LOAN AND SECURITY AGREEMENT

                                                  by and between

                                     CONGRESS FINANCIAL CORPORATION (SOUTHERN)
                                                     as Lender

                                                        and

                                          ONE PRICE CLOTHING STORES, INC.
                                                        and
                                      ONE PRICE CLOTHING OF PUERTO RICO, INC.
                                                   as Borrowers




                                              Dated:  March 25, 1996


<PAGE>



                                                 TABLE OF CONTENTS
<TABLE>

<S>       <C>                                                                                                 <C>
SECTION 1.   DEFINITIONS..........................................................................................1

SECTION 2.   CREDIT FACILITIES...................................................................................12
         2.1  Revolving Loans....................................................................................12
         2.2  Letter of Credit Accommodations....................................................................13
         2.3  Term Loan..........................................................................................16
         2.4  Availability Reserves..............................................................................16

SECTION 3.   INTEREST AND FEES.................................................................................. 17
         3.1  Interest...........................................................................................17
         3.2  Closing Fee........................................................................................19
         3.3  Servicing Fee......................................................................................19
         3.4  Unused Line Fee....................................................................................19
         3.5  Changes in Laws and Increased Costs of Loans.......................................................19
         3.6  Maximum Interest...................................................................................20

SECTION 4.  CONDITIONS PRECEDENT.................................................................................22
         4.1  Conditions Precedent to Initial Loans and Letter
                   of Credit Accommodations......................................................................22
         4.2  Conditions Precedent to All Loans and Letter of
                   Credit Accommodations.........................................................................25

SECTION 5.   SECURITY INTEREST...................................................................................25

SECTION 6.   COLLECTION AND ADMINISTRATION.......................................................................27
         6.1  Borrowers' Loan Accounts...........................................................................27
         6.2  Statements.........................................................................................27
         6.3  Collection of Accounts and other Proceeds of
                   Collateral....................................................................................27
         6.4  Payments...........................................................................................30
         6.5  Authorization to Make Loans........................................................................31
         6.6  Use of Proceeds....................................................................................31
         6.7  Appointment of One Price as Agent for One Price PR.................................................31

SECTION 7.   COLLATERAL REPORTING AND COVENANTS..................................................................32
         7.1  Collateral Reporting...............................................................................32
         7.2  Accounts Covenants.................................................................................33
         7.3  Inventory Covenants................................................................................35
         7.4  Equipment Covenants................................................................................36
         7.5  Power of Attorney..................................................................................37

                                                        (i)

<PAGE>



         7.6  Right to Cure......................................................................................38
         7.7  Access to Premises.................................................................................38

SECTION 8.   REPRESENTATIONS AND WARRANTIES......................................................................38
         8.1  Corporate Existence, Power and Authority;
                   Subsidiaries..................................................................................39
         8.2  Financial Statements; No Material Adverse Change...................................................39
         8.3  Chief Executive Office; Collateral Locations.......................................................39
         8.4  Priority of Liens; Title to Properties.............................................................39
         8.5  Tax Returns........................................................................................40
         8.6  Litigation.........................................................................................40
         8.7  Compliance with Other Agreements and Applicable
                   Laws..........................................................................................41
         8.8  Environmental Compliance...........................................................................42
         8.9  Credit Card Agreements.............................................................................42
         8.10 Employee Benefits..................................................................................43
         8.11 Accuracy and Completeness of Information...........................................................44
         8.12 Interrelated Business..............................................................................44
         8.13 Survival of Warranties; Cumulative.................................................................45

SECTION 9.   AFFIRMATIVE AND NEGATIVE COVENANTS..................................................................45
         9.1  Maintenance of Existence...........................................................................45
         9.2  New Collateral Locations...........................................................................45
         9.3  Compliance with Laws, Regulations, Etc.............................................................45
         9.4  Payment of Taxes and Claims........................................................................47
         9.5  Insurance..........................................................................................47
         9.6  Financial Statements and Other Information.........................................................48
         9.7  Sale of Assets, Consolidation, Merger,
                   Dissolution, Etc..............................................................................50
         9.8  Encumbrances.......................................................................................51
         9.9  Indebtedness.......................................................................................52
         9.10 Loans, Investments, Guarantees, Etc................................................................54
         9.11 Dividends and Redemptions..........................................................................55
         9.12 Transactions with Affiliates.......................................................................55
         9.13 Credit Card Agreements.............................................................................56
         9.14 Adjusted Net Worth.................................................................................57
         9.15 Working Capital....................................................................................57
         9.16 Compliance with ERISA..............................................................................57
         9.17 Costs and Expenses.................................................................................57
         9.18 Further Assurances.................................................................................58

SECTION 10.   EVENTS OF DEFAULT AND REMEDIES.....................................................................59
         10.1  Events of Default.................................................................................59
         10.2  Remedies..........................................................................................61


                                                       (ii)

<PAGE>



SECTION 11.   JURY TRIAL WAIVER; OTHER WAIVERS
                      AND CONSENTS; GOVERNING LAW................................................................63
         11.1  Governing Law; Choice of Forum; Service of
                    Process; Jury Trial Waiver...................................................................63
         11.2  Waiver of Notices.................................................................................64
         11.3  Amendments and Waivers............................................................................64
         11.4  Waiver of Counterclaims...........................................................................65
         11.5  Indemnification...................................................................................65

SECTION 12.  TERM OF AGREEMENT; MISCELLANEOUS....................................................................65
         12.1  Term..............................................................................................65
         12.2  Notices...........................................................................................67
         12.3  Partial Invalidity................................................................................67
         12.4  Successors........................................................................................67
         12.5  Confidentiality...................................................................................68
         12.6  Entire Agreement..................................................................................69

</TABLE>

                                                       (iii)

<PAGE>



                                                     INDEX TO
                                              EXHIBITS AND SCHEDULES


                  Exhibit A                 Borrowing Base Certificate

                  Exhibit B                 Information Certificates

                  Schedule 6.3              Bank Accounts

                  Schedule 8.4              Existing Liens

                  Schedule 8.8              Environmental Compliance

                  Schedule 8.9              Credit Card Agreements

                  Schedule 9.7              Certain Retail Stores to be Closed

                  Schedule 9.9              Existing Indebtedness

                  Schedule 9.10             Loans, Investments, Guarantees


                                                       (iv)

<PAGE>



                                            LOAN AND SECURITY AGREEMENT


         This Loan and Security  Agreement  dated March 25, 1996 is entered into
by and among Congress Financial  Corporation  (Southern),  a Georgia corporation
("Lender") and One Price Clothing  Stores,  Inc., a Delaware  corporation  ("One
Price") and One Price Clothing of Puerto Rico,  Inc., a Puerto Rico  corporation
("One Price PR",  and  together  with One Price,  individually  referred to as a
"Borrower" and collectively as "Borrowers").


                                               W I T N E S S E T H:


         WHEREAS,  Borrowers  have  requested  that  Lender  enter into  certain
financing  arrangements  with Borrowers  pursuant to which Lender may make loans
and provide other financial accommodations to Borrowers; and

         WHEREAS,  Lender  is  willing  to make  such  loans  and  provide  such
financial accommodations on the terms and conditions set forth herein;

         NOW,   THEREFORE,   in  consideration  of  the  mutual  conditions  and
agreements set forth herein, and for other good and valuable consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereto
agree as follows:


SECTION
1.   DEFINITIONS

         All terms used  herein  which are  defined in Article 1 or Article 9 of
the  Uniform  Commercial  Code  shall have the  meanings  given  therein  unless
otherwise  defined in this Agreement.  All references to the plural herein shall
also mean the  singular  and to the  singular  shall also mean the  plural.  All
references to Borrowers shall,  unless the context otherwise expressly provides,
mean either Borrower and both Borrowers, individually and collectively,  jointly
and  severally.   All  references  to  Borrowers  and  Lender  pursuant  to  the
definitions  set forth in the recitals  hereto,  or to any other person  herein,
shall include  their  respective  successors  and assigns.  The words  "hereof",
"herein",

                                                   

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"hereunder",  "this  Agreement"  and words of similar  import  when used in this
Agreement  shall  refer  to this  Agreement  as a whole  and not any  particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended,  modified,  supplemented,  extended,  renewed, restated or replaced. An
Event of Default  shall exist or continue or be  continuing  until such Event of
Default is waived in accordance  with Section  11.3.  Any  accounting  term used
herein  unless  otherwise  defined  in this  Agreement  shall  have the  meaning
customarily  given to such term in  accordance  with GAAP.  For purposes of this
Agreement,  the following terms shall have the respective meanings given to them
below:

          1.1 "Accounts" shall mean, as to each Borrower, all present and future
rights of such  Borrower  to payment  for goods  sold or leased or for  services
rendered,  which are not evidenced by instruments or chattel paper,  and whether
or not  earned  by  performance,  including,  without  limitation,  Credit  Card
Receivables.

          1.2  "Adjusted  Eurodollar  Rate"  shall  mean,  with  respect to each
Interest  Period  for any  Eurodollar  Rate  Loan,  the rate per annum  (rounded
upwards,  if necessary,  to the next  one-sixteenth  (1/16) of one (1%) percent)
determined by dividing (1) the Eurodollar Rate for such Interest Period by (2) a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes
hereof,  "Reserve Percentage" shall mean the reserve percentage,  expressed as a
decimal,  prescribed  by any United  States or  foreign  banking  authority  for
determining the reserve  requirement which is or would be applicable to deposits
of United  States  dollars in a non-United  States or an  international  banking
office of Reference  Bank used to fund a Eurodollar  Rate Loan or any Eurodollar
Rate Loan made with the proceeds of such  deposit,  whether or not the Reference
Bank  actually  holds or has  made any such  deposits  or  loans.  The  Adjusted
Eurodollar  Rate shall be adjusted on and as of the  effective day of any change
in the Reserve Percentage.

         1.3 "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

                                                       

<PAGE>



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).

         1.4   "Availability   Reserves"   shall   mean,   as  of  any  date  of
determination, such amounts as Lender may from time to time establish and revise
in good  faith  reducing  the  amount of  Revolving  Loans and  Letter of Credit
Accommodations  that would otherwise be available to Borrowers under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies
or risks that, as determined by Lender in good faith, do or may adversely affect
either  (i) the  Collateral  or any other  property  which is  security  for the
Obligations  or its value,  (ii) the  assets,  business or  prospects  of either
Borrower  or any Obligor or (iii) the  security  interests  and other  rights of
Lender in the Collateral (including the enforceability,  perfection and priority
thereof) or (b) to reflect Lender's good faith belief that any collateral report
or financial  information  furnished  by or on behalf of either  Borrower or any
Obligor to Lender is or may have been  incomplete,  inaccurate  or misleading in
any  material  respect  or (c) in  respect  of any state of facts  which  Lender
determines in good faith  constitutes an Event of Default or may, with notice or
passage  of time or both,  constitute  an Event of  Default,  or (d) to  reflect
outstanding Letter of Credit Accommodations as provided in Section 2.2 hereof or
(e) as otherwise provided in Section 2.4 hereof.

         1.5 "Borrowing Base Certificate" shall mean a certificate substantially
in the form of Exhibit A hereto,  as such form may from time to time be modified
by Lender,  which is duly  completed  and executed by Borrowers and delivered to
Lender, from time to time in accordance with the terms hereof.

         1.6 "Blocked  Accounts" shall have the meaning set forth in Section 6.3
hereof.


                                                        

<PAGE>



         1.7  "Business  Day" shall mean (a) for the Prime Rate  Loans,  any day
other  than a  Saturday,  Sunday,  or other  day on which  commercial  banks are
authorized  or  required to close under the laws of the State of New York or the
State of Georgia or the  Commonwealth  of  Pennsylvania,  and a day on which the
Reference Bank and Lender are open for the transaction of business,  and (b) for
all  Eurodollar  Rate  Loans,  any such day as  described  in (a)  above in this
definition  of  Business  Day,  excluding  any day on which banks are closed for
dealings in dollar deposits in the London  interbank  market or other applicable
Eurodollar Rate market.

         1.8  "Capital  Stock"  shall  mean  any  and  all  shares,   interests,
participations,  or other equivalents (however designated) of corporate stock or
partnership  interests  and any options or warrants  with  respect to any of the
foregoing.

         1.9 "Code"  shall mean the Internal  Revenue Code of 1986,  as the same
now exists or may from time to time hereafter be amended,  modified,  recodified
or  supplemented,  together  with all  rules,  regulations  and  interpretations
thereunder or related thereto.

         1.10  "Collateral" shall have the meaning set forth in
Section 5 hereof.

