THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO ss.15-48-10 OF THE SOUTH
CAROLINA CODE OF LAWS (1976), AS AMENDED, IN THE EVENT THE FEDERAL ARBITRATION
ACT IS NOT APPLICABLE.
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (the "Agreement") dated June
21, 2002 is entered into by and among One Price Clothing Stores, Inc., a
Delaware corporation ("One Price"), One Price Clothing of Puerto Rico, Inc., a
Puerto Rico corporation ("One Price PR"), and One Price Clothing - U.S. Virgin
Islands, Inc., a United States Virgin Islands corporation ("One Price VI" and
together with One Price and One Price PR, individually referred to as a
"Borrower" and collectively as "Borrowers") and Carolina First Bank, a South
Carolina corporation ("Bank").
W I T N E S S E T H:
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WHEREAS, Borrowers have previously entered into certain financing
arrangements with Bank pursuant to the Continuing Commercial Credit Agreement,
dated May 16, 1997, as amended. The Continuing Commercial Credit Agreement
established a facility for the issuance from time to time, at Bank's option, of
one or more Documentary Letters of Credit.
WHEREAS, the Continuing Commercial Credit Agreement, as amended, will
expire on June 30, 2002, and Borrowers have requested that Bank continue
providing Letter of Credit Accommodations; and
WHEREAS, Bank is willing to continue providing Letter of Credit
Accommodations on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS
Unless otherwise defined herein, all capitalized terms shall have the
meanings given in the Loan and Security Agreement between One Price, One Price
PR and Congress Financial Corporation (Southern), dated March 25, 1996, as
amended (the "Congress Agreement"). The Congress Agreement as in existence as of
the date of this Agreement, including eleven amendments, is attached as Exhibit
A. All terms used herein which are defined in Article 1 or Article 9 of the
Uniform Commercial Code shall have the meanings given therein unless otherwise
defined in this Agreement. All references to the plural herein shall also mean
the singular and to the singular shall also mean the plural. All references to
Borrowers shall, unless the context otherwise expressly provides, mean any
Borrower and all Borrowers, individually and collectively, jointly and
severally. All references to Borrowers and Bank pursuant to the definitions set
forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns. The words "hereof", "herein", "hereunder",
"this Agreement" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not any particular provision of this
Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced. Any accounting
term used herein unless otherwise defined in this Agreement shall have the
meaning customarily given to such term in accordance with GAAP. For purposes of
this Agreement, the following terms shall have the respective meanings given to
them below:
"Application" shall mean the request made by any Borrower to Bank for
Letter of Credit Accommodations on a form identical to Exhibit B.
"Default Rate" shall mean the rate of interest for which Borrowers are
obligated to pay to Bank after an Event of Default on unpaid amounts due to Bank
pursuant to Section 2.1(e), and shall be the lesser of (a) Bank's Prime Rate
plus two and one-half (2-1/2%) percent per annum, or (b) the Maximum Interest
Rate.
"Event of Default" shall mean the occurrence or existence of any event
or condition described in Section 9.1 hereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"Letter of Credit Accommodations" shall mean the Letters of Credit,
merchandise purchase or other guaranties which are from time to time issued or
opened by Bank for the account of any Borrower.
"Material Adverse Effect" shall mean any material adverse effect upon
the business, assets or financial condition of Borrowers, or any material
adverse effect upon the Property or Bank's rights or interests in or with
respect to the Property.
"Maximum Credit" shall mean $8,000,000.
"Net Worth" shall mean total assets minus total liabilities.
"Obligations" shall mean any and all Letters of Credit Accommodations
and all other obligations, liabilities and indebtedness of every kind, nature
and description owing by any or all Borrowers to Bank and/or its affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether arising under this Agreement or otherwise, whether now existing or
hereafter arising, whether arising before, during or after the term of this
Agreement or after the commencement of any case with respect to any Borrower
under the United States Bankruptcy Code or any similar statute (including,
without limitation, the payment of interest and other amounts which would accrue
and become due but for the commencement of such case), whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or
secondary, liquidated or unliquidated, secured or unsecured, and however
acquired by Bank.
"Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.
"Payment Account" shall have the meaning set forth in Section 6.3
hereof.
"Primary Lender" shall mean Congress Financial Corporation (Southern).
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"Prime Rate" shall mean the rate from time to time publicly announced
by Bank, or its successors, at its office in Columbia, South Carolina, as its
prime rate, whether or not such announced rate is the best rate available at
such bank.
"Property" shall mean all goods and merchandise shipped by any vendor
at the request of any Borrower for which Bank has issued Letter of Credit
Accommodations and for which Borrowers have not complied with this Agreement in
general, and Section 2.1(e) in particular.
"Records" shall mean, as to each Borrower, all of such Borrower's
present and future books of account of every kind or nature, purchase and sale
agreements, invoices, ledger cards, bills of lading and other shipping evidence,
statements, correspondence, memoranda, credit files and other data relating to
the Property, together with the tapes, disks, diskettes and other data and
software storage media and devices, file cabinets or containers in or on which
the foregoing are stored (including any rights of such Borrower with respect to
the foregoing maintained with or by any other person).
"Term" shall mean the period of time set forth in Section 11.1 during
which this Agreement shall continue in full force and effect.
"Transportation Documents" shall mean all documents relating to the
Property shipped under or pursuant to or in connection with the Letter of Credit
Accommodations under this Agreement, including but not limited to (a) import,
export or other licenses for import, export or shipping of any and all of the
Property; (b) bills of lading of other documents issued or purporting to be
issued by or on behalf of any carrier which acknowledges receipt of the Property
for transportation, and (c) insurance policies and insurance certificates
relating to the Property.
SECTION 2. LETTER OF CREDIT ACCOMMODATIONS
2.1 General Terms and Conditions. Subject to, and upon the terms and
conditions contained herein, at the request of a Borrower, Bank agrees to issue
one or more Letters of Credit for the account of such Borrower containing terms
and conditions acceptable to Bank.
(a) The purpose for the Letter of Credit Accommodations shall
be for Borrower's purchase of goods and merchandise that, upon satisfaction of
Borrowers' requirements under Section 2.1(e), would qualify as "Eligible
Inventory" under the Congress Agreement.
