder or under the Loan Agreement; and (ii) declare the
outstanding principal of this Note, all interest thereon and all other amounts
payable under this Note or otherwise to be forthwith due and payable. Thereupon,
this Note, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower. Sixty (60) days
after the earlier to occur of (i) the date of a payment default hereunder which
has not been cured, or (ii) the date of an acceleration of all sums due
hereunder after the occurrence of an Event of Default, all outstanding principal
hereunder, and accrued and unpaid interest and other charges hereunder, shall
bear interest at the rate of either two percent (2%) per annum above the Prime
Rate until paid or, if such rate is usurious under the laws of Florida, then at
the highest legal rate permissible thereunder (the "Default Rate").
7. EXPENSES. All parties liable for the payment of this Note agree to
pay the Lender all costs incurred by it in connection with the collection of
this Note. Such costs include, without limitation, fees for the services of
counsel and legal assistants employed to collect this Note, whether or not suit
be brought, and whether incurred in connection with collection, trial, appeal or
otherwise. All such parties further agree to indemnify and hold the Lender
harmless against liability for the
28
<PAGE>
payment of state documentary stamp taxes,
intangible taxes or other taxes (including interest and penalties, if any),
excluding income or service taxes of the Lender, which may be determined to be
payable with respect to this transaction.
8. SUBSTITUTE RATE. Anything herein to the contrary notwithstanding, if
the Lender is not, for any reason whatsoever, able to obtain rates to enable it
to determine the Adjusted Libor Rate, the Lender shall give the Borrower prompt
notice thereof. The Note shall thereafter accrue interest at the rate set forth
in Subsection 3(a) hereof.
9. CHANGE OF LAW. Notwithstanding any other provision herein, if any
applicable law, rule or regulation or the interpretation or administration
thereof makes it unlawful for the Lender to (i) honor any commitment it may have
hereunder to accrue interest at the Adjusted Libor Rate, then such commitment
shall terminate, or (ii) maintain any accrual of interest at the Adjusted Libor
Rate, then interest shall immediately upon notice from the Lender accrue at the
rate set forth in Subsection 3(a) hereof.
10. MISCELLANEOUS. The Borrower shall make all payments hereunder in
lawful money of the United States at the Lender's address set forth herein or at
such other place as the Lender may designate in writing. The remedies of the
Lender as provided herein shall be cumulative and concurrent, and may be pursued
singly, successively or together, at the sole discretion of the Lender and may
be exercised as often as occasion therefor shall arise. No act of omission or
commission of the Lender, including specifically any failure to exercise any
right, remedy or recourse, shall be effective, unless set forth in a written
document executed by the Lender, and then only to the extent specifically
recited therein. A waiver or release with reference to one event shall not be
construed as continuing, as a bar to, or as a waiver or release of any
subsequent right, remedy or recourse as to any subsequent event. This Note shall
be construed and enforced in accordance with Florida law and shall be binding on
the successors and assigns of the parties hereto. The term "Lender" as used
herein shall mean any holder of this Note. The Lender may, at its option, round
any or all fractional amounts under Section 3 upwards to the next higher 1/100
of 1%.
The Borrower hereby: (i) waives demand, notice of demand,
presentment for payment, notice of nonpayment or dishonor, protest, notice of
protest and all other notice, filing of suit and diligence in collecting this
Note; (ii) agrees to any substitution, addition or release of any party or
person primarily or secondarily liable hereon; and (iii) agrees that the Lender
shall not be required first to institute any suit, or to exhaust his, their or
its remedies against the Borrower or any other person or party to become liable
hereunder, or against any collateral in order to enforce payment of this Note.
29
<PAGE>
EXHIBIT 10(c)
This Note is the Seasonal Note referred to in the Loan Agreement.
STEIN MART, INC.
By /s/ James G. Delfs
------------------------------------------------
Its Senior Vice President/Chief Financial Officer
---------------------------------------------
(CORPORATE SEAL)
STATE OF GEORGIA
COUNTY OF Camden
The foregoing instrument was executed, acknowledged and delivered before
me this 4th day of June, 1996, by James G. Delfs the Senior Vice President/
Chief Financial Officer of Stein Mart, Inc., a Florida corporation, on behalf of
the corporation, in Camden County, Georgia.
/s/ Jo Myers Johnston
------------------------------------
Notary Public, State and County
aforesaid
Print Name: Jo Myers Johnston
My Commission Expires:
Notary Public, Camden County, Georgia
My Commission Expires Nov. 27, 1999
[Notary Seal]
30
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the condensed
consolidated balance sheet and condensed consolidated statement of income found
on the Company's Form 10-Q for the six months ended June 29, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 6326
<SECURITIES> 0
<RECEIVABLES> 1213
<ALLOWANCES> 0
<INVENTORY> 140479
<CURRENT-ASSETS> 150768
<PP&E> 70153
<DEPRECIATION> 25865
<TOTAL-ASSETS> 196406
<CURRENT-LIABILITIES> 56835
<BONDS> 0
0
0
<COMMON> 222
<OTHER-SE> 106425
<TOTAL-LIABILITY-AND-EQUITY> 196406
<SALES> 257917
<TOTAL-REVENUES> 261536
<CGS> 190234
<TOTAL-COSTS> 249153
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 665
<INCOME-PRETAX> 11718
<INCOME-TAX> 4570
<INCOME-CONTINUING> 7148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7148
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
</TABLE>