         1.11 "Cost" shall mean,  as to  Inventory  as of any date,  the cost of
such Inventory as of such date, determined on a first-in- first-out average cost
basis in  accordance  with GAAP,  except,  that (i) there shall be excluded from
such cost,  the aggregate  amounts  included by Borrowers in accounting  for the
cost of  Inventory  in respect of  capitalized  amounts  relating to  Inventory,
commonly known as UNICAP amounts, and (ii) with respect to any Inventory sold by
one  Borrower  to the other  Borrower,  such term shall mean the  original  cost
thereof to the Borrower which originally  purchased such Inventory and shall not
include any markup or profit on such intercompany sale.

         1.12  "Credit  Card  Acknowledgments"  shall  mean,   individually  and
collectively,  the  agreements by Credit Card Issuers or Credit Card  Processors
who are  parties  to Credit  Card  Agreements  in favor of Lender  acknowledging
Lender's first priority security interest in the monies due and to become due to
Borrowers

                                                        

<PAGE>



(including,  without  limitation,  credits and  reserves)  under the Credit Card
Agreements,  and agreeing to transfer all such amounts to the Blocked  Accounts,
as the same now  exist or may  hereafter  be  amended,  modified,  supplemented,
extended, renewed, restated or replaced.

         1.13  "Credit  Card  Agreements"  shall  mean  all  agreements  now  or
hereafter  entered into by  Borrowers  with any Credit Card Issuer or any Credit
Card  Processor,  as the same now exist or may  hereafter be amended,  modified,
supplemented,  extended,  renewed,  restated  or  replaced,  including,  but not
limited to, the agreements identified on Schedule 8.9 hereto.

         1.14 "Credit Card Issuer" shall mean any person (other than a Borrower)
who issues or whose members issue credit cards,  including,  without limitation,
MasterCard  or VISA bank  credit or debit  cards or other  bank  credit or debit
cards,  and American  Express,  Discover,  Diners Club,  Carte Blanche and other
non-bank credit or debit cards.

         1.15 "Credit Card  Processor"  shall mean any  servicing or  processing
agent  or any  factor  or  financial  intermediary  who  facilitates,  services,
processes or manages the credit authorization,  billing, transfer and/or payment
procedures with respect to any of Borrowers' sales transactions involving credit
card or debit card  purchases  by  customers  using  credit cards or debit cards
issued by any Credit Card  Issuer  (including,  but not limited to those  Credit
Card Processors identified on Schedule 8.9 hereto.

         1.16 "Credit Card  Receivables"  shall mean, as to each  Borrower,  all
Accounts consisting of the present and future rights of such Borrower to payment
for  Inventory  sold and delivered to customers  who have  purchased  such goods
using a credit card or a debit card issued by a Credit Card Issuer.

         1.17  "Direct  Remittance  Event"  shall have the  meaning set forth in
Section 6.3 hereof.

         1.18  "Distribution  Center"  shall  mean the  distribution/  warehouse
facility  owned by One Price and located in Duncan,  Spartanburg  County,  South
Carolina.


                                                        

<PAGE>



         1.19 "Eligible Inventory" shall mean, as to each Borrower, Inventory of
such Borrower  consisting of first quality  finished goods consisting of apparel
or other  merchandise  categories  acceptable to Lender,  held for resale in the
ordinary  course of the business of such Borrower that are  acceptable to Lender
based on the criteria set forth below. In general,  Eligible Inventory shall not
include (a) packaging and shipping  materials;  (b) supplies used or consumed in
Borrowers'  business;  (c)  Inventory  at  premises  other than those  owned and
controlled by Borrowers, except (i) if the premises are occupied and operated by
such  Borrower  as a Retail  Store or (ii) if  Lender  shall  have  received  an
agreement in writing from the person in possession of such Inventory  and/or the
owner or operator of such premises in form and substance  satisfactory to Lender
acknowledging  Lender's  first  priority  security  interest  in the  Inventory,
waiving  security  interests and claims by such person against the Inventory and
permitting  Lender  access to, and the right to remain on, the premises so as to
exercise  Lender's  rights and remedies and otherwise deal with the  Collateral;
(d)  Inventory  subject  to a security  interest  or lien in favor of any person
other than Lender except those  permitted in this  Agreement;  (e) bill and hold
goods; (f) unserviceable, obsolete or slow moving Inventory; (g) Inventory which
is not subject to the first priority,  valid and perfected  security interest of
Lender;   (h)  Inventory  in  transit,   except  Inventory  in  transit  to  the
Distribution Center or any Retail Store location located in the United States or
the Commonwealth of Puerto Rico, provided (A) title to such Inventory has passed
to a Borrower, (B) the documents of title covering such goods are consigned only
to a Borrower or to Lender and a Borrower,  are in the  possession of Lender or,
if permitted by Lender,  are in the  possession  of a Borrower or the agent of a
Borrower,  and (C) such  Inventory  has not  been  purchased  under,  and is not
otherwise covered by, a Letter of Credit Accommodation or other letter of credit
under which payment for such  Inventory has not yet been fully made; (i) damaged
and/or defective Inventory (j) returned Inventory that is not first quality held
for resale;  (k) Inventory to be returned to vendors;  (l) Inventory  subject to
deposits made by customers for sales of Inventory  that has not been  delivered;
(m) Inventory held after the applicable  expiration  date thereof;  (n) samples;
and (o)  Inventory  purchased  or  sold on  consignment.  General  criteria  for
Eligible Inventory may be established and revised from time to time by Lender in
good faith and Lender shall advise Borrowers of

                                                        

<PAGE>



any  additional  criteria as so  established  or any  criteria  so revised.  Any
Inventory  which is not Eligible  Inventory  shall  nevertheless  be part of the
Collateral.

         1.20  "Environmental  Laws" shall mean all  federal,  state,  district,
local and foreign laws,  rules,  regulations,  ordinances,  and consent  decrees
relating to health,  safety,  hazardous substances,  pollution and environmental
matters,  as now or at any  time  hereafter  in  effect,  applicable  to  either
Borrower's  business and facilities (whether or not owned by it), including laws
relating  to  emissions,   discharges,   releases  or  threatened   releases  of
pollutants,   contamination,   chemicals,  or  hazardous,   toxic  or  dangerous
substances,  materials  or  wastes  into  the  environment  (including,  without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata)  or  otherwise  relating  to the  generation,  manufacture,  processing,
distribution,  use,  treatment,  storage,  disposal,  transport  or  handling of
pollutants,   contaminants,   chemicals,   or  hazardous,   toxic  or  dangerous
substances, materials or wastes.

         1.21  "Equipment"  shall  mean,  as  to  each  Borrower,  all  of  such
Borrower's now owned and hereafter acquired equipment,  machinery, computers and
computer  hardware and software  (whether owned or licensed),  vehicles,  tools,
furniture,  fixtures, all attachments,  accessions and property now or hereafter
affixed  thereto  or  used  in  connection  therewith,   and  substitutions  and
replacements thereof, wherever located.

         1.22 "ERISA" shall mean the United States  Employee  Retirement  Income
Security Act of 1974, as the same now exists or may hereafter  from time to time
be amended,  modified,  recodified  or  supplemented,  together  with all rules,
regulations and interpretations thereunder or related thereto.

         1.23 "ERISA  Affiliate" shall mean any person required to be aggregated
with any Borrower or any of its  subsidiaries  under  Sections  414(b),  414(c),
414(m) or 414(o) of the Code.

         1.24  "Eurodollar  Rate" shall mean with respect to the Interest Period
for a Eurodollar  Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded  upwards,  if necessary,  to
the next one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is

                                                        

<PAGE>



offered  deposits of United States  dollars in the London  interbank  market (or
other  Eurodollar  Rate market selected by a Borrower and approved by Lender) on
or about 9:00 a.m.  (Atlanta,  Georgia  time) two (2) Business Days prior to the
commencement  of such  Interest  Period in  amounts  substantially  equal to the
principal  amount of the Eurodollar  Rate Loans  requested by and available to a
Borrower  in  accordance  with this  Agreement,  with a maturity  of  comparable
duration to the Interest Period selected by such Borrower.

         1.25 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on
which  interest is payable based on the Adjusted  Eurodollar  Rate in accordance
with the terms hereof.

         1.26 "Excess  Availability"  shall mean the amount,  as  determined  by
Lender,  calculated  at any time,  equal to: (a) the lesser of (i) the amount of
the  Revolving  Loans  available  to  Borrowers  as of such  time  based  on the
applicable  lending  formula under Section 2.1 hereof,  as determined by Lender,
and  subject  to the  sublimits  and  Availability  Reserves  from  time to time
established  by Lender  hereunder and (ii) an amount equal to the Inventory Loan
Limit,  minus (b) the sum of: (i) the amount of all then  outstanding and unpaid
Obligations (but not including for this purpose the outstanding principal amount
of the Term  Loan),  plus (ii) the  aggregate  amount of all trade  payables  of
Borrowers  which are more than forty-five (45) days past due as of such time and
are not then being disputed in good faith by Borrowers.

         1.27 "Event of Default"  shall mean the  occurrence or existence of any
event or condition described in Section 10.1 hereof.

         1.28 "Financing  Agreements" shall mean,  collectively,  this Agreement
and all notes, guarantees,  security agreements and other agreements,  documents
and instruments now or at any time hereafter executed and/or delivered by either
Borrower or any Obligor in connection with this Agreement, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

         1.29 "GAAP" shall mean generally accepted accounting  principles in the
United  States of  America  as in  effect  from time to time as set forth in the
opinions and pronouncements of the

                                                        

<PAGE>



Accounting  Principles  Board and the American  Institute  of  Certified  Public
Accountants and the statements and  pronouncements  of the Financial  Accounting
Standards  Boards which are  applicable to the  circumstances  as of the date of
determination  consistently applied,  except that, for purposes of Sections 9.14
and 9.15 hereof,  GAAP shall be  determined  on the basis of such  principles in
effect on the date hereof and consistent  with those used in the  preparation of
the audited financial statements delivered to Lender prior to the date hereof.

         1.30 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances,  materials and wastes, including,  without limitation,  hydrocarbons
(including   naturally   occurring  or  man-made  petroleum  and  hydrocarbons),
flammable  explosives,  asbestos,  urea  formaldehyde  insulation,   radioactive
materials,   biological  substances,   polychlorinated  biphenyls,   pesticides,
herbicides  and any  other  kind  and/or  type  of  pollutants  or  contaminants
(including, without limitation, materials which include hazardous constituents),
sewage,  sludge,  industrial slag, solvents and/or any other similar substances,
materials,  or wastes and  including any other  substances,  materials or wastes
that are or become  regulated under any  Environmental  Law (including,  without
limitation  any that are or become  classified  as  hazardous or toxic under any
Environmental Law).

         1.31 "Information Certificates" shall mean the Information Certificates
of Borrowers  constituting Exhibit B hereto containing material information with
respect to  Borrowers,  their  business  and assets  provided by or on behalf of
Borrowers to Lender in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.

         1.32  "Interest  Period"  shall mean for any  Eurodollar  Rate Loan,  a
period of approximately one (1), two (2), or three (3) months duration as either
Borrower  may elect,  commencing  three (3)  Business  Days  following  Lender's
receipt of a request  by a Borrower  (or by One Price on behalf of One Price PR)
for such Interest  Period under Section 3.1(b) hereof,  the exact duration to be
determined  in  accordance  with  the  customary   practice  in  the  applicable
Eurodollar Rate market; provided, that, a Borrower may

                                                        

<PAGE>



not  elect  an  Interest  Period  which  will  end  after  the  last  day of the
then-current term of this Agreement.

         1.33  "Interest  Rate"  shall mean,  as to Prime Rate Loans,  a rate of
one-half of one (1/2%)  percent per annum in excess of the Prime Rate and, as to
Eurodollar  Rate Loans, a rate of two and one-half (2 1/2%) percent per annum in
excess of the Adjusted  Eurodollar Rate (based on the Eurodollar Rate applicable
for the Interest Period selected by the applicable  Borrower for such Eurodollar
Rate Loans in accordance  with the terms hereof,  whether such rate is higher or
lower than any rate  previously  quoted to such Borrower);  provided,  that: the
Interest  Rate  shall  be  increased  to 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-half (4 1/2%)  percent per annum in excess of the Adjusted
Eurodollar Rate as to Eurodollar Rate Loans, at Lender's option, without notice,
(a) for the  period  on and  after (i) 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 (ii) 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 (b) 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).

         1.34  "Inventory"  shall  mean,  as  to  each  Borrower,  all  of  such
Borrower's now owned and hereafter  existing or acquired raw materials,  work in
process,  finished goods and all other  inventory of whatsoever  kind or nature,
wherever located.

         1.35  "Inventory Loan Limit" shall mean $37,500,000.

         1.36  "Letter  of Credit  Accommodations"  shall  mean the  letters  of
credit,  merchandise  purchase or other  guaranties  which are from time to time
either  (a) issued or opened by Lender for the  account of any  Borrower  or any
Obligor or (b) with respect to which  Lender has agreed to indemnify  the issuer
or guaranteed to

                                                      

<PAGE>



the issuer the performance by a Borrower of its obligations to
such issuer.