(b) The aggregate amount of all outstanding Letters of
Credit issued by Bank shall not at any time exceed the Maximum Credit.
(c) Except in Bank's sole discretion, no single Letter of
Credit shall be available to Borrower in an amount in excess of $200,000.
(d) The term of each individual Letter of Credit issued shall
not exceed one hundred and eighty (180) days, and the expiration date of a
Letter of Credit shall not extend beyond ninety (90) days after the date
appearing in Section 11.1(a), as amended from time to time.
(e) Borrowers shall establish and maintain a depository
account with Bank with a minimum balance of $10,000 at all times. At least one
day prior to Bank's release of the Transportation Documents, Borrowers shall
transfer into this account, on demand, or have sufficient funds available in the
account in fully collected United States currency, to cover the amount specified
under each Letter of Credit.
(f) All Letters of Credit issued by Bank shall be payable at
sight and shall provide for the Transportation Documents to be consigned to the
order of Bank.
(g) All negotiations as to amendments, extensions, or
discrepancies of Transportation Documents shall be at the sole discretion of
Bank.
(h) No new Letter of Credit Accommodations shall be available
to a Borrower at any time an Event of Default exists or has occurred and is
continuing.
(i) Except for contrary instructions given by Borrowers to
Bank prior to the issuance of a Letter of Credit: (i) Bank may receive and
accept as Transportation Documents relating to Property any document issued or
purporting to be issued by or on behalf of any carrier which acknowledges
receipt of Property for transportation, regardless of the specific provisions of
the documents, the date of each document shall be deemed the date of shipment of
the Property mentioned therein, and any Transportation Document issued by or on
behalf of an ocean carrier may be accepted by Bank whether or not the entire
transportation is by water; (ii) part shipment and/or shipments in excess of the
quantity called for in the Letter of Credit may be made, and Bank may honor the
relative drafts, the liability of Borrowers to reimburse Bank for payments made
or obligations incurred on such drafts being limited to the amount of the Letter
of Credit; (iii) if the Letter of Credit specifies shipments in installments
within stated periods, and the shipper fails to ship in any designated period,
the Letter of Credit shall not be available for that or any subsequent
installments; (iv) Bank may receive and accept as documents of Insurance either
insurance policies or insurance certificates which need not be for an amount of
insurance greater than the amount paid by Bank or relative to a Letter of
Credit; and (v) Bank may receive or pay as complying with the terms of the
Letter of Credit any drafts or other documents otherwise in order, which may be
signed by, or issued to, the trustee in bankruptcy of, or the receiver of any of
the Property of, the party in whose name the Letter of Credit provides that any
drafts or other document should be drawn or issued.
(j) Nothing contained herein shall be deemed or construed to
grant Borrowers any right or authority to pledge the credit of Bank in any
manner.
2.2 Bank's Good Faith Interpretation. Borrowers shall be bound by any
interpretation made in good faith by Bank under or in connection with any Letter
of Credit or any documents, drafts or acceptances thereunder, notwithstanding
that such interpretation may be inconsistent with any instructions of Borrowers.
2.3 Noncompliance; Acceptance and Rejection; Extensions and Amendments.
Bank shall have the sole and exclusive right and authority to, and Borrowers
shall not: (a) at any time an Event of Default exists or has occurred and is
continuing, (i) approve or resolve any questions of noncompliance of the
Transportation Documents, (ii) give any instructions as to acceptance or
rejection of any Transportation Documents or goods, (iii) execute any and all
applications for steamship or airway guaranties, indemnities or delivery orders,
or (iv) transfer to and/or register in the name of Bank or its nominee all or
part of the Property and to do so with or without notice to Borrowers, and (b)
at all times, (i) grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances, or Transportation
Documents, and (ii) agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the Applications, Letters of Credit or Transportation Documents thereunder.
Bank may take such actions either in its own name or in the name of a Borrower.
2.4 Borrowers' Assumption of Risk; Indemnification and Hold Harmless.
Borrowers assume all risks with respect to the acts or omissions of the
beneficiary of any Letter of Credit, and for such purposes the beneficiary shall
be deemed the agent of Borrowers. Borrowers assume all risks for, and agree to
pay, all foreign, Federal, State and local taxes, duties and levies relating to
any goods subject to any Letter of Credit or any Transportation Documents
thereunder. Borrowers shall indemnify and hold Bank harmless from and against
any and all losses, claims, damages, liabilities, costs and expenses which Bank
may suffer or incur in connection with any Letter of Credit and any
Transportation Documents relating thereto. Borrowers hereby release and hold
Bank harmless from and against any acts, waivers, errors, delays or omissions
with respect to or relating to any Letter of Credit. The provisions of this
Section 2.4 shall survive the payment of Obligations and the termination or
non-renewal of this Agreement.
SECTION 3. FEES AND CHARGES
3.1 Facility Fee. Borrowers shall pay to Bank as a facility fee
the amount of $80,000.
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3.2 Transaction Fees. Borrowers shall pay to Bank for each
Letter of Credit issued the transaction fees as shown on Exhibit C, as
amended from time to time.
3.3 Attorney's Fees. Borrowers shall pay to Bank immediately upon
demand the full amount of all reasonable costs and expenses, including attorneys
fees, incurred by Bank (a) in connection with negotiation and preparation of
this Agreement, and (b) for which Borrowers are obligated to reimburse Bank in
accordance with the terms of Section 2.1(e).
3.4 Maximum Interest. Notwithstanding anything to the contrary
contained in this Agreement, in no event whatsoever shall the aggregate of all
amounts that are contracted for, charged or received by Bank pursuant to the
terms of this Agreement and that are deemed interest under applicable law exceed
the Maximum Interest Rate. No agreements, conditions, provisions or stipulations
contained in this Agreement, or any Event of Default, or the exercise by Bank of
the right to accelerate the payment or the maturity of all or any portion of the
Obligations, or the exercise of any option whatsoever contained in this
Agreement, or the prepayment by Borrowers of any of the Obligations, or the
occurrence of any event or contingency whatsoever, shall entitle Bank to
contract for, charge or receive in any event, interest or any charges, amounts,
premiums or fees deemed interest by applicable law in excess of the Maximum
Interest Rate. In no event shall Borrowers be obligated to pay interest or such
amounts as may be deemed interest under applicable law in amounts which exceed
the Maximum Interest Rate. All agreements, conditions or stipulations, if any,
which may in any event or contingency whatsoever operate to bind, obligate or
compel Borrowers to pay interest or such amounts which are deemed to constitute
interest in amounts which exceed the Maximum Interest Rate shall be (i) without
binding force or effect, at law or in equity, to the extent of the excess of
interest or such amounts which are deemed to constitute interest over such
Maximum Interest Rate, and (ii) deemed amended to conform to the provisions of
this Section 3.4.
