AMENDMENT NO. 12 TO FINANCING AGREEMENTS
September 25, 2002
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
Amendment No. 1 to Financing Agreements, dated May 16, 1997, Amendment No. 2 to
Financing Agreements, dated June 17, 1997, Amendment No. 3 to Financing
Agreements, dated February 19, 1998, Amendment No. 4 to Financing Agreements,
dated January 31, 1999, Amendment No. 5 to Financing Agreements, dated February
23, 2000, Amendment No. 6 to Financing Agreements, dated June 30, 2000,
Amendment No. 7 to Financing Agreements, dated February 9, 2001, Amendment No. 8
to Financing Agreements, dated September 13, 2001, Amendment No. 9 to Financing
Agreements, dated November 12, 2001, Amendment No. 10 to Financing Agreements,
dated December 12, 2001, and Amendment No. 11 to Financing Agreements, dated
January 31, 2002, and 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 agree to amend certain provisions
of the Loan Agreement. Lender is willing to do so on the terms and conditions
and to the extent 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. Interpretation. For purposes of this Amendment, unless otherwise defined
herein, all terms used herein, including, but not limited to, those terms used
and/or defined in the recitals above, shall have the respective meanings
assigned to such terms in the Loan Agreement.
2. Amendments to Loan Agreement.
(a) Interest Rate. The definition of "Interest Rate" set forth at
Section 1.33 of the Loan Agreement is amended in its entirety to read as
follows:
"1.33 "Interest Rate" shall mean:
(a) subject to clause (b) below, as to Prime Rate Loans, a rate of
one-half (1/2%) percent per annum in excess of the Prime Rate
and as to Eurodollar Rate Loans a rate of two and one-quarter
(2 1/4 %) percent per annum in excess of the Adjusted
Eurodollar Rate (based on the Eurodollar Rate applicable for
the Interest Period selected by Borrower as in effect three
(3) Business Days after the date of receipt by Lender of the
request of Borrower for such Eurodollar Rate Loans in
accordance with the terms hereof, whether such rate is higher
or lower than any Eurodollar Rate previously quoted to
Borrower); and
(b) notwithstanding anything to the contrary contained herein, the
Interest Rate shall mean the rate of two and one-half (2 1/2%)
percent per annum in excess of the Prime Rate as to Prime Rate
Loans and the rate of four and one-quarter (4 1/4%) percent
per annum in excess of the Adjusted Eurodollar Rate as to
Eurodollar Rate Loans, at Lender's option, without notice, (i)
for the period on and after (A) the date of termination or
non- renewal hereof and until such time as all Obligations are
indefeasibly paid in full (notwithstanding entry of any
judgment against either Borrower), or (B) the date of the
occurrence of any Event of Default or act, condition or event
which with notice or passage of time or both would constitute
an Event of Default, and for so long as such Event of Default
or other event is continuing as determined by Lender and (ii)
on the Loans at any time outstanding in excess of the amounts
available to the respective Borrowers under Section 2 (whether
or not such excess(es), arise or are made with or without
Lender's knowledge or consent and whether made before or after
an Event of Default)."
(b) Adjusted Net Worth. The definition of "Adjusted Net Worth" set
forth at Section 1.3 of the Loan Agreement is amended in its entirety to read as
follows:
"Adjusted Net Worth" shall mean as to any Person, at any
time, in accordance with GAAP (except as otherwise
specifically set forth below),on a consolidated basis for such
Person and its subsidiaries (if any),the amount equal to the
difference between: (a) the aggregate net book value of all
assets of such Person and its subsidiaries, calculating the
book value of inventory for this purpose as the lower of cost,
on a first-in-first-out average cost basis, or market value
computed under the retail method of accounting, after
deducting from such book values all appropriate reserves in
accordance with GAAP (including all reserves for doubtful
receivables, obsolescence, depreciation and amortization),and
(b) the aggregate amount of the indebtedness and other
liabilities of such Person and its subsidiaries (including tax
and other proper accruals); provided, that, after deduction of
the amount, if any, of SFAS 109 Reserves of Borrowers and
their consolidated subsidiaries, in accordance with GAAP,
Borrower shall, for purposes of determining compliance with
Section 9.14 hereof, add back to the aggregate net book value
of assets the amount of SFAS 109 Reserves so deducted up to a
maximum amount of $14,000,000. For purposes of this
definition, the term "SFAS 109 Reserves" shall mean as to any
Person, at any time, in accordance with GAAP, on a
consolidated basis for such Person and its subsidiaries (if
any), the amount equal to all non-cash accounting reserves
established against deferred income tax assets under Statement
of Financial Accounting Standards Number 109."
(c) Inventory Loan Limit. The definition of "Inventory Loan Limit" set
forth at Section 1.35 of the Loan Agreement is amended in its entirety to read
as follows:
"Inventory Loan Limit" shall mean $40,000,000."