         1.37  "Loans" shall mean the Revolving Loans and the Term
Loan.

         1.38 "Material  Adverse Effect" shall mean any material  adverse effect
upon the business,  assets or financial condition of Borrowers,  or any material
adverse  effect upon the  Collateral or Lender's  rights or interests in or with
respect to the Collateral.

         1.39  "Maximum Credit" shall mean $45,000,000.

         1.40 "Maximum  Interest Rate" shall mean the maximum  non-usurious rate
of interest under applicable Federal or State law as in effect from time to time
that may be contracted for, taken,  reserved,  charged or received in respect of
the indebtedness of Borrowers to Lender,  or to the extent that at any time such
applicable  law may  thereafter  permit a higher  maximum  non-usurious  rate of
interest, then such higher rate. Notwithstanding any other provision hereof, the
Maximum  Interest  Rate shall be  calculated  on a daily basis  (computed on the
actual number of days elapsed over a year of three hundred  sixty-five  (365) or
three hundred sixty-six (366) days, as the case may be)

         1.41  "Mortgage"   shall  mean  the  Open  End  Mortgage  and  Security
Agreement,  dated of even date  herewith,  by One Price in favor of Lender  with
respect to the Real Property and related  assets of One Price located in Duncan,
Spartanburg County,  South Carolina,  as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

         1.42 "Net Recovery Cost Percentage" shall mean the fraction,  expressed
as a percentage,  (a) the numerator of which is the amount equal to the recovery
on the aggregate  amount of the Inventory of a Borrower at such time on a "going
out of business sale" basis as set forth in the most recent acceptable appraisal
of such  Inventory  received by Lender in  accordance  with  Section 7.3, net of
operating  expenses,   liquidation   expenses  and  commissions,   and  (b)  the
denominator of which is the aggregate  original Cost of the Inventory subject to
appraisal.


                                                      

<PAGE>



         1.43  "Net  Recovery  Retail   Percentage"  shall  mean  the  fraction,
expressed as a percentage, (a) the numerator of which is the amount equal to the
recovery on the aggregate  amount of the Inventory of a Borrower at such time on
a "going out of business sale" basis as set forth in the most recent  acceptable
appraisal of such Inventory  received by Lender in accordance  with Section 7.3,
net of operating  expenses,  liquidation  expenses and commissions,  and (b) the
denominator of which is the aggregate  Retail Value of the Inventory  subject to
appraisal.

         1.44  "Obligations"  shall  mean any and all  Loans,  Letter  of Credit
Accommodations and all other obligations,  liabilities and indebtedness of every
kind,  nature and description owing by either or both Borrowers to Lender and/or
its  affiliates,   including  principal,  interest,  charges,  fees,  costs  and
expenses, however evidenced,  whether as principal,  surety, endorser, guarantor
or otherwise,  whether  arising under this  Agreement or otherwise,  whether now
existing or  hereafter  arising,  whether  arising  before,  during or after the
initial or any renewal term of this Agreement or after the  commencement  of any
case with respect to either or both Borrowers under the United States Bankruptcy
Code or any  similar  statute  (including,  without  limitation,  the payment of
interest  and other  amounts  which  would  accrue  and  become  due but for the
commencement of such case), whether direct or indirect,  absolute or contingent,
joint  or  several,  due  or  not  due,  primary  or  secondary,  liquidated  or
unliquidated, secured or unsecured, and however acquired by Lender.

         1.45 "Obligor" shall mean any guarantor,  endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.

         1.46 "Payment  Account" shall have the meaning set forth in Section 6.3
hereof.

         1.47   "Person"   or   "person"   shall  mean  any   individual,   sole
proprietorship,  partnership,  corporation (including,  without limitation,  any
corporation which elects subchapter S status under the Code),  limited liability
corporation,  limited  liability  partnership,  business  trust,  unincorporated
association,  joint stock  corporation,  trust, joint venture or other entity or
any

                                                       

<PAGE>



government or any agency or instrumentality or political
subdivision thereof.

         1.48  "Prime  Rate"  shall  mean the rate  from  time to time  publicly
announced  by  CoreStates  Bank,  N.A.,  or its  successors,  at its  office  in
Philadelphia,  Pennsylvania,  as its prime rate,  whether or not such  announced
rate is the best rate available at such bank.

         1.49  "Prime  Rate  Loans"  shall mean any Loans or portion  thereof on
which  interest is payable based on the Prime Rate in accordance  with the terms
hereof.

         1.50 "Puerto Rico Sublimit" shall have the meaning set forth in Section
2.1(c) hereof.

         1.51 "Real Property" shall mean, as to each Borrower, all now owned and
hereafter  acquired  real  property  of  such  Borrower,   including   leasehold
interests,  together  with all  buildings,  structures,  and other  improvements
located thereon and all licenses,  easements and appurtenances relating thereto,
wherever  located,  including  without  limitation,  as to One  Price,  the real
property and related assets more particularly described in the Mortgage.

         1.52 "Records" shall mean, as to each Borrower,  all of such Borrower's
present and future  books of account of every kind or nature,  purchase and sale
agreements, invoices, ledger cards, bills of lading and other shipping evidence,
statements,  correspondence,  memoranda, credit files and other data relating to
the Collateral or any account debtor,  together with the tapes, disks, diskettes
and  other  data and  software  storage  media and  devices,  file  cabinets  or
containers in or on which the foregoing are stored (including any rights of such
Borrower with respect to the foregoing maintained with or by any other person).

         1.53 "Refinancing Term  Indebtedness"  shall have the meaning set forth
in Section 9.9(f) hereof.

         1.54 "Retail Value" shall mean, as to the Inventory of a Borrower as of
any date, the then current retail sales price of such Inventory as of such date,
net of markdowns  from the original  retail sales price or ticketed  sales price
with respect

                                                       

<PAGE>



thereto.

         1.55  "Revolving  Loans" shall mean the loans now or hereafter  made by
Lender to or for the  benefit  of  Borrowers  on a  revolving  basis  (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.

         1.56 "Term  Loan"  shall mean the term loan made by Lender to One Price
as provided for in Section 2.3 hereof.

         1.57 "Value" shall mean,  as  determined by Lender in good faith,  with
respect to Inventory,  the lower of (a) Cost or (b) market value  computed under
the retail method of accounting.

         1.58 "Working  Capital"  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 the  difference  between:  (a) the
aggregate  net  book  value  of all  current  assets  of  such  Person  and  its
subsidiaries (as determined in accordance with GAAP), 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,  and (b) all current liabilities of such Person and its subsidiaries
(as determined in accordance with GAAP);  provided,  that, as to Borrowers,  for
purposes  of  Section  9.15,   (i)  the   liabilities  of  Borrowers  and  their
subsidiaries  to Lender under this  Agreement  shall not be  considered  current
liabilities (whether or not classified as current liabilities in accordance with
GAAP) and (ii) if One Price refinances the indebtedness owed to Lender evidenced
by the Term Loan as permitted under this  Agreement,  then, as of any date on or
after such refinancing,  only the amount of the current liabilities,  determined
in accordance with GAAP, in respect of such Refinancing Term  Indebtedness  that
exceeds the amount of  liabilities of One Price to Lender in respect of the Term
Loan that would have been considered current  liabilities,  as of such date, had
the Term Loan been repaid to the extent of its regularly scheduled payment terms
through such date, as determined in accordance with GAAP notwithstanding  clause
(i) of this  proviso,  shall be  considered a current  liability for purposes of
Section 9.15.



                                                      

<PAGE>



SECTION 2.   CREDIT FACILITIES

          2.1  Revolving Loans.

                  (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),  up to the amount  equal to the sum of:  (i) the least of: (A) sixty  (60%)
percent  of the  Value  of the  Eligible  Inventory  of  such  Borrower,  or (B)
eighty-one  (81%) percent of the Net Recovery Cost Percentage  multiplied by the
Cost of the Eligible Inventory of such Borrower, or (C) eighty-one (81%) percent
of the Net  Recovery  Retail  Percentage  multiplied  by the Retail Value of the
Eligible Inventory of such Borrower, minus (ii) any Availability Reserves.

                  (b) Lender may, in its discretion, from time to time, upon not
less than five (5) days prior  notice to One Price,  reduce the lending  formula
with respect to Eligible  Inventory to the extent that Lender  determines  that:
(i) the  number of days of the  turnover  of the  Inventory  for any  period has
changed in any  material  respect,  taking into  account  seasonal  fluctuations
consistent with  historical  seasonal  fluctuations  prior to the date hereof or
(ii) the nature and quality of the Inventory has  deteriorated.  In  determining
whether  to  reduce  the  lending   formula(s),   Lender  may  consider  events,
conditions,  contingencies  or risks which are also  considered  in  determining
Eligible Inventory or in establishing Availability Reserves.

                  (c) Except in Lender's  discretion,  the  aggregate  amount of
Revolving  Loans and  Letter of Credit  Accommodations  available  in respect of
Eligible  Inventory  of One  Price PR shall  not,  at any one time  outstanding,
exceed an amount equal to the lesser of (i) the product of $80,000 multiplied by
the number of open Retail Stores operated in Puerto Rico by One Price PR at such
time, or (ii) $4,000,000 (such sublimit, the "Puerto Rico Sublimit").

                  (d) Except in Lender's discretion, the aggregate amount of the
Loans and the Letter of Credit Accommodations  outstanding at any time shall not
exceed the Maximum  Credit,  and the  aggregate  amount of  Revolving  Loans and
Letter of Credit Accommodations outstanding at any time, shall not exceed the

                                                      

<PAGE>



Inventory Loan Limit. In the event that the outstanding  amount of the Loans, or
the   aggregate   amount  of  the   outstanding   Loans  and  Letter  of  Credit
Accommodations,  exceed the amounts  available under the lending  formulas,  the
Inventory Loan Limit, the sublimit for Letter of Credit Accommodations set forth
in Section 2.2(d) or the Maximum  Credit,  as  applicable,  such event shall not
limit, waive or otherwise affect any rights of Lender in that circumstance or on
any future  occasions and Borrowers shall,  upon demand by Lender,  which may be
made at any time or from time to time,  immediately  repay to Lender  the entire
amount of any such excess(es) for which payment is demanded.

          2.2  Letter of Credit Accommodations.

                  (a)  Subject to, and upon the terms and  conditions  contained
herein,  at the request of a Borrower,  Lender  agrees to provide or arrange for
Letter of Credit  Accommodations  for the  account of such  Borrower  containing
terms and conditions  acceptable to Lender and the issuer thereof.  Any payments
made by Lender to any issuer thereof and/or related  parties in connection  with
the Letter of Credit  Accommodations shall constitute additional Revolving Loans
to such Borrower pursuant to this Section 2.

                  (b) In addition to any  charges,  fees or expenses  charged by
any bank or issuer in connection with the Letter of Credit Accommodations,  each
Borrower  shall pay to Lender a letter of credit  fee at a rate equal to one and
three-quarters  (1 3/4%) percent per annum on the daily  outstanding  balance of
the Letter of Credit  Accommodations  issued for its account for the immediately
preceding  month (or part  thereof),  payable  in arrears as of the first day of
each succeeding month, except that such Borrower shall pay to Lender such letter
of credit fee, at Lender's option,  without notice, at a rate equal to three and
three-quarters  (3-3/4%) percent per annum for (i) the period from and after the
date of  termination  or  non-renewal  hereof until Lender has received full and
final payment of all Obligations  (notwithstanding  entry of a judgment  against
such  Borrower) and (ii) the period from and after the date of the occurrence of
an Event of Default and for so long as such Event of Default is continuing. Such
letter of credit fee shall be  calculated  on the basis of a three hundred sixty
(360) day year and actual days

                                                       

<PAGE>



elapsed and the  obligation  of such  Borrower to pay such fee shall survive the
termination or non-renewal of this Agreement.

                  (c) No Letter of Credit Accommodations shall be available to a
Borrower  unless on the date of the  proposed  issuance  of any Letter of Credit
Accommodations,  the Revolving Loans available to such Borrower  (subject to the
Maximum  Credit and the  Inventory  Loan Limit as to both  Borrowers  considered
together,  the  Puerto  Rico  Sublimit  in the  case  of One  Price  PR and  any
Availability  Reserves) are equal to or greater than (i) if the proposed  Letter
of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the
sum of (A) the  percentage  equal to one hundred  (100%)  percent minus the then
applicable  percentage set forth in Section  2.1(a)(i)  above  multiplied by the
Value of such Eligible Inventory (if the lending formula in Section 2.1(a)(i)(A)
is  applicable),  or multiplied  by the Cost of such Eligible  Inventory (if the
lending  formula in Section  2.1(a)(i)(B)  is  applicable)  or multiplied by the
Retail  Value of such  Eligible  Inventory  (if the  lending  formula in Section
2.1(a)(i)(C) is applicable), plus (B) fifty (50%) percent of the freight, taxes,
duty and other amounts that Lender  estimates  must be paid in  connection  with
such Inventory upon arrival and for delivery to one of Borrowers'  locations for
Eligible Inventory;  and (ii) if the proposed Letter of Credit  Accommodation is
for any other purpose an amount equal to one hundred  (100%) percent of the face
amount thereof and all other  commitments  and  obligations  made or incurred by
Lender with respect thereto.  Effective on the issuance of each Letter of Credit
Accommodations,  an Availability  Reserve shall be established in the applicable
amount set forth in Section 2.2(c)(i) or Section 2.2(c)(ii).

