UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
Washington, D.C. 20549
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July
1, 1995
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
_________________ to _______________
Commission file number 0-15385
ONE PRICE CLOTHING STORES, INC.
(Exact name of Registrant as specified in
its Charter)
DELAWARE 57-0779028
(State or other jurisdiction (I.R.S.
of incorporation or Employer
organization) Identification
No.)
Highway 290, Commerce Park
1875 East Main Street
Duncan, South Carolina 29334
(Address of principle (Zip Code)
executive offices)
Registrant's telephone number, including area
code: (803) 433-8888
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to
file such reports), and (2) has been subject to
such filing requirements for the past 90
days.
Yes X No
The number of shares of the Registrant's Common
Stock outstanding as of July 31, 1995 was
10,311,781.
INDEX
ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets --
July 1, 1995, December 31, 1994 and July
2, 1994
Condensed consolidated statements of
income -- Three-month and six-month
periods ended July 1, 1995 and July 2,
1994
Condensed consolidated statements of cash
flows -- Six-month periods ended July 1,
1995 and July 2, 1994
Notes to unaudited condensed consolidated
financial statements -- July 1, 1995
Independent accountants' report on review
of interim financial information
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
PARTII. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
One Price Clothing Stores, Inc. and Subsidiary
<TABLE>
<S> <C> <C> <C>
July 1, December 31, July 2,
1995 1994 1994
(Unaudited) (1) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,530,000 $ 362,000 $ 1,517,000
Merchandise inventories 38,928,000 26,337,000 36,253,000
Prepaid Federal and state
income taxes 386,000 -- --
Deferred income taxes 2,316,000 1,709,000 1,843,000
Other current assets --Note B 4,920,000 2,844,000 4,290,000
TOTAL CURRENT ASSETS 50,080,000 31,252,000 43,903,000
PROPERTY & EQUIPMENT, at cost 56,143,000 48,996,000 42,910,000
Less accumulated depreciation 15,346,000 13,606,000 12,160,000
40,797,000 35,390,000 30,750,000
OTHER ASSETS 1,414,000 1,288,000 1,455,000
$92,291,000 $67,930,000 $76,108,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $16,980,000 $ 6,470,000 $11,748,000
Note payable -- Note C 7,510,000 -- --
Current portion of long-term
debt -- Note C 1,500,000 -- --
Sundry liabilities 7,506,000 6,565,000 6,014,000
Federal and state income taxes
payable -- -- 2,874,000
TOTAL CURRENT LIABILITIES 33,496,000 13,035,000 20,636,000
LONG-TERM DEBT -- Note C 4,500,000 -- --
DEFERRED INCOME TAXES AND OTHER
LIABILITIES 1,955,000 1,821,000 1,776,000
SHAREHOLDERS' EQUITY -- Notes D and E
Preferred Stock, par value $0.01
--authorized and unissued 500,000 shares
Common Stock, par value $0.01
--authorized 35,000,000 shares,
issued and outstanding 10,311,781,
10,305,256 and 10,299,736
shares 103,000 103,000 103,000
Additional paid-in capital 10,928,000 10,891,000 10,782,000
Retained earnings 41,309,000 42,080,000 42,811,000
52,340,000 53,074,000 53,696,000
$92,291,000 $67,930,000 $76,108,000
(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
One Price Clothing Stores, Inc. and Subsidiary
</TABLE>
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Three-Month Period Six-Month Period
Ended Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
NET SALES $86,647,000 $82,566,000 $141,287,000 $138,573,000
Cost of sales 48,722,000 46,058,000 84,032,000 80,947,000
GROSS MARGIN 37,925,000 36,508,000 57,255,000 57,626,000
Selling, general and
administrative
expenses 23,355,000 21,160,000 43,963,000 38,406,000
Store rent and related
expenses 6,205,000 4,832,000 12,082,000 9,341,000
Depreciation and
amortization expense 997,000 838,000 1,989,000 1,614,000
Interest expense 312,000 12,000 509,000 31,000
30,869,000 26,842,000 58,543,000 49,392,000
Interest income 15,000 29,000 24,000 50,000
NET EXPENSES 30,854,000 26,813,000 58,519,000 49,342,000
INCOME (LOSS) BEFORE
INCOME TAXES 7,071,000 9,695,000 (1,264,000) 8,284,000
Provision for (benefit from)
income taxes 2,757,000 3,703,000 (493,000) 3,164,000
NET INCOME (LOSS) $ 4,314,000 $ 5,992,000 $ (771,000) $ 5,120,000
Net income (loss) per common
share -- Note D $ 0.42 $ 0.57 $ (0.07) $ 0 .49
Weighted average common
shares outstanding
-- Note D 10,347,591 10,593,573 10,309,610 10,554,938
</TABLE>
See notes to unaudited condensed consolidated
financial statements
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
One Price Clothing Stores, Inc. and Subsidiary
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Six-Month Period Ended
July 1, July 2,
1995 1994
OPERATING ACTIVITIES:
Net (loss) income $ (771,000) $ 5,120,000
Adjustments to reconcile net (loss)
income to net cash used in operating
activities:
Depreciation and amortization 1,989,000 1,614,000
(Increase) decrease in other
noncurrent assets (75,000) 47,000
Deferred income taxes (451,000) (344,000)
Loss on disposal of property
and equipment 280,000 200,000
Changes in operating assets and
liabilities (1,904,000) (9,190,000)
NET CASH USED IN OPERATING ACTIVITIES (932,000) (2,553,000)
INVESTING ACTIVITIES:
Purchases of property and equipment (7,661,000) (4,910,000)
Purchases in anticipation of sale
/ leaseback arrangements (1,698,000) --
Purchases of other noncurrent assets (66,000) (291,000)
NET CASH USED IN INVESTING ACTIVITIES (9,425,000) (5,201,000)
FINANCING ACTIVITIES:
Net borrowings from line of credit 7,510,000 --
Proceeds from issuance of long-term debt 6,000,000 --
Decrease in other noncurrent liabilities (22,000) (19,000)
Proceeds from exercise of Common
Stock options 37,000 750,000
NET CASH PROVIDED BY FINANCING
ACTIVITIES 13,525,000 731,000
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,168,000 (7,023,000)
Cash and cash equivalents at
beginning of period 362,000 8,540,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,530,000 $ 1,517,000
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $ 395,000 $ 3,062,000
Interest paid 465,000 28,000
</TABLE>
See notes to unaudited condensed consolidated
financial statements
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
One Price Clothing Stores, Inc. and Subsidiary
July 1, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying condensed consolidated financial
statements are unaudited and include the accounts
of One Price Clothing Stores, Inc. and its wholly-
owned subsidiary (the "Company"). All significant
intercompany accounts and transactions have been
eliminated in consolidation.
These financial statements have been prepared in
accordance with generally accepted accounting
principles for interim financial information and
the instructions of Regulation
S-X. Accordingly, they do not include all of the
information and footnotes required by generally
accepted accounting principles for complete
financial statements.
For interim reporting, the Company uses an
estimated gross profit as calculated on a current
quarterly basis by its inventory management system.
At year-end, inventories are stated at the lower of
average unit cost or market. Average unit cost is
determined by the first-in, first-out (FIFO)
method. Therefore, there is no assurance that a
final determination of annual gross profit will not
result in a significant impact on the fourth
quarter results of operations.
In the opinion of management, all adjustments
(consisting of normal recurring accruals)
considered necessary for a fair presentation have
been included. Due to the seasonality of the
Company's sales, operating results for the three-
month and six-month periods ended July 1, 1995 are
not necessarily indicative of the results that may
be expected for the year ending December 30, 1995.
For further information, refer to the financial
statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
Certain previously reported amounts have been
reclassified to conform with the current year
presentation.
NOTE B -- SALE / LEASEBACK TRANSACTIONS
All costs of acquisition and construction of
property and equipment which the Company intends to
sell and lease back within one year are accumulated
in current assets until such property and equipment
is sold.
NOTE C -- CREDIT FACILITIES
Effective June 30, 1995, the Company's credit
facility agreement was amended to convert the
$25,000,000 line of credit facility to a
$19,000,000 line of credit and a $6,000,000 term
loan facility. Borrowings against these amended
credit facilities are secured by the land, building
and improvements at the Corporate Office and
Distribution Center. Under the amended agreement,
borrowings against the line of credit bear interest
at the Company's option of a Base Rate (defined as
the higher of the Bank's prime interest rate or the
Federal Funds rate plus 0.50%) or the adjusted
LIBOR rate plus 1.50%. The term loan bears
interest, payable quarterly, at the Company's
option of the Base Rate, as defined above, plus
1.0% or the adjusted LIBOR rate plus 2.50%. The
principal balance on the term loan is payable in 12
consecutive quarterly installments of $500,000 each
commencing December 31, 1995. The amended credit
facilities contain certain covenants which, among
other things, restrict or limit the ability of the
Company to incur indebtedness, or encumber or
dispose of assets, requires the Company to reduce
the outstanding balance on the line of credit to
zero for at least thirty consecutive days during
the term of the agreement and limits capital
expenditures. In addition, the Company may not
repurchase its Common Stock or pay dividends
without prior approval. The Company was in
compliance with the covenants at July 1, 1995.
NOTE D -- EARNINGS PER SHARE
Earnings per share were computed based upon the
weighted average number of common and common
equivalent shares outstanding. Common equivalent
shares are represented by shares under option.
NOTE E -- COMMITMENTS AND CONTINGENCIES
Two lawsuits filed by shareholders in September
1994 making certain securities and common law
allegations and seeking unspecified damages against
the Company and its Chairman and Chief Executive
Officer were dismissed by the court on July 10,
1995. The dismissal is subject to appeal.
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
One Price Clothing Stores, Inc. and Subsidiary:
We have reviewed the accompanying condensed
consolidated balance sheets of One Price Clothing
Stores, Inc. and subsidiary (the "Company") as of
July 1, 1995 and July 2, 1994, and the related
condensed consolidated statements of operations for
the three-month and six-month periods then ended,
and the related condensed consolidated statements
of cash flows for the six-month periods then ended.
These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with
standards established by the American Institute of
Certified Public Accountants. A review of interim
financial information consists principally of
applying analytical procedures to financial data
and of making inquiries of persons responsible for
financial and accounting matters. It is
substantially less in scope than an audit conducted
in accordance with generally accepted auditing
standards, the objective of which is the expression
of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any
material modifications that should be made to such
condensed consolidated financial statements for
them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with
generally accepted auditing standards, the
consolidated balance sheet of One Price Clothing
Stores, Inc. and subsidiary as of December 31,
1994, and the related consolidated statements of
income, shareholders' equity, and cash flows for
the year then ended (not presented herein); and in
our report dated February 10, 1995 (February 28,
1995 as to Note B), we expressed an unqualified
opinion on those financial statements. In our
opinion, the information set forth in the
accompanying condensed consolidated balance sheet
as of December 31, 1994 is fairly stated, in all
material respects, in relation to the consolidated
balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
July 20, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the second quarter ended July 1, 1995
increased approximately 5% to $86,647,000 compared
to $82,566,000 for the same quarter ended July 2,
1994. Net sales for the six-month period ended
July 1, 1995 increased approximately 2% to
$141,287,000 compared to $138,573,000 for the
comparable six-month period ended July 2, 1994.
Comparable store sales decreased 14% for the
quarter and 17% year-to-date compared to the same
periods last year. The Company considers stores
that are 18 months or older as comparable for this
purpose, and there were 497 such stores at July 1,
1995.
Management believes that sales during the first
half of fiscal 1995 reflect the continued industry-
wide softness in consumer spending on women's
apparel. Sales thus far in the third quarter of
1995 remain soft compared to the same period of the
previous year.
