ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
EXHIBIT 10(b) - Continuing Commercial Credit Agreement by and between Carolina
First Bank as Lender and the Registrant, One Price
Clothing of Puerto Rico, Inc. and One Price Clothing - U.S. Virgin Islands, Inc.
as Borrowers dated May 16, 1997.
CONTINUING COMMERCIAL CREDIT AGREEMENT
by and between
CAROLINA FIRST BANK
as Bank
and
ONE PRICE CLOTHING STORES, INC.
and
ONE PRICE CLOTHING OF PUERTO RICO, INC.
and
ONE PRICE CLOTHING - U.S. VIRGIN ISLANDS, INC.
as Borrowers
Dated: May 16, 1997
TABLE OF CONTENTS
SECTION 1. DEFINITIONS......................................................................................... 1
1.1 "Application"................................................................................. 2
1.2 "Default Rate"................................................................................ 2
1.3 "Event of Default"............................................................................ 2
1.4 "Letter of Credit Accommodations"............................................................. 2
1.5 "Material Adverse Effect"..................................................................... 2
1.6 "Maximum Credit".............................................................................. 2
1.7 "Obligations"................................................................................. 2
1.8 "Obligor"..................................................................................... 2
1.9 "Payment Account"............................................................................. 2
1.10 "Primary Lender".............................................................................. 2
1.11 "Prime Rate".................................................................................. 2
1.12 "Property".................................................................................... 3
1.13 "Records"..................................................................................... 3
1.14 "Term"........................................................................................ 3
1.15 "Transportation Documents".................................................................... 3
SECTION 2. LETTER OF CREDIT ACCOMMODATIONS...................................................................... 3
2.1 General Terms and Conditions.................................................................. 3
2.2 Bank's Good Faith Interpretation.............................................................. 4
2.3 Noncompliance; Acceptance and Rejection; Extensions and
Amendments.................................................................................... 5
2.4 Borrowers' Assumption of Risk; Indemnification and Hold Harmless.............................. 5
SECTION 3. FEES AND CHARGES..................................................................................... 5
3.1 Closing Fee................................................................................... 5
3.2 Transaction Fees.............................................................................. 5
3.3 Attorney's Fees............................................................................... 5
3.4 Maximum Interest.............................................................................. 6
SECTION 4. CONDITIONS PRECEDENT................................................................................ 6
4.1 Requisite Corporate Action.................................................................... 6
4.2 No Material Adverse Change.................................................................... 6
4.3 Consents, Waivers, Acknowledgements........................................................... 6
4.4 Accurate Representations and Warranties....................................................... 7
4.5 No Event of Default........................................................................... 7
SECTION 5. BANK'S RIGHTS TO THE PROPERTY AND THE
TRANSPORTATION DOCUMENTS...................................................................... 7
5.1 Bank's Ownership Rights....................................................................... 7
5.2 No Waiver by Bank............................................................................. 7
SECTION 6. COLLECTION AND ADMINISTRATION....................................................................... 7
6.1 Borrowers' Letter of Credit Accounts.......................................................... 7
6.2 Statements.................................................................................... 7
6.3 Payments...................................................................................... 8
6.4 Authorization to Issue Letter of Credit....................................................... 8
6.5 Appointment of One Price as Agent for One Price PR and One Price VI........................... 8
SECTION 7. REPRESENTATIONS AND WARRANTIES....................................................................... 9
7.1 Corporate Existence, Power and Authority; Subsidiaries........................................ 9
7.2 Financial Statements; No Material Adverse Change.............................................. 9
7.3 Chief Executive Office........................................................................ 9
7.4 Tax Returns................................................................................... 9
7.5 Litigation.................................................................................... 10
7.6 Compliance with Other Agreements and Applicable Laws.......................................... 10
7.7 Accuracy and Completeness of Information...................................................... 11
7.8 Interrelated Business......................................................................... 11
7.9 Survival of Warranties; Cumulative............................................................ 11
SECTION 8. AFFIRMATIVE AND NEGATIVE COVENANTS................................................................... 12
8.1 Maintenance of Existence...................................................................... 12
8.2 Compliance with Laws, Regulations, Etc........................................................ 12
8.3 Insurance..................................................................................... 12
8.4 Financial Statements and Other Information.................................................... 13
8.5 Encumbrances.................................................................................. 14
8.6 Adjusted Net Worth............................................................................ 14
8.7 Working Capital............................................................................... 14
8.8 Costs and Expenses............................................................................ 14
8.9 Further Assurances............................................................................ 14
SECTION 9. EVENTS OF DEFAULT AND REMEDIES....................................................................... 15
9.1 Events of Default............................................................................. 15
9.2 Remedies...................................................................................... 16
SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; ..........................................GOVERNING LAW;
17
10.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver......................... 17
10.2 Waiver of Notices............................................................................. 18
10.3 Amendments and Waivers........................................................................ 19
10.4 Waiver of Counterclaims....................................................................... 19
10.5 Indemnification............................................................................... 19
SECTION 11. TERM OF AGREEMENT: MISCELLANEOUS................................................................... 19
11.1 Term.......................................................................................... 19
11.2 Uniform Customs and Practice.................................................................. 20
11.3 Notices....................................................................................... 20
11.4 Partial Invalidity............................................................................ 20
11.5 Successors.................................................................................... 20
11.6 Confidentiality............................................................................... 21
11.7 Entire Agreement.............................................................................. 21
CONTINUING COMMERCIAL CREDIT AGREEMENT
This Continuing Commercial Credit Agreement (the "Agreement") dated May
16, 1997 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:
WHEREAS, Borrowers have requested that Bank establish a facility for
the issuance from time to time, at Bank's option, of one or more International
Documentary Letters of Credit (each being hereafter referred to individually as
a "Letter of Credit" and collectively as "Letters of Credit"); and
WHEREAS, Bank is willing to provide 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
All capitalized terms, unless otherwise defined herein, 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, and
amended in May, 1997 (the "Congress Agreement"). The Congress Agreement as in
existence as of the date of this Agreement 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. An Event of
Default shall exist or continue or be continuing until such Event of Default is
waived in accordance with Section 10.3. 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:
1.1 "Application" shall mean the request made by any Borrower to Bank
for Letter of Credit Accommodations on a form identical to Exhibit B.