                  (d)  Except  in  Lender's   discretion,   the  amount  of  all
outstanding  Letter  of Credit  Accommodations  and all  other  commitments  and
obligations made or incurred by Lender in connection therewith, shall not at any
time exceed $25,000,000.  At any time an Event of Default exists or has occurred
and is  continuing,  upon Lender's  request,  Borrowers will either furnish cash
collateral to secure the  reimbursement  obligations to the issuer in connection
with any Letter of Credit  Accommodations  or furnish cash  collateral to Lender
for the Letter of Credit Accommodations, and in either case, the Revolving Loans
otherwise

                                                    

<PAGE>



available to Borrowers shall not be reduced as provided in Section to 2.2(c) the
extent of such cash collateral.

                  (e) Borrowers  shall  indemnify and hold Lender  harmless from
and  against  any and all  losses,  claims,  damages,  liabil  ities,  costs and
expenses  which  Lender  may  suffer or incur in  connection  with any Letter of
Credit Accommodations and any documents, drafts or acceptances relating thereto,
including, but not limited to, any losses, claims, damages,  liabilities,  costs
and  expenses  due to any  action  taken by any  issuer or corres  pondent  with
respect to any Letter of Credit  Accommodation.  Borrowers assume all risks with
respect to the acts or  omissions  of the  drawer  under or  beneficiary  of any
Letter of Credit  Accommodation  and for such purposes the drawer or beneficiary
shall be deemed the agent of  Borrowers.  Borrowers  assume  all risks for,  and
agree to pay, all  foreign,  Federal,  State and local taxes,  duties and levies
relating  to any goods  subject  to any Letter of Credit  Accommodations  or any
documents,  drafts or acceptances thereunder.  Borrowers hereby release and hold
Lender harmless from and against any acts, waivers, errors, delays or omissions,
whether caused by Borrowers,  by any issuer or  correspondent  or otherwise with
respect to or relating to any Letter of Credit Accommodation.  The provisions of
this Section 2.2(e) shall survive the payment of Obligations and the termination
or non-renewal of this Agreement.

                  (f) Nothing  contained  herein shall be deemed or construed to
grant  Borrowers  any right or  authority  to pledge the credit of Lender in any
manner. Lender shall have no liability of any kind with respect to any Letter of
Credit  Accommodation  provided by an issuer other than Lender unless Lender has
duly  executed and  delivered to such issuer the  application  or a guarantee or
indemnification in writing with respect to such Letter of Credit  Accommodation.
Borrowers shall be bound by any interpretation  made in good faith by Lender, or
any other  issuer or  correspondent  under or in  connection  with any Letter of
Credit  Accommodation  or  any  documents,  drafts  or  acceptances  thereunder,
notwithstanding   that  such   interpretation   may  be  inconsistent  with  any
instructions  of Borrowers.  Lender shall have the sole and exclusive  right and
authority  to,  and  Borrowers  shall  not:  (i) at any time an Event of Default
exists or has occurred and is  continuing,  (A) approve or resolve any questions
of non-compliance of documents, (B) give any instructions as to

                                                     

<PAGE>



acceptance  or  rejection  of any  documents or goods or (C) execute any and all
applications for steamship or airway guaranties, indemnities or delivery orders,
and (ii) at all times,  (A) grant any  extensions  of the  maturity  of, time of
payment for, or time of presentation of, any drafts,  acceptances, or documents,
and (B) agree to any amendments, renewals, extensions, modifications, changes or
cancellations  of any of the  terms or  conditions  of any of the  applications,
Letter of Credit Accommodations, or docu ments, drafts or acceptances thereunder
or any  letters  of credit  included  in the  Collateral.  Lender  may take such
actions either in its own name or in the name of a Borrower.

                  (g) Any rights,  remedies,  duties or  obligations  granted or
undertaken by a Borrower to any issuer or  correspondent  in any application for
any  Letter of Credit  Accommodation,  or any  other  agreement  in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by such Borrower to Lender. Any duties
or  obligations  undertaken  by Lender to any  issuer  or  correspondent  in any
application  for any Letter of Credit  Accommodation,  or any other agreement by
Lender in favor of any issuer or correspondent  relating to any Letter of Credit
Accommodation,  shall  be  deemed  to have  been  undertaken  by the  applicable
Borrower to Lender and to apply in all respects to such Borrower.

         2.3  Term  Loan.  Lender  is  making  a Term  Loan to One  Price in the
original  principal  amount of  $7,500,000.  The Term Loan is (a) evidenced by a
Term  Promissory  Note in such  original  principal  amount  duly  executed  and
delivered  by One  Price to  Lender  concurrently  herewith;  (b) to be  repaid,
together with interest and other amounts, in accordance with this Agreement, the
Term Promissory Note, and the other Financing  Agreements and (c) secured by all
of the Collateral.

         2.4 Availability  Reserves.  All Revolving Loans otherwise available to
Borrowers pursuant to the lending formulas and subject to the Maximum Credit and
other applicable limits hereunder shall be subject to Lender's  continuing right
to establish and revise Availability Reserves. Without limiting any other rights
or  remedies  of Lender  under  this  Agreement  or any of the  other  Financing
Agreements with respect to the establishment of Availability Reserves,  Lender's
default rights or remedies or

                                                       

<PAGE>



otherwise, Lender may establish and revise Availability Reserves to reflect: (a)
inventory shrinkage;  (b) the aggregate amount of deposits,  if any, received by
Borrowers  from  its  retail   customers  in  respect  of  unfilled  orders  for
merchandise;  (c) at any time after a Direct Remittance Event, amounts due or to
become due in respect of sales, use, personal property and/or withholding taxes,
other than sales  taxes  that have been and remain set aside and  segregated  by
Borrowers in a separate  deposit  account as provided in Section  6.3(c) hereof;
(d) at any time that Excess Availability is less than $3,000,000, or at any time
after the occurrence and during the  continuance of an Event of Default,  or the
occurrence  of any event or  existence  of any state of facts  that  would  with
notice or passage of time or both,  constitute an Event of Default, an amount in
respect of rental payments or other amounts then or thereafter owed by Borrowers
to lessors of their Retail Stores, equal to $1,000,000 multiplied by a fraction,
the numerator of which is equal to the aggregate  amount of monthly rent owed by
Borrowers  to the  lessors  of their  Retail  Stores  from whom  Lender  has not
received an agreement in writing, in form and substance  satisfactory to Lender,
acknowledging  Lender's  priority  security  interest in the Inventory,  waiving
security  interests  and  claims  by  such  lessor  against  the  Inventory  and
permitting  Lender  access  to,  and the right to remain  on,  the  premises  to
exercise  Lender's  rights and remedies and otherwise deal with the  Collateral,
and the  denominator  of which is the  aggregate  amount of monthly rent owed by
Borrowers  to their  lessors  for all Retail  Stores;  (e) at any time after the
occurrence  and during the  continuance of an Event of Default or the occurrence
of any event or  existence  of any state of facts  that  would,  with  notice or
passage of time,  or both,  constitute  an Event of  Default,  amounts  owing by
Borrowers to Credit Card Issuers or Credit Card  Processors in  connection  with
the Credit Card Agreements; and (f) an Availability Reserve covering one hundred
and five (105%)  percent of that portion of the undrawn  amounts  under  certain
documentary letters of credit issued by NationsBank, N.A. for the account of One
Price  prior to the date  hereof,  that may be drawn as of or after May 31, 1996
(the "May 31 Undrawn Amount"),  which Availability  Reserve shall be established
and increased in weekly  installments of $170,000 each,  commencing on March 28,
1996 and on each Thursday thereafter; provided, that the weekly increases in the
Availability Reserve under this clause (f) shall cease if, and such Availability
Reserve shall be reduced to the extent that, at

                                                       

<PAGE>



any time, the aggregate amount of such Availability Reserve
exceeds the remaining May 31 Undrawn Amount, as advised in
writing by NationsBank N.A. to Lender.


SECTION 3.   INTEREST AND FEES

          3.1  Interest.

                  (a) Borrowers  shall pay to Lender interest on the outstanding
principal  amount of the  non-contingent  Obligations  at the Interest Rate. All
interest  accruing  hereunder  on and after the date of any Event of  Default or
termination or non-renewal hereof shall be payable ON DEMAND.

                  (b) One Price  (for  itself  and/or on behalf of One Price PR)
may from time to time request  that Prime Rate Loans be converted to  Eurodollar
Rate Loans or that any existing Eurodollar Rate Loans continue for an additional
Interest  Period.  Such request  from One Price shall  specify the amount of the
Prime Rate Loans which will  constitute  Eurodollar  Rate Loans  (subject to the
limits  set  forth  below)  and the  Interest  Period to be  applicable  to such
Eurodollar  Rate Loans.  Subject to the terms and conditions  contained  herein,
three (3)  Business  Days  after  receipt  by Lender of such a request  from One
Price, such Prime Rate Loans shall be converted to Eurodollar Rate Loans or such
Eurodollar Rate Loans shall continue, as the case may be, provided,  that, as of
such date each of the following conditions is satisfied as determined by Lender:
(i) no Event of  Default,  or event which with notice or passage of time or both
would  constitute an Event of Default  exists or has occurred and is continuing,
(ii) no party hereto shall have sent any notice of termination or non-renewal of
this  Agreement,  (iii)  Borrowers  shall  have  complied  with  such  customary
procedures  as are  established  by Lender and  specified by Lender to One Price
from time to time for requests by One Price for Eurodollar  Rate Loans,  (iv) no
more than five (5)  Interest  Periods may be in effect at any one time,  (v) the
aggregate amount of the Eurodollar Rate Loans must be in an amount not less than
$5,000,000 or an integral  multiple of $1,000,000  in excess  thereof,  (vi) the
maximum  amount of the  Eurodollar  Rate Loans at any time  requested  by or for
Borrowers shall not exceed the amount equal to eighty (80%) percent of the daily
average of the principal amount of the

                                                       

<PAGE>



Loans which it is anticipated will be outstanding during the applicable Interest
Period,  in each case as  determined by Lender (but with no obligation of Lender
to make such Loans) and (vii)  Lender  shall have  determined  that the Interest
Period or Adjusted  Eurodollar Rate is available to Lender through the Reference
Bank  and can be  readily  determined  as of the  date of the  request  for such
Eurodollar  Rate Loan by One Price.  Any  request by One Price to convert  Prime
Rate Loans to Eurodollar Rate Loans or to continue any existing  Eurodollar Rate
Loans shall be irrevocable.  Notwithstanding  anything to the contrary contained
herein,  Lender and  Reference  Bank shall not be required  to  purchase  United
States  Dollar  deposits  in the  London  interbank  market or other  applicable
Eurodollar  Rate market to fund any  Eurodollar  Rate Loans,  but the provisions
hereof shall be deemed to apply as if Lender and  Reference  Bank had  purchased
such deposits to fund the Eurodollar Rate Loans.

                  (c) Any Eurodollar Rate Loans shall  automatically  convert to
Prime Rate Loans upon the last day of the  applicable  Interest  Period,  unless
Lender has received and approved a request to continue such Eurodollar Rate Loan
at least three (3) Business Days prior to such last day in  accordance  with the
terms hereof.  Any Eurodollar Rate Loans shall, at Lender's option,  upon notice
by Lender to One  Price,  convert  to Prime  Rate Loans in the event that (i) an
Event of Default or event which with the notice or passage of time or both would
constitute an Event of Default, shall exist, (ii) this Agreement shall terminate
or not be renewed,  or (iii) the  aggregate  principal  amount of the Prime Rate
Loans which have  previously been converted to Eurodollar Rate Loans or existing
Eurodollar  Rate Loans  continued,  as the case may be, at the  beginning  of an
Interest  Period shall at any time during such Interest Period exceed either (A)
the aggregate  principal amount of the Loans then outstanding,  or (B) the Loans
then  available  to Borrowers  under  Section 2 hereof.  Borrowers  shall pay to
Lender,  upon demand by Lender (or Lender  may,  at its option,  charge any loan
account of Borrowers) any amounts required to compensate  Lender,  the Reference
Bank or any participant  with Lender for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion
of Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing.


