Amendment To Second Amended And Restated Credit Agreement

In WITNESS WHEREOF, the Parties Have Hereunto Caused This Fourth Amendment to Be Duly Executed by Their Respective Authorized Officers as a Sealed Instrument as of the Date First Above Written. BORROWER: SPECIALTY RETAILERS, INC. By: /S/ Jason T. Curtis ...

EXHIBIT 10.5 EXECUTION COPY FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT This Fourth Amendment to Second Amended and Restated Credit Agreement (this “Fourth Amendment”), is made as of January 11, 2019, by and among: SPECIALTY RETAILERS, INC., a Texas corporation (“Borrower”); STAGE STORES, INC., a Nevada corporation (“Parent”); WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent (in such capacity, the “Administrative Agent”) and Collateral Agent (in such capacity, the “Collateral Agent”) for the Lenders; WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Term Loan Agent for the Term Loan Lenders (in such capacity, the “Term Loan Agent”, and together with the Administrative Agent and the Collateral Agent, collectively, the “Agents”); and The LENDERS party hereto; In consideration of the mutual covenants herein contained and the benefits to be derived herefrom. BACKGROUND: WHEREAS, reference is made to that certain Second Amended and Restated Credit Agreement, dated as of October 6, 2014, as amended by the First Amendment to Second Amended and Restated Credit Agreement, dated as of December 16, 2016, by the Second Amendment to Second Amended and Restated Credit Agreement and Amendment to Amended and Restated Security Agreement, dated as of April 21, 2017, and by the Third Amendment to Second Amended and Restated Credit Agreement, Second Amendment to Amended and Restated Security Agreement, and First Amendment to Amended and Restated Guaranty, dated as of August 3, 2018 (together with any modifications or amendments thereto, collectively, the “Agreement”); WHEREAS, the Loan Parties have requested that the Agents and the Lenders amend certain provisions of the Agreement, including to provide for the making of a new term loan in favor of Borrower on the Fourth Amendment Effective Date, such that as of the Fourth Amendment Effective Date, the outstanding principal balance of the Term Loan under the Agreement shall be $50,000,000; WHEREAS, each of Pathlight Capital Fund I LP and Pathlight Capital LLC (each, a “New Lender”, and collectively, the “New Lenders”) desires to join the Credit Agreement as a Term Loan Lender thereunder; and WHEREAS, the Borrower, the Parent, the Agents and the Lenders have agreed to modify and amend certain additional terms and conditions of the Credit Agreement, subject to the terms and conditions of this Amendment.


 
NOW, THEREFORE, the Borrower, the Parent, the Agents and the Lenders hereby agree as follows: 1. Definitions. All capitalized terms used in this Fourth Amendment and not otherwise defined shall have the same meanings herein as in the Agreement. 2. Joinder to Credit Agreement. Subject to the satisfaction of the conditions precedent specified in Section 5 below, each New Lender: (a) joins in the execution of, and becomes a party to, the Agreement as a Term Loan Lender; (b) is bound by all agreements and obligations (including, without limitation, the obligation to make loans to the Borrower pursuant to Section 2.01(b) of the Agreement, subject to the terms and conditions of the Agreement), and has all of the rights and benefits of a Term Loan Lender under the Agreement and the other Loan Documents to which the Term Loan Lenders are party, in each case, with the same force and effect as if such New Lender was a signatory to the Agreement and such other Loan Documents and was expressly named as a Term Loan Lender therein; (c) assumes and agrees to perform all duties of a Term Loan Lender under the Agreement and the other Loan Documents; (d) acknowledges and agrees that its Term Loan Commitment shall be the amount specified for such New Lender set forth on Schedule 1.1 to the Agreement (as amended hereby); (e) represents and warrants to the other parties hereto that it is legally authorized to enter into this Amendment; (f) agrees that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; and (g) appoints and authorizes the Agents to take such action as agent on its behalf and to exercise such powers under the Agreement as are delegated to the Agents by the terms thereof, together with such powers as are reasonably incidental thereto. Each New Lender hereby acknowledges that it has received and reviewed a copy of the Agreement (as amended hereby) and each of the other Loan Documents. 3. Amendments to Credit Agreement. Subject to the satisfaction of the conditions precedent specified in Section 5 below, the Agreement shall be amended as follows: (a) Composite Credit Agreement. By deleting the stricken text (indicated textually in the same manner as the following example: stricken text) and by adding the double- 2