Thirty-one new stores were opened during the second
quarter of 1995 and one under-performing store was
closed. For the six-month period ended July 1,
1995, the Company opened 55 new stores and closed
16 underperforming stores. At July 1, 1995, the
Company operated 680 stores in 28 states and Puerto
Rico. Management deems it prudent, at this time,
to reduce the previously announced new store
expansion rate further during the remainder of the
fiscal year and anticipates that approximately 700
stores will be in operation by year end.
The Company's sales and operating results are
seasonal, as is typical in the women's retail
apparel industry. The Company's sales historically
have been lowest during the first quarter (January
- March) and third quarter (July - September) and
highest during the second quarter (April - June)
and fourth quarter (October - December). Reduced
sales volumes in first and third quarters coincide
with the transition of seasonal merchandise.
Therefore, increased levels of markdowns occur
during these transitional periods, and operating
expenses, when expressed as a percentage of sales,
are typically higher.
Gross margin decreased to 43.8% of net sales in the
second quarter of 1995 as compared to 44.2% of net
sales for the comparable quarter ended July 2,
1994. Gross margin for the six-month period ended
July 1, 1995 was 40.5% of net sales compared to
41.6% for the six-month period ended July 2, 1994.
The decrease in gross margin as a percentage of net
sales for the second quarter and for the six-month
period ended July 1, 1995 compared to the same
periods last year was primarily the result of
taking increased levels of markdowns combined with
the shortfall in sales of full-price spring
merchandise.
Selling, general and administrative expenses
increased as a percentage of net sales to 27.0% in
the second quarter of 1995 from 25.6% in the same
period of 1994. For the first six months of fiscal
1995, selling, general and administrative expenses
increased to 31.1 % of net sales from 27.7% of net
sales for the comparable period of 1994. These
increases in selling, general and administrative
expenses when expressed as a percentage of net
sales are due to the significantly lower average
store sales volumes experienced in the second
quarter and six-month-periods ended July 1, 1995
compared to the same periods last year. The
Company's total selling, general and administrative
expenses per average store in the second quarter
and six-month-periods ended July 1, 1995,
respectively, were approximately 7% and 4% less
than the same periods last year primarily due to
the impact on variable costs of the shortfall in
sales, efficiencies gained in transportation costs
and as a result of management's efforts to more
stringently control other costs in light of current
business conditions.
Total selling, general and administrative expenses
increased due to the 94 net new stores opened since
the second quarter of fiscal 1994 and investments
made in personnel and training at the corporate
offices.
Store rent expense increased as a percentage of net
sales to 7.2% in the second quarter of 1995
compared to 5.9% in the same period in 1994. For
the first six months of 1995, store rent expense
increased to 8.6% of net sales compared to 6.7% of
net sales for the comparable period of 1994. Rent
expense per average store for the quarter and for
the six-month period ended July 1, 1995 compared to
the same periods of 1994 increased 8% due to the
impact of entering into leases in larger, more
costly, urban and metropolitan markets and
increases in lessor operating costs and property
taxes which are passed on to the Company. The
Company believes that increasing average store
rents may continue in the future.
Depreciation and amortization expense increased to
1.2% of net sales in the second quarter of 1995 as
compared to 1.0% of net sales for the second
quarter of 1994 and increased to 1.4% of net sales
from 1.2% for the six-month period ended July 1,
1995 compared to the same period in 1994.
The Company's effective tax rate for fiscal 1994
was 38.5%. The Company's estimated annual
effective tax rate for fiscal 1995 is 39.0%. The
increase in fiscal 1995's estimated annual
effective tax rate compared to 1994's effective tax
rate is primarily related to the expiration of the
Federal Targeted Jobs Tax Credit program and due to
the Company's expansion into state and local tax
jurisdictions with higher tax rates in fiscal 1995.
Liquidity and Capital Resources
During the first six months of 1995 and 1994,
$932,000 and $2,553,000, respectively, was used in
operating activities, primarily due to the results
of operations and the increase in net operating
assets. The largest component of the net change in
operating assets and liabilities resulted from an
increase in merchandise inventories in excess of
the increase in accounts payable.
Total inventories at the end of the second quarter
of fiscal 1995 and 1994 were $38,928,000 and
$36,253,000, respectively. Total inventories at
December 31, 1994 were $26,337,000. The level of
inventories are subject to fluctuations because of
the Company's opportunistic buying strategy and
prevailing business conditions. The above amounts
represent total inventory, whether located at the
stores, in the Distribution Center or in-transit.
The average inventory per store was approximately
$57,000 and $62,000 at the end of the second
quarter of fiscal 1995 and 1994, respectively, a
decrease of approximately 8%. This decrease in
average inventory per store resulted from the
current weak condition of the women's apparel
industry, management's efforts to adjust inventory
levels in response to sales trends, and the
Company's opportunistic buying strategy. The
average inventory per store was approximately
$41,000 at December 31, 1994. Typically, the
average inventory per store is at its lowest level
at the end of the Company's fiscal year.
Total accounts payable and the note payable under
the line of credit at the end of the second quarter
of fiscal 1995 and 1994, respectively, was
$24,490,000 and $11,748,000. In comparison, total
accounts payable at December 31, 1994 was
$6,470,000. The level of accounts payable is
subject to fluctuations because of the Company's
opportunistic buying strategy and prevailing
business conditions. The increase in the accounts
and note payable is also due to the increase in
capital expenditures described below and funding
the operating loss for the first six months of
fiscal 1995.
During the first six months of fiscal 1995, a net
of $9,425,000 was used in investing activities
primarily to purchase property and equipment and to
make purchases in anticipation of sale / leaseback
arrangements. Such purchases consisted of
leasehold improvements and equipment for the fifty-
five new stores opened during the period and
building and equipment costs principally associated
with the expansion of the Distribution Center. In
fiscal 1995, the Company plans to spend a total of
approximately $11.0 million on capital expenditures
for new store openings, expansion of the Company's
distribution facility, a new warehouse management
system, equipment and enhanced information systems.
During the first six months of 1994, a net of
$5,201,000 was used in investing activities,
primarily to purchase leasehold improvements and
equipment for the sixty-three new stores opened
during the period, building and equipment costs
associated with the expansion of the Corporate
Office, and for equipment purchased in anticipation
of the additional new stores to be opened in
subsequent periods.
The exercise of Common Stock options pursuant to
the Company's stock option plans provided cash of
$37,000 in the first six months of 1995 compared to
$750,000 in the first six months of 1994.
The Company executed an agreement in March 1995
with its banks that provided for a $25,000,000 line
of credit and a $15,000,000 letter of credit
facility expiring May 31, 1996. This agreement
replaced the Company's $20,000,000 line of credit
and $10,000,000 letter of credit facility with that
bank.
Effective June 30, 1995, the agreement was amended
to convert the $25,000,000 line of credit facility
to a $19,000,000 line of credit and a $6,000,000
term loan facility. Borrowings against these
amended credit facilities are secured by the land,
building and improvements at the Corporate Office
and Distribution Center. Under the amended
agreement, borrowings against the line of credit
bear interest at the Company's option of a Base
Rate (defined as the higher of the Bank's prime
interest rate or the Federal Funds rate plus 0.50%)
or the adjusted LIBOR rate plus 1.50%. The term
loan bears interest, payable quarterly, at the
Company's option of the Base Rate, as defined
above, plus 1.0% or the adjusted LIBOR rate plus
2.50%. The principal balance on the term loan is
payable in 12 consecutive quarterly installments of
$500,000 each commencing December 31, 1995. The
amended credit facilities contain certain covenants
which, among other things, restrict or limit the
ability of the Company to incur indebtedness, or
encumber or dispose of assets, requires the Company
to reduce the outstanding balance on the line of
credit to zero for at least thirty consecutive days
during the term of the agreement and limits capital
expenditures. In addition, the Company may not
repurchase its Common Stock or pay dividends
without prior approval. The Company was in
compliance with the covenants at July 1, 1995.
At the end of the second quarter of fiscal 1995,
the Company had $7,510,000 outstanding under the
line of credit and $6,000,000 under the term loan.
No amount was outstanding under the line of credit
at the end of the same period of fiscal 1994. The
maximum amounts outstanding under the line of
credit during the second quarters of fiscal 1995
and 1994, respectively, were $20,586,000 and
$3,109,000. The average amounts outstanding under
the line of credit were $17,745,000 during the
second quarter of fiscal 1995 and $92,000 during
the second quarter of fiscal 1994. The weighted
average interest rates were 8.3% and 6.1% for the
second quarters of fiscal 1995 and 1994,
respectively.
The Company had outstanding letters of credit
totaling approximately $3,699,000 at July 1, 1995.
Letters of credit are used primarily to purchase
merchandise from foreign suppliers. All such
purchases are paid for in United States dollars;
thus the Company is not subject to foreign currency
risks.
Management believes that the Company's needs for
operating capital and funds for capital
expenditures for fiscal 1995 should be satisfied by
its cash flows from operations and through the use
of its available line of credit, long-term debt,
capital leases and operating leases.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On September 22, 1995, two separate lawsuits making
certain securities and common law allegations and
seeking unspecified damages were filed in the
United States District Court for the District of
South Carolina, Columbia Division against the
Company and its Chairman and Chief Executive
Officer, Henry D. Jacobs, Jr. A motion to
consolidate these cases was filed. The lawsuits,
which sought certification as class actions,
alleged that the Chairman and Chief Executive
Officer and the Company made materially false,
misleading and untimely projections and statements
on earnings. The plaintiffs in these cases, which
were sought to be consolidated, were Leonard
Pitten, Katherine Hogan and Anthony J. Mallozzi.
The Company moved to dismiss the lawsuits and, on
July 10, 1995, such lawsuits were dismissed by the
court. The dismissal is subject to appeal.
Occasionally the Company is a defendant in legal
actions involving claims arising in the normal
course of its business. The Company believes that,
as a result of its legal defenses and insurance
arrangements, none of these other actions presently
pending, if decided adversely, would have a
material adverse effect on its financial position
or results of operations.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of
Security Holders
The summary of votes at the Annual Meeting of the
Company's Shareholders held April 19, 1995 are
incorporated herein by reference to Item 4 in the
Company's quarterly report on Form 10-Q for the
quarter ended April 1, 1995 (File No. 0-15385).
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits including those incorporated by
reference:
10(a) Assignment and Acceptance (dated
April 24, 1995) of an interest
in the Credit Agreement (dated
March 17, 1995) to CoreStates
Bank and Promissory Notes dated
April 13, 1995 by and between
the Registrant and CoreStates
Bank and NationsBank, N.A.
10(b) Amendment Number 1 to Credit
Agreement (dated as of June 30,
1995) by and between the
Registrant, various banks and
lending institutions, and
NationsBank, N.A. (as agent),
and Promissory Notes and
Mortgage and Security Agreement.
11 Statement re: Computation of Per
Share Earnings
15 Acknowledgement of Deloitte &
Touche LLP, Independent
Accountants
27 Financial Data Schedule
(electronic filing only)
(b) On July 14, 1995, the Company filed a
report on Form 8-K dated July 10,1995
to report the court's dismissal of the
lawsuits discussed in Item 1. above.
SIGNATURES Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ONE PRICE CLOTHING STORES, INC. (Registrant)
<TABLE>
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Date: August 8, 1994 /s/ Henry D. Jacobs, Jr.
Henry D. Jacobs, Jr.