                                                     

<PAGE>



                  (d) Interest  shall be payable by Borrowers to Lender  monthly
in  arrears  not later  than the first day of each  calendar  month and shall be
calculated  on the basis of a three hundred sixty (360) day year and actual days
elapsed.  Borrowers  hereby  acknowledge  and understand that the calculation of
interest  on the basis of the  actual  days  elapsed  over the period of a three
hundred and sixty (360) day year opposed to a year of three  hundred  sixty-five
(365) or three  hundred and sixty-six  (366) days results in a higher  effective
rate of interest.  The interest rate on non-contingent  Obligations  (other than
Eurodollar  Rate Loans)  shall  increase or decrease by an amount  equal to each
increase or decrease in the Prime Rate  effective  on the first day of the month
after any  change in such  Prime  Rate is  announced  based on the Prime Rate in
effect on the last day of the month in which any such change occurs.

                  (e) On the  date  hereof,  the  Prime  Rate is  eight  and one
quarter (8.25%)  percent and therefore the rate of interest in effect  hereunder
for Prime Rate Loans  outstanding  on the date of this  Agreement,  expressed in
simple interest terms is eight and one quarter (8.25%) percent per annum.

          3.2  Closing Fee.  Borrowers shall pay to Lender as a
closing fee the amount of $450,000 which shall be fully earned as
of and payable on the date hereof.

          3.3 Servicing Fee.  Borrowers  shall pay to Lender monthly a servicing
fee in the  amount  of  $3,000  for each  month  (or part  thereof)  while  this
Agreement is in effect and for so long  thereafter as any of the Obligations are
outstanding,  which fee  shall be  payable  on the  first  day of each  month in
arrears.

          3.4 Unused Line Fee.  Borrowers  shall pay to Lender monthly an unused
line fee at a rate equal to one-half of one (1/2%) percent per annum  calculated
upon the amount by which the  Inventory  Loan Limit  exceeds the  average  daily
principal  balance  of the  outstanding  Revolving  Loans  and  Letter of Credit
Accommodations  during the  immediately  preceding month (or part thereof) while
this Agreement is in effect and for so long thereafter as any of the Obligations
are  outstanding,  which fee shall be  payable on the first day of each month in
arrears.

         3.5  Changes in Laws and Increased Costs of Loans.

                                                       

<PAGE>



                  (a) Notwithstanding anything to the contrary contained herein,
all Eurodollar Rate Loans shall, upon notice by Lender to One Price,  convert to
Prime  Rate  Loans  in the  event  that  (i) any  change  in  applicable  law or
regulation (or the  interpretation or  administration  thereof) shall either (A)
make it  unlawful  for  Lender,  Reference  Bank or any  participant  to make or
maintain  Eurodollar Rate Loans or to comply with the terms hereof in connection
with the Eurodollar Rate Loans, by an amount deemed by Lender to be material, or
(B) shall result in the increase in the costs to Lender,  Reference  Bank or any
participant of making or maintaining any Eurodollar Rate Loans or (C) reduce the
amounts received or receivable by Lender in respect thereof, by an amount deemed
by Lender  to be  material  or (ii) the cost to  Lender,  Reference  Bank or any
participant of making or maintaining  any Eurodollar  Rate Loans shall otherwise
increase by an amount  deemed by Lender to be material.  Borrowers  shall pay to
Lender,  upon demand by Lender (or Lender  may,  at its option,  charge any loan
account of Borrowers) any amounts required to compensate  Lender,  the Reference
Bank or any participant  with Lender for any loss (including loss of anticipated
profits),  cost or expense incurred by such person as a result of the foregoing,
including, without limitation, any such loss, cost or expense incurred by reason
of the  liquidation or  reemployment of deposits or other funds acquired by such
person to make or maintain the Eurodollar Rate Loans or any portion  thereof.  A
certificate  of Lender  setting  forth the basis for the  determination  of such
amount  necessary to  compensate  Lender as aforesaid  shall be delivered to One
Price and shall be conclusive, absent manifest error.

                  (b)  If  any  payments  or   prepayments  in  respect  of  the
Eurodollar  Rate Loans are  received by Lender other than on the last day of the
applicable  Interest Period (whether pursuant to acceleration,  upon maturity or
otherwise),  including any payments  pursuant to the  application of collections
under Section 6.3 or any other  payments  made with the proceeds of  Collateral,
Borrowers  shall pay to Lender  upon  demand by Lender  (or Lender  may,  at its
option, charge any loan account of Borrowers) any amounts required to compensate
Lender,  the Reference  Bank or any  participant  with Lender for any additional
loss (including loss of anticipated  profits),  cost or expense incurred by such
person as a result of such prepayment or payment, including, without limitation,
any loss, cost or expense  incurred by reason of the liquidation or reemployment
of deposits or other funds acquired

                                                       

<PAGE>



by such person to make or  maintain  such  Eurodollar  Rate Loans or any portion
thereof.

         3.6      Maximum Interest.

                  (a) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Financing Agreements, in no event whatsoever shall
the  aggregate of all amounts that are  contracted  for,  charged or received by
Lender  pursuant to the terms of this  Agreement  or any of the other  Financing
Agreements and that are deemed interest under  applicable law exceed the Maximum
Interest Rate (including,  to the extent  applicable,  the provisions of Section
5197 of the  Revised  Statutes of the United  States of America as  amended,  12
U.S.C.  Section  85, as  amended).  No  agreements,  conditions,  provisions  or
stipulations  contained  in  this  Agreement  or  any  of  the  other  Financing
Agreements,  or any Event of Default,  or the exercise by Lender of the right to
accelerate the payment or the maturity of all or any portion of the Obligations,
or the exercise of any option  whatsoever  contained in this Agreement or any of
the other  Financing  Agreements,  or the  prepayment by Borrowers of any of the
Obligations,  or the  occurrence of any event or contingency  whatsoever,  shall
entitle Lender to contract for, charge or receive in any event,  interest or any
charges,  amounts,  premiums or fees deemed interest by applicable law in excess
of the Maximum  Interest  Rate. In no event shall  Borrowers be obligated to pay
interest  or such  amounts as may be deemed  interest  under  applicable  law in
amounts which exceed the Maximum  Interest Rate. All  agreements,  conditions or
stipulations,  if any, which may in any event or contingency  whatsoever operate
to bind,  obligate or compel Borrowers to pay interest or such amounts which are
deemed to constitute  interest in amounts which exceed the Maximum Interest Rate
shall be (i) without binding force or effect, at law or in equity, to the extent
of the  excess  of  interest  or such  amounts  which are  deemed to  constitute
interest over such Maximum  Interest Rate, and (ii) deemed amended to conform to
the provisions of this Section 3.6.

                  (b) In the event any interest is charged or received in excess
of the Maximum  Interest Rate  ("Excess"),  Borrowers  acknowledge and stipulate
that any such charge or receipt shall be the result of an accident and bona fide
error,  and that any Excess  received by Lender shall be applied,  first, to the
payment

                                                       

<PAGE>



of the then outstanding and unpaid principal hereunder; second to the payment of
the other  Obligations  then  outstanding  and  unpaid;  and third,  returned to
Borrowers,  it being  the  intent  of the  parties  hereto  not to enter  into a
usurious or otherwise illegal relationship. The right to accelerate the maturity
of any of the Obligations  does not include the right to accelerate any interest
that has not otherwise accrued on the date of such acceleration, and Lender does
not  intend  to  collect  any  unearned  interest  in  the  event  of  any  such
acceleration.  Borrowers  recognize  that,  with  fluctuations  in the  rates of
interest  set forth in Section 3.1 of this  Agreement  and the Maximum  Interest
Rate, such an unintentional result could inadvertently occur. All monies paid to
Lender  hereunder  or under any of the other  Financing  Agreements,  whether at
maturity or by prepayment,  shall be subject to any rebate of unearned  interest
as and to the extent required by applicable law.

                  (c) By the execution of this  Agreement,  Borrowers agree that
(i) the  credit or return of any  Excess  shall  constitute  the  acceptance  by
Borrowers of such Excess,  and (ii) Borrower  shall not seek or pursue any other
remedy,  legal or  equitable,  against  Lender,  based in whole or in part  upon
contracting  for,  charging or receiving  any interest or such amounts which are
deemed to constitute  interest in excess of the Maximum  Interest  Rate. For the
purpose  of  determining  whether or not any  Excess  has been  contracted  for,
charged or received by Lender,  all interest at any time contracted for, charged
or received from Borrowers in connection with this Agreement or any of the other
Financing  Agreements  shall,  to the extent  permitted  by  applicable  law, be
amortized,  prorated,  allocated  and  spread  during  the  entire  term of this
Agreement in accordance with the amounts outstanding from time to time hereunder
and the Maximum  Interest  Rate from time to time in effect in order to lawfully
charge the maximum amount of interest permitted under applicable laws.

                  (d) The  provisions  of this Section 3.6 shall be deemed to be
incorporated  into each of the other  Financing  Agreements  (whether or not any
provision  of this  Section  is  referred  to  therein).  Each of the  Financing
Agreements and communications relating to any interest owed by Borrowers and all
figures set forth therein shall, for the sole purpose of computing the extent of
the Obligations, be automatically recomputed by Borrowers, and

                                                      

<PAGE>



by any court  considering the same, to give effect to the adjustments or credits
required by this Section.


SECTION 4.  CONDITIONS PRECEDENT

         4.1  Conditions  Precedent  to  Initial  Loans  and  Letter  of  Credit
Accommodations.  Each of the following is a condition precedent to Lender making
the initial  Loans and  providing  the initial  Letter of Credit  Accommodations
hereunder:

                  (a)  Lender  shall  have  received,   in  form  and  substance
satisfactory to Lender,  all releases,  terminations and such other documents as
Lender may request to evidence and  effectuate the  termination by  NationsBank,
N.A., as agent, of its financing arrangements with Borrowers and the termination
and  release  by it of any  interest  in and to any  assets  and  properties  of
Borrowers  and each  Obligor,  duly  authorized,  executed and  delivered by it,
including,  but not  limited  to,  (i) UCC  termination  statements  for all UCC
financing  statements  previously  filed by it or its  predecessors,  as secured
party and  Borrowers  or any  Obligor,  as  debtor  and (ii)  satisfactions  and
discharges of any mortgages, deeds of trust or deeds to secure debt by Borrowers
or any Obligor in favor of  NationsBank,  N.A., as agent, or a trustee acting on
its behalf,  in form  acceptable for recording in the  appropriate  governmental
office;

                  (b) Lender shall have received evidence, in form and substance
satisfactory  to Lender,  that  Lender has valid  perfected  and first  priority
security interests in and liens upon the Collateral and any other property which
is intended to be security for the  Obligations  or the liability of any Obligor
in respect thereof,  subject only to the security  interests and liens permitted
herein or in the other Financing Agreements;

                  (c)  Lender  shall  have  received,   in  form  and  substance
satisfactory to Lender, a valid and effective title insurance policy issued by a
company and agent  acceptable  to Lender (i) insuring the  priority,  amount and
sufficiency  of  the  Mortgage  and  (ii)   containing  any  legally   available
endorsements,  assurances  or  affirmative  coverage  requested  by  Lender  for
protection of its interests;


                                                       

<PAGE>



                  (d)  all  requisite   corporate   action  and  proceedings  in
connection  with this  Agreement  and the other  Financing  Agreements  shall be
satisfactory in form and substance to Lender, and Lender shall have received all
information and copies of all documents,  including, without limitation, records
of requisite corporate action and proceedings which Lender may have requested in
connection therewith, such documents where requested by Lender or its counsel to
be certified by appropriate corporate officers or governmental authorities;

                  (e) no  material  adverse  change  shall have  occurred in the
consolidated  assets,  business  or  prospects  of  Borrowers  since the date of
Lender's  latest field  examination  and no material  change or event shall have
occurred  which  would  impair the  ability of either or both  Borrowers  or any
Obligor to perform its obligations hereunder or under any of the other Financing
Agreements  to which it is a party or of Lender to enforce  the  Obligations  or
realize upon the Collateral;

                  (f) Lender shall have  completed a field review of the Records
and such other  information with respect to the Collateral as Lender may require
to determine the amount of Loans  available to  Borrowers,  the results of which
shall be satisfactory to Lender,  not more than three (3) Business Days prior to
the date hereof;

                  (g)  Lender  shall  have  received,   in  form  and  substance
satisfactory to Lender,  a guarantee of payment by each Borrower with respect to
the Obligations owed by the other Borrower;

                  (h)  Lender  shall  have  received,   in  form  and  substance
satisfactory to Lender (i) an agreement with and duly  authorized,  executed and
delivered by  NationsBank,  N.A.,  individually  and as agent,  as agreed to and
acknowledged  by Borrowers,  providing for the relative rights and priorities of
such lender and Lender in certain cash collateral,  documents of title and goods
covered  thereby,  relating  to goods  that are  purchased  by One  Price  under
outstanding  letters of credit  issued by such lender  prior to the date hereof,
and related matters,  and (ii) a letter  agreement  between  NationsBank,  N.A.,
individually  and as  agent,  and  One  Price,  duly  authorized,  executed  and
delivered by such lender and One Price,  setting forth such lender's  agreements
with One Price

