UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No 1)*
Solo Serve Corporation
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(Name of Issuer)
Common Stock, par value $.01
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(Title of Class of Securities)
834263-20-4
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(CUSIP Number)
Julie Lefkowitz, c/o General Atlantic Corporation,
950 Third Avenue, 26th Floor, New York, NY 10022
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
October 2, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement . (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP No. 834263-20-4 Page 2 of 7 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
General Atlantic Corporation
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a) (b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
NUMBER OF
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,388,889
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
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WITH 10 SHARED DISPOSITIVE POWER
1,388,889
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,388,889
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.7%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
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CUSIP No. 834263-20-4 Page 3 of 7 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Atlantic Foundation
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a) (b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
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7 SOLE VOTING POWER
0
NUMBER OF
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,388,889
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
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WITH 10 SHARED DISPOSITIVE POWER
1,388,889
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,388,889
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.7
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
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CUSIP No. 834263-20-4 Page 4 of 7 Pages
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AMENDMENT NO. 1 AND RESTATEMENT OF TO SCHEDULE 13D
This Amendment No. 1 and Restatement of Schedule 13D filed by General
Atlantic Corporation ("GAC") amends Items 2, 4, 5 and 7.
Item 1. Security and Issuer.
Common Stock, par value $.01 per share ("Shares"), of Solo Serve
Corporation ("Solo Serve"), 1610 Cornerway Boulevard, San Antonio, Texas
78219-2900.
Item 2. Identity and Background.
The "Reporting Persons" are: (1) GAC, a Delaware Corporation, 950 Third
Avenue, New York, New York 10022 and (2) The Atlantic Foundation, a Bermuda
not-for-profit foundation ("Atlantic"), P.O. Box HM 666, Clarendon House, Church
Street, Hamilton HM CX, Bermuda.
The directors and officers of GAC, the address for each of whom is c/o
General Atlantic Corporation, 950 Third Avenue, New York, New York 10022, are:
Christopher G. Oechsli, President and Director; Julie S. Lefkowitz,
Vice-President, Secretary and Director; and Daivd I. Walsh, Vice-President and
Treasurer and Director.
None of the Reporting Persons and none of the above individuals has been a
defendant in (i) any criminal proceeding or (ii) any civil proceeding which has
resulted in any judgment, decree or final order finding any violation of federal
or state securities laws or enjoining future violations of, or prohibiting or
mandating activities subject to, such laws.
GAC is a wholly-owned subsidiary of Genant Securities N.V., a Netherlands
Antilles corporation. The address of Genant Securities N.V. is c/o Holland
Intertrust N.V., De Ruyter Kade 58A, Netherlands, Antilles. Genant Securities
N.V. is a wholly-owned subsidiary of General Atlantic Investments Limited, a
Bermuda corporation. The address of General Atlantic Investments Limited is
Washington Mall II, Church Street, Hamilton 5, Bermuda. General Atlantic
Investments Limited is a wholly-owned subsidiary of General Atlantic Group
Limited. The address of General Atlantic Group Limited is Washington Mall II,
Church Street, Hamilton 5, Bermuda. General Atlantic Group Limited is a
wholly-owned subsidiary of Exeter Associates Limited, a Bermuda corporation. The
address of Exeter Associates Limited is P.O. Box HM 666, Clarendon House, Church
Street, Hamilton HM CX, Bermuda. Exeter Associates Limited is a wholly-owned
subsidiary of Atlantic.
Item 3. Source and Amount of Funds or Other Consideration.
All Shares beneficially owned by the Reporting Persons were acquired with
general corporate funds.
Item 4. Purpose of Transaction
On July 6, 1995, the United States Bankruptcy Court for the Western
District of Texas, San Antonio Division, Judge Ronald B. King, presiding,
entered an order confirming the First Amended Plan of Reorganization of Solo
Serve Corporation dated May 17, 1995 as further modified by the Non-material
Modifications to the First Amended Chapter 11 Plan of Solo Serve Corporation
(the "Plan"). The Effective Date of the Plan was July 18, 1995.