SECTION 4. CONDITIONS PRECEDENT. Each of the following is a condition
precedent to Bank issuing any Letter of Credit hereunder:
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4.1 Requisite Corporate Action. All requisite corporate action and
proceedings in connection with this Agreement shall be satisfactory in form and
substance to Bank, and Bank shall have received all information and copies of
all documents, including, without limitation, records of requisite corporate
action and proceedings which Bank may have requested in connection therewith,
such documents where requested by Bank or its counsel to be certified by
appropriate corporate officers or governmental authorities.
4.2 No Material Adverse Change. No material adverse change shall have
occurred in the consolidated assets, business or prospects of Borrowers since
the date of Borrowers' consolidated financial statement for the fiscal year
ended February 2, 2002. No material change or event shall have occurred which
would impair the ability of any Borrower or any Obligor to perform its
obligations hereunder or of Bank to enforce the Obligations or realize upon the
Property.
4.3 Consents, Waivers, Acknowledgements. Bank shall have received, in
form and substance satisfactory to Bank, all consents, waivers, acknowledgments
and other agreements from Primary Lender and other third persons which Bank may
deem necessary or desirable in order to permit, protect and perfect its rights
in or liens upon the Transportation Documents and the Property or to effectuate
the provisions or purposes of this Agreement, including, without limitation,
written consent from Primary Lender for Borrowers to enter into this Agreement
and to exercise any privileges hereunder with respect to the issuance of Letters
of Credit, acknowledgements by lessors, mortgagees and warehousemen of Bank's
ownership rights or security interests in the Transportation Documents and the
Property, waivers by such persons of any security interests, liens or other
claims by such persons to the Transportation Documents and the Property and
agreements permitting Bank access to, and the right to exercise its rights and
remedies and otherwise deal with the Transportation Documents and the Property.
4.4 Accurate Representations and Warranties. All representations and
warranties contained herein shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of providing each such Letter of Credit Accommodation and
after giving effect thereto.
4.5 No Event of Default. No Event of Default and no event or condition
which, with notice or passage of time or both, would constitute an Event of
Default, shall exist or have occurred and be continuing on and as of the date of
providing each such Letter of Credit Accommodation and after giving effect
thereto.
SECTION 5. BANK'S RIGHTS TO THE PROPERTY AND THE TRANSPORTATION
DOCUMENTS.
Borrowers recognize and admit that Bank has the following rights until the
Borrowers have satisfied the requirements of Section 2.1(e).
5.1 Bank's Ownership Rights. Borrowers have conveyed and assigned to
Bank all rights they may have in the Property and the Transportation Documents,
and Bank shall have the unqualified right to the possession and disposal of any
and all Property and Transportation Documents.
5.2 No Waiver by Bank. Nothing Bank does or attempts to do, including
the sale or disposal of the Property or the transfer and assignment of the
Transportation Documents, in connection with protecting its rights in the
Property and the Transportation Documents shall operate as a waiver or an
estoppel to its right to be paid for Borrowers' Obligations pursuant to Section
2.
SECTION 6. COLLECTION AND ADMINISTRATION.
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6.1 Borrowers' Letter of Credit Accounts. Bank shall maintain one or
more Letter of Credit account(s) on its books in which shall be recorded (a) all
Letters of Credit and the Property, (b) all payments made by or on behalf of
Borrowers and (c) all other appropriate debits and credits related to Borrowers'
Obligations as provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All entries in the Letter of Credit
account(s) shall be made in accordance with Bank's customary practices as in
effect from time to time.
6.2 Statements. Bank shall render to One Price (for itself and on
behalf of One Price PR and One Price VI) (i) a monthly outstanding Letter of
Credit statement setting forth the Maximum Credit, all draws made during the
Term, current outstanding Letters of Credit, and the expiration dates of all
Letters of Credit; and (ii) a statement of fees as each Letter of Credit is
issued setting forth the amount of fees, costs and expenses due to Bank from
Borrowers. Each such statement shall be subject to subsequent adjustment by Bank
but shall, absent manifest errors or omissions, be considered correct and deemed
accepted by Borrowers and conclusively binding upon Borrowers as an account
stated except to the extent that Bank receives a written notice from any
Borrower of any specific exceptions of such Borrower thereto within thirty (30)
days after the date such statement has been mailed by Bank. Until such time as
Bank shall have rendered to One Price a written statement as provided above, the
balance(s) in Borrowers' Letter of Credit account(s) shall be presumptive
evidence of the amounts due and owing to Bank by Borrowers.
6.3 Payments. All statements for fees, costs and expenses shall be paid
to Bank at the time payment is effected on Letter of Credit draws. Borrowers
shall make all payments to Bank on the Obligations free and clear of, and
without deduction or withholding for or on account of, any setoff, counterclaim,
defense, duties, taxes, levies, imposts, fees, deductions, withholding,
restrictions or conditions of any kind. If after receipt of any payment of, or
proceeds of Property applied to the payment of, any of the Obligations, Bank is
required to surrender or return such payment or proceeds to any Person for any
reason, then the Obligations intended to be satisfied by such payment or
proceeds shall be reinstated and continue and this Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
Bank. Borrowers shall be liable to pay to Bank, and each Borrower does hereby
indemnify and hold Bank harmless for the amount of any payments or proceeds
surrendered or returned. This Section 6.3 shall remain effective notwithstanding
any contrary action which may be taken by Bank in reliance upon such payment or
proceeds. This Section 6.3 shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
6.4 Authorization to Issue Letter of Credit. Bank is authorized to
issue Letters of Credit based upon a facsimile of the front page of an
Application, the form of which is attached hereto as Exhibit B, received from
anyone purporting to be an officer of a Borrower (including One Price for itself
and/or on behalf of One Price PR and/or One Price VI) or other authorized
person. The facsimile of the Application shall be sent by Borrowers to the
address and facsimile number shown below. All Applications for Letters of Credit
hereunder shall specify the date on which the requested issuance is to occur
(which day shall be a Business Day) and the amount of the requested Letter of
Credit. Applications received after 12:00 noon Eastern Time on any day shall be
deemed to have been made as of the opening of business on the immediately
following business day. All Letters of Credit under this Agreement shall be
conclusively presumed to have been made to, and at the request of and for the
benefit of, Borrowers when issued in accordance with the instructions of a
Borrower (including One Price for itself and/or on behalf of One Price PR and/or
on behalf of One Price VI) or in accordance with the terms and conditions of
this Agreement.