 
underlined text (indicated textually in the same manner as the following example: double-underlined text) as reflected in the modifications identified in the document annexed hereto as Annex A attached to this Fourth Amendment. (b) Updated Exhibit. By amending and restating Exhibit E (Form of Borrowing Base Certificate) to the Agreement in its entirety and by substituting therefor the form of Exhibit E annexed hereto as Annex B to this Fourth Amendment. (c) Updated Schedules. By amending and restating Schedules 1.1, 2.23(a), 2.23(b), 2.23(c), 2.23(f), 3.04, 3.05(c)(i), 3.05(c)(ii), 3.12 and 3.13 to the Agreement in its entirety and by substituting therefor the respective forms of such Schedules annexed hereto as Annex C to this Fourth Amendment. 4. Ratification of Loan Documents; Representations and Warranties; Waiver of Claims. (a) Except as otherwise expressly provided herein, all terms and conditions of the Agreement and the other Loan Documents remain in full force and effect. The Loan Parties hereby ratify, confirm, and reaffirm (i) all Loan Documents as amended hereby, and (ii) that all representations and warranties of the Loan Parties contained in the Agreement or any other Loan Document are true and correct in all material respects on and as of the Fourth Amendment Effective Date, except to the extent that (i) such representations and warranties relate solely to an earlier date, in which case such representations and warranties were true, correct, and complete in all material respects as of such earlier date, or (ii) such representations and warranties are already qualified by Material Adverse Effect, “materiality” or similar qualifier, in which case, such representations and warranties are true, correct, and complete in all respects. Without limiting the foregoing, the Loan Parties hereby ratify, confirm, reaffirm and restate their grant of security interest in the Collateral (as defined in the Security Agreement) and acknowledge and agree that such security interest secures all of the Secured Obligations (as defined in the Security Agreement) (including, without limitation all Term Loans made or deemed made on the Fourth Amendment Effective Date). (b) The Loan Parties hereby represent and warrant as follows: (i) as of the Fourth Amendment Effective Date, and immediately after giving effect to the consummation of the transactions contemplated by this Fourth Amendment to occur on the Fourth Amendment Effective Date, no Default or Event of Default has occurred and is continuing; (ii) all corporate and shareholder action on the part of the Loan Parties and all consents and approvals necessary for the valid execution, delivery and performance by the Loan Parties of this Fourth Amendment and the documents, instruments and agreements delivered in connection herewith have been duly and effectively taken and evidence thereof reasonably satisfactory to the Agents has been provided to the Agents; and 3


 
(iii) as of the Fourth Amendment Effective Date, and immediately after giving effect to the consummation of the transactions contemplated by Fourth Amendment to occur on the Fourth Amendment Effective Date, the Loan Parties, on a consolidated basis, are Solvent. (c) Each of the Loan Parties hereby acknowledges and agrees that, as of the Fourth Amendment Effective Date, there is no basis or set of facts on the basis of which any amount (or any portion thereof) owed by the Loan Parties under the Loan Documents could be reduced, offset, waived, or forgiven, by rescission or otherwise; nor is there any claim, counterclaim, offset, or defense (or other right, remedy, or basis having a similar effect) available to the Loan Parties with regard thereto; nor is there any basis on which the terms and conditions of any of the Obligations could be claimed to be other than as stated on the written instruments which evidence such Obligations. (d) Each of the Loan Parties hereby acknowledges and agrees that, as of the Fourth Amendment Effective Date, it has no offsets, defenses, claims, or counterclaims against the Agents or any Lender, or any of their respective affiliates, predecessors, successors, or assigns, or any of their respective officers, directors, employees, attorneys, or representatives, with respect to the Obligations, and that if any Loan Party now has, or ever did have prior to the Fourth Amendment Effective Date, any offsets, defenses, claims, or counterclaims against the Agents or any Lender, or their respective affiliates, predecessors, successors, or assigns, or their respective officers, directors, employees, attorneys, or representatives, with respect to the Obligations, whether known or unknown, at law or in equity, from the beginning of the world through this date and through the time of execution of this Fourth Amendment, all of them are hereby expressly WAIVED, and each of the Loan Parties hereby RELEASES the Agents and each Lender and their respective officers, directors, employees, attorneys, representatives, affiliates, predecessors, successors, and assigns from any liability therefor. 5. Conditions to Effectiveness. This Fourth Amendment shall not be effective until each of the following conditions precedent has been fulfilled to the reasonable satisfaction of the Agents: (a) The Agents shall have received counterparts of this Fourth Amendment, each duly executed and delivered by each of the parties hereto. (b) All necessary consents and approvals to the transactions contemplated hereby shall have been obtained and shall be satisfactory to the Agents. (c) Each Loan Party shall have delivered the following to the Agents, in form and substance reasonably satisfactory to the Agents: (i) Copies of such Loan Party’s Organizational Documents (or certifications of no change since the Third Amendment Effective Date) and such other documents and certifications as the Agents may reasonably require to 4