                                                       

<PAGE>



regarding such outstanding letters of credit referred to in
clause (i);

                  (i)  Lender  shall  have  received,   in  form  and  substance
satisfactory  to  Lender,  all  consents,  waivers,  acknowledgments  and  other
agreements  from third persons  which Lender may deem  necessary or desirable in
order to permit,  protect and perfect its  security  interests in and liens upon
the Collateral or to effectuate the provisions or purposes of this Agreement and
the other Financing Agreements, including, without limitation,  acknowledgements
by lessors,  mortgagees and warehousemen of Lender's  security  interests in the
Collateral,  waivers by such persons of any security  interests,  liens or other
claims by such persons to the Collateral and agreements permitting Lender access
to, and the right to remain on, the premises to exercise its rights and remedies
and otherwise deal with the Collateral;

                  (j) Borrowers shall have  established the Blocked Accounts and
Lender shall have received,  in form and substance  satisfactory to Lender,  all
agreements with the depository  banks and Borrowers with respect to such Blocked
Accounts as Lender may require pursuant to Section 6.3 hereof,  duly authorized,
executed and delivered by such depository banks and Borrowers;

                  (k) Lender shall have received  original  letters  executed by
Borrowers,  in form and substance satisfactory to Lender,  notifying each of the
depository banks used by Borrowers for the deposit of Retail Store receipts from
the sale of  merchandise  and by Borrowers for the deposit of other  proceeds of
Collateral or other property  which is security for the  Obligations of Lender's
security  interest  therein and irrevocably  authorizing and directing each such
bank to send all funds and deposits with such banks only to the Blocked Accounts
as required pursuant to Section 6.3 hereof or as Lender otherwise directs;

                  (l)  Lender  shall  have  received,   in  form  and  substance
satisfactory  to Lender,  an agreement by RGIS  Inventory  Specialists,  Inc. or
another  inventory  counting  service used by Borrowers and acceptable to Lender
pursuant  to which such  inventory  counting  service  shall  agree to  promptly
deliver  directly to Lender  copies of all  inventory  reports or other  reports
prepared  by it  with  respect  to  Borrowers,  duly  authorized,  executed  and
delivered by RGIS Inventory Specialists,

                                                       

<PAGE>



Inc. or such other inventory counting service;

                  (m) Lender shall have received Credit Card Acknowledgements in
each case,  duly  authorized,  executed and delivered by the Credit Card Issuers
and Credit Card Processors;

                  (n) Lender shall have received  evidence of insurance and loss
payee endorsements  required hereunder and under the other Financing Agreements,
in form and substance  satisfactory  to Lender,  and  certificates  of insurance
policies  and/or  endorse  ments  naming  Lender as loss  payee  and  additional
insured;

                  (o)  Lender  shall  have  received,   in  form  and  substance
satisfactory  to Lender,  the opinion  letter of  counsel(s)  to Borrowers  with
respect to the  Financing  Agreements  and the security  interests  and liens of
Lender  with  respect to the  Collateral  and such other  matters and Lender may
request; and

                  (p) the other  Financing  Agreements and all  instruments  and
documents  hereunder and thereunder  shall have been duly executed and delivered
to Lender, in form and substance satisfactory to Lender.

         4.2   Conditions   Precedent   to  All  Loans  and   Letter  of  Credit
Accommodations.  Each of the following is an additional  condition  precedent to
Lender  making  Loans  and/or  providing  Letter  of  Credit  Accommodations  to
Borrowers,  including the initial Loans and Letter of Credit  Accommodations and
any future Loans and Letter of Credit Accommodations:

                  (a) all representations and warranties contained herein and in
the  other  Financing  Agreements  shall be true  and  correct  in all  material
respects with the same effect as though such  representations and warranties had
been made on and as of the date of the  making  of each  such Loan or  providing
each such Letter of Credit Accommodation and after giving effect thereto; and

                  (b) no Event of Default and no event or condition which,  with
notice or passage of time or both, would  constitute an Event of Default,  shall
exist or have  occurred and be continuing on and as of the date of the making of
such Loan or

                                                       

<PAGE>



providing  each such  Letter of Credit  Accommodation  and after  giving  effect
thereto.


SECTION 5.   SECURITY INTEREST

         To secure  payment and  performance of all  Obligations,  each Borrower
hereby grants to Lender a continuing  security  interest in, a lien upon,  and a
right of set off  against,  and  hereby  assigns  to  Lender  as  security,  the
following  property and  interests  in property,  whether now owned or hereafter
acquired or existing, and wherever located (collectively, the "Collateral"):

         5.1  Accounts;

         5.2  all  present  and  future  contract  rights,  general  intangibles
(including,   but  not  limited  to,  tax  and  duty  refunds,   registered  and
unregistered  patents,  trademarks,  service  marks,  copyrights,  trade  names,
applications for the foregoing,  trade secrets, goodwill,  processes,  drawings,
blueprints, customer lists, licenses, whether as licensor or licensee, choses in
action  and  other  claims  and  existing  and  future  leasehold  interests  in
equipment,  real estate and fixtures),  chattel paper,  documents,  instruments,
letters of credit, bankers' acceptances and guaranties;

          5.3 all  present  and  future  monies,  securities,  credit  balances,
deposits,  deposit accounts and other property of such Borrower now or hereafter
held or  received by or in transit to Lender or its  affiliates  or at any other
depository  or  other  institution  from or for the  account  of such  Borrower,
whether for safekeeping, pledge, custody, transmission, collection or otherwise,
and all present and future liens, security interests,  rights,  remedies,  title
and interest in, to and in respect of Accounts and other Collateral,  including,
without  limitation,  (i) rights and remedies  under or relating to  guaranties,
contracts  of  suretyship,  letters of credit  and  credit  and other  insurance
related  to the  Collateral,  (ii)  rights of  stoppage  in  transit,  replevin,
repossession,  reclamation  and other rights and  remedies of an unpaid  vendor,
lienor or secured party, (iii) goods described in invoices, documents, contracts
or  instruments  with  respect  to, or  otherwise  representing  or  evidencing,
Accounts or other Collateral, including, without limitation, returned,

                                                       

<PAGE>



repossessed  and reclaimed  goods,  and (iv) deposits by and property of account
debtors or other persons securing the obligations of account debtors;

          5.4  Inventory;

          5.5  Equipment (other than motor vehicles);

          5.6  Real  Property,  provided  that,  in the  case of  Real  Property
acquired  after  the date  hereof,  the  security  interest  in and lien  hereby
intended  to  be  granted  by  Borrowers  shall  be  further   evidenced  and/or
effectuated  by a mortgage or deed of trust or deed to secure debt  satisfactory
to Lender,  contemporaneously  with the purchase of such hereafter acquired Real
Property;

          5.7  Records; and

          5.8  all  products  and  proceeds  of  the  foregoing,  in  any  form,
including,  without limitation,  insurance proceeds and all claims against third
parties for loss or damage to or destruction of any or all of the foregoing.


SECTION 6.   COLLECTION AND ADMINISTRATION

          6.1 Borrowers'  Loan Accounts.  Lender shall maintain one or more loan
account(s)  on its books in which  shall be  recorded  (a) all Loans,  Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on  behalf of  Borrowers  and (c) all other  appropriate  debits  and
credits as provided in this  Agreement,  including,  without  limitation,  fees,
charges,  costs, expenses and interest. All entries in the loan account(s) shall
be made in accordance with Lender's  customary  practices as in effect from time
to time.

         6.2  Statements.  Lender  shall  render to One Price (for itself and on
behalf of One Price PR) each month a statement  setting forth the balance in the
loan account(s) maintained by Lender for Borrowers pursuant to the provisions of
this Agreement,  including principal,  interest,  fees, costs and expenses. Each
such  statement  shall be subject to subsequent  adjustment by Lender but shall,
absent manifest errors or

                                                       

<PAGE>



omissions,   be  considered   correct  and  deemed  accepted  by  Borrowers  and
conclusively  binding upon  Borrowers as an account  stated except to the extent
that  Lender  receives a written  notice from  either  Borrower of any  specific
exceptions of such Borrower  thereto  within sixty (60) days after the date such
statement  has been  mailed by  Lender.  Until  such time as Lender  shall  have
rendered to One Price a written  statement as provided above,  the balance(s) in
Borrowers' loan account(s) shall be presumptive  evidence of the amounts due and
owing to Lender by Borrowers.

         6.3  Collection of Accounts and other Proceeds of
Collateral.

                  (a) Borrowers shall establish and maintain,  at their expense,
deposit account  arrangements and merchant payment  arrangements  with the banks
set forth on Schedule 6.3 hereto and after prior written notice to Lender,  such
other banks as Borrowers may hereafter  select as are acceptable to Lender.  The
banks set forth on Schedule 6.3  constitute all of the banks with whom Borrowers
have deposit account  arrangements and merchant  payment  arrangements as of the
date hereof and Schedule  6.3  identifies  each of the deposit  accounts at such
banks as applicable to a Retail Store of a Borrower using such deposit  accounts
or  otherwise  describes  the  nature  of the use of  such  deposit  account  by
Borrowers.

                           (i)  Borrowers shall deposit all proceeds from
sales of Inventory in every form,  including,  without limitation,  cash, checks
and other forms of daily store  receipts,  other than credit card sales  drafts,
credit card sales or charge slips or receipts,  from each Retail Store  location
of Borrowers on or before the following  business day, or, if Borrowers  cannot,
or determine for safety or security reasons not to, deposit such proceeds on the
same day or the following  business day, then on the second  following  business
day, in each case into the respective  deposit accounts of Borrowers used solely
for such purpose and  identified as applicable to such Retail Store  location as
set forth on Schedule 6.3. All such funds  deposited  into the separate  deposit
accounts shall be sent by wire transfer or other electronic  transfer means on a
daily basis or other periodic basis  acceptable to Lender and all other proceeds
of  Collateral  shall  be sent by wire  transfer,  to the  Blocked  Accounts  as
provided in Section 6.3(a)(iii) below. Borrowers

                                                       

<PAGE>



shall  irrevocably  authorize  and  direct  in  writing,  in form and  substance
satisfactory  to Lender,  each of the banks into  which  proceeds  from sales of
Inventory from each Retail Store location of Borrowers are at any time deposited
as provided  above to send all funds  deposited in such account by wire transfer
or other  electronic  transfer  means on a daily basis or other  periodic  basis
acceptable to Lender solely to the Blocked Accounts, or as otherwise directed by
Lender.  Such  authorization  and direction  shall not be rescinded,  revoked or
modified without the prior written consent of Lender.

                           (ii)     All credit card sales drafts, credit card
sales or charge  slips or  receipts  shall be  delivered  by  Borrowers  (either
physically or  electronically)  to the respective Credit Card Issuers and Credit
Card Processors on a daily basis or other periodic basis acceptable to Lender.

                           (iii)  Borrowers shall establish and maintain, at
their expense, deposit accounts with such banks as are acceptable to Lender (the
"Blocked Accounts") into which Borrowers shall promptly either cause all amounts
on deposit in its deposit accounts used by each Retail Store location to be sent
as provided in Section  6.3(a)(i)  above or shall itself  deposit or cause to be
deposited  in the Blocked  Accounts all proceeds  from sales of  Inventory,  all
amounts payable to Borrowers from Credit Card Issuers and Credit Card Processors
and all other  proceeds of Collateral.  The banks at which the Blocked  Accounts
are  established   shall  enter  into  an  agreement,   in  form  and  substance
satisfactory  to Lender,  providing  that all items received or deposited in the
Blocked  Accounts are the property of Lender,  that the  depository  bank has no
lien upon, or right of setoff against, the Blocked Accounts,  the items received
for deposit therein,  or the funds from time to time on deposit therein and that
the depository bank will wire, or otherwise transfer,  in immediately  available
funds, on a daily basis, at such time as Lender shall direct, all funds received
or deposited into the Blocked  Accounts to such bank account of Lender as Lender
may from time to time designate for such purpose ("Payment Account").  Borrowers
agree  that all  amounts  deposited  in such  Blocked  Accounts  or other  funds
received  and  collected  by Lender,  whether as proceeds of  Inventory or other
Collateral  or otherwise  shall be the property of Lender.  Notwithstanding  the
foregoing,  unless and until (A) the Excess  Availability  at any time hereafter
shall

                                                       

<PAGE>



fall below  $2,500,000,  or (B) an Event of Default or condition or event which,
with notice or passage of time or both,  would  constitute  an Event of Default,
then exists or has occurred and is continuing, or (C) Borrower shall have failed
to deliver a  Borrowing  Base  Certificate  in  accordance  with the  provisions
hereof,  or (D) Lender believes in good faith that any information  contained in
any Borrowing Base  Certificate  is incomplete,  inaccurate or misleading in any
material  respect  (each of the  foregoing  under clauses (A), (B) (C) or (D), a
"Direct  Remittance  Event"),  Lender shall direct the depository  bank or banks
maintaining  such Blocked  Accounts to transfer  any  deposits or other  amounts
transferred  to the Blocked  Accounts to an  operating  account of  Borrowers as
directed by Borrowers. After the occurrence of a Direct Remittance Event, Lender
may notify the depository  bank or banks  maintaining  such Blocked  Accounts to
remit the funds  received  into the Blocked  Accounts to the Payment  Account of
Lender  pursuant  to  the   instructions   set  forth  in  the  Blocked  Account
Agreement(s) among Lender, Borrowers and the banks at which the Blocked Accounts
are  established.  Following a Direct  Remittance  Event,  no elimination of the
Direct Remittance Event or other change in circumstance  shall require Lender to
direct that  amounts in the  Blocked  Accounts be  transferred  to an  operating
account of Borrowers in lieu of the Payment Account.