Chairman and Chief Executive Officer
(principal executive officer)
Date: August 8, 1994 /s/ Ethan S. Shapiro
Ethan S. Shapiro
President and Chief Operating Officer
Date: August 8, 1994 /s/ Stephen A. Feldman
Stephen A. Feldman
Chief Financial Officer and Treasurer
(principal financial officer)
</TABLE>
EXHIBIT 11 -- Statement Re: Computation of Per Share Earnings
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Three-Month Period Ended Six-Month Period Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
PRIMARY
Average shares outstanding 10,311,763 10,291,208 10,309,610 10,266,008
Net effect of dilutive stock
options - based on the
treasury stock method using
the average market price 35,828 302,365 -- 288,930
TOTAL 10,347,591 10,593,573 10,309,610 10,554,938
Net income (loss) $ 4,314,000 $ 5,992,000 $ (771,000) $ 5,120,000
Net income (loss) per share $ 0.42 $ 0.57 $ (0.07) $ 0 .49
FULLY DILUTED
Average shares outstanding 10,311,763 10,291,208 10,309,610 10,266,008
Net effect of dilutive stock
options - based on the
treasury stock method using
the greater of ending or
average market price 35,830 302,506 -- 289,823
TOTAL 10,347,593 10,593,714 10,309,610 10,555,831
Net income (loss) $ 4,314,000 $ 5,992,000 $ (771,000) $ 5,120,000
Net income (loss) per share $ 0.42 $ 0 .57 $ (0.07) $ 0 .49
</TABLE>
EXHIBIT 15 -- ACKNOWLEDGEMENT OF DELOITTE
& TOUCHE LLP, INDEPENDENT ACCOUNTANTS
One Price Clothing Stores, Inc. and
Subsidiary
We have made a review, in accordance with
standards established by the American
Institute of Certified Public Accountants,
of the unaudited interim consolidated
financial information of One Price
Clothing Stores, Inc. and subsidiary for
the three-month and six-month periods
ended July 1, 1995 and July 2, 1994, as
indicated in our report dated July 20,
1995; because we did not perform an audit,
we expressed no opinion on that
information.
We are aware that our report referred to
above, which is included in your Quarterly
Report on Form 10-Q for the quarter ended
July 1, 1995, is incorporated by reference
in Registration Statements No. 33-20529,
33-31623, and 33-48091 on Form S-8
pertaining to the 1987 Stock Option Plan,
1988 Stock Option Plan, and the 1991 Stock
Option Plan, respectively, of One Price
Clothing Stores, Inc.
We are also aware that the aforementioned
report, pursuant to Rule 436(c) under the
Securities Act of 1933, is not considered
a part of the Registration Statement
prepared or certified by an accountant or
a report prepared or certified by an
accountant within the meaning of Sections
7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Greenville, South Carolina
August 8, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> JUL-01-1995
<CASH> 3530
<SECURITIES> 0
<RECEIVABLES> 2494
<ALLOWANCES> 204
<INVENTORY> 38928
<CURRENT-ASSETS> 50080
<PP&E> 56143
<DEPRECIATION> 15346
<TOTAL-ASSETS> 92291
<CURRENT-LIABILITIES> 33496
<BONDS> 0
<COMMON> 103
0
0
<OTHER-SE> 52237
<TOTAL-LIABILITY-AND-EQUITY> 92291
<SALES> 86647
<TOTAL-REVENUES> 86647
<CGS> 48722
<TOTAL-COSTS> 48722
<OTHER-EXPENSES> 7202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 312
<INCOME-PRETAX> 7071
<INCOME-TAX> 2757
<INCOME-CONTINUING> 4314
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4314
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
EXHIBIT 10(a) -- Assignment and
Acceptance (dated April 24, 1995)
of an interest in the credit
agreement (dated March 17, 1995) to
Corestates Bank and Promissory
Notes dated April 13, 1995 by and
between the registrant and
Corestates Bank and Nationsbank,
N.A.
ASSIGNMENT AND ACCEPTANCE
Dated April 24, 1995
Reference is made to the
Credit Agreement dated as of March
17, 1995 (the "Credit Agreement")
among One Price Clothing Stores,
Inc., the Banks listed on the
signature pages thereto and
NationsBank, N.A. (Carolinas) as
agent (the "Agent"). Terms defined
in the Credit Agreement are used
herein with the same meaning.
NationsBank, N.A. (Carolinas)
(the "Assignor") and CoreStates
Bank (the "Assignee") agree as
follows:
1. The Assignor hereby sells
and assigns to the Assignee, and
the Assignee hereby purchases and
assumes from the Assignor, a 37.5%
interest in and to all of the
Assignor's rights and obligations
under the Credit Agreement as of
the Effective Date (as defined
below) (including, without
limitation, such percentage
interest in (i) the Assignor's
Commitment under the Credit
Agreement as in effect on the
Effective Date, (ii) the Assignor's
Revolving Loan Commitment under the
Credit Agreement as in effect on
the Effective Date, (iii) the
Assignor's Letter of Credit
Commitment under the Credit
Agreement as in effect on the
Effective Date, (iv) the Loans
owing to the Assignor under the
Credit Agreement on the Effective
Date, (v) the Note held by the
Assignor under the Credit Agreement
and the rights and obligations
appurtenant thereto under the
Financing Documents and (vi) all
Letters of Credit issued as of the
Effective Date. Upon the Effective
Date, (a) the Assignor's Revolving
Loan Commitment shall be
$15,625,000.00, the Assignor's
Letter of Credit Commitment shall
be $9,375,000.00 and the Assignor's
Commitment Percentage shall be
62.5% and (b) the Assignee's
Revolving Loan Commitment shall be
$9,375,000.00, the Assignee's
Letter of Credit Commitment shall
be $5,625,000.00 and the Assignee's
Commitment Percentage shall be
37.5%.
2. The Assignor (i)
represents and warrants that as of
the date hereof its Revolving Loan
Commitment under the Credit
Agreement (without giving effect to
assignments thereof which have not
yet become effective) is
$25,000,000.00 and its Letter of
Credit Commitment under the Credit
Agreement (without giving effect to
assignments thereof which have not
yet become effective) is
$15,000,000.00; (ii) represents and
warrants that it is the legal and
beneficial owner of the interest
being assigned by it hereunder and
that such interest is free and
clear of any adverse claim; (iii)
makes no representation or warranty
and assumes no responsibility with
respect to any statements,
warranties or representations made
in or in connection with the Credit
Agreement or any other Financing
Document or the execution,
legality, validity, enforceability,
genuineness, sufficiency or value
of the Credit Agreement or any
Financing Document or any other
instrument or document furnished
pursuant thereto; and (iv) makes no
representation or warranty and
assumes no responsibility with
respect to the financial condition
of the Borrower or the performance
or observance by the Borrower of
any of its obligations under the
Credit Agreement or any Financing
Document or any other instrument or
document furnished pursuant
thereto.
3. The Assignee (i)
represents and warrants that it is
legally authorized to enter into
this Assignment and Acceptance (ii)
confirms that it has received a
copy of the Credit Agreement and
each other Financing Document (as
defined in the Credit Agreement),
together with copies of the
financial statements referred to in
Section 5.01(a) of the Credit
Agreement for the fiscal year
ending December 31, 1995 and such
other documents and information as
it has deemed appropriate to make
its own credit analysis and
decision to enter into this
Assignment and Acceptance; (iii)
agrees that it will, independently
and without reliance upon the
Agent, the Assignor or any other
Bank and based on such documents
and information as it shall deem
appropriate at the time, continue
to make its own credit decisions in
taking or not taking action under
the Credit Agreement or any other
Financing Document; (iv) appoints
and authorizes the Agent to take
such action as the Agent on its
behalf and to exercise such powers
under the Credit Agreement and each
Financing Document as are delegated
to the Agent by the terms thereof,
together with such powers as are
reasonably incidental thereto; (v)
agrees that it will perform in
accordance with their terms all of
the obligations which by the terms
of the Credit Agreement or any
Financing Document are required to
be performed by it as a Bank; and
(vi) specifies as its address for
notices the address set forth
beneath its name on the signature
pages hereof [and (vii) attaches
the forms prescribed by the
Internal Revenue Service of the
United States certifying as to the
Assignee's status for purposes of
determining exemption from United
States withholding taxes with
respect to all payments to be made
to the Assignee under the Credit
Agreement and the Note or such
other documents as are necessary to
indicate that all such payments are
subject to such rates at a rate
reduced by an applicable tax
treaty].
4. The effective date for
this Assignment and Acceptance
shall be April 13, 1995 (the
"Effective Date"). Following the
execution of this Assignment and
Acceptance, it will be delivered to
the Agent for acceptance and
recording by the Agent.
5. Upon such acceptance and
recording, as of the Effective
Date, (i) the Assignee shall be a
party to the Credit Agreement and,
to the extent provided in this
Assignment and Acceptance, have the
rights and obligations of a Bank
thereunder and (ii) the Assignor
shall, to the extent provided in
this Assignment and Acceptance,
relinquish its rights and be
released from its obligations under
the Credit Agreement.
6. Upon such acceptance and
recording, from and after the
Effective Date, the Agent shall
make all payments under the Credit
Agreement and the Note of the
Assignor in respect of the interest
assigned hereby (including, without
limitation, all payments of
principal, interest and fees with
respect thereto) to the Assignee.
The Assignor and Assignee shall
make all appropriate adjustments in
payments under the Credit Agreement
and such Notes of the Assignor for
periods prior to the Effective Date
directly between themselves.
7. This Assignment and
Acceptance shall be governed by,
and construed in accordance with,
the laws of the State of North
Carolina.
8. This Agreement is
conditioned upon the consent of the
Borrower and the Agent pursuant to
Section 9.06(c) of the Credit
Agreement. The execution of this
Assignment and Acceptance by the
Borrower and the Agent is evidence
of such consent. Pursuant to
Section 9.06(c) of the Credit
Agreement, the Borrower agrees to
deliver a Note payable to the
Assignee to evidence the assignment
and assumption provided for herein.
/table
[S] [C]
NATIONSBANK, N.A. (CAROLINAS)
By: /s/Mark D. Halmrast
Title:Vice President
CORESTATES BANK
By: /s/James Richards
Title:Vice President
Address for Notices:
1339 Chestnut Street
P.O. Box 7618
Philadelphia, Pennsylvania
19101-7618
F.C.1-8-3-16
\table
Accepted this 13th day
of April, 1995
NATIONSBANK, N.A. (CAROLINAS) as Agent
By /s/Mark D. Halmrast
Title Vice PResident
ONE PRICE CLOTHING STORES, INC.
By /s/Stephen A. Feldman
Title Chief Financial Officer
PROMISSORY NOTE
April 13, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of NationsBank, N.A.
(Carolinas) (the "Bank"), the unpaid
principal amount of each Loan ("Loan")
made by the Bank to the Borrower pursuant
to the Credit Agreement (hereinafter
defined). Each such Loan shall be payable
on the Termination Date provided for in
the Credit Agreement. The Borrower
promises to pay interest on the unpaid
principal amount of each such Loan on the
dates and at the rate or rates provided
for in the Credit Agreement. All such
payments of principal and interest shall
be made in United States Dollars in
immediately available funds at the offices
of NationsBank, N.A. (Carolinas) in
Charlotte, North Carolina.
All Loans made by the Bank to the
Borrower and all repayments of the
principal thereof shall be recorded by the
Bank and, prior to any transfer hereof,
appropriate notations to evidence the
foregoing information with respect to each
such Loan then outstanding shall be
endorsed by the Bank on the schedule
attached to and made a part hereof;
provided that the failure of the Bank to
make any such recordation or endorsement
shall not affect the obligations of the
Borrower hereunder or under the Credit
Agreement.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, among the
Borrower, the banks party thereto and
NationsBank, N.A. (Carolinas) as Agent (as
the same may be amended from time to time,
the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein with
the same meanings. Reference is made to
the Credit Agreement for provisions for
the prepayment hereof and the acceleration
of the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
/table
[S] [C]
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By:_____________________ By: /s/ Stephen A. Feldman
Title:___________________ Title:Chief Financial Officer
(Corporate Seal)
Promissory Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
[S] [C] [C] [C] [C]
Amount of
Amount of Principal Notation
Date Loan Repaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
\table
PROMISSORY NOTE
April 13, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of CoreStates Bank (the
"Bank"), the unpaid principal amount of
each Loan ("Loan") made by the Bank to the
Borrower pursuant to the Credit Agreement
(hereinafter defined). Each such Loan
shall be payable on the Termination Date
provided for in the Credit Agreement. The
Borrower promises to pay interest on the
unpaid principal amount of each such Loan
on the dates and at the rate or rates
provided for in the Credit Agreement. All
such payments of principal and interest
shall be made in United States Dollars in
immediately available funds at the offices
of NationsBank, N.A. (Carolinas) in
Charlotte, North Carolina.
