ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
EXHIBIT 10(c) - Amendment No. 2 to the Loan and Security Agreement by and
between Congress Financial Corporation (Southern) as Lender and
the Registrant and One Price Clothing of Puerto Rico,
Inc. as Borrowers dated June 17, 1997
AMENDMENT NO. 2 TO FINANCING AGREEMENTS
June 17, 1997
One Price Clothing Stores, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
One Price Clothing of Puerto Rico, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Gentlemen:
Congress Financial Corporation (Southern) ("Lender"), One Price
Clothing Stores, Inc. ("One Price") and One Price Clothing of Puerto Rico, Inc.
("One Price PR"; and together with One Price, individually referred to as a
"Borrower" and collectively as the "Borrowers") have entered into certain
financing arrangements pursuant to the Loan and Security Agreement, dated March
25, 1996, between the Lender and Borrowers (the "Loan Agreement"), as amended by
the Amendment No. 1 to Financing Agreements, dated May 16, 1997, together with
various other agreements, documents and instruments at any time executed and/or
delivered in connection therewith or related thereto (as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, collectively, the "Financing Agreements"). All capitalized terms used
herein and not herein defined shall have the meanings given to them in the
Financing Agreements.
Borrowers have requested that Lender (a) consent to the formation of
One Price Realty, Inc., a wholly-owned subsidiary of One Price ("One Price
Realty"), (b) consent to the transfer by One Price of certain real estate and
fixtures (including the Distribution Center) owned by One Price located in
Spartanburg County, South Carolina to One Price Realty (the "Duncan Real
Property"), (c) release its security interest and lien on the Duncan Real
Property, (d) permit the contingent indebtedness of One Price to First Union
National Bank ("First Union") pursuant to an indemnity and guaranty agreement by
One Price with respect to certain obligations of One Price Realty to First Union
and an environmental indemnity agreement in favor of First Union, and (e) to
amend the Loan Agreement in connection with the foregoing; and Lender is willing
to agree to such formation, transfer, release, indebtedness and amendments,
subject to the terms and conditions set forth herein.
In consideration of the foregoing, the mutual agreements and covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
1. Additional Definitions. Effective as of the date hereof, the following terms shall have the
respective meanings given to them below and the Loan Agreement is hereby amended to include, in addition and not
in limitation, each of the following definitions:
(a) "Duncan Lease" shall mean the Lease, dated the date hereof
between One Price Realty, as Landlord, and One Price as Tenant, with respect to
the Xxxxxx Real Property.
(b) "Duncan Real Property" shall have the meaning set forth in the introductory paragraphs
of this Amendment.
(c) "First Union" shall mean First Union National Bank, a
national banking association, and its successors and assigns.
(d) "First Union Financing" shall have the meaning set forth in Section 6 hereof.
(e) "One Price Guaranty" shall mean, collectively, the
Indemnity and Guaranty Agreement, dated the date hereof, by One Price with
respect to certain obligations of One Price Realty to First Union, and the
Environmental Indemnity Agreement, dated the date hereof, by One Price and One
Price Realty in favor of First Union, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(f) "One Price Realty" shall mean One Price Realty, Inc., a
South Carolina corporation, and its successors and assigns.
2. Consent. Subject to the terms and conditions herein, Lender hereby
(a) confirms that is has no objection to (i) the formation of One Price Realty
as a wholly-owned subsidiary of One Price, (ii) the transfer by One Price to One
Price Realty of the Duncan Real Property and the leasing of the Duncan Real
Property by One Price Realty to One Price pursuant to the Duncan Lease, (iii)
the indemnity and guaranty by One Price with respect to certain obligations of
One Price Realty to First Union and the indemnity by One Price in favor of First
Union with respect to certain environmental liabilities related to the Duncan
Real Property, in each case pursuant to the One Price Guaranty; and (b) agrees
to release its security interests and liens in the Duncan Real Property.
3. Indebtedness. Section 9.9 of the Loan Agreement is hereby amended by adding a new Section
9.9(h) thereto as follows:
"(h) contingent indebtedness of One Price to First
Union arising under the One Price Guaranty in respect of or
relating to the obligations of One Price Realty to First
Union; provided, that: (i) the total principal amount of the
guaranteed indebtedness outstanding at any time thereunder
shall not exceed $8,125,000, (ii) One Price shall not,
directly or indirectly, without Lender's prior written
consent, amend, modify, alter or change the terms of such
guaranteed indebtedness or the One Price Guaranty as in effect
on the date hereof, (iii) One Price shall furnish to Lender
all notices or demands in connection with such guaranteed
indebtedness or the One Price Guaranty either received by One
Price or on its behalf, promptly after the receipt thereof, or
sent by One Price or on its behalf, concurrently with the
sending thereof, as the case may be, (iv) Lender shall
receive, in form and substance satisfactory to Lender, a
Mortgagee Agreement between Lender and First Union, duly
authorized, executed and delivered by First Union and (v)
Lender shall receive, in form and substance satisfactory to
Lender, a Landlord Agreement, duly authorized, executed and
delivered by One Price Realty."