Under the terms of the Plan, Solo Serve issued 1,388,889 shares of
Preferred Stock to GAC in consideration of an aggregate purchase price of
$2,500,000 on July 18, 1995. The Preferred Stock is convertible into an equal
number of Shares, votes with the Shares on a share-for-share basis, and was not
subject to reduction by the two-for-one reverse split effected in connection
with the Plan.
As of July 18, 1995, there were 5,712,252 Shares issued and outstanding
before effecting the two-for-one reverse split. On July 18, 1995, Solo Serve
amended its Certificate of Incorporation to provide for the two-for-one reverse
split of Shares and to designate the Preferred Stock. After the reverse split,
GAC held 1,255,000 Shares and 1,388,889 shares of Preferred Stock.
GAC, at the time it received its stock and until recently, had no plan,
proposal, or intention which related to or would have resulted in any action
with respect to the matters listed in paragraphs (b) through (j) of Item 4 of
Schedule 13D.
On October 2, 1997, GAC sold 1,255,000 Shares to Charles M. Siegel pursuant
to a Stock Purchase Agreement, dated as of September 26, 1997, for a purchase
price of $125,500. Such purchase price was paid by a promissory note from Mr.
Siegel to GAC payable in five equal annual installments with interest at the
fixed rate of 7%.
Item 5. Interest in Securities of the Issuer
(a) GAC and Atlantic are the beneficial owners of 1,388,889 shares of
Preferred Stock convertible into an equal number of Shares, or 32.7% of the
outstanding Shares.
(b) GAC and Atlantic have sole voting and dispositive power with respect to
1,388,889 Shares, or 32.7% of the outstanding Shares.
(c) For information concerning recent transactions, see Item 4 above.
(d) Not applicable.
(e) Not applicable.
Item 6. Conracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
For information regarding such contracts, see Item 4. above.
Item 7. Material to Be Filed as Exhibits
Exhibit 1 Joint Filing Agreement between General Atlantic Corporation
and The Atlantic Foundation dated as of February 14, 1994
(Incorporated by reference to Exhibit 1 of Schedule 13G dated
February 14, 1994 of General Atlantic Corporation and The
Atlantic Foundation).
Exhibit 2 Stock Purchase Agreement dated as of September 26, 1997
between Charles M. Siegel and General Atlantic Corporation.
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 16, 1997
General Atlantic Corporation*
By: /s/ Julie Lefkowitz
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Julie Lefkowitz
Vice President and Secretary
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* Pursuant to Joint Filing Agreement between General Atlantic Corporation and
The Atlantic Foundation dated as of February 14, 1994, this filing also
constitutes a filing by The Atlantic Foundation.
This Stock Purchase Agreement (the "Agreement") is made as of this 26th day
of September, 1997, between Charles M. Siegel ("Buyer") and General Atlantic
Corporation, a Delaware corporation (the "Seller"), having its principal office
at 950 Third Avenue, New York, New York 10022.
WHEREAS, the Seller owns beneficially and of record 1,255,000 shares (the
"Shares") of the issued and outstanding shares of Common Stock, par value $.01
per share, of Solo Serve Corporation, a Delaware corporation ("Solo Serve"),
having its principal office at 1610 Cornerway Boulevard, San Antonio TX 78219;
and
WHEREAS, subject to the terms and conditions set forth herein, Buyer
desires to purchase from the Seller, and the Seller desires to sell to Buyer,
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties and conditions contained in this Agreement, the
parties hereto hereby agree as follows:
1. DEFINITIONS
1.1. Certain Defined Terms. Unless the context otherwise requires, as used
in this Agreement, the following terms have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate" with respect to any Person, means any other Person directly or
indirectly Controlling, Controlled by or under common Control with such Person.
"Applicable Law" means all applicable laws, statutes, regulations and
orders of any governmental authority or regulatory body and judgments, decrees,
injunctions, writs, orders, or like action of any court, arbitrator or other
judicial tribunal of competent jurisdiction with respect thereto.
"Business Day" means any day other than a Saturday, Sunday or a day on
which commercial banks in the State of New York are required or authorized by
law to close.