All Loans made by the Bank to the
Borrower and all repayments of the
principal thereof shall be recorded by the
Bank and, prior to any transfer hereof,
appropriate notations to evidence the
foregoing information with respect to each
such Loan then outstanding shall be
endorsed by the Bank on the schedule
attached to and made a part hereof;
provided that the failure of the Bank to
make any such recordation or endorsement
shall not affect the obligations of the
Borrower hereunder or under the Credit
Agreement.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, among the
Borrower, the banks party thereto and
NationsBank, N.A. (Carolinas) as Agent (as
the same may be amended from time to time,
the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein with
the same meanings. Reference is made to
the Credit Agreement for provisions for
the prepayment hereof and the acceleration
of the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
/table
[S] [C]
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By:_____________________ By: /s/ Stephen A. Feldman
Title:__________________ Title: Chief Financial
Officer
(Corporate Seal)
Promissory Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
[S] [C] [C] [C] [C]
Amount of
Amount of Principal Notation
Date Loan Repaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
\table
EXHIBIT 10(b) -- Amendment Number 1
to Credit Agreement (dated as of
June 30, 1995) by and between the
Registrant, various banks and
lending institutions, and
NationsBank, N.A. (as agent), and
Promissory Notes and Mortgage and
Security Agreement
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT AGREEMENT (this
"Amendment"), dated as of June 30,
1995, among ONE PRICE CLOTHING
STORES, INC., a Delaware
corporation (the "Borrower"), the
various banks and lending
institutions parties hereto (each a
"Bank" and collectively, the
"Banks"), and NATIONSBANK, N.A.
(CAROLINAS), a national banking
association, as agent for the Banks
(in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, pursuant to that
certain Credit Agreement, dated as
of March 17, 1995 (the "Existing
Credit Agreement"), among the
parties hereto, the Banks have
agreed to make loans to the
Borrower; and
WHEREAS, the Borrower, the
Banks and the Agent desire to make
certain amendments to the Existing
Credit Agreement;
NOW, THEREFORE, in
consideration of the agreements
herein contained, the parties
hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain
Definitions. Unless otherwise
defined herein or the context
otherwise requires, terms used in
this Amendment, including its
preamble and recitals, have the
following meanings (such meanings
to be equally applicable to the
singular and plural forms thereof):
"Amended Credit Agreement"
means the Existing Credit Agreement
as amended hereby.
"Amendment No. 1 Effective
Date" is defined in Subpart 3.1.
SUBPART 1.2. Other
Definitions. Unless otherwise
defined herein or the context
otherwise requires, terms used in
this Amendment, including its
preamble and recitals, have the
meanings provided in the Amended
Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT
AGREEMENT
Effective on (and subject to
the occurrence of) the Amendment
No. 1 Effective Date, the Existing
Credit Agreement is hereby amended
in accordance with this Part II.
Except as so amended, the Existing
Credit Agreement, the Notes and the
other Financing Documents shall
continue in full force and effect.
SUBPART 2.1 Amendments to the
Introduction. The first paragraph
of the Existing Credit Agreement is
amended to read in its entirety as
follows:
THIS AGREEMENT,
dated as of March 17,
1995 and amended as of
June 30, 1995, by and
among ONE PRICE CLOTHING
STORES, INC., the banks
listed on the signature
pages hereof, and
NATIONSBANK, N.A.
(CAROLINAS), as agent for
such banks.
SUBPART 2.2 Amendments to
Article I. Article I of the
Existing Credit Agreement is hereby
amended by inserting, in the
alphabetically appropriate places,
the following definitions:
"Amendment No. 1"
means Amendment No. 1 to
Credit Agreement, dated
as of June 30, 1995,
among the Borrower, the
Agent and the Banks,
amending this Credit
Agreement as then in
effect.
"Applicable Margin" means
(i) with respect to Revolving
Loans consisting of Eurodollar
Loans, 1.5%, (ii) with respect
to Revolving Loans consisting
of Base Rate Loans, 0.0%,
(iii) with respect to Term
Loans consisting of Eurodollar
Loans, 2.5% and (iv) with
respect to Term Loans
consisting of Base Rate Loans,
1.0%.
"Long-Term Debt" means,
at any time, any senior debt
obligations outstanding at
such time with a maturity more
than one (1) year after the
date of any determination
hereunder.
"Mortgage" means that
certain Mortgage and Security
Agreement executed by the
Borrower in favor of the Agent
granting the Agent a lien on
the Borrower's home office,
distribution center and
property located at Hwy. 290,
Commerce Park, 1875 East Main
Street, Duncan, South Carolina
29334, to secure the Revolving
Loans and the Term Loans.
"Notes" means the
promissory notes of the
Borrower evidencing the
obligations of the Borrower to
repay the Loan.
"Term Loan Commitment"
means, with respect to each
Bank, the amount set forth
opposite the name of such Bank
under the heading "Term Loan
Commitment" on the signature
pages of Amendment No. 1.
"Term Loan" means a
Eurodollar Loan or a Base Rate
Loan made under Section 2.01-
A.
"Term Loan Maturity Date"
means September 30, 1998.
"Term Notes" means
promissory notes of the
Borrower evidencing the
obligations of the Borrower to
repay the Term Loans.
SUBPART 2.3 Additional
Amendments to Article I. Article I
is further amended by amending in
their entirety the following
definitions so that such
definitions now read as follows:
"Commitment" means, with
respect to each Bank, the
Revolving Loan Commitment, the
Term Loan Commitment and the
Letter of Credit Commitment of
such Bank.
"Consolidated
Capitalization" means, at any
time, the sum of (a)
stockholders' equity of the
Borrower and its Consolidated
Subsidiaries at such time,
determined in accordance with
generally accepted accounting
principles applied on a
consistent basis, with no
upward adjustments due to a
revaluation of assets plus (b)
Consolidated Funded
Indebtedness plus (c)
Capitalized Operating Lease
Obligations of the Borrower
and its Subsidiaries.
"Consolidated Funded
Indebtedness" means, without
duplication, all Long-Term
Debt of the Borrower and its
Subsidiaries plus the least
amount of outstanding
Revolving Loans of the
Borrower and its Subsidiaries
over the last six months
sustained for a 30 day period.
"Consolidated Leverage
Ratio" means the ratio of (x)
the sum of (1) Consolidated
Funded Indebtedness plus (2)
all Capitalized Operating
Lease Obligations of the
Borrower and its Subsidiaries
to (y) Consolidated
Capitalization.
"Financing Documents"
means the Credit Agreement,
the Notes, the Mortgage and
the Subsidiary Guarantee, in
each case as amended, and in
effect from time to time.
"Interest Period" means,
with respect to each
Eurodollar Loan, a period
commencing on the date of
Borrowing specified in the
applicable Notice of Borrowing
or on the date specified in
the applicable Notice of
Interest Rate Election and
ending, one, two, three or six
months thereafter, as the
Borrower may elect in the
applicable Notice; provided
that:
(i) any Interest Period
which would otherwise end on a
day which is not a Eurodollar
Business Day shall be extended
to the next succeeding
Eurodollar Business Day unless
such Eurodollar Business Day
falls in another calendar
month, in which case such
Interest Period shall end on
the next preceding Eurodollar
Business Day;
(ii) any Interest Period
which begins on the last
Eurodollar Business Day of a
calendar month (or on a day
for which there is no
numerically corresponding day
in the calendar month at the
end of such Interest Period)
shall end on the last
Eurodollar Business Day of a
calendar month;
(iii) any Interest Period
with respect to a Revolving
Loan that would otherwise
extend beyond the Termination
Date shall end on the
Termination Date; and
(iv) any Interest Period
with respect to a Term Loan
that would otherwise extend
beyond the Term Loan Maturity
Date shall end on the Term
Loan Maturity Date.
"Revolving Loan
Commitment" means, with
respect to each Bank, the
amount set forth opposite the
name of such Bank under the
heading "Revolving Loan
Commitment" on the signature
pages of Amendment No. 1, as
such amount may be reduced
from time to time pursuant to
Section 2.06.
SUBPART 2.4 Amendments to
Article II. Section 2.01-A is
added to the Existing Credit
Agreement as follows:
SECTION 2.01-A Term
Loan. Each Bank severally
agrees, on the terms and
conditions set forth in this
Credit Agreement (including
the conditions set forth in
Section 3.03 hereof) and in
reliance on the
representations and warranties
set forth herein, to make a
Term Loan to the Borrower on
June 30, 1995 in the amount of
its Term Loan Commitment. The
amount of the Term Loans
repaid or prepaid from time to
time may not be reborrowed.
SUBPART 2.5. Amendments to
Section 2.03(a). Section 2.03(a)
is amended by adding the following
sentence thereto:
The Term Loan of each
Bank shall be evidenced by one
Term Note payable to the order
of such Bank for the account
of its Applicable Lending
Office in an amount equal to
the aggregate unpaid principal
amount of such Bank's Term
Loan.
SUBPART 2.6. Additional
Amendments to Article II. Article
II is further amended by adding the
following Section 2.04-A thereto:
SECTION 2.04-A Repayment
of Term Loans. The
outstanding principal balance
of the Term Loans shall be
payable in 12 consecutive
quarterly installments each in
the amount of $500,000 on the
last day of each March, June,
September and December
commencing December 31, 1995.
Each repayment pursuant to
this Section 2.05(b) shall be
applied ratably to payment of
the Term Loans of the several
Banks in proportion to the
aggregate outstanding
principal amounts of their
Term Loans.
SUBPART 2.7. Amendments to
Section 2.05. Section 2.05 is
amended in its entirety so that
such Section now reads as follows:
SECTION 2.05 Interest
Rates.
(a) Each Base Rate Loan
shall bear interest on the
outstanding principal amount
thereof, for each day from the
date such Loan is made until
it becomes due, at a rate
equal to the Base Rate for
such day plus the Applicable
Margin. Such interest shall
be payable quarterly in
arrears on the last day of
each Quarterly Period. Any
overdue principal of or
interest on any Base Rate Loan
shall bear interest, payable
on demand, for each day until
paid at a rate per annum equal
to the sum of 2.000% plus the
rate otherwise applicable to
Base Rate Loans for such day.
(b) Each Eurodollar Loan
shall bear interest on the
outstanding principal amount
thereof, for the Interest
Period applicable thereto, at
a rate equal to the Adjusted
Eurodollar Rate for such
Interest Period plus the
Applicable Margin. Such
interest shall be payable for
each interest period on the
last day thereof and, if such
Interest Period is longer than
3 months, at intervals of 3
months after the first day
thereof. Any overdue
principal of or interest on
any Eurodollar Loan shall bear
interest, payable on demand,
for each day until paid at a
rate per annum equal to the
sum of 2.000% plus (i) for
each day during any Interest
Period applicable to such
Eurodollar Loan, the rate
applicable to such Eurodollar
Loan for such day, and (ii)
for each day after the end of
such Interest Period, the sum
of 2.000% plus the rate
applicable to Base Rate Loans
for such day.
(c) The Agent shall
determine each interest rate
applicable to the Loans
hereunder. The Agent shall
give prompt notice to the
Borrower and the Banks by
facsimile, telex or cable of
each rate of interest so
determined, and its
determination thereof shall be
conclusive in the absence of
manifest error.