4. Conditions Precedent. The effectiveness of the consent and Collateral release contained in
Section 2 hereof and the amendments to the Loan Agreement and the other Financing Agreements provided for herein
is conditioned upon the satisfaction of each of the following conditions precedent in a manner satisfactory to
Lender:
(a) Lender shall have received true, correct and complete
copies of the (i) One Price Guaranty, (ii) the documents related to the loan by
First Union to One Price Realty secured by the Duncan Real Property, (iii) the
deed and all other documents (if any) evidencing or relating to the transfer of
the Duncan Real Property from One Price to One Price Realty, and (iv) the Duncan
Lease, each duly authorized, executed and delivered by the parties thereto;
(b) Lender shall have received, in form and substance
satisfactory to Lender, a Mortgagee Agreement between First Union and Lender,
duly authorized, executed and delivered by First Union;
(c) Lender shall have received, in form and substance
satisfactory to Lender, a Landlord Agreement, duly authorized, executed and
delivered by One Price Realty;
(d) Lender shall have received, the amount of $7,368,421 in
immediately available funds representing repayment of the entire principal
amount outstanding under the Term Loan;
(e) No Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred; and
(f) Lender shall have received an original of this Amendment,
duly authorized, executed and delivered by Borrowers and One Price VI.
5. Release of Duncan Real Property.
Upon fulfillment of all of the conditions precedent set forth
in Section 4 of this Amendment, the Mortgage will be endorsed by Lender and
delivered to One Price (or as One Price shall direct) for cancellation, and
Lender will execute and deliver to One Price (or as One Price shall direct) a
UCC termination statement with respect to the UCC fixture filing filed with the
RMC Office for Spartanburg County, South Carolina at File No. 9600549; but
neither such endorsement and cancellation of the Mortgage nor the execution and
delivery of such UCC termination statement shall be deemed to satisfy or
extinguish any of the Obligations secured thereby (other than the principal
amount of the Term Loan repaid pursuant to the terms hereof), nor to release any
other Collateral for the Obligations (except for the Duncan Real Property
including the fixtures described in the UCC fixture filing so terminated by
Lender, but not any trade fixtures, equipment or other personal property covered
by any other UCC financing statement(s) filed by Lender against One Price).
6. Notices of Compliance with First Union Financing and Duncan Lease; Rights to Cure.
(a) On or before the third day of each month, One Price shall
provide to Lender evidence satisfactory to Lender that (i) One Price has paid
all rent and other amounts due under the Duncan Lease as of and through the
first day of such month and that One Price and One Price Realty are in all other
respects in compliance with the terms thereof, (ii) One Price Realty has paid
all principal, interest and other amounts due as of and through the first day of
such month in respect of the guaranteed indebtedness referred to in Section
9.9(h) of the Loan Agreement as amended hereby and otherwise under the financing
agreements relating thereto (collectively, the First Union Financing"), and
(iii) One Price Realty and One Price are in all other respects in compliance
with the terms of the First Union Financing.
(b) In addition to and not by way of limiting Lender's rights
under Section 7.6 of the Loan Agreement, Lender may cure for Borrowers' account
any default by One Price or One Price Realty under the Lease and/or any default
by One Price Realty or One Price under the First Union Financing. Lender may add
any amounts so expended to the Obligations and charge Borrowers' account(s)
therefor, such amounts to be repayable by Borrowers on demand. Lender shall be
under no obligation to effect such cure, and shall not, by doing so, be deemed
to have assumed any obligation or liability of One Price or One Price Realty.
Any payment made or other action taken by Lender under this Section shall be
without prejudice to any right to assert an Event of Default under the Loan
Agreement and to proceed accordingly.
7. Miscellaneous.
(a) Entire Agreement; Ratification and Confirmation of the
Financing Agreements. This Amendment contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous term sheets, proposals, discussions, negotiations,
correspondence, commitments and communications between or among the parties
concerning the subject matter hereof. This Amendment may not be modified or any
provision waived, except in writing signed by the party against whom such
modification or waiver is sought to be enforced. Except as specifically modified
pursuant hereto, the Financing Agreements are hereby ratified, restated and
confirmed by the parties hereto as of the effective date hereof. To the extent
of conflict between the terms of this Amendment and the Financing Agreements,
the terms of this Amendment shall control.
(b) Governing Law. This Amendment and the rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance with the internal laws of the
State of Georgia, without regard to principles of conflicts of law.
(c) Binding Effect. This Amendment shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.
(d) Counterparts. This Amendment may be executed in any number of counterparts, but all
of such counterparts shall together constitute but one and the same agreement. In making proof of this Amendment
it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the
parties hereto.
By the signature hereto of each of their duly authorized officers, all
of the parties hereto mutually covenant and agree
as set forth herein.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
(SOUTHERN)
By: /s/ Xxxxxx X. Xxxxxxxx
Title: First Vice President
AGREED AND ACCEPTED:
ONE PRICE CLOTHING STORES, INC.
By: /s/ C. Xxxx Xxxxx
Title: Treasurer
ONE PRICE CLOTHING OF PUERTO RICO, INC.
By: /s/C. Xxxx Xxxxx
Title: Treasurer
CONSENTED TO AND AGREED:
ONE PRICE CLOTHING - U.S. VIRGIN ISLANDS, INC.
By: /s/ C. Xxxx Xxxxx
Title: Treasurer