 
evidence that such Loan Party is duly organized, and that such Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to so qualify in such jurisdiction could not reasonably be expected to have a Material Adverse Effect; (ii) Certificates of resolutions or other action, incumbency certificates and/or other certificates of senior officers of such Loan Party as the Agents may require evidencing (A) the authority of such Loan Party to enter into this Fourth Amendment and the other Loan Documents to which such Loan Party is a party or is to become a party and (B) the identity, authority and capacity of each senior officer thereof authorized to act as a senior officer in connection with this Fourth Amendment and the other Loan Documents to which such Loan Party is a party or is to become a party; and (iii) The other documents, instruments and agreements set forth on Schedule I annexed hereto. (d) The Agents shall have received a favorable written opinion (addressed to each Agent and the Lenders and dated the Fourth Amendment Effective Date) of McAfee & Taft, A Professional Corporation, counsel for the Loan Parties, and such local counsel of the Loan Parties, as applicable, covering other matters relating to the Loan Parties, the Loan Documents or the transactions contemplated thereby as the Required Lenders shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion. (e) The Administrative Agent shall have received and be satisfied with a detailed forecast for the period commencing on the Fourth Amendment Effective Date and ending February 1, 2020, which shall include an Excess Availability model, Consolidated income statement, balance sheet, and statement of cash flow, by month, each prepared in conformity with GAAP and consistent with the Loan Parties’ then current practices. (f) All filings, recordations and searches reasonably requested by the Collateral Agent to be made in connection with the liens and security interests in the Loan Parties’ properties shall have been duly made. (g) The Collateral Agent shall have received, and be reasonably satisfied with, evidence of the Loan Parties’ insurance, together with such endorsements as are required by the Loan Documents. (h) After giving effect to this Fourth Amendment, no Default or Event of Default shall have occurred and be continuing. (i) No event shall have occurred since February 3, 2018 that could reasonably be expected to have a Material Adverse Effect. 5


 
(j) After giving effect to the transactions contemplated hereby, Excess Availability on the Fourth Amendment Effective Date shall be not less than $90,000,000. The Agents shall have received a Borrowing Base Certificate dated the Fourth Amendment Effective Date, relating to the Fiscal Month ended on January 5, 2019, and executed by a Financial Officer of the Borrower. (k) The Agents and the Lenders shall have received, in form and substance reasonably satisfactory to the Agents and the Lenders, such other information and documents including, without limitation, such information and documents as may be required by any Agent or any Lender in order to complete “know your customer” and other compliance diligence, as may be reasonably requested by any Agent or any Lender. (l) There shall be no material misstatements of fact in the written materials furnished by the Loan Parties to the Agents or the Lenders prior to closing of this Fourth Amendment, or, after giving effect to the amendments to the Schedules made pursuant to this Amendment, in the representations or warranties of the Loan Parties made in the Credit Agreement or this Amendment. (m) All fees payable to the Agents and the Lenders required to be paid on or before the Fourth Amendment Effective Date shall have been paid. (n) The Agents shall have been reimbursed by the Loan Parties for all reasonable costs and expenses of the Agents (including, without limitation, reasonable attorneys’ fees) in connection with the preparation, negotiation, execution, and delivery of this Fourth Amendment and related documents. The Loan Parties hereby acknowledge and agree that the Agents may charge the Loan Account to pay such costs and expenses. 6. Miscellaneous. (a) This Fourth Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. Delivery of an executed counterpart of a signature page to this Fourth Amendment by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Fourth Amendment. (b) This Fourth Amendment, together with the other Loan Documents, expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. (c) Any provision of this Fourth Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 6