6.5 Appointment of One Price as Agent for One Price PR and One Price
VI. One Price PR and One Price VI hereby irrevocably appoint One Price, and each
officer thereof, as their agent and attorney-in-fact to request Letters of
Credit on their behalf, to receive notices and statements of account from Bank,
to take such other actions in their behalf as is provided hereunder and
generally to deal with Bank in their behalf, for all matters pertaining to the
credit arrangements under this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Borrowers hereby, jointly and severally, represent and warrant to Bank
the following (which shall survive the execution and delivery of this
Agreement), the truth and accuracy of which are a continuing condition of
providing Letters of Credit by Bank on behalf of Borrowers:
7.1 Corporate Existence, Power and Authority; Subsidiaries. Each
Borrower is a corporation duly organized and in good standing under the laws of
its state of incorporation and is duly qualified as a foreign corporation and in
good standing in all states or other jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on such Borrower's financial
condition, results of operation or business or the rights of Bank in or to any
of the Transportation Documents or Property. The execution, delivery and
performance of this Agreement and the transactions contemplated hereunder and
thereunder are all within each Borrower's corporate powers, have been duly
authorized and are not in contravention of law or the terms of any Borrower's
certificate of incorporation, by-laws, or other organizational documentation, or
any indenture, agreement or undertaking to which any Borrower is a party or by
which any Borrower or its or their property or properties are bound. This
Agreement constitutes a legal, valid and binding obligation of Borrowers
enforceable in accordance with its respective terms. Borrowers do not have any
subsidiaries except as set forth on Exhibit D attached hereto.
7.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers which have been or may hereafter be delivered
by Borrowers to Bank have been prepared in accordance with GAAP and fairly
present the financial condition and the results of operation of Borrowers as at
the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrowers to Bank prior to the date of
this Agreement, there has been no material adverse change in the assets,
liabilities, properties and condition, financial or otherwise, of the Borrowers
on a consolidated basis, since the date of the most recent audited financial
statements furnished by Borrowers to Bank prior to the date of this Agreement.
7.3 Chief Executive Office. The chief executive office of each
Borrower is located at the address set forth below.
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7.4 Tax Returns. Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed by it, except where the failure to do so does not, and could not
reasonably be expected to, result in any Material Adverse Effect. All
information in such tax returns, reports and declarations is complete and
accurate in all material respects. Each Borrower has paid or caused to be paid
all taxes due and payable or claimed due and payable in any assessment received
by it, and has collected, deposited and remitted in accordance with all
applicable laws all sales and/or use taxes applicable to the conduct of its
business, except taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to such Borrower and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed. Each Borrower has collected and
remitted when due to the appropriate tax authority all sales and/or use taxes
applicable to its business required to be collected under the laws of the United
States and each possession or territory thereof, and each State or political
subdivision thereof.
7.5 Litigation. Except as previously disclosed to Bank in writing,
there is no present investigation by any governmental agency pending, or to the
best of any Borrower's knowledge threatened, against or affecting any Borrower,
its assets or business and there is no action, suit, proceeding or claim by any
Person pending, or to the best of any Borrower's knowledge threatened, against
any Borrower or its assets or goodwill, or against or affecting any transactions
contemplated by this Agreement, which if adversely determined against any
Borrower would result in any material adverse change in the assets, business or
prospects of Borrowers on a consolidated basis, or would impair the ability of
any Borrower to perform its obligations hereunder or of Bank to enforce any
obligations or realize upon any Transportation Documents or Property.
7.6 Compliance with Other Agreements and Applicable Laws.
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(a) No Borrower is in default in any respect under, or in
violation in any respect of any of the terms of, any material agreement,
contract, instrument, lease or other commitment to which it is a party or by
which it or any of its assets are bound, except for any such default or
violation which does not, and could not reasonably be expected to, result in a
Material Adverse Effect. Each Borrower is in compliance in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority relating to its business, including, without
limitation, those set forth in or promulgated pursuant to the Occupational
Safety and Hazard Act of 1970, as amended, the Fair Labor Standards Act of 1938,
as amended, ERISA, the Code, as amended, and the rules and regulations
thereunder, all federal, state and local statutes, regulations, rules and orders
relating to consumer credit (including, without limitation, as each has been
amended, the Truth-in-Lending Act, the Fair Credit Billing Act, the Equal Credit
Opportunity Act and the Fair Credit Reporting Act, and regulations, rules and
orders promulgated thereunder), all federal, state and local states,
regulations, rules and orders pertaining to sales of consumer goods (including,
without limitation, the Consumer Products Safety Act of 1972, as amended, and
the Federal Trade Commission Act of 1914, as amended, and all regulations, rules
and orders promulgated thereunder).