SUBPART 2.8. Amendments to
Section 2.07. Section 2.07 is
amended by adding the following
subsection (iii) thereto:
(iii) Partial
prepayments of the Term Loans
shall be applied to principal
installments in the inverse
order of maturities.
SUBPART 2.9. Amendments to
Section 2.13(a). Section 2.13(a)
is amended by adding the following
sentence thereto:
The Letters of Credit
shall consist of documentary
letters of credit.
SUBPART 2.10. Amendments to
Section 5.07. Section 5.07 is
amended in its entirety so that
such Section now reads as follows:
SECTION 5.07 Limitation
on Debt. Except for existing
Debt as set forth on Schedule
5.07, the Borrower will not
nor will it permit any of its
Subsidiaries to incur or at
any time be liable with
respect to any Debt other than
(i) Debt in favor of the Banks
hereunder and (ii) capitalized
lease indebtedness (related to
assets other than store
fixtures and equipment) so
long as the aggregate amount
of such capitalized lease
indebtedness does not exceed
$2,500,000 at any time
outstanding.
SUBPART 2.11. Amendments to
Section 5.08(g). Section 5.08(g)
is amended in its entirety so that
such Section now reads as follows:
(g)(i) leasehold
interests in assets subject to
operating leases and (ii)
leasehold interests in assets
subject to capital leases
permitted by Section 5.07.
SUBPART 2.12. Amendments to
Section 5.18. Section 5.18 is
amended in its entirety so that
such Section now reads as follows:
SECTION 5.18
Consolidated Fixed Charge
Coverage Ratio. The Borrower
will maintain a Consolidated
Fixed Charge Coverage Ratio of
at least the following amounts
as of the last day of the
following fiscal quarters:
/table
[S] [C] [C]
Fiscal Quarter Ending Required Ratio
July 1, 1995 0.80 to 1.0
September 30, 1995 0.90 to 1.0
December 31, 1995 1.00 to 1.0
March 31, 1996 1.10 to 1.0
June 30, 1996 1.10 to 1.0
September 30, 1996 1.10 to 1.0
December 31, 1996 and 1.20 to 1.0
each fiscal quarter ending
thereafter
\table
SUBPART 2.13. Amendments to Section
5.20. Section 5.20 is amended in its
entirety so that such Section now reads as
follows:
SECTION 5.20 Consolidated
Tangible Net Worth. The Borrower
shall maintain Consolidated Tangible
Net Worth as of the last day of each
fiscal year (commencing with the
fiscal year ending December 31, 1994)
in an amount at least equal to
$41,000,000.00; provided, however,
the amount of Consolidated Tangible
Net Worth required by this Section
5.20 shall be increased on the last
day of each fiscal year (commencing
with the fiscal year ending December
31, 1995) by an amount equal to 50%
of the consolidated net income of the
Borrower and its Subsidiaries for
such fiscal year; provided further,
the amount of Consolidated Tangible
Net Worth required by this Section
5.20 shall be further increased on
the date the Borrower raises any
additional equity by an amount equal
to 100% of the net proceeds received
by the Borrower on account of such
equity.
SUBPART 2.14. Additional Amendments
to Article V. Article V is further
amended by adding the following Section
5.21 thereto:
SECTION 5.21 Capital
Expenditures. Until such time as the
Term Loans have been repaid in full,
the Borrower will not, nor will it
permit any of its Subsidiaries to,
make (i) aggregate capital
expenditures in excess of the
following amounts during the
following periods:
<TABLE>
<S> <C> <C>
Period Maximum Amount
the period commencing on aggregate depreciation
July 2, 1995 through and amortization during such
December 31, 1995 period
the period commencing on aggregate depreciation
July 2, 1995 through and amortization during such
March 30, 1996 period
each period comprised of four aggregate depreciation
consecutive fiscal quarterly and amortization during each
commencing with such such period
period for the four consecutive
fiscal quarterly periods ending
as of the last date of the second
fiscal quarter of fiscal year
1996
</TABLE>
The following capital expenditures
shall not be counted when computing the
foregoing limitations:
(i) capital assets financed
with the proceeds of the capitalized
lease indebtedness permitted by
Section 5.07(ii) hereof are not
deemed to be capital expenditures;
(ii) capital expenditures
incurred in connection with purchases
and subsequent sale-leasebacks of up
to $1,500,000.00 of distribution
center racks, conveyors, materials
handling equipment, computers and
communication equipment utilized in
connection with the Borrower's
distribution center; and
(iii) capital expenditures of up
to $500,000.00 made subsequent to the
date of Amendment No. 1 for purposes
of completing the current expansion
to the Borrower's plant and
distribution facility.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Amendment No. 1
Effective Date. This Amendment shall be
and become effective on such date (the
"Amendment No. 1 Effective Date") on or
prior to June 30, 1995, when all of the
conditions set forth in this Subpart 3.1
shall have been satisfied, and thereafter,
this Amendment shall be known, and may be
referred to, as "Amendment No. 1."
SUBPART 3.1.1. Execution of
Counterparts. The Agent shall have
received counterparts of this Amendment,
each of which shall have been duly
executed on behalf of the Borrower, the
Agent and each Bank.
SUBPART 3.1.2. Consent. The Agent
shall have received, from each person
listed on the signature pages of the
Consent attached hereto as Appendix A, an
executed copy of such Consent.
SUBPART 3.1.3. Certified
Resolutions. The Agent shall have
received resolutions of the Board of
Directors of the Borrower authorizing this
Amendment No. 1, such resolutions to be
certified by the Secretary or Assistant
Secretary of the Borrower.
SUBPART 3.1.4. Notes, Mortgage. The
Agent shall have received the Notes and
the Mortgage which shall have been duly
executed on behalf of the Borrower. The
Agent shall also have received all
documents requested by the Agent in
connection with the Mortgage including,
without limitation, a title insurance
commitment, a survey and flood hazard
evidence, in each case satisfactory to the
Agent.
SUBPART 3.1.5. Legal Details, Etc.
All documents executed or submitted
pursuant hereto shall be satisfactory in
form and substance to the Agent and its
counsel. The Agent and its counsel shall
have received all information, and such
counterpart originals or such certified or
other copies of such originals, as the
Agent may reasonably request, and all
legal matters incident to the transactions
contemplated by this Amendment shall be
satisfactory to the Agent. In addition,
the Agent shall have received such other
agreements, documents or instruments as it
may from time to time reasonably request.
PART IV
MISCELLANEOUS
SUBPART 4.1 Cross-References.
References in this Amendment to any Part
or Subpart are, unless otherwise
specified, to such Part or Subpart of this
Amendment.
SUBPART 4.2 Instrument Pursuant to
Existing Credit Agreement. This Amendment
is a document executed pursuant to the
Existing Credit Agreement and shall
(unless otherwise expressly indicated
therein) be construed, administered and
applied in accordance with the terms and
provisions of the Existing Credit
Agreement.
SUBPART 4.3 Notes and Financing
Documents. The Borrower hereby confirms
and agrees that the Notes and the other
Financing Documents are, and shall
continue to be, in full force and effect,
and hereby ratifies and confirms in all
respects its obligations thereunder,
except that, upon the effectiveness of,
and on and after the date of, this
Amendment, all references in each Note and
each Financing Document to the "Credit
Agreement", "thereunder", "thereof" or
words of like import referring to the
Existing Credit Agreement shall mean the
Amended Credit Agreement.
SUBPART 4.4 Counterparts,
Effectiveness, Etc. This Amendment may be
executed by the parties hereto in several
counterparts, each of which shall be
deemed to be an original and all of which
shall constitute together but one and the
same agreement.
SUBPART 4.5 Governing Law; Entire
Agreement. THIS AMENDMENT SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NORTH
CAROLINA WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
SUBPART 4.6 Successors and Assigns.
This Amendment shall be binding upon and
inure to the benefit of the parties hereto
and their respective successors and
assigns. <PAGE>
IN WITNESS WHEREOF, the parties
hereto have caused this Amendment to be
executed by their respective duly
authorized officers as of the day and year
first above written.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By /s/Diane O'Bryant By /s/Stephen A. Feldman
Title Assistant Secretary Title Chief Financial Officer
(Corporate Seal)
NATIONSBANK, N.A. (CAROLINAS),
in its individual
capacity and as Agent
By /s/ Loy Thompson
TitleSenior Vice President
Revolving Loan Commitment: $11,875,000.00
Term Loan Commitment: $ 3,750,000.00
Letter of Credit Commitment: $ 9,375,000.00
Commitment Percentage: 62.5%
CORESTATES BANK
By /s/James Richards
Title Vice President
Revolving Loan Commitment: $ 7,125,000.00
Term Loan Commitment: $ 2,250,000.00
Letter of Credit Commitment: $ 5,625,000.00
Commitment Percentage: 37.5%
</TABLE>
CONSENT
This Consent (this "Consent"), dated
as of June 30, 1995, is delivered in
connection with Amendment No. 1 to Credit
Agreement, dated as of the date hereof
("Amendment No. 1)", among ONE PRICE
CLOTHING STORES, INC., the various banks
parties thereto (the "Banks") and
NationsBank, N.A. (Carolinas), as Agent
(the "Agent"). Unless otherwise defined,
terms used herein have the meanings
provided in the Existing Credit Agreement
(as defined in Amendment No. 1) as amended
by Amendment No. 1 (such agreement, as so
amended, being the "Amended Credit
Agreement").
The undersigned, as party to the
Subsidiary Guarantee, hereby acknowledges
the execution and delivery of Amendment
No. 1, and hereby confirms and agrees that
the Subsidiary Guarantee is, and shall
continue to be, in full force and effect,
and hereby ratifies and confirms in all
respects its obligations thereunder,
except that, upon the effectiveness of,
and on and after the date of, Amendment
No. 1, all references in the Subsidiary
Guaranty to the "Credit Agreement,"
"thereunder," "thereof" or words of like
import referring to the Existing Credit
Agreement shall mean the Amended Credit
Agreement.
<TABLE>
<S> <C>
ONE PRICE CLOTHING OF PUERTO
RICO, INC.
By /s/Stephen A. Feldman
Title Chief Financial Officer
</TABLE>
PROMISSORY NOTE
June 30, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of CoreStates Bank (the
"Bank"), the unpaid principal amount of
each Revolving Loan ("Revolving Loans")
made by the Bank to the Borrower pursuant
to the Credit Agreement (hereinafter
defined). Each such Revolving Loan shall
be payable on the Termination Date
provided for in the Credit Agreement. The
Borrower promises to pay interest on the
unpaid principal amount of each such
Revolving Loan on the dates and at the
rate or rates provided for in the Credit
Agreement. All such payments of principal
and interest shall be made in United
States Dollars in immediately available
funds at the offices of NationsBank, N.A.
(Carolinas) in Charlotte, North Carolina.
All Revolving Loans made by the Bank
to the Borrower and all repayments of the
principal thereof shall be recorded by the
Bank and, prior to any transfer hereof,
appropriate notations to evidence the
foregoing information with respect to each
such Revolving Loan then outstanding shall
be endorsed by the Bank on the schedule
attached to and made a part hereof;
provided that the failure of the Bank to
make any such recordation or endorsement
shall not affect the obligations of the
Borrower hereunder or under the Credit
Agreement.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, as amended
June 30, 1995, among the Borrower, the
banks party thereto and NationsBank, N.A.
(Carolinas) as Agent (as the same may be
amended from time to time, the "Credit
Agreement"). Terms defined in the Credit
Agreement are used herein with the same
meanings. Reference is made to the Credit
Agreement for provisions for the
prepayment hereof and the acceleration of
the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By: /s/Diane O'Bryant By: /s/Stephen A. Feldman
Title:Assistant Secretary Title:Chief Financial Officer
(Corporate Seal)
Promissory Note (cont'd)
REVOLVING LOANS AND PAYMENTS OF PRINCIPAL
</TABLE>
<TABLE>
_________________________________________________________________
<S> <C> <C> <C> <C>
Amount of
Amount of Principal Notation
Date Revolving Loan Repaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
</TABLE>
PROMISSORY NOTE
June 30, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of NationsBank, N.A.