1.2 "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.
1.3 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 9.1 hereof.
1.4 "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.
1.5 "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.
1.6 "Maximum Credit" shall mean $3,000,000.
1.7 "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.
1.8 "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.
1.9 "Payment Account" shall have the meaning set forth in Section
6.3 hereof.
1.10 "Primary Lender" shall mean Congress Financial Corporation
(Southern).
1.11 "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.
1.12 "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.
1.13 "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).
1.14 "Term" shall mean the period of time set forth in Section 11.1
during which this Agreement shall continue in full force and effect.
1.15 "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 120 days, and the expiration date of a Letter of Credit shall not
extend beyond June 30, 1998.
(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 Interpretation2.2Bank'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
AmendmentsNoncompliance; 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
HarmlessBorrowers' 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 CHARGESSECTION.
3.1 Closing Fee. Borrowers shall pay to Bank as a
closing fee the amount of $30,000 which shall be fully earned as of and payable
on the date hereof.
3.2 Transaction Fees. Borrowers shall pay to Bank for each
Letter of Credit issued the transaction fees as shown on Exhibit C
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 PRECEDENTSECTION. Each of the following is a condition
precedent to Bank issuing any Letter of Credit hereunder:
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 1, 1997. 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.
5. BANK'S RIGHTS TO THE PROPERTY AND THE TRANSPORTATIONDOCUMENTS. 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.
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.
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
(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 InformationAccuracy 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 1, 1997, 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 BusinessInterrelated 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; CumulativeSurvival 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) within 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)
within 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, (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 Adjusted Net Worth. Borrowers shall,
at all times, maintain Adjusted Net Worth of not less than $34,000,000.
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.
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; Choice of Forum; Service of Process;
Jury Trial Waiver.
(a) The validity, interpretation and enforcement of this
Agreement and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of South Carolina (without giving effect to
principles of conflicts of law).
(b) Each Borrower and Bank irrevocably consent and submit to
the non-exclusive jurisdiction of the Circuit Court of Greenville County, South
Carolina and the United States District Court for the District of South Carolina
and waive any objection based on venue or forum non conveniens with respect to
any action instituted therein arising under this Agreement or in any way
connected with or related or incidental to the dealings of the parties hereto in
respect of this Agreement or the transactions related hereto or thereto, in each
case whether now existing or hereafter arising, and whether in contract, tort,
equity or otherwise, and agree that any dispute with respect to any such matters
shall be heard only in the courts described above (except that Bank shall have
the right to bring any action or proceeding against a Borrower or the Property
in the courts of any other jurisdiction which Bank deems necessary or
appropriate in order to realize on the Property or to otherwise enforce its
rights against such Borrower or the Property).
(c) Each Borrower hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Bank's option, by service upon Borrowers in any other manner provided under
the rules of any such courts. Within thirty (30) days after such service, such
Borrowers shall appear in answer to such process, failing which Borrowers shall
be deemed in default and judgment may be entered by Bank against Borrowers for
the amount of the claim and other relief requested.
(d) EACH BORROWER AND BANK HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH BORROWER AND
BANK HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER OR
BANK MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(e) Bank shall not have any liability to any Borrower (whether
in tort, contract, equity or otherwise) for losses suffered by any Borrower in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on Bank, that the losses were the
result of acts or omissions constituting gross negligence or willful misconduct.
In any such litigation, Bank shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of this Agreement.
10.2 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.
10.3 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.
10.4 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.
10.5 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, 1998 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: Xxxxxxx X. Xxxxxxxxxxx By: C. Xxxx Xxxxx
Title: Executive Vice President Title: 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: C. Xxxx Xxxxx
Title: Treasurer
Chief Executive Office:
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
ONE PRICE CLOTHING - U.S. VIRGIN
ISLANDS, INC.
By: C. Xxxx Xxxxx
Title: Treasurer
Chief Executive Office:
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