"Contract" means, with respect to a Person, any contract, agreement, lease,
indenture, deed of trust, mortgage, license, note, instrument, guarantee or
obligation to which such Person is a party or by which such Person or its
property is bound or affected.
"Control" whether used as a noun or verb, refers to the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Person" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental or regulatory body or other entity.
2. CONSIDERATION FOR PURCHASE AND SALE OF SHARES; TRANSFER OF SHARES
2.1. Consideration for Shares. Subject to the terms and conditions set
forth in this Agreement, at the Closing the Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and the Buyer agrees to purchase, acquire
and accept delivery from Seller of, all of the Shares for the Purchase Price.
The Purchase Price shall be $125,500, payable by delivery of a Promissory Note
(the "Note") in the form of Exhibit A.
2.2. Transfer of Shares. On the Closing Date, the Seller shall sell,
assign, transfer, convey and deliver to Buyer all of the Shares together with
appropriate stock powers and other transfer documents signed in blank.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
The parties hereto recognize that Buyer was responsible for the management
of the business of Solo Serve prior to the date hereof and is expected to
continue in such capacity subsequent to the Closing Date. Consequently, the
Seller has relied, in part, upon information supplied by Buyer regarding the
business and affairs of Solo Serve and is selling the Shares "as is" without
representations or warranties regarding the business or affairs of Solo Serve
and only with the following representations and warranties:
3.1. Corporate Existence. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
3.2. Ownership of Stock. Seller is and as of the Closing will be the
registered holder and beneficial owner of all of the Shares. Seller has, and at
the Closing will have, good and marketable title to all of the Shares, free and
clear of any and all liens and encumbrances.
3.3. Due Authorization; No Restrictions. Seller has full corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to carry out the transactions contemplated hereunder. The
execution, delivery and performance of this Agreement by Seller will not
conflict with, result in a default, right to accelerate or loss of rights under,
or require the consent of any governmental authority or regulatory body or other
Person under any provision of the certificate of incorporation or by-laws of
Seller, or (b) any material Contract of Seller or any Applicable Law. This
Agreement has been duly authorized, executed and delivered by Seller and
constitutes Seller's legal, valid and binding obligation enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the enforcement of creditors' rights generally and except as
enforceability may be subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents, covenants and warrants as follows and acknowledges
that Seller is relying upon such representations, covenants and warranties in
connection with the sale, assignment and transfer to Buyer of the Shares:
4.1. Due Authorization; No Breach. Buyer has full power and authority to
execute, deliver and perform its obligations under this Agreement and to carry
out the transactions contemplated hereunder. The execution, delivery and
performance of this Agreement and the Note by Buyer will not conflict with,
result in a default, right to accelerate or loss of rights under, or require the
consent of any governmental authority or regulatory body or other Person
pursuant to any material Contract of the Buyer or Solo Serve or any Applicable
Law. This Agreement has been duly executed and delivered by Buyer and
constitutes, and the Note when executed and delivered in accordance with this
Agreement will constitute, Buyer's legal, valid and binding obligation
enforceable in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or affecting the enforcement of creditors' rights generally and
except as enforceability may be subject to the application of general principles
of equity (regardless of whether considered in a proceeding in equity or at
law).
4.2. Investment Representation. The Buyer is acquiring the Shares for his
own account and with no present intention of dividing the same or otherwise
making any distribution of the same. Buyer will not make any sale, transfer or
other disposition of any of the Shares in violation of the Securities Act of
1933, as amended, or applicable state securities laws.
4.3 No Material Litigation. No litigation or administration of or before
any court, tribunal or governmental body is presently pending, or, to the
knowledge of Buyer, threatened against Buyer or any of his properties which, if
adversely determined, would have a material adverse effect on the business,
assets or financial condition of the Buyer.
5. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF BUYER AND SELLER
All statements contained herein or any certificate delivered pursuant to
this Agreement shall be deemed representations, warranties, covenants and
agreements made by Buyer or Seller, as the case may be. Each statement,
representation, warranty, covenant and agreement made or deemed made by Seller
shall remain in effect continuously to and including the Closing but shall not
survive the Closing except that the representations and warranties made by the
Seller in Section 3.2 shall survive for a period of five years after the Closing
Date. Each statement, representation, warranty, covenant and agreement made or
deemed made by Buyer shall remain in effect continuously to and including the
date one year after the date on which all indebtedness under the Note shall have
been paid in full.
6. THE CLOSING
6.1. Time and Place. Subject to satisfaction or waiver of the conditions
set forth in Article 7 hereof, the transfer of beneficial ownership of and legal
title to the Shares by the Seller to the Buyer and transfer of the Purchase
Price by the Buyer to the Seller (the "Closing") shall occur at the offices of
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, at
10:00 A.M. local time, on September 30, 1997, or at such other place and time as
may be mutually agreed in writing by the Seller and the Buyer. The date on which
the Closing takes place is referred to herein as the "Closing Date."
6.2 Closing Actions. At the Closing the Seller shall deliver to the Buyer
certificates representing all of the Shares endorsed or accompanied by stock
powers executed in blank sufficient to transfer good and marketable legal title
in and beneficial ownership of the Shares to Buyer or its designee against
payment by Buyer of the Purchase Price by delivery of the Note. Seller shall pay
any documentary stamp tax or transfer tax due or payable by the Seller in
connection with the transfer of the Shares to Buyer or its designee.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to sell, assign, transfer, convey and deliver the
Shares to Buyer and to consummate the transactions contemplated hereunder is
subject to the satisfaction of the conditions set forth in this Article 7 for
the exclusive benefit of the Seller to be fulfilled at or prior to the Closing,
all in form and substance reasonably satisfactory to Seller. Seller may,
however, waive the fulfillment of any of these conditions, either before or
after the Closing, but any waiver, to be binding upon Seller, must be by a
writing duly executed by it. Buyer shall use its best efforts to cause each
condition set forth in this Article 7 to be fulfilled.
7.1. Reduction in Amount of Letter of Credit. The Letter of Credit issued
in favor of Congress Financial Corporation in the original amount of $1,500,000
shall have been terminated and a new letter of credit shall have been issued in
favor of Sanwa Business Credit Corporation in the amount of $750,000 and shall
provide for the termination thereof on December 31, 1998.
7.2. Solo Serve shall have completed an inventory financing with Sanwa Bank
in the amount of up to $12,000,000 upon the terms and conditions attached as
Exhibit B. 7.3. Buyer and/or its Affiliates shall have made a loan to Solo Serve
in the amount of $500,000 upon the terms and conditions attached as Exhibit C.
8. MISCELLANEOUS
8.1. Stock Option Plan. Seller agrees to vote any shares of Solo Serve then
held by it in favor of an amendment to the Solo Serve Stock Option Plan (the
"Plan"), which was previously approve by the board of directors of Solo Serve,
in order to increase the number of shares covered by the Plan to 750,000 in the
event the amendment to the Plan is presented to the shareholders of Solo Serve
for their approval.
8.2. Notices. All notices, requests and other communications hereunder
shall be in writing and shall be delivered personally, telegraphed, telexed
(with appropriate answer back received), sent by facsimile transmission (with
immediate confirmation thereafter by telephone or otherwise), or sent by U.S.
registered, certified or express mail, postage prepaid, return receipt
requested, or sent by a nationally recognized overnight courier service, marked
for overnight delivery. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed (provided the correct answer back is received),
or sent by facsimile transmission (provided confirmation is received immediately
thereafter); or if sent by express mail or overnight courier, one Business Day
after the date of delivery to a U.S. Post Office or the courier service marked
for overnight delivery; or if so sent by registered or certified mail, seven
days after the date of deposit in the mails; in each case addressed as follows:
(a) If to Buyer, to:
Charles M. Siegel
1403 Fortune Hill
San Antonio, TX 78258
with a copy to:
David Oppenheimer, Esq.