(Carolinas) (the "Bank"), the unpaid
principal amount of each Revolving Loan
("Revolving Loans") made by the Bank to
the Borrower pursuant to the Credit
Agreement (hereinafter defined). Each
such Revolving Loan shall be payable on
the Termination Date provided for in the
Credit Agreement. The Borrower promises
to pay interest on the unpaid principal
amount of each such Revolving Loan on the
dates and at the rate or rates provided
for in the Credit Agreement. All such
payments of principal and interest shall
be made in United States Dollars in
immediately available funds at the offices
of NationsBank, N.A. (Carolinas) in
Charlotte, North Carolina.
All Revolving Loans made by the Bank
to the Borrower and all repayments of the
principal thereof shall be recorded by the
Bank and, prior to any transfer hereof,
appropriate notations to evidence the
foregoing information with respect to each
such Revolving Loan then outstanding shall
be endorsed by the Bank on the schedule
attached to and made a part hereof;
provided that the failure of the Bank to
make any such recordation or endorsement
shall not affect the obligations of the
Borrower hereunder or under the Credit
Agreement.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, as amended
June 30, 1995, among the Borrower, the
banks party thereto and NationsBank, N.A.
(Carolinas) as Agent (as the same may be
amended from time to time, the "Credit
Agreement"). Terms defined in the Credit
Agreement are used herein with the same
meanings. Reference is made to the Credit
Agreement for provisions for the
prepayment hereof and the acceleration of
the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By: /s/ Diane O'Bryant By:/s/ Stephen A. Feldman
Title:Assistant Secretary Title:Chief Financial Officer
(Corporate Seal)
Promissory Note (cont'd)
REVOLVING LOANS AND PAYMENTS OF PRINCIPAL
</TABLE>
<TABLE>
_________________________________________________________________
<S> <C> <C> <C>
Amount of
Amount of Principal Notation
Date Revolving Loan Repaid Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
</TABLE>
PROMISSORY NOTE
June 30, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of NationsBank, N.A.
(Carolinas) (the "Bank"), the unpaid
principal amount of the term loan (the
"Term Loan") made by the Bank to the
Borrower pursuant to the Credit Agreement
(hereinafter defined). Such Term Loan
shall be payable on the dates set forth in
Section 2.04-A of the Credit Agreement.
The Borrower promises to pay interest on
the unpaid principal amount of the Term
Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All
such payments of principal and interest
shall be made in United States Dollars in
immediately available funds at the offices
of NationsBank, N.A. (Carolinas) in
Charlotte, North Carolina.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, as amended
June 30, 1995, among the Borrower, the
banks party thereto and NationsBank, N.A.
(Carolinas) as Agent (as the same may be
amended from time to time, the "Credit
Agreement"). Terms defined in the Credit
Agreement are used herein with the same
meanings. Reference is made to the Credit
Agreement for provisions for the
prepayment hereof and the acceleration of
the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By:/s/ Diane O'Bryant By:/s/ Stephen A. Feldman
Title:Assistant Secretary Title:Chief Financial Officer
(Corporate Seal)
</TABLE>
PROMISSORY NOTE
June 30, 1995
For value received, ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation (the "Borrower"), promises to
pay to the order of CoreStates Bank (the
"Bank"), the unpaid principal amount of
the term loan (the "Term Loan") made by
the Bank to the Borrower pursuant to the
Credit Agreement (hereinafter defined).
Such Term Loan shall be payable on the
dates set forth in Section 2.04-A of the
Credit Agreement. The Borrower promises
to pay interest on the unpaid principal
amount of the Term Loan on the dates and
at the rate or rates provided for in the
Credit Agreement. All such payments of
principal and interest shall be made in
United States Dollars in immediately
available funds at the offices of
NationsBank, N.A. (Carolinas) in
Charlotte, North Carolina.
This promissory note is one of the
Notes referred to in the Credit Agreement
dated as of March 17, 1995, as amended
June 30, 1995, among the Borrower, the
banks party thereto and NationsBank, N.A.
(Carolinas) as Agent (as the same may be
amended from time to time, the "Credit
Agreement"). Terms defined in the Credit
Agreement are used herein with the same
meanings. Reference is made to the Credit
Agreement for provisions for the
prepayment hereof and the acceleration of
the maturity hereof. All of the terms,
conditions and covenants of the Credit
Agreement are hereby expressly made a part
of this promissory note by reference in
the same manner and with the same effect
as if set forth herein at length and any
holder of this promissory note is entitled
to the benefits of and remedies provided
in the Credit Agreement.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.
ATTEST:
By: /s/Diane O'Bryant By:/s/Stephen A. Feldman
Title:Assistant Secretary Title:Chief Financial Officer
(Corporate Seal)
</TABLE>
Drawn By and Return To:
Moore & Van Allen (CCK)
NationsBank Corporate Center
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
<TABLE>
<S> <C>
STATE OF SOUTH CAROLINA MORTGAGE
AND
COUNTY OF Spartanburg SECURITY AGREEMENT
</TABLE>
COLLATERAL IS OR INCLUDES FIXTURES
THIS MORTGAGE AND SECURITY AGREEMENT
(the "Mortgage") is made and entered into
as of the 30th day of June, 1995, by
ONE PRICE CLOTHING STORES, INC., a
Delaware corporation (the "Borrower"); and
extended to
NATIONSBANK, N.A. (CAROLINAS), a
national banking association organized and
existing under the laws of the United
States, having its principal office in
Charlotte, North Carolina, as Agent for
the Banks under the Credit Agreement
hereinafter defined (in its capacity as
Agent hereunder, together with any
successor in such capacity, hereinafter
the "Agent").
W I T N E S S E T H:
In consideration of the indebtedness
herein recited and for better securing the
payment thereof, and in consideration of
$10.00 in hand well and truly paid by the
Agent to the Borrower before the sealing
and delivery of these presents, the
receipt and sufficiency of which are
hereby acknowledged, the Borrower has
granted, bargained, sold, released and
conveyed and by these presents does
irrevocably grant, bargain, sell, release
and convey to the Agent and the Agent's
successors and assigns, all of the
following described land, real property
interests, buildings, improvements and
fixtures:
(a) All that tract or
parcel of land and other real
property interests in
Spartanburg County, South
Carolina more particularly
described in Exhibit A attached
hereto and made a part hereof
(the "Land"), together with all
privileges, hereditaments,
easements and appurtenances
thereunto; and
(b) All buildings and
improvements of every kind and
description now or hereafter erected
or placed on the aforesaid land (the
"Improvements") and all materials
intended for construction,
reconstruction, alteration and repair
of such Improvements now or hereafter
erected thereon, all of which
materials shall be deemed to be
included within the premises hereby
conveyed immediately upon the
delivery thereof to the aforesaid
Land, and all fixtures now or
hereafter owned by the Borrower and
attached to or contained in and used
in connection with the aforesaid Land
and Improvements including, but not
limited to, all plumbing, heating,
lighting, ventilating, incinerating,
air conditioning and sprinkler
equipment and fixtures and
appurtenances thereto and all
renewals or replacements thereof or
articles in substitution thereof,
whether or not the same are or shall
be attached to the Land and
Improvements in any manner but
excluding all racks, conveyors, lifts
and other materials handling
equipment (the "Fixtures" --
hereinafter the Land, the
Improvements and the Fixtures are
referred to collectively as the
"Premises");
And, as additional security for said
indebtedness, the Borrower hereby
conditionally assigns to the Agent all the
security deposits, rents, issues, profits
and revenues of the Premises from time to
time accruing (the "Rents and Profits"),
reserving only the right to the Borrower
to collect the same as long as there shall
exist no Event of Default (as defined in
Article III).
As additional collateral and further
security for the indebtedness, the
Borrower does hereby assign to the Agent
and grants to the Agent a security
interest in all of the right, title and
the interest of the Borrower in and to any
and all of the following contracts only to
the extent such contracts are with parties
who have not guaranteed the indebtedness
secured hereby: any and all leases
(including equipment leases), rental
agreements, management contracts,
franchise agreements, construction
contracts, architects' contracts,
technical services agreements, or other
contracts, licenses and permits now or
hereafter affecting the Premises (the
"Intangible Personalty") or any part
thereof, and the Borrower agrees to
execute and deliver to the Agent such
additional instruments, in form and
substance satisfactory to the Bank, as may
hereafter be requested by the Agent to
evidence and confirm said assignment;
provided, however, that acceptance of any
such assignment shall not be construed as
a consent by the Bank to any lease, rental
agreement, management contract, franchise
agreement, construction contract,
technical services agreement or other
contract, license or permit, or to impose
upon the Bank any obligation with respect
thereto.
TO HAVE AND TO HOLD all and singular
the Premises, the Rents and Profits and
the Intangible Personalty unto Agent and
the Agent's successors and assigns forever
to secure the indebtedness herein recited.
All the Fixtures which comprise a
part of the Premises shall, as far as
permitted by law, be deemed to be affixed
to the aforesaid Land and conveyed
therewith. As to the balance of the
Fixtures and the Intangible Personalty,
this Mortgage shall be considered to be a
security agreement which creates a
security interest in such items for the
benefit of the Agent. In that regard, the
Borrower grants to the Agent all of the
rights and remedies of a secured party
under the South Carolina Uniform
Commercial Code.
The Borrower and the Agent covenant,
represent and agree as follows:
ARTICLE I
Indebtedness Secured
1.1 Obligations Secured. The
indebtedness secured by this Mortgage is
the result of term loans of $6,000,000 and
revolving loans of up to $19,000,000 (the
"Loans") to be made to the Borrower
pursuant to the terms of that certain
Credit Agreement dated as March 17, 1995,
as amended as of June 30, 1995, among the
Borrower, the banks party thereto from
time to time (the "Banks") and the Agent
(as amended, modified, extended, renewed
or replaced from time to time, the "Credit
Agreement"; terms used but not otherwise
defined herein shall have the meanings
provided in the Credit Agreement) and as
evidenced by those revolving credit
promissory notes of the Borrower (as
referenced and defined in the Credit
Agreement, as amended, modified,
supplemented, extended, renewed or
replaced from time to time, the "Revolving
Notes") and those term loan promissory
notes of the Borrower (as referenced in
the Credit Agreement, as amended,
modified, supplemented, extended, renewed
or replaced from time to time, the "Term
Notes") (hereinafter the Revolving Notes
and the Term Notes may be referred to the
"Debt Instruments").
1.2 Amount Secured. This Mortgage
secures all present and future loan
disbursements made pursuant to the Credit
Agreement, and all other indebtedness and
obligations from time to time owing by the
Borrower under the Credit Agreement or
otherwise; provided, however, this
Mortgage shall not secure the obligation
of the Borrower to reimburse the Agent and
the Banks for letters of credit issued on
the application of the Borrower pursuant
to the Credit Agreement. The amount of
all indebtedness and obligations which may
be secured hereby at any one time is
$35,000,000. The time period within which
such future disbursements are to be made
is the period between the date hereof and
the date fifteen (15) years from the date
hereof.
ARTICLE II
Borrower's Covenants, Representations and
Agreements
2.1 Title to Property. The Borrower
represents and warrants that it is seized
of the Land, the Improvements (and any
fixtures) and the Fixtures in fee (and has
title to any appurtenant easements) and
has the right to encumber and convey the
same, that title to such property is free
and clear of all encumbrances except for
the matters shown on the title insurance
policy accepted by the Agent in connection
with this Mortgage (the "Permitted
Encumbrances"), and that it will warrant
and defend the title to such property
except for the Permitted Encumbrances
against the claims of all persons or
parties. As to the balance of the
Premises, the Rents and Profits and the
Intangible Personalty, the Borrower
represents and warrants that it has title
to such property, that it has the right to
encumber and convey such property and that
it will warrant and defend such property
against the claims of all persons or
parties.