 
(d) The Loan Parties represent and warrant that they have consulted with independent legal counsel of their selection in connection with this Fourth Amendment and are not relying on any representations or warranties of the Agents or the Lenders or their counsel in entering into this Fourth Amendment. (e) THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. [SIGNATURE PAGES FOLLOW] 7


 
IN WITNESS WHEREOF, the parties have hereunto caused this Fourth Amendment to be duly executed by their respective authorized officers as a sealed instrument as of the date first above written. BORROWER: SPECIALTY RETAILERS, INC. By: /s/ Jason T. Curtis ____________ Name: Jason Curtis Title: Interim Chief Financial Officer and Treasurer FACILITY GUARANTOR AND PARENT: STAGE STORES, INC. By: /s/ Jason T. Curtis ______________ Name: Jason Curtis Title: Interim Chief Financial Officer and Treasurer Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Collateral Agent, Swingline Lender, and Issuing Bank By: /s/ Jai Alexander________________ Name: Jai Alexander__________________ Title: Director______________________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Term Loan Agent By: /s/ Wai Yin Cheng______________ Name: Wai Yin Cheng ________________ Title: Director______________________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Revolving Loan Lender By: /s/ Jai Alexander________________ Name: Jai Alexander__________________ Title: Director Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
BANK OF AMERICA, N.A., as a Revolving Loan Lender By: /s/ Peter M. Walther_____________ Name: Peter M. Walther_______________ Title: Senior Vice President___________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
REGIONS BANK, as a Revolving Loan Lender By: /s/ Connie Ruan________________ Name: Connie Ruan __________________ Title: Director______________________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
SUNTRUST BANK, as a Revolving Loan Lender By: /s/ Pavo Hrkac_________________ Name: Pavo Hrkac ___________________ Title: Vice President_________________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Term Loan Lender By: /s/ Wai Yin Cheng______________ Name: Wai Yin Cheng ________________ Title: Director______________________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
PATHLIGHT CAPITAL FUND I LP, as a Term Loan Lender By: Pathlight Partners GP LLC, its General Partner By: /s/ Katie Hendricks______________ Name: Katie Hendricks________________ Title: Managing Director_____________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
PATHLIGHT CAPITAL LLC, as a Term Loan Lender By: /s/ Katie Hendricks______________ Name: Katie Hendricks________________ Title: Managing Director_____________ Signature Page to Fourth Amendment to Second Amended and Restated Credit Agreement


 
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ANNEX C Certain Updated Schedules to Credit Agreement [see attached]


 
Schedule 1.1 Lenders and Commitments Lender Revolving Loan Commitment Revolving Loan Commitment Percentage Ordinary Seasonal Term Loan Ordinary Seasonal Term Loan Revolving Revolving Commitment Revolving Revolving Commitment Loan Loan Loan Loan Percentage Commitment Commitment Commitment Commitment Increase Percentage Increase Period Period Commitment Commitment Percentage Wells Fargo $133,300,000 $158,300,000 $25,000,000* 33.325% x/y 50% Bank, National Association JPMorgan $75,000,000 $75,000,000 $0 18.750% x/y 0% Chase Bank, N.A. Regions $75,000,000 $75,000,000 $0 18.750% x/y 0% Bank Bank of $66,700,000 $66,700,000 $0 16.675% x/y 0% America, N.A. SunTrust $50,000,000 $50,000,000 $0 12.250% x/y 0% Bank Pathlight $0 $0 $12,775,000 0% 0% 25.55% Capital Fund I LP Pathlight $0 $0 $12,225,000 0% 0% 24.45% Capital LLC $400,000,000 $425,000,000 $50,000,000 100% 100% 100% * = funded and terminated as of the Third Amendment Effective Date x = as to each Revolving Loan Lender, other than the Seasonal Increase Commitment Lender, such Revolving Loan Lender’s Ordinary Commitment, and as to the Seasonal Increase Commitment Lender, the sum of such Revolving Loan Lender’s Ordinary Commitment plus the Seasonal Commitment Increase Utilized Amount. y = Adjusted Revolving Loan Commitments