(d) Maximum Credit. The definition of "Maximum Credit" set forth at
Section 1.39 of the Loan Agreement is amended in its entirety to read as
follows:
"Maximum Credit" shall mean $43,950,000; provided, that, the
Maximum Credit shall permanently reduce each time Borrowers
make a principal payment in respect of the Second Supplemental
Loan, by an amount equal to the amount of such principal
payment(s)."
(e) Revolving Loans. Section 2.1(a) of the Loan Agreement is hereby
amended in its entirety to read as follows:
"(a) Subject to, and upon the terms and conditions contained
herein, Lender agrees to make Revolving Loans to each Borrower
from time to time in amounts requested by such Borrower (or by
One Price on behalf of One Price PR),
(i) prior to January 20, 2003, up to an amount equal
to the sum of: (A) the lesser of: (1) eighty (80%)
percent of the Value of the Eligible Inventory of
such Borrower, or (2) eighty-five (85%) percent of
the Net Recovery Cost Percentage multiplied by the
Cost of the Eligible Inventory of such Borrower,
minus (B) any Availability Reserves; and
(ii) at all times on and after January 20, 2003, up
to an amount equal to the lesser of: (A) the sum of:
(i) the lesser of: (x) eighty (80%) percent of the
Value of the Eligible Inventory of such Borrower, or
(y) eighty-five (85%) percent of the Net Recovery
Cost Percentage multiplied by the Cost of the
Eligible Inventory of such Borrower, minus (ii) any
Availability Reserves; or (B) the sum of: (1)
ninety-two (92%) percent of the Net Recovery Cost
Percentage multiplied by the Cost of the Eligible
Inventory of such Borrower, minus (2) the sum of:
(aa) any Availability Reserves and (bb) the amount of
outstanding Obligations in respect of the Second
Supplemental Loan; provided, however, that upon
Lender's determination that all of the Obligations
arising in respect of the Second Supplemental Loan
have been paid in full, Section 2.1(a)(ii)(B) hereof
and the words "the lesser of " in the lead-in of this
clause (ii) shall be deemed deleted.
(f) Loan Monitoring Fee. Section 3.4.6 of the Loan Agreement is hereby
amended in its entirety to read as follows:
"3.4.6 Loan Monitoring Fee. In addition to the servicing fee
set forth in Section 3.3 hereof, as compensation for the
Lender's agreements hereunder, the Lender shall have earned by
its execution of this Agreement, an additional loan monitoring
fee equal to .525% of the outstanding balance of the Second
Supplemental Loan, payable in arrears on the first day of each
month that any portion of the Second Supplemental Loan remains
outstanding (and which shall be pro-rated based on a 30-day
month and actual number of days elapsed for any
partial month during which any portion of the Second
Supplemental Loan remains outstanding)."
(g) Blocked Accounts. Clause (A) of Section 6.3(a)(iii) of the Loan
Agreement is hereby amended in its entirety to read as follows:
"(A) the average daily Excess Availability of Borrowers at
anytime hereafter shall be less than $2,500,000 for a period
of any twenty (20) consecutive Business Days, or"
(h) Inventory Covenants. Clause (d) of Section 7.3 of the Loan
Agreement is hereby amended in its entirety to read as follows:
"(d) upon Lender's request, Borrowers shall, at their expense,
no more than two (2) times in any twelve (12) month period (at
times to be mutually agreed to by Borrowers and Lender), but
at any time or times as Lender may request on or after an
Event of Default, deliver or cause to be delivered to Lender
written reports or appraisals as to the Inventory in form,
scope and methodology acceptable to Lender and by an appraiser
acceptable to Lender, addressed to Lender or upon which Lender
is expressly permitted to rely;"
(i) Adjusted Net Worth. Section 9.14 of the Loan Agreement is hereby
amended in its entirety to read as follows:
"9.14 Adjusted Net Worth. Borrowers shall, at all times,
maintain Adjusted Net Worth of not less than $22,000,000."
(j) Minimum Excess Availability. Section 9.15.1 of the Loan Agreement
is hereby amended in its entirety to read as follows:
"9.15.1 Excess Availability. Borrowers shall (a) for the
period commencing September 13, 2001 through and including
November 15, 2002, maintain Excess Availability of at least
$1,500,000, (b) for the period commencing November 16, 2002,
through and including December 31, 2002, maintain Excess
Availability of at least $2,000,000, and (a) for the period
commencing January 1, 2003 and at all times thereafter,
maintain Excess Availability of at least $1,500,000."