2.2 Taxes and Fees. The Borrower
will pay as they become due all taxes,
general and special assessments, insurance
premiums, permit fees, inspection fees,
user fees, license fees, water and sewer
charges, franchise fees and equipment
rents against it or the Premises, and the
Borrower, upon request of the Agent, will
submit to the Bank receipts evidencing
said payments.
2.3 Reimbursement. The Borrower
agrees that if it shall fail to pay when
due any tax, assessment or charge levied
or assessed against the Premises or any
utility charge, whether public or private,
or any insurance premium or if it shall
fail to procure the insurance coverage and
the delivery of the insurance certificates
required hereunder, or if it shall fail to
pay any other charge, fee or expense
described in Sections 2.3, 2.6 or 2.8,
then the Agent, at its option, may pay or
procure the same. The Borrower will
reimburse the Agent upon demand for any
sums of money paid by the Agent pursuant
to this Section, together with interest on
each such payment at the rate set forth in
the Credit Agreement and all such sums and
interest thereon shall be secured hereby.
2.4 Additional Documents. The
Borrower agrees to execute and deliver to
the Agent, concurrently with the execution
of this Mortgage and upon the request of
the Agent from time to time hereafter, all
financing statements and other documents
reasonably required to perfect and
maintain the security interest created
hereby. The Borrower hereby irrevocably
(as long as the Loans remain unpaid)
makes, constitutes and appoints the Agent
as the true and lawful attorney of the
Borrower (such appointment being coupled
with an interest) to sign the name of the
Borrower (after the Borrower has failed or
refused to timely execute such documents
upon request of the Agent) on any
financing statement, continuation of
financing statement or similar document
required to perfect or continue such
security interests.
2.5 Sale or Encumbrance. The
Borrower will not sell, encumber or
otherwise dispose of any of the Fixtures
except to incorporate such into the
Improvements or replace such with goods of
quality and value at least equal to that
replaced.
2.6 Fees and Expenses. The Borrower
will pay or reimburse, or cause the
Borrower to pay or reimburse, the Agent
for all reasonable documented attorneys'
fees, costs and expenses incurred by the
Agent in any action, legal proceeding or
dispute of any kind which affects the
Loans, the interest created herein, the
Premises, the Rents and Profits, Fixtures
or the Intangible Personalty, including
but not limited to, any foreclosure of
this Mortgage, enforcement of payment of
the Debt Instruments, any condemnation
action involving the Premises or any
action to protect the security hereof.
Any such amounts paid by the Agent shall
be due and payable upon demand and shall
be secured hereby.
2.7 Leases and Other Agreements.
Without first obtaining on each occasion
the written approval of the Agent, the
Borrower shall not, except as permitted by
the Credit Agreement, enter into, cancel,
surrender or modify or permit the
cancellation of any lease (including any
equipment lease but excluding any capital
lease permitted by Section 5.07(ii) of the
Credit Agreement), rental agreement,
management contract, franchise agreement,
construction contract, technical services
agreement or other contract, license or
permit now or hereafter affecting the
Premises and involving more than
$100,000.00, or modify any of said
instruments, or accept or permit to be
made, any prepayment of any installment of
rent or fees thereunder. Certified copies
of each such approved lease or other
agreement shall be submitted to the Agent
as soon as possible. The Borrower shall
faithfully keep and perform, or cause to
be kept and performed, all of the
covenants, conditions, and agreements
contained in each of said instruments, now
or hereafter existing, on the part of the
Borrower to be kept and performed
(including performance of all covenants to
be performed under any and all leases of
the Premises or any part thereof) and
shall at all times do all things necessary
and appropriate to compel performance by
each other party to said instruments of
all obligations, covenants and agreements
by such other party to be performed
thereunder.
2.8 Maintenance of Premises. The
Borrower will abstain from and will not
permit the commission of waste in or about
the Premises and will maintain, or cause
to be maintained, the Premises in good
condition and repair, reasonable wear and
tear excepted.
2.9 Insurance.
(a) Liability: The
Borrower covenants to maintain
or cause to be maintained,
general accident and public
liability insurance against all
claims for bodily injury, death
or property damage occurring
upon, in or about any part of
the Premises. The policies must
be from companies and in amounts
satisfactory to the Agent.
(b) Hazard: The Borrower
covenants to maintain or cause
to be maintained at all times
hazard insurance on the
Premises. The policy must be
from a company reasonably
satisfactory to Agent, must be
in an amount satisfactory to the
Agent, can only include
co-insurance provisions
satisfactory to the Agent, must
include provisions for a minimum
30-day advance written notice to
the Agent of any intended policy
cancellation or non-renewal, and
must designate the Agent as
mortgagee and loss payee in a
standard mortgagee endorsement,
as its interest may appear.
(c) Flood: If any part of
the Improvements is located in
an area having "special flood
hazards" as defined in the
Federal Flood Disaster
Protection Act of 1973, a flood
insurance policy naming the
Agent as mortgagee must be
submitted to the Agent. The
policy must be from a company
and in an amount satisfactory to
the Bank and must include
provisions for a minimum 30-day
advance written notice to the
Agent of any intended policy
cancellation or non-renewal.
(d) Delivery of Policies
and Renewals: The Borrower
agrees to deliver to the Agent,
as additional security hereto,
the original policies of such
insurance or certificates of
insurance as is required by the
Agent pursuant to subsections
(a), (b) and (c) hereof and of
any additional insurance which
shall be taken out upon the
Premises while any part of the
Loans shall remain unpaid.
Renewals of such policies shall
be so delivered at least ten
(10) days before any such
insurance shall expire. In the
event the Borrower fails to
maintain insurance as required
hereunder the Agent has the
right to procure such insurance
whether or not the Borrower's
failure to maintain such
insurance constitutes an Event
of Default (as defined in
Article III) or an event or
condition which, upon the giving
of notice or the passage of
time, or both, would constitute
an Event of Default. Any
amounts paid by the Agent for
insurance shall be due and
payable to the Agent upon demand
and shall be secured by this
Mortgage.
(e) Proof of Loss; Claims
Settlement: In the event of
loss, the Borrower shall give
prompt notice thereof to the
insurance carrier and the Agent,
and the Agent may make proof of
loss if not made promptly by
Borrower. Subject to the
provisions of subsection (f)
below, the Agent and the
Borrower shall jointly adjust,
compromise and collect the
proceeds of any insurance
claims.
(f) Use of Proceeds: The
Borrower hereby assigns the
proceeds of any such insurance
policies to the Agent and hereby
directs and authorizes each
insurance company to make
payment for such loss directly
to the Agent to the extent the
proceeds with respect to such
loss are in excess of
$100,000.00. Prior to the
occurrence of an Event of
Default under the Credit
Agreement, the Borrower shall
have the right to use such
proceeds either for restoration
or repair of the Premises
damaged and the Bank agrees to
disburse such proceeds for such
purposes. After the occurrence
of an Event of Default under the
Credit Agreement, the Agent
shall have the option to use
such proceeds either for
restoration or repair of the
Premises damaged or for
application to the indebtedness
secured by this Mortgage.
2.10 Eminent Domain. The Borrower
assigns to the Agent any proceeds or
awards which may become due by reason of
any condemnation or other taking for
public use of the whole or any part of the
Premises or any rights appurtenant
thereto, and the Agent may, at its option,
either apply the same to the Debt
Instruments or release the same to the
Borrower without thereby incurring any
liability to any other person. The
Borrower agrees to execute such further
assignments and agreements as may be
reasonably required by the Agent to assure
the effectiveness of this Section. In the
event any governmental agency or authority
shall require or commence any proceedings
for the demolition of any buildings or
structures comprising a part of the
Premises, or shall commence any
proceedings to condemn or otherwise take
pursuant to the power of eminent domain a
material portion of the Premises, the
Borrower shall promptly notify the Agent
of such requirement or commencement of
proceeding (for demolition, condemnation
or other taking).
2.11 Transfer of Premises. The
Borrower covenants and agrees with the
Agent that the Borrower shall not sell,
transfer, convey, mortgage, encumber or
otherwise dispose of the Premises, the
Rents and Profits or the Intangible
Personalty or any part thereof or any
interest therein or engage in subordinate
financing with respect thereto during the
term of this Mortgage without the prior
written consent of the Agent [(other than
as permitted in Section 5.09 of the Credit
Agreement, in which case Agent shall upon
request of Borrower provide appropriate
releases at the expense of the Borrower)].
2.12 Compliance with Law. The
Borrower will comply with all applicable
statutes, regulations and orders of, and
all applicable restrictions imposed by,
all governmental bodies, domestic or
foreign, in respect of the conduct of its
business and the ownership of the Premises
(including applicable statutes,
regulations, orders and restrictions
relating to environmental standards and
controls described in Section 2.15
hereof).
2.13 Inspection. The Borrower will
permit the Agent, or its agents, at all
reasonable times and with advance prior
notice to enter and pass through or over
the Premises for the purpose of inspecting
same; provided, however, prior to an Event
of Default inspections shall be at
reasonable times during the Borrower's
normal business hours.
2.14 Releases and Waivers. The
Borrower agrees that no release by the
Agent of any portion of the Premises, the
Rents and Profits or the Intangible
Personalty, no subordination of lien, no
forbearance on the part of the Banks or
the Agent to collect on the Loans, or any
part thereof, no waiver of any right
granted or remedy available to the Agent
and no action taken or not taken by the
Agent shall in any way have the effect of
releasing the Borrower from full
responsibility to the Banks and the Agent
for the complete discharge of each and
every of the Borrower's obligations hereunder.
2.15 Environmental Representations
and Warranties.
(a) The Borrower
represents that it is in
material compliance with all
federal, state, and local
requirements relating to
protection of health or the
environment in connection with
the operation of the Borrower's
business on the Premises;
(b) The Borrower
represents and warrants that
(i) Borrower has not, and
(ii) to the best of Borrower's
knowledge no third party has
disposed of Hazardous Materials
on, under or about the Premises
in such a manner as would give
rise to a liability which would
have a material adverse effect
on the Borrower, and that to the
best of the Borrower's
knowledge, to the extent that
the Borrower generated, stored
or transported Hazardous
Materials, such activities were
done in such a manner as would
not give rise to a liability for
failure to comply with any
applicable federal, state and
local laws, ordinances and
regulations which would have a
material adverse effect on the
Borrower. For purposes hereof,
"Hazardous Materials" shall be
defined as "hazardous
substances" or "toxic substanc-
es" in the Comprehensive
Environmental Response,
Compensation and Liability Act
of 1980, as amended, 42 U.S.C.
section 9601 et seq.; Hazardous
Materials Transportation Act, 42
U.S.C. section 6901 et seq.; and those
substances defined as "hazardous
wastes" in any state or local
laws, rules or regulations
applicable to the Borrower.