                  (b) For  purposes  of  calculating  the  amount  of the  Loans
available to the  respective  Borrowers,  payments will be applied  (conditional
upon final  collection)  to the  Obligations  on the  business day of receipt by
Lender in the Payment Account,  if such payments are received within  sufficient
time (in  accordance  with Lender's  usual and customary  practices as in effect
from time to time) to credit the applicable Borrower's Revolving Loan account on
such day, and if not, then on the next business day.  After Lender has exercised
its  rights  following  a  Direct   Remittance  Event  as  provided  in  Section
6.3(a)(iii),  Borrowers shall provide Lender with sufficient information no less
frequently  than weekly,  to enable Lender to allocate (by adjusting  entries or
otherwise)  to the  respective  Revolving  Loan  accounts  of  Borrowers,  their
respective  portions of amounts  transferred  from the  Blocked  Accounts to the
Payment Account.

                  (c)  Borrowers  and  all of  their  affiliates,  subsidiaries,
shareholders,  directors,  employees  or agents  shall,  acting as  trustee  for
Lender, receive, as the property of Lender,

                                                       
<PAGE>



any  monies,  checks,  notes,  drafts or any other  payment  relating  to and/or
proceeds of Accounts or other  Collateral  which come into their  possession  or
under their control and immediately upon receipt thereof, shall deposit or cause
the same to be deposited in the Blocked Accounts, or remit the same or cause the
same to be  remitted,  in  kind,  to  Lender,  except  for the  portion  thereof
representing  sales and/or use taxes  payable in  connection  with such sales or
otherwise,  which, upon and after Lender's request  subsequent to the occurrence
of a Direct  Remittance  Event,  Borrowers  shall cause to be  deposited  into a
separate  bank account or accounts  established  for such  purpose.  In no event
shall the same be  commingled  with  Borrowers'  own funds.  Borrowers  agree to
reimburse  Lender on demand for any amounts  owed or paid to any bank at which a
Blocked  Account  is  established  or any other bank or person  involved  in the
transfer  of funds to or from  the  Blocked  Accounts  arising  out of  Lender's
payments  to or  indemnification  of such bank or  person.  The  Obligations  of
Borrowers  to  reimburse  Lender for such  amounts  pursuant to this Section 6.3
shall survive the termination or non-renewal of this Agreement.

          6.4 Payments.  All Obligations shall be payable to the Payment Account
as designated under Section 6.3 or such other place as Lender may designate from
time to time.  The  Obligations  shall be  payable  upon the  effective  date of
termination  hereof,  or  earlier  upon an Event of  Default,  or  otherwise  as
provided elsewhere herein or in the other Financing Agreements. Lender may apply
payments  received or collected  from  Borrowers or for the account of Borrowers
(including,  without  limitation,  the monetary  proceeds of  collections  or of
realization  upon any Collateral and expressly  including,  without  limitation,
amounts  received in the Payment Account after Lender exercises its rights under
Section  6.3(a)(iii)  following  a  Direct  Remittance  Event)  to  such  of the
Obligations in respect of Revolving Loans,  whether or not then due, and to such
other  Obligations  then due,  in each case in such  order and  manner as Lender
determines.  At Lender's option, all principal,  interest, fees, costs, expenses
and  other  charges  provided  for in  this  Agreement  or the  other  Financing
Agreements  may  be  charged  directly  to the  loan  account(s)  of  Borrowers.
Borrowers  shall make all payments to Lender on the  Obligations  free and clear
of, and  without  deduction  or  withholding  for or on account  of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,

                                                      
<PAGE>



withholding,  restrictions  or  conditions  of any kind. If after receipt of any
payment  of, or  proceeds  of  Collateral  applied to the payment of, any of the
Obligations,  Lender is required to surrender or return such payment or proceeds
to any Person for any reason,  then the Obligations  intended to be satisfied by
such payment or proceeds  shall be  reinstated  and continue and this  Agreement
shall  continue in full force and effect as if such  payment or proceeds had not
been received by Lender.  Borrowers  shall be liable to pay to Lender,  and each
Borrower does hereby  indemnify  and hold Lender  harmless for the amount of any
payments or proceeds  surrendered  or  returned.  This  Section 6.4 shall remain
effective  notwithstanding  any contrary  action which may be taken by Lender in
reliance  upon such  payment or  proceeds.  This  Section 6.4 shall  survive the
payment of the Obligations and the termination or non-renewal of this Agreement.

          6.5  Authorization  to Make Loans.  Lender is  authorized  to make the
Loans and provide the Letter of Credit  Accommodations  based upon telephonic or
other  instructions  received  from  anyone  purporting  to be an  officer  of a
Borrower  (including  One Price for itself  and/or on behalf of One Price PR) or
other  authorized  person or, at the  discretion  of  Lender,  if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations  hereunder shall specify the date on which the requested  advance
is to be made or Letter of Credit Accommodations established (which day shall be
a Business Day) and the amount of the requested  Loan.  Requests  received after
12:00 noon Atlanta, Georgia time on any day shall be deemed to have been made as
of the opening of business on the immediately  following business day. All Loans
and Letter of Credit  Accommodations  under this Agreement shall be conclusively
presumed  to have been made to, and at the  request of and for the  benefit  of,
Borrowers when  deposited to the credit of a Borrower or otherwise  disbursed or
established in accordance  with the  instructions  of a Borrower  (including One
Price for  itself  and/or on behalf of One Price PR) or in  accordance  with the
terms and conditions of this Agreement.

         6.6 Use of Proceeds.  Borrowers  shall use the initial  proceeds of the
Loans  provided by Lender to Borrowers  hereunder only for: (a) payments to each
of the  persons  listed  in  the  disbursement  direction  letter  furnished  by
Borrowers to Lender on or about the date hereof and (b) costs, expenses and fees
in

                                                      

<PAGE>



connection  with the  preparation,  negotiation,  execution and delivery of this
Agreement and the other Financing Agreements.  All other Loans made or Letter of
Credit Accommodations provided by Lender to Borrowers pursuant to the provisions
hereof shall be used by Borrowers only for general  operating,  working  capital
and other proper corporate purposes of Borrowers not otherwise prohibited by the
terms hereof. None of the proceeds will be used, directly or indirectly, for the
purpose of  purchasing  or carrying  any margin  security or for the purposes of
reducing or retiring any indebtedness which was originally  incurred to purchase
or carry any margin  security or for any other  purpose which might cause any of
the Loans to be considered a "purpose credit" within the meaning of Regulation G
of the Board of Governors of the Federal Reserve System, as amended.

         6.7  Appointment  of One Price as Agent for One Price PR.  One Price PR
hereby  irrevocably  appoints One Price, and each officer thereof,  as its agent
and attorney-in-fact to request Loans and Letter of Credit Accommodations on its
behalf,  to receive  disbursements  of Loans on its behalf (which may be made to
the same account of One Price to which  disbursements  of Loans to One Price are
made) to make requests  relating to  Eurodollar  Rate Loans,  in its behalf,  to
receive  notices  and  statements  of account  from  Lender,  to take such other
actions  in its  behalf  as is  provided  hereunder  or under  any of the  other
Financing  Agreements  and generally to deal with Lender in its behalf,  for all
matters pertaining to the financing arrangements under this Agreement.


SECTION 7.   COLLATERAL REPORTING AND COVENANTS

          7.1 Collateral Reporting.  Each Borrower shall provide Lender with the
following  documents in a form satisfactory to Lender:  (a) on a weekly basis or
more  frequently  as Lender may  request,  (i)  reports  of sales of  Inventory,
indicating gross sales,  returns,  allowances and net sales, (ii) reports of all
Inventory purchases (including all costs related thereto,  such as freight, duty
and taxes) and identifying items of Inventory in transit to Borrowers related to
the applicable  documentary letter of credit and/or bill of lading number, (iii)
reports  of the  Retail  Value  of the  Inventory  and  (iv)  a  Borrowing  Base
Certificate setting forth Borrowers' calculation of the Revolving

                                                       

<PAGE>



Loans and Letter of Credit Accommodations  available to Borrower pursuant to the
terms and conditions  contained herein as of the last day of the preceding week,
duly completed and executed by the chief financial  officer or other appropriate
financial  officer  acceptable to Lender,  together with all schedules  required
pursuant to the terms of the Borrowing Base Certificate duly completed; (b) on a
monthly basis or more frequently as Lender may request,  (i) perpetual Inventory
reports,  (ii) Inventory reports by category,  (iii) agings of accounts payable,
(iv) reports of sales for each category of  Inventory,  and (v) reports on sales
and use tax  collections,  deposits and payments,  including a written  analysis
prepared  by  Borrowers  in respect of  monthly  sales and use tax and  personal
property tax accruals  and, if requested by Lender,  copies of sales and use tax
and personal property tax returns filed by Borrowers, (c) upon Lender's request,
(i) copies of  customer  statements  and credit  memos,  remittance  advices and
reports,  and  copies of  deposit  slips  and bank  statements,  (ii)  copies of
shipping and delivery documents,  (iii) copies of purchase orders,  invoices and
delivery  documents for  Inventory and Equipment  acquired by Borrowers and (iv)
reports by Retail Store  location of sales and  operating  profits for each such
Retail Store  location;  (v) monthly  statements  received by Borrowers from any
Credit Card Issuers or Credit Card  Processors,  together  with such  additional
information  with respect  thereto as shall be  sufficient  to enable  Lender to
monitor the transactions pursuant to the Credit Card Agreements,  (vi) agings of
accounts  receivable,  and  (vii)  reports  on  Accounts,   including  aggregate
outstanding  amounts by  category,  payments,  accruals  and  returns  and other
credits, and (d) such other reports as to the Collateral as Lender shall request
from time to time. If any of Borrowers' records or reports of the Collateral are
prepared or maintained by an accounting  service,  contractor,  shipper or other
agent, Borrowers hereby irrevocably authorizes such service, contractor, shipper
or agent to deliver such records,  reports,  and related documents to Lender and
to follow  Lender's  instructions  with respect to further  services at any time
that an Event of  Default  exists or has  occurred  and is  continuing.  Nothing
contained in any Borrowing Base Certificate shall be deemed to limit,  impair or
otherwise  affect the rights of Lender  contained herein and in the event of any
conflict or  inconsistency  between the  calculation of the Revolving  Loans and
Letter of  Credit  Accommodations  available  to  Borrowers  as set forth in any
Borrowing Base Certificate and as determined by

                                                       

<PAGE>



Lender,  the  determination of Lender shall govern and be conclusive and binding
upon  Borrowers.  Without  limiting the  foregoing,  Borrowers  shall furnish to
Lender  any  information  which  Lender may  reasonably  request  regarding  the
determination  and  calculation of any of the amounts set forth in the Borrowing
Base Certificate.

          7.2  Accounts Covenants.

                  (a) Borrowers shall notify Lender promptly of the assertion of
any claims, offsets,  defenses or counterclaims involving amounts aggregating in
excess of $10,000 by any  account  debtor,  Credit  Card  Issuer or Credit  Card
Processor or any disputes  involving  amounts  aggregating  in excess of $10,000
with any of such persons or any settlement, adjustment or compromise thereof and
(ii) all material adverse information relating to the financial condition of any
account  debtor,  Credit  Card  Issuer  or Credit  Card  Processor.  No  credit,
discount,  allowance or extension or agreement for any of the foregoing shall be
granted by a Borrower to any account  debtor,  Credit Card Issuer or Credit Card
Processor  except  in  the  ordinary  course  of  such  Borrower's  business  in
accordance with its most recent past practices and policies. So long as no Event
of Default exists or has occurred and is continuing, each Borrower shall settle,
adjust or compromise any claim, offset, counterclaim or dispute with its account
debtors,  Credit Card  Issuers and Credit Card  Processors.  At any time that an
Event of Default exists or has occurred and is continuing,  Lender shall, at its
option,  have the exclusive  right to settle,  adjust or  compromise  any claim,
offset,  counterclaim  or dispute with account  debtors,  Credit Card Issuers or
Credit Card Processors or grant any credits, discounts or allowances.