(b) Each Borrower has obtained all material permits, licenses,
approvals, consents, certificates, orders or authorizations of any governmental
agency required for the lawful conduct of its business and is in compliance in
all material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental agency (including, but not limited
to, the Department of State, the Department of Commerce, the Bureau of Alcohol,
Tobacco and Firearms, and the Environmental Protection Agency) relating to its
business (including, without limitation, those set forth in or promulgated
pursuant to ERISA, the Occupational Safety and Hazard Act of 1970, as amended,
the Fair Labor Standards Act of 1938, as amended, the Code, and the
Environmental Laws). Each Borrower has all of the permits, licenses, approvals,
consents, certificates, orders or authorizations (the "Permits") issued by the
appropriate federal, state or local governmental agency necessary for each
Borrower to own and operate its business as presently conducted or proposed to
be conducted, except where the failure to have such Permits does not, and could
not reasonably be expected to, result in a Material Adverse Effect or any
adverse effect on the legality, validity or enforceability of this Agreement or
the ability of any Borrower to perform its obligations under the Agreement or
the rights and remedies of Bank under this Agreement. All of the Permits are
valid and subsisting and in full force and effect. There are no actions, claims
or proceedings pending or threatened that seek the revocation, cancellation,
suspension or modification of any of the Permits.
7.7 Accuracy and Completeness of Information. All information furnished
by or on behalf of any Borrower in writing to Bank in connection with this
Agreement or any transaction contemplated hereby or thereby, including, without
limitation, all information in Borrowers' consolidated financial statement for
the fiscal year ended February 2, 2002, is true and correct in all material
respects on the date as of which such information is dated or certified and does
not omit any material fact necessary in order to make such information not
misleading. No event or circumstance has occurred which has had or could
reasonably be expected to have a material adverse affect on the business, assets
or prospects of any Borrower, which has not been fully and accurately disclosed
to Bank in writing.
7.8 Interrelated Business. One Price is the direct and beneficial owner
and holder of all of the issued and outstanding shares of Capital Stock of One
Price PR and of One Price VI. Borrowers share an identity of interests such that
any benefit received by any Borrower benefits the others. Each Borrower (a)
renders services to or for the benefit of other Borrowers, (b) makes loans and
advances and provides other financial accommodations to or for the benefit of
other Borrowers (including, inter alia, the payment and or guaranties by one
Borrower of indebtedness of another Borrower), and (c) provides administrative,
marketing, payroll and management services to or for the benefit of other
Borrowers. Borrowers have centralized purchasing, collection, distribution,
accounting, legal and other services.
7.9 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement shall survive the execution and delivery
of this Agreement and shall be deemed to have been made again to Bank on the
date of issuance of each Letter of Credit hereunder and shall be conclusively
presumed to have been relied on by Bank regardless of any investigation made or
information possessed by Bank. The representations and warranties set forth
herein shall be cumulative and in addition to any other representations or
warranties which Borrowers shall now or hereafter give, or cause to be given, to
Bank.
SECTION 8. AFFIRMATIVE AND NEGATIVE COVENANTS
8.1 Maintenance of Existence. Each Borrower shall at all times
preserve, renew and keep in full, force and effect its corporate existence and
rights and franchises with respect thereto and maintain in full force and effect
all permits, licenses, trademarks, tradenames, approvals, authorizations, leases
and contracts necessary to carry on the business as presently or proposed to be
conducted. Each Borrower shall give Bank thirty (30) days prior written notice
of any proposed change in its corporate name, which notice shall set forth the
new name and such Borrower shall deliver to Bank a copy of the amendment to the
Certificate of Incorporation of such Borrower providing for the name change
certified by the Secretary of State of the jurisdiction of incorporation of such
Borrower as soon as it is available.
8.2 Compliance with Laws, Regulations, Etc. Each Borrower shall, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
material requirements of any Federal, State or local governmental authority,
including, without limitation, the Employee Retirement Security Act of 1974, as
amended, the Occupational Safety and Hazard Act of 1970, as amended, the Fair
Labor Standards Act of 1938, as amended.
8.3 Insurance. Each Borrower shall, at all times, maintain with
financially sound and reputable insurers insurance with respect to the Property
against loss or damage. The policies of insurance shall be satisfactory to Bank
as to form, amount and insurer. Each Borrower shall furnish certificates,
policies, or endorsements to Bank as Bank shall require as proof of such
insurance, and, if any Borrower fails to do so, Bank is authorized, but not
required, to obtain such insurance at the expense of Borrowers. Each Borrower
shall cause Bank to be named as a loss payee and an additional insured (but
without any liability for any premiums) under such insurance policies and each
Borrower shall obtain non-contributory lender's loss payable endorsements for
such policies in favor of Bank and Bank's interests with regard to Property in
form and substance satisfactory to Bank. Such lender's loss payable endorsements
shall specify that the proceeds of such insurance shall be payable to Bank as
its interests may appear with regard to Property and further specify that Bank
shall be paid regardless of any act or omission by any Borrower or any of its
affiliates. At its option, Bank may apply any insurance proceeds received by
Bank at any time to payment of the Obligations, whether or not then due, in any
order and in such manner as Bank may determine or hold such proceeds as cash
collateral for the Obligations.
8.4 Financial Statements and Other Information.
------------------------------------------
(a) Each Borrower shall keep proper books and records in which
true and complete entries shall be made of all dealings or transactions of or in
relation to the Property and the business of such Borrower and its subsidiaries
(if any) in accordance with GAAP and such Borrower shall furnish or cause to be
furnished to Bank:
(i) Monthly Statements. As soon as possible,
but not later than thirty (30) days after the end of each
-------------------
fiscal month, except within forty-five (45) days after the end of each fiscal
month that coincides with the end of a fiscal quarter, monthly unaudited
consolidated financial statements, and, if a Borrower has any subsidiaries or
any other subsidiaries, unaudited consolidating financial statements (including
in each case balance sheets, statements of income and loss statements of cash
flow and statements of shareholders, equity), all in reasonable detail, fairly
presenting the financial position and the results of the operations of Borrowers
and each of their subsidiaries as of the end of and through such fiscal month
;and
(ii) Annual Statements. As soon as possible,
but not later than ninety (90) days after the end of each
------------------
fiscal year, audited consolidated financial statements (including in each case
balance sheets, statements of income and loss, statements of cash flow and
statements of shareholders' equity), and the accompanying notes thereto, all in
reasonable detail, fairly presenting the financial position and the results of
the operations of Borrowers and their subsidiaries as of the end of and for such
fiscal year, together with the opinion of independent certified public
accountants, which accountants shall be an independent accounting firm selected
by Borrowers and reasonably acceptable to Bank, that such financial statements
have been prepared in accordance with GAAP, and present fairly the results of
operations and financial condition of Borrowers and their subsidiaries as of the
end of and for the fiscal year then ended.