Oppenheimer, Blend, Harrison & Tate
711 Navarro
6th Floor
San Antonio, TX 78205
(b) If to Seller, to:
General Atlantic Corporation
950 Third Avenue
New York, NY 10022
Attention: Christopher G. Oechsli
with a copy to:
Malcolm P. Wattman
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
or to such other address as the parties hereto may specify from time to time by
notice given as provided herein.
8.3. No Waiver. No modification hereof nor any waiver of any breach or
default hereunder shall be valid unless in writing and signed by the parties
making such modification or giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.
8.4. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each party hereto, and its successors and permitted assigns. This
Agreement shall not be transferred or assigned by either Buyer or Seller and any
attempted transfer or assignment shall be null and void.
8.5. Headings. The article and section headings contained herein are for
the purpose of convenience only and are not intended to define or limit the
contents of said articles or sections.
8.6. Merger. This Agreement cancels and supersedes all prior letters of
intent, memoranda of terms, and other documents of understanding heretofore
executed by or exchanged, circulated or discussed between the parties with
respect to the subject matter hereof.
8.7. Governing Law. This Agreement and all amendments hereof shall, in all
respects, be governed by and construed and enforced in accordance with the
internal laws (without regard to principles of conflicts of law) of the State of
New York.
8.8. Expenses. Each party shall bear its own costs and expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
8.9. Brokers. None of the parties hereto nor any of their respective
Affiliates is obligated to pay, or has retained any broker or finder or any
other Person who is entitled to, any broker's or finder's fee or any other
commission or financial advisory fee based on any agreement or undertaking made
by or for the benefit of Seller or Buyer in connection with the sale of the
Shares and the consummation of the transactions contemplated herein. Each party
hereto agrees to indemnify, defend and hold the other party hereto harmless from
any claim or demand from any Person for any and all such fees and commissions
through Seller or Buyer.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
/s/ Charles M. Siegel
----------------------
Charles M. Siegel
GENERAL ATLANTIC CORPORATION
By: /s/ Julie Lefkowitz
-------------------
Name: Julie Lefkowitz
Title: Vicer President and Secretary
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$125,500.00 September 30, 1997
----------
FOR VALUE RECEIVED, the undersigned (the "Maker") hereby agrees to pay to
the order of General Atlantic Corporation, a Delaware Corporation (the
"Corporation"), the principal sum of $125,500.00 in 5 equal annual installments
commencing on October 1, 1998, together with interest on such principal amount
from September 30, 1997 at a fixed rate of 7% per annum. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months. The Maker may
prepay the full principal amount of this Note, together with interest due
thereon to date of payment, without penalty or premium.
This Note has been made and delivered pursuant to the terms and conditions
of the Stock Purchase Agreement, dated September 26, 1997, between the
Corporation and the Maker.
Any installment of principal and interest that is paid more than ten (10)
days late shall be subject to a 2% penalty. In addition, Maker shall pay any
court costs and reasonable attorneys' fees and other charges incurred by the
holder in connection with the collection of amounts due hereunder.
The outstanding balance of this Note may be accelerated by the holder and
declared immediately due and payable upon the failure to pay any installment of
principal and interest within ten (10) day after it is due or upon the
insolvency of Maker, an assignment for the benefit of creditors or the
institution of bankruptcy or similar proceedings by Maker.
The terms of this Note shall be governed by and construed and enforced in
accordance with the internal laws (without regard to the principles of conflicts
of law) of the State of New York.
/s/ Charles M. Siegel
---------------------
Charles M. Siegel
<PAGE>
EXHIBIT C
Terms and Conditions of Loan from Charles Siegel to Solo Serve
Amount of Loan: $500,000
Term of Loan: 5 years
Interest Rate: Prime plus 1%
Payment Terms: Principal shall be payable on the day that is five years
after the date the loan is made and interest shall be
payable monthly
Other Terms: The loan will be subordinate to the obligations of Solo
Serve arising under (i) the Loan and Security Agreement
dated as of September 25, 1997 between Solo Serve and Sanwa
Business Credit Corporation and (ii) the Letter of Credit
and Security Agreement between Solo Serve and General
Atlantic Corporation