(c) The Borrower covenants
that it will (i) comply with or
contest in good faith all
statutes and governmental
regulations, specifically
including without limitation all
federal, state and local
environmental laws, rules and
regulations, the noncompliance
with which would have a material
adverse effect on the financial
condition of the Borrower; and
(ii) pay all taxes, assessments,
governmental charges, claims for
labor, supplies, rent and any
other obligation which, if
unpaid, might become a lien
against any of its properties
except liabilities being
contested in good faith and
against which, if reasonably
requested by the Agent, reserves
satisfactory to the Agent will
be established;
(d) The Borrower covenants
and agrees that it will (i)
conduct and complete all
investigations, studies,
sampling, and testing and all
remedial, removal, and other
actions necessary to clean up
and remove all Hazardous
Materials on, from, or affecting
the Premises (A) in accordance
with all applicable federal,
state, and local laws,
regulations, rules, and
policies, (B) to the reasonable
satisfaction of the Agent, and
(C) in accordance with the
orders and directives of all
federal, state and local
governmental authorities, and
(ii) defend, indemnify, and hold
harmless the Agent, its
employees, agents, officers, and
directors, from and against any
claims, demands, penalties,
fines, liabilities, settlements,
damages, costs, or expenses
(including, without limit,
attorney and consultant fees,
investigation and laboratory
fees, court costs, and
litigation expenses) of whatever
kind of nature, known or
unknown, contingent or
otherwise, arising out of or in
any way related to (A) the
presence, disposal, release, or
threatened release of any
Hazardous Materials which are
on, from, or affecting the soil,
water, vegetation, buildings,
personal property, persons,
animals, or otherwise; (B) any
personal injury (including
wrongful death) or property
damage (real or personal)
arising out of or related to
such Hazardous Materials; (C)
any lawsuit brought or
threatened, settlement reached,
or government order relating to
such Hazardous Materials, and/or
(D) any violation of laws,
orders, regulations,
requirements, or demands of
government authorities, or any
policies or requirements of the
Agent, which are based upon or
in any way related to such
Hazardous Materials; provided,
however, the foregoing indemnity
shall not be applicable to
liabilities incurred by the
Agent as a result of the Agent's
actions..
2.16 Environmental Assessments.
Upon the reasonable request of the Agent,
provide the Agent (at the Borrower's
expense) with a current environmental
assessment of the Premises within a
reasonable time after such request. Such
assessment shall be in a form reasonably
satisfactory to the Agent and from an
environmental engineer or consultant
satisfactory to the Agent. If the Agent
requests any such environmental assessment
on account of a directive received by any
governmental agency having regulatory
authority over the Agent, the Borrower
agrees that such request shall be deemed
to be reasonable.
2.17 Appraisals. Upon the
reasonable request of the Agent, provide
the Agent (at the Borrower's expense) with
a current appraisal of the Premises within
a reasonable time after such request.
Such appraisal shall be by a qualified
appraiser reasonably satisfactory to the
Agent and must be reasonably satisfactory
to the Agent in form and substance. If
the Agent requests any such appraisal on
account of a directive received by any
governmental agency having regulatory
authority over the Agent, the Borrower
agrees that such request shall be deemed
to be reasonable.
ARTICLE III
Events of Default
An Event of Default shall exist under
the terms of this Mortgage upon the
existence of an Event of Default under the
terms of the Credit Agreement.
ARTICLE IV
Foreclosure
4.1 Acceleration of Secured
Indebtedness; Foreclosure. Upon the
occurrence of an Event of Default the
entire balance of the indebtedness secured
hereby, including all accrued interest,
shall, at the option of the Agent, become
immediately due and payable. Upon failure
to pay the indebtedness secured hereby in
full at any stated or accelerated
maturity, the Agent may foreclose the lien
of this Mortgage by judicial proceeding.
4.2 Foreclosure Expenses. In a
judicial proceeding for foreclosure of
this Mortgage, the Agent shall be entitled
to collect all expenses of foreclosure,
including, but not limited to, reasonable
attorneys' fees and cost of documentary
evidence, abstracts and title reports, all
of which shall be additional sums secured
by this Mortgage.
4.3 Proceeds of Foreclosure. The
proceeds of any foreclosure sale of the
Premises, or such part or parts thereof or
interests therein as the Agent may select,
shall, subject to applicable law, be
applied: FIRST, to the payment of all
necessary costs and expenses incident to
such foreclosure proceeding and sale,
including but not limited to all
reasonable attorneys' fees and legal
expenses, all court costs and charges of
every character, and to the payment of any
other secured indebtedness, including
specifically without limitation the
principal, accrued interest and attorneys'
fees due and unpaid on the Debt
Instruments and the amounts due and unpaid
and owed to the Agent under this Mortgage,
the order and manner of application to the
items in this clause FIRST to be in the
Agent's sole discretion; and SECOND, the
remainder, if any, shall be paid to
Borrower, or to Borrower's heirs,
devisees, representatives, successors or
assigns, or such other persons (including
the holder or beneficiary of any inferior
lien) as may be entitled thereto by law;
provided, however, that if the Agent is
uncertain which person or persons are so
entitled, the Agent may interplead such
remainder in any court of competent
jurisdiction, and the amount of any
attorneys' fees, court costs and expenses
incurred in such action shall be a part of
the secured indebtedness and shall be
reimbursable (without limitation clause)
from such remainder.
ARTICLE V
Additional Rights and Remedies of the
Agent
5.1 Rights Upon an Event of Default.
Upon the occurrence of an Event of
Default, the Agent, immediately and
without additional notice and without
liability therefor to the Borrower, except
for gross negligence, willful misconduct
or unlawful conduct, may do or cause to be
done any or all of the following:
(a) take physical possession of the
Premises; (b) exercise its right to
collect the Rents and Profits; (c) enter
into contracts for the completion, repair
and maintenance of the Improvements
thereon; (d) expend Loan funds and any
rents, income and profits derived from the
Premises; for payment of any taxes,
insurance premiums, assessments and
charges for completion, repair and
maintenance of the Improvements,
preservation of the lien of this Mortgage
and satisfaction and fulfillment of any
liabilities or obligations of the Borrower
arising out of or in any way connected
with the construction of Improvements on
the Premises whether or not such
liabilities and obligations in any way
affect, or may affect, the lien of this
Mortgage; (e) enter into leases demising
the Premises or any part thereof; (f) take
such steps to protect and enforce the
specific performance of any covenant,
condition or agreement in the Credit
Agreement, the Debt Instruments, this
Mortgage, or the other Financing
Documents, or to aid the execution of any
power herein granted; and (g) generally,
supervise, manage, and contract with
reference to the Premises as if the Agent
were equitable owner of the Premises.
Notwithstanding the occurrence of an Event
of Default or acceleration of the Loans,
the Agent shall continue to have the right
to pay money, whether or not Loan funds,
for the purposes described in Sections
2.2, 2.6 and 2.12 hereof, and all such
sums and interest thereon shall be secured
hereby. The Borrower also agrees that any
of the foregoing rights and remedies of
the Agent may be exercised at any time
independently of the exercise of any other
such rights and remedies, and the Agent
may continue to exercise any or all such
rights and remedies until the Event(s) of
Default are cured with the consent of the
Agent or until foreclosure and the
conveyance of the Premises to the high
bidder or until the Loans are otherwise
satisfied or paid in full.
5.2 Appointment of Receiver. Upon
the occurrence of an Event of Default, the
Agent shall be entitled, without
additional notice and without regard to
the adequacy of any security for the
indebtedness secured hereby or the
solvency of any party bound for its
payment, to seek the appointment of a
receiver to take possession of and to
operate the Premises, and to collect the
rents, issues, profits, and income
thereof, all expenses of which shall be
added to the Loans and secured hereby.
5.3 Waivers. No waiver of any Event
of Default shall at any time thereafter be
held to be a waiver of any rights of the
Agent stated anywhere in the Credit
Agreement, the Debt Instruments, this
Mortgage, or any of the other Financing
Documents, nor shall any waiver of a prior
Event of Default operate to waive any
subsequent Event(s) of Default. All
remedies provided in this Mortgage, in the
Credit Agreement, the Debt Instruments and
in the other Financing Documents are
cumulative and may, at the election of the
Agent, be exercised alternatively,
successively, or in any manner and are in
addition to any other rights provided by
law.
ARTICLE VI
General Conditions
6.1 Terms. The singular used herein
shall be deemed to include the plural; the
masculine deemed to include the feminine
and neuter; and the named parties deemed
to include their heirs, successors and
assigns. The term "Bank" shall include
any payee of the indebtedness hereby
secured or any transferee thereof whether
by operation of law or otherwise.
6.2 Notices. All notices and other
communications required to be given
hereunder shall be effective (i) when
delivered, (ii) when transmitted via
telecopy (or other facsimile device) to
the number set out below, (iii) the
Business Day following the day on which
the same has been delivered prepaid to a
reputable national overnight air courier
service, or (iv) the third Business Day
following the day on which the same is
sent by certified or registered mail,
postage prepaid, in each case to the
respective parties at the address or
telecopy numbers set forth below, or at
such other address as such party may
specify by written notice to the other
parties hereto.
<TABLE>
<S> <C>
to the Borrower:
One Price Clothing Stores, Inc.
1875 East Main Street
Duncan, South Carolina 29334
Attention: Chief Financial Officer
Phone: (803) 433-8888
Fax: (803) 433-9584
with a copy to:
Wyche, Burgess, Freeman & Parham
44 East Camperdown Way
P.O. Box 728
Greenville, South Carolina 29602
Attention: Larry D. Estridge
Phone: (803) 242-8256
Fax: (803) 235-8900
to the Agent:
NationsBank, N.A. (Carolinas)
NationsBank Corporate Center
Charlotte, North Carolina 28255
Attention: Mark D. Halmrast
Phone: (704) 386-0649
Fax: (704) 386-1270
</TABLE>
6.4 Greater Estate. In the event
that the Borrower is the owner of a
leasehold estate with respect to any
portion of the Premises and, prior to the
satisfaction of the indebtedness and the
cancellation of this Mortgage of record,
the Borrower obtains a fee estate in such
portion of the Premises, then such fee
estate shall automatically, and without
further action of any kind on the part of
the Borrower, be and become subject to the
security lien of this Mortgage.
6.5 Imposition of Tax. In the event
of the passage of any state, federal,
municipal or other governmental law,
order, rule or regulation, in any manner
changing or modifying the laws now in
force governing the taxation of debts
secured by mortgages or the manner of
collecting taxes so as to affect adversely
the Agent or the Banks, the Borrower will
promptly pay any such tax on or before the
due date thereof. In no event shall the
Borrower be obligated to pay any North
Carolina intangible taxes assessed against
the Agent or either of the Banks under the
Credit Agreement on account of the
indebtedness secured hereby or the
transactions evidenced by this Mortgage or
the Credit Agreement.
6.6 Invalidation of Provisions.
Invalidation of any one or more of the
provisions of this Mortgage shall in no
way affect any of the other provisions
hereof, which shall remain in full force
and effect.
6.7 Headings. The captions and
headings herein are inserted only as a
matter of convenience and for reference
and in no way define, limit, or describe
the scope of this Mortgage nor the intent
of any provision hereof.
6.8 GOVERNING LAW. THIS MORTGAGE
SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
SOUTH CAROLINA.
IN WITNESS WHEREOF, the Borrower has
executed this Mortgage under seal as of
the above written date.
<TABLE>
<S> <C>
ONE PRICE CLOTHING STORES, INC.,
a Delaware corporation
ATTEST:
By /s/Diane O'Bryant By: /s/Stephen A. Feldman
Title Assistant Secretary Name: Stephen A. Feldman
(Corporate Seal) Title:Chief Financial Officer
</TABLE>
WITNESSES:
/s/Deborah C. Erwin
/s/Lynde White
STATE OF South Carolina
COUNTY OF Spartanburg
Before me, a notary public,
personally appeared Deborah C. Erwin, who
being duly sworn deposed and said that
(s)he saw the within-named ONE PRICE
CLOTHING STORES, INC., a Delaware
corporation, by Stephen A. Feldman ,
its Treasurer , sign, seal and, as its
act and deed, deliver the within-written
Mortgage and Security Agreement for the
use and purposes therein mentioned and
that (s)he with Lynde White
witnessed the execution thereof.
/s/Deborah C. Erwin
(Witness)
SWORN TO before me this 11th
day of July , 1995.
/s/Lynde S. White
Notary Public for South Carolina, State at Large
My Commission Expires: February 17, 2005