(b) Borrowers shall promptly notify Bank in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Property, and (ii) the occurrence of any Event of Default
or act, condition or event which, with the passage of time or giving of notice
or both, would constitute an Event of Default.
(c) Borrowers shall promptly after the sending or filing
thereof furnish or cause to be furnished to Bank copies of all reports which
Borrowers send to their stockholders generally and copies of all reports and
registration statements which Borrowers file with the Securities and Exchange
Commission, any national securities exchange or the National Association of
Securities Dealers, Inc.
(d) Borrowers shall furnish or cause to be furnished to Bank
such budgets, forecasts, projections and other information respecting the
Property and the business of Borrowers, as Bank may, from time to time,
reasonably request. Bank is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business of Borrowers to any
court or other government agency or to any participant or assignee or
prospective participant or assignee. Borrowers hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Bank, at Borrowers' expense,
copies of the financial statements of Borrowers and any reports or management
letters prepared by such accountants or auditors on behalf of Borrowers and to
disclose to Bank such information as they may have regarding the business of
Borrowers. Any documents, schedules, invoices or other papers delivered to Bank
may be destroyed or otherwise disposed of by Bank one year after the same are
delivered to Bank, except as otherwise designated by Borrowers to Bank in
writing.
8.5 Encumbrances. No Borrower shall create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien, charge or other encumbrance
of any nature whatsoever on any of the Property.
8.6 Net Worth. Borrowers shall, at all times, maintain Net Worth
of not less than $12,000,000.
---------
8.7 Working Capital. Borrowers shall, at all times, maintain
Working Capital of not less than $5,000,000.
---------------
8.8 Costs and Expenses. Borrowers shall pay to Bank on demand all
costs, expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Bank's
rights in the Property, this Agreement, and all other documents related hereto
or thereto, including any amendments, supplements or consents which may
hereafter be contemplated (whether or not executed) or entered into in respect
hereof and thereof, including, but not limited to: (a) all costs and expenses of
filing or recording (including Uniform Commercial Code financing statement
filing taxes and fees, documentary taxes, intangibles taxes, if applicable); (b)
charges, fees or expenses charged by Bank in connection with the Letters of
Credit; (c) costs and expenses of preserving and protecting the Property; (d)
costs and expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the rights of Bank in the Property, selling or otherwise
realizing upon the Property, and otherwise enforcing the provisions of this
Agreement or defending any claims made or threatened against Bank arising out of
the transactions contemplated hereby and thereby (including, without limitation,
preparations for and consultations concerning any such matters); (e) the
reasonable fees and disbursements of counsel (including legal assistants) to
Bank in connection with any of the foregoing.
8.9 Further Assurances. At the request of Bank at any time and from
time to time, Borrowers shall, at Borrowers' expense, duly execute and deliver,
or cause to be duly executed and delivered, such further agreements, documents
and instruments, and do or cause to be done such further acts as may be
necessary or proper to evidence, perfect, maintain and enforce the rights of
Bank in the Property and to otherwise effectuate the provisions or purposes of
this Agreement. Bank may at any time and from time to time request a certificate
from an officer of each Borrower representing that all conditions precedent to
issuing a Letter of Credit pursuant hereto are satisfied. In the event of such
request by Bank, Bank may, at its option, if such certificate has not been
delivered within five (5) days after such request, cease to issue any further
Letters of Credit until Bank has received such certificate and, in addition,
Bank has determined that such conditions are satisfied. Where permitted by law,
each of Borrowers hereby authorizes Bank to execute and file one or more UCC
financing statements related to the Property signed only by Bank.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) any Borrower fails to pay when due any of the
Obligations, or (ii) any Borrower or any obligor fails to perform any of the
terms, covenants, conditions or provisions contained in this Agreement and such
failure shall continue for twenty (20) days; provided, that, such twenty (20)
day period shall not apply in the case of: (A) any failure to observe any such
term, covenant, condition or provision which is not capable of being cured at
all or within such twenty (20) day period or which has been the subject of a
prior failure within a six (6) month period or (B) an intentional breach by any
Borrower or any Obligor of any such term, covenant, condition or provision, or
(C) the failure to observe or perform any of the covenants or provisions
contained in Sections 8.1, 8.3 or 8.5 of this Agreement; or
(b) any representation, warranty or statement of fact made by
any Borrower to Bank in this Agreement, or any other agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be false or
misleading in any material respect;
(c) any Obligor revokes, terminates or fails to perform any of
the terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favor of Bank;
(d) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against any Borrower or any Obligor or all or any part of
its properties and such petition or application is not dismissed within thirty
(30) days after the date of its filing or any Borrower or any Obligor shall file
any answer admitting or not contesting such petition or application or indicates
its consent to, acquiescence in or approval of, any such action or proceeding or
the relief requested is granted sooner;
(e) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by any Borrower or any Obligor or for all or any part of its
property;
(f) any act, condition or event shall exist or shall have
occurred that results in a Material Adverse Effect relating to the Property or
Bank's rights or interests in or with respect to the Property; or
(g) an Event of Default occurs under the Congress Agreement. A
waiver by Primary Lender of an Event of Default under the Congress Agreement
shall not be binding on Bank. Unless Bank separately and independently waives a
default in this Agreement based on an Event of Default in the Congress
Agreement, the default of Borrowers under this Agreement shall continue to
exist.
9.2 Remedies.
--------
(a) At any time an Event of Default exists or has occurred and
is continuing, Borrowers shall pay to Bank interest at the Default Rate on the
aggregate amount of all unpaid amounts due to Bank pursuant to Section 2.1(e).
(b) At any time an Event of Default exists or has occurred and
is continuing, Bank shall have all rights and remedies provided in this
Agreement, the Uniform Commercial Code and other applicable law, all of which
rights and remedies may be exercised without notice to or consent by any
Borrower or any Obligor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers
granted to Bank hereunder, the Uniform Commercial Code or other applicable law,
are cumulative, not exclusive, and are enforceable, in Bank's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by any Borrower of this
Agreement. Bank may, at any time or times, proceed directly against any Borrower
or any Obligor to collect the Obligations without prior recourse to the
Property.