(k) Costs and Expenses. Section 9.17 of the Loan Agreement is hereby
amended in its entirety to read as follows:
" 9.17 Costs and Expenses. Borrowers shall pay to Lender on
demand all costs, expenses, filing fees and taxes paid or
payable in connection with the preparation, negotiation,
execution, delivery, recording, administration, collection,
liquidation, enforcement and defense of the Obligations,
Lender's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or
thereto, including any amendments, supplements or consents
which may hereafter be contemplated (whether or not executed)
or entered into in respect hereof and thereof, including: (i)
all costs and expenses of filing or recording (including
Uniform Commercial Code financing statement filing taxes and
fees, documentary taxes, intangibles taxes and mortgage
recording taxes and fees, if applicable); (ii) costs and
expenses and fees for insurance premiums, environmental
audits, title insurance premiums, surveys, assessments,
engineering reports and inspections, appraisal fees and search
fees, costs and expenses of remitting loan proceeds,
collecting checks and other items of payment, and establishing
and maintaining the Blocked Accounts, together with Lender's
customary charges and fees with respect thereto; (iii)
charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit Accommodations; (iv)
costs and expenses of preserving and protecting the
Collateral; (v) costs and expenses paid or incurred in
connection with obtaining payment of the Obligations,
enforcing the security interests and liens of Lender, selling
or otherwise realizing upon the Collateral, and otherwise
enforcing the provisions of this Agreement and the other
Financing Agreements or defending any claims made or
threatened against Lender arising out of the transactions
contemplated hereby and thereby (including preparations for
and consultations concerning any such matters); (vi) all
out-of-pocket expenses and costs heretofore and from time to
time hereafter incurred by Lender during the course of
periodic field examinations of the Collateral and such
Borrower's operations, plus a per diem charge at Lender's then
standard rate for Lender's examiners in the field and office
(which rate as of the date hereof is $750 per person per day);
and (vii) the fees and disbursements of counsel (including
legal assistants) to Lender in connection with any of the
foregoing."
(l) Term. (a) The first sentence of Section 12.1(a) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
"(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on July 31, 2005
(the "Renewal Date"), and from year to year thereafter, unless sooner
terminated pursuant to the terms hereof."
(b) Clauses (i), (ii) and (iii) of the first sentence of Section
12.1(c) of the Loan Agreement (as previously amended) are hereby deleted in
their entirety and the following is substituted therefor:
"(i) 1% of the September 25, 2002 to and
Inventory Loan Limit including July 31, 2003.
(ii) 1/2 % of the August 1, 2003 to and
Inventory Loan Limit including July 31, 2004.
(iii) 1/8% of the August 1, 2004 to but not
Inventory Loan Limit including July 31, 2005;
or if the term of this
Agreement is extended for
any year as provided
above, then at any time
prior to end of the then
current term."
3. Carolina First Bank.
(a) Lender hereby consents to an extension of the term of the Carolina Bank
Documents to July 31, 2005.
(b) Lender's consent pursuant to Section 3(a), shall, however, be
conditioned Lender's receipt, in form and substance satisfactory to Lender, of
the written agreements between One Price and Carolina Bank setting forth the
foregoing modification, together with, if required by Lender, a written
confirmation by Carolina Bank of the continued effectiveness of the
Intercreditor Agreement, dated May 16, 1997, between Lender and Carolina Bank,
in form and substance satisfactory to Lender and accompanied by the written
agreement and acknowledgment of One Price.
4. Amendment Fee. In addition to all other fees, charges, interest and expenses
payable by Borrower to Lender, Borrower shall pay to Lender a fee for entering
into this amendment in the amount equal to $125,000, which fee is fully earned
and payable as of the date hereof and may be charged directly to the loan
account of Borrower maintained by Lender.
5.Conditions Precedent. The effectiveness of the amendments set forth
herein are further conditioned upon the satisfaction of each of the following
conditions precedent in a manner satisfactory to Lender:
(a) 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;
(b) Lender shall have received an original of the consent letter, duly
authorized and delivered by Enhanced Retail Funding, LLC, in form and substance
satisfactory to Lender, agreeing to its consent to this Amendment; and
(c) Lender shall have received an original of this Amendment, duly authorized,
executed and delivered by Borrowers and One Price VI.
6. Additional Representations, Warranties and Covenants. Each Borrower
represents, warrants and covenants with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making of Loans by
Lender to Borrower:
(a) No Event of Default or act, condition or event which with notice or
passage of time or both would constitute an Event of Default exists or has
occurred as of the date of this Amendment (after giving effect to the amendments
to the Financing Agreements made by this Amendment); and
(b) This Amendment has been duly executed and delivered by each
Borrower and is in full force and effect as of the date hereof and the
agreements and obligations of each Borrower contained herein constitute legal,
valid and binding obligations of such Borrower enforceable against such Borrower
in accordance with their respective terms.
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 for those provisions specifically modified or waived
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.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
(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
Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
AGREED AND ACCEPTED:
ONE PRICE CLOTHING STORES, INC.
By: /s/ C. Xxxx Xxxxx
C. Xxxx Xxxxx
Title: Vice President-Finance & Treasurer
ONE PRICE CLOTHING OF PUERTO RICO, INC.
By: /s/ C. Xxxx Xxxxx
C. Xxxx Xxxxx
Title: Vice President & Treasurer
CONSENTED TO AND AGREED:
ONE PRICE CLOTHING - U.S. VIRGIN ISLANDS, INC.
By: /s/ C. Xxxx Xxxxx
C. Xxxx Xxxxx
Title: Vice President & Treasurer