(c) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, Bank may, in its discretion
and without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Bank (provided, that, upon the occurrence of any
Event of Default described in Sections 9.1(d) and 9.1(e), all Obligations shall
automatically become immediately due and payable), (ii) with or without judicial
process or the aid or assistance of others, present the Transportation Documents
to any port, shipper or freight line service where any of the Property may be
located and take possession of the Property, (iii) collect, foreclose, receive,
appropriate, setoff and realize upon any and all of the Property, (iv) remove
any or all of the Property from any premises on or in which the same may be
located for the purpose of effecting the sale or other disposition thereof or
for any other purpose, (v) sell, lease, transfer, assign, deliver or otherwise
dispose of any and all of the Property (including, without limitation, entering
into contracts with respect thereto, public or private sales at any exchange,
broker's board, at any office of Bank or elsewhere) at such prices or terms as
Bank may deem reasonable, for cash, upon credit or for future delivery, with the
Bank having the right to purchase the whole or any part of the Property at any
such public sale, all of the foregoing being free from any right or equity of
redemption of any Borrower, which right or equity of redemption is hereby
expressly waived and released by each Borrower and/or (vi) terminate this
Agreement. If any of the Property is sold or leased by Bank upon credit terms or
for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by Bank. If notice of disposition of
the Property is required by law, five (5) days prior notice by Bank to Borrowers
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of the Property is to be made, shall
be deemed to be reasonable notice thereof to Borrowers and each Borrower waives
any other notice. In the event Bank institutes an action to recover any of the
Property or seeks recovery of any of the Property by way of prejudgment remedy,
each Borrower waives the posting of any bond which might otherwise be required.
(d) Bank may apply the cash proceeds of the Property actually
received by Bank from any sale, lease, foreclosure or other disposition of the
Property to payment of the Obligations, in whole or in part and in such order as
Bank may elect, whether or not then due. Each Borrower shall remain liable to
Bank for the payment of any deficiency with interest at the Default Rate and all
costs and expenses of collection or enforcement, including reasonable attorneys'
fees and legal expenses.
(e) Without limiting the foregoing, upon the occurrence of an
Event of Default or an event which with notice or passage of time or both would
constitute an Event of Default, Bank may, at its option, without notice, (i)
cease issuing Letters of Credit and/or (ii) terminate any provision of this
Agreement providing for any future Letters of Credit to be made by Bank on
behalf of Borrowers.
SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING
---------------------------------------------------------
LAW;
10.1 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
SOUTH CAROLINA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF SOUTH CAROLINA; PROVIDED, HOWEVER, THAT IF ANY OF
THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN SOUTH CAROLINA,
THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
THE ENFORCEMENT OF BANK'S REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT
THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE
LAWS OF SOUTH CAROLINA. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY
RECEIVED, BORROWERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN GREENVILLE COUNTY OF THE STATE OF SOUTH CAROLINA AND WAIVE
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO BORROWERS AT THE ADDRESS STATED BELOW AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. BORROWERS WAIVE ANY
OBJECTION TO PERSONAL JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT
AS PROVIDED HEREIN AND AGREE IN SUCH CIRCUMSTANCES NOT TO ASSERT ANY DEFENSE
BASED ON LACK OF PERSONAL JURISDICTION OR VENUE.
10.2 WAIVERS BY BORROWERS. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
AGREEMENT, BORROWERS WAIVE PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF
PRESENTMENT, AND ANY RIGHT BORROWERS MAY HAVE UPON PAYMENT IN FULL OF THE
OBLIGATIONS TO REQUIRE BANK TO TERMINATE ITS SECURITY INTEREST IN THE COLLATERAL
OR IN ANY OTHER PROPERTY OF BORROWERS UNTIL TERMINATION OF THIS AGREEMENT IN
ACCORDANCE WITH ITS TERMS AND THE EXECUTION BY BORROWERS OF AN AGREEMENT
INDEMNIFYING BANK FROM ANY LOSS OR DAMAGE BANK MAY INCUR (OTHER THAN ANY ARISING
FROM BANK'S NEGLIGENCE OR WILLFUL MISCONDUCT) AS THE RESULT OF DISHONORED CHECKS
OR OTHER ITEMS OF PAYMENT RECEIVED BY BANK FROM BORROWERS OR ANY ACCOUNT DEBTOR
AND APPLIED TO THE OBLIGATIONS.
10.3 WAIVER OF JURY TRAIL. TO THE EXTENT PERMITTED BY LAW, BORROWERS
AND ANY AND ALL GUARANTORS WAIVE THE RIGHT TO A JURY TRIAL IN CONNECTION WITH
ANY DISPUTES AS TO THIS AGREEMENT AND THE LOANS HEREUNDER.
10.4 ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS,
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW). JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,
TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT
APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
10.5 Waiver of Notices. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the obligations or the Property, and any and all other demands and notices of
any kind or nature whatsoever with respect to the Obligations, the Property and
this Agreement, except such as are expressly provided for herein. No notice to
or demand on any Borrower which Bank may elect to give shall entitle Borrowers
to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, each Borrower
waives (i) notice prior to Bank's taking possession or control of any of the
Property or any bond or security which might be required by any court prior to
allowing Bank to exercise any of Bank's remedies, including the transfer into
Bank's name the Property or the Transportation Documents, or the issuance of an
immediate writ of possession, and (ii) the benefit of any valuation,
appraisement and exemption laws.
10.6 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Bank. Bank shall not, by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its rights, powers and/or remedies unless
such waiver shall be in writing and signed by an authorized officer of Bank. Any
such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Bank of any right, power and/or remedy on any one occasion
shall not be construed as a bar to or waiver of any such right, power and/or
remedy which Bank would otherwise have on any future occasion, whether similar
in kind or otherwise.
10.7 Waiver of Counterclaims. Each Borrower waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Property or any matter arising therefrom or
relating hereto or thereto.
10.8 Indemnification. Each Borrower shall indemnify and hold Bank, and
its directors, agents, employees and counsel, harmless from and against any and
all losses, claims, damages, liabilities, costs or expenses imposed on, incurred
by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, or any undertaking or proceeding related to
any of the transactions contemplated hereby or any act, omission, event or
transaction related or attendant thereto, including, without limitation, amounts
paid in settlement, court costs, and the fees and expenses of counsel. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section may be unenforceable because it violates any law or public policy,
each Borrower shall pay the maximum portion which it is permitted to pay under
applicable law to Bank in satisfaction of indemnified matters under this
Section. The foregoing indemnity shall survive the payment of the Obligations
and the termination or non-renewal of this Agreement.
SECTION 11. TERM OF AGREEMENT: MISCELLANEOUS
11.1 Term.
----
(a) This Agreement shall become effective as of the date set
forth on the first page hereof and shall continue in full force and effect for a
term ending on the earlier of (i) June 30, 2003 or (ii) the termination of the
Congress Agreement. At the end of the Term, Borrowers shall have paid to Bank,
in full, all outstanding and unpaid Obligations and shall furnish cash
collateral to Bank in such amounts as Bank determines are reasonably necessary
to secure Bank from loss, cost, damage or expense, including attorneys' fees and
legal expenses, in connection with any contingent obligations, including issued
and outstanding Letters of Credit and checks or other payments provisionally
credited to the Obligations and/or as to which Bank has not yet received final
and indefeasible payment. Such payments and cash collateral shall be remitted by
wire transfer in Federal funds to such bank account of Bank, as Bank may, in its
discretion, designate in writing to Borrowers for such purpose. Interest at the
Default Rate shall accrue on all unpaid Obligations not satisfied as of the end
of the Term and shall be due until and including the next business day, if the
amounts so paid by Borrowers to the bank account designated by Bank are received
in such bank account later than 12:00 noon, Greenville, South Carolina time.
(b) No termination of this Agreement shall relieve or
discharge any Borrower of its respective duties, obligations and covenants under
this Agreement until all Obligations have been fully and finally discharged and
paid, and Bank's continuing rights in the Property and the rights and remedies
of Bank hereunder, and under applicable law, shall remain in effect until all of
the Obligations have been fully and finally discharged and paid.
11.2 Uniform Customs and Practice. Except as otherwise expressly
provided in this Agreement or as Borrowers and Bank may otherwise expressly
agree with regard to, and prior to the issuance of, a Letter of Credit, the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 shall in all respects be
deemed a part of this Agreement as fully as if incorporated herein and shall
apply to the Letters of Credit.
11.3 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Bank at its address set forth below and to each Borrower
at its chief executive office set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.
11.4 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
11.5 Successors. This Agreement, and any other document referred to
herein shall be binding upon and inure to the benefit of and be enforceable by
Bank, Borrowers and their respective successors and assigns, except that
Borrowers may not assign their rights under this Agreement, and any other
document referred to herein without the prior written consent of Bank. Bank may,
after notice to Borrowers, assign its rights and delegate its obligations under
this Agreement and further may assign, or sell participations in, all or any
part of the Letters of Credit or any other interest herein to another financial
institution or other person, in which event, the assignee or participant shall
have, to the extent of such assignment or participation, the same rights and
benefits as it would have if it were the Bank hereunder, except as otherwise
provided by the terms of such assignment or participation.
11.6 Confidentiality.
---------------
(a) Bank shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by Borrowers pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by a Borrower to Bank, provided, that, nothing contained herein shall
limit the disclosure of any such information: (i) to the extent required by
statute, rule, regulation, subpoena or court order, (ii) to bank examiners and
other regulators, auditors and/or accountants, (iii) in connection with any
litigation to which Bank is a party, (iv) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) shall have first agreed in writing to treat
such information as confidential in accordance with this Section 11.6, or (v) to
counsel for Bank or any participant or assignee (or prospective participant or
assignee).
(b) In no event shall this Section 11.6 or any other provision
of this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by a Borrower or any
third party without breach of this Section 11.6 or otherwise become generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Bank on a non-confidential basis from a person other than a
Borrower, (iii) require Bank to return any materials furnished by a Borrower to
Bank or (iv) prevent Bank from responding to routine informational requests in
accordance with the Code of Ethics for the Exchange of Credit Information
promulgated by The Xxxxxx Xxxxxx Associates or other applicable industry
standards relating to the exchange of credit information. The obligations of
Bank under this Section 11.6 shall supersede and replace the obligations of Bank
under any confidentiality letter signed prior to the date hereof.
11.7 Entire Agreement. This Agreement, any supplements hereto, and any
instruments or documents delivered or to be delivered in connection herewith
represents the entire agreement and understanding concerning the subject matter
hereof and thereof between the parties hereto, and supersede all other prior
agreements, understandings, negotiations and discussions, representations,
warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof, whether oral or written.
IN WITNESS WHEREOF, Bank and each of Borrowers have caused these
presents to be duly executed as of the day and year first above written.
BANK BORROWERS
CAROLINA FIRST BANK ONE PRICE CLOTHING STORES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ C. Xxxx Xxxxx
------------------------------- -------------------------------------
Xxxxxxx X. Xxxxxxxxxxx C. Xxxx Xxxxx
Title: Senior Vice President Title: Vice President - Finance & Treasurer
Address: Chief Executive Office:
------- ----------------------
International Department 0000 Xxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000 Telephone No. (000) 000-0000
Telephone No. (000) 000-0000 Facsimile No. (000) 000-0000
Facsimile No. (000) 000-0000
ONE PRICE CLOTHING OF PUERTO RICO, INC.
By: /s/ C. Xxxx Xxxxx
-----------------------------------------
C. Xxxx Xxxxx
Title: Vice President & Treasurer
Chief Executive Office:
----------------------
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
ONE PRICE CLOTHING - U.S. VIRGIN
ISLANDS, INC.
By: /s/ C. Xxxx Xxxxx
-----------------------------------------
C. Xxxx Xxxxx
Title: Vice President & Treasurer
Chief Executive Office:
----------------------
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
EXHIBIT A
[Congress Agreement]
EXHIBIT B
Application for Letter of Credit Accommodations
See attached 3 pages
EXHIBIT C
Transaction Fee Schedule
EXHIBIT D
Subsidiaries of One Price Clothing Stores, Inc.
One Price Clothing of Puerto Rico, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
One Price Clothing - U.S. Virgin Islands, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
One Price Realty, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