                  (b) Each  Borrower  shall notify  Lender  promptly of: (i) any
notice of a material  default  by such  Borrower  under any of the  Credit  Card
Agreements  or of any default  which  might  result in the Credit Card Issuer or
Credit Card  Processor  ceasing to make payments or suspending  payments to such
Borrower aggregating in excess of $10,000,  (ii) any notice from any Credit Card
Issuer or Credit Card Processor  that such person is ceasing or  suspending,  or
will cease or suspend,  any present or future  payments  due or to become due to
such Borrower from such person  aggregating  in excess of $10,000,  or that such
person is

                                                       

<PAGE>



terminating or will terminate any of the Credit Card  Agreements,  and (iii) the
failure of such  Borrower to comply with any  material  terms of the Credit Card
Agreements  or any terms thereof which might result in the Credit Card Issuer or
Credit Card Processor ceasing or suspending payments to such Borrower.

                  (c) With respect to each Account: (i) the amounts shown on any
invoice  delivered  to Lender or schedule  thereof  delivered to Lender shall be
true and  complete,  (ii) no  payments  shall be made  thereon  except  payments
deposited and/or  transferred to the Blocked  Accounts  pursuant to the terms of
this Agreement,  (iii) no credit, discount,  allowance or extension or agreement
for any of the foregoing  shall be granted by a Borrower to any account  debtor,
Credit  Card Issuer or Credit  Card  Processor,  except as reported to Lender in
accordance with this Agreement and except for credits, discounts,  allowances or
extensions made or given in the ordinary  course of such Borrower's  business in
accordance  with  practices and policies  previously  disclosed to Lender,  (iv)
there shall be no  setoffs,  deductions,  contras,  defenses,  counterclaims  or
disputes  existing or asserted with respect thereto except as reported to Lender
in accordance  with the terms of this  Agreement,  (v) none of the  transactions
giving  rise  thereto  will  violate  any  applicable  State or Federal  Laws or
regulations, all documentation relating thereto will be legally sufficient under
such laws and regulations and all such documentation will be legally enforceable
in accordance with its terms.

                  (d) Lender  may, at any time or times that an Event of Default
exists or has  occurred,  (i) notify any or all  account  debtors,  Credit  Card
Issuers and Credit  Card  Processors  that the  Accounts  have been  assigned to
Lender and that Lender has a security interest therein and Lender may direct any
or all account  debtors,  Credit Card Issuers and Credit Card Processors to make
payments  of Accounts  directly  to Lender,  (ii) extend the time of payment of,
compromise,  settle  or adjust  for  cash,  credit,  return  of  merchandise  or
otherwise,  and upon any  terms or  conditions,  any and all  Accounts  or other
obligations  included in the  Collateral  and thereby  discharge  or release the
account  debtor or any other  party or parties  in any way  liable  for  payment
thereof  without  affecting any of the  Obligations,  (iii)  demand,  collect or
enforce payment of any Accounts or such other obligations,  but without any duty
to do so, and Lender shall not

                                                       

<PAGE>



be liable for its failure to collect or enforce the payment  thereof not for the
negligence  of its  agents  or  attorneys  with  respect  thereto  and (iv) take
whatever  other action Lender may deem necessary or desirable for the protection
of its  interests.  At any time that an Event of Default  exists or has occurred
and is continuing,  at Lender's request, all invoices and statements sent to any
account debtor, Credit Card Issuer or Credit Card Processor shall state that the
Accounts  due from such  account  debtor,  Credit  Card  Issuer  or Credit  Card
Processor  and such  other  obligations  have been  assigned  to Lender  and are
payable  directly and only to Lender and Borrowers  shall deliver to Lender such
originals  of  documents  evidencing  the  sale  and  delivery  of  goods or the
performance of services giving rise to any Accounts as Lender may require.

                  (e)  Lender  shall  have the  right at any time or  times,  in
Lender's  name or in the name of a nominee  of Lender,  to verify the  validity,
amount or any other matter relating to any Account or other Collateral, by mail,
telephone, facsimile transmission or otherwise.

                  (f) Each  Borrower  shall  deliver or cause to be delivered to
Lender, with appropriate endorsement and assignment,  with full recourse to such
Borrower,  all chattel paper and instruments  which such Borrower now own or may
at any time acquire immediately upon such Borrower's receipt thereof,  except as
Lender may otherwise agree.

         7.3  Inventory  Covenants.  With  respect  to the  Inventory:  (a) Each
Borrower shall at all times maintain inventory records  reasonably  satisfactory
to Lender,  keeping  correct and accurate  records  itemizing and describing the
kind, type, quality and quantity of Inventory, such Borrower's Cost therefor and
daily  withdrawals  therefrom and  additions  thereto;  (b) each Borrower  shall
conduct a physical  count of the  Inventory at least once each year,  but at any
time or times as  Lender  may  request  on or  after  an Event of  Default,  and
promptly  following such physical inventory shall supply Lender with a report in
the form and with such  specificity as may be reasonably  satisfactory to Lender
concerning such physical count; (c) each Borrower shall not remove any Inventory
from the  locations  set forth or permitted  herein,  without the prior  written
consent of Lender,  except (i) for sales of Inventory in the ordinary  course of
such

                                                       

<PAGE>



Borrower's business, (ii) to move Inventory directly from one location set forth
or  permitted  herein to another  such  location  and (iii) prior to an Event of
Default,  for donations to charities of Inventory consisting of damaged goods or
end of season  Inventory  in the  ordinary  course of such  Borrower's  business
consistent with past practices;  (d) upon Lender's request,  Borrowers shall, at
their  expense,  no more than once in any twelve (12) month  period,  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;  (e) upon  Lender's  request,  in addition to any
inventory  counting  programs  conducted  by  Borrowers  on their  own,  through
counting  services  or  otherwise  (the  reports  for which  shall be  delivered
directly  to Lender by the  counting  service  or by  Borrowers  if no  counting
service is employed),  Borrowers  shall, at their expense,  conduct through RGIS
Inventory Specialists,  Inc. or another inventory counting service acceptable to
Lender,  a physical count of all or any portion of the Inventory of Borrowers as
determined by Lender,  in form,  scope and  methodology  acceptable to Lender no
more than once in any  twelve  (12)  month  period,  but at any time or times as
Lender may request on or after an Event of  Default,  the results of which shall
be reported directly by such inventory  counting service to Lender and Borrowers
shall  promptly  deliver  confirmation  in a form  satisfactory  to Lender  that
appropriate  adjustments have been made to the inventory records of Borrowers to
reconcile the inventory count to Borrowers' inventory records; (f) each Borrower
shall produce,  use, store and maintain the Inventory,  with all reasonable care
and caution and in accordance with applicable  standards of any insurance and in
conformity with applicable laws (including, but not limited to, the requirements
of the  Federal  Fair Labor  Standards  Act of 1938,  as amended  and all rules,
regulations  and  orders  related  thereto);   (g)  each  Borrower  assumes  all
responsibility  and liability  arising from or relating to the production,  use,
sale or other  disposition  of the  Inventory;  (h) neither  Borrower shall sell
Inventory  to any customer on  approval,  or any other basis which  entitles the
customer to return or may obligate  either Borrower to repurchase such Inventory
other than  returns by retail  customers in the  ordinary  course of  Borrowers'
business  pursuant to the return policies of Borrowers  previously  disclosed to
Lender in writing;

                                                       
<PAGE>



(i) each Borrower shall keep its Inventory in good and marketable condition; and
(j) neither Borrower shall,  without prior written notice to Lender,  acquire or
accept any Inventory on consignment or approval.

          7.4  Equipment  Covenants.  With  respect to the  Equipment:  (a) upon
Lender's request,  each Borrower shall, at its expense,  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 Equipment in form,
scope and  methodology  acceptable  to Lender and by an appraiser  acceptable to
Lender;  (b) each  Borrower  shall keep its  Equipment  in good  order,  repair,
running and marketable  condition  (ordinary wear and tear  excepted);  (c) each
Borrower  shall use its Equipment  with all  reasonable  care and caution and in
accordance with applicable standards of any insurance and in conformity with all
applicable laws; (d) the Equipment of each Borrower is and shall be used in such
Borrowers' business and not for personal,  family, household or farming use; (e)
neither  Borrower  shall remove any  Equipment  from the  locations set forth or
permitted  herein,  except (i) to the  extent  necessary  to have any  Equipment
repaired or maintained  in the ordinary  course of the business of such Borrower
or (ii) in the case of Equipment at Retail Stores,  to move  Equipment  directly
from one Retail Store  location  set forth or  permitted  herein to another such
location,  or (iii) the movement after the date hereof of other Equipment having
a value not to exceed $40,000 from one of Borrowers'  locations permitted herein
to another such  location,  including  the movement of Equipment  intended to be
personally  carried by Borrowers'  employees (such as laptop  computers) or (iv)
the movement of motor  vehicles  used by or for the benefit of such  Borrower in
the  ordinary  course of business or (v) to dispose of  Equipment  as  permitted
under  Section 9.7 hereof;  (f) the  Equipment is now and shall remain  personal
property and neither  Borrower shall permit any of the Equipment of Borrowers to
be or  become a part of or  affixed  to real  property;  and (g)  each  Borrower
assumes all responsibility and liability arising from the use of the Equipment.

          7.5  Power of Attorney.  Each Borrower hereby irrevocably
designates and appoints Lender (and all persons designated by
Lender) as such Borrower's true and lawful attorney-in-fact, and
authorizes Lender, in such Borrower's or Lender's name, to: (a)

                                                       

<PAGE>



at any time an Event of Default or event which with notice or passage of time or
both  would  constitute  an Event  of  Default  exists  or has  occurred  and is
continuing  (i) demand  payment on Accounts or other  proceeds of  Inventory  or
other  Collateral,  (ii)  enforce  payment of Accounts by legal  proceedings  or
otherwise,  (iii) exercise all of such Borrower's rights and remedies to collect
any  Account  or other  Collateral,  (iv) sell or assign any  Account  upon such
terms,  for such amount and at such time or times as the Lender deems advisable,
(v) settle, adjust,  compromise,  extend or renew an Account, (vi) discharge and
release any Account,  (vii) prepare,  file and sign such  Borrower's name on any
proof of claim in  bankruptcy  or other  similar  document  against  an  account
debtor,  (viii)  notify the post  office  authorities  to change the address for
delivery of such  Borrower's mail to an address  designated by Lender,  and open
all mail addressed to such  Borrower,  and (ix) do all acts and things which are
necessary,  in Lender's  determination,  to fulfill such Borrower's  obligations
under this  Agreement  and the other  Financing  Agreements  and (b) at any time
after the  occurrence  of a Direct  Remittance  Event to (i) take control in any
manner of any item of  payment  or  proceeds  thereof,  (ii) have  access to any
lockbox  or postal  box into  which such  Borrower's  mail is  deposited,  (iii)
endorse such Borrower's  name upon any items of payment or proceeds  thereof and
deposit the same in the Lender's  account for  application  to the  Obligations,
(iv) endorse such Borrower's name upon any chattel paper, document,  instrument,
invoice,  or similar document or agreement  relating to any Account or any goods
pertaining thereto or any other Collateral, (v) sign such Borrower's name on any
verification of Accounts and notices thereof to account debtors and (vi) execute
in such  Borrower's  name and file any UCC  financing  statements  or amendments
thereto.  Each Borrower hereby  releases Lender and its officers,  employees and
designees from any liabilities  arising from any act or acts under this power of
attorney and in furtherance thereof,  whether of omission or commission,  except
as a result of Lender's own gross negligence or wilful  misconduct as determined
pursuant to a final non-appealable order of a court of competent jurisdiction.

          7.6 Right to Cure. Lender may, at its option, (a) after the occurrence
and  during  the  continuance  of an Event of  Default,  cure any  default  by a
Borrower  under any  agreement  with a third  party or pay or bond on appeal any
judgment  entered  against a Borrower,  (b)  discharge  taxes,  liens,  security
interests or other

                                                      
<PAGE>



encumbrances  at any time levied on or existing  with respect to the  Collateral
and (c) pay any amount,  incur any expense or perform any act which, in Lender's
judgment, is necessary or appropriate to preserve,  protect,  insure or maintain
the Collateral and the rights of Lender with respect thereto. Lender may add any
amounts so  expended  to the  Obligations  and charge  such  Borrower's  account
therefor,  such amounts to be repayable by such Borrower on demand. Lender shall
be under no obligation to effect such cure, payment or bonding and shall not, by
doing so, be  deemed to have  assumed  any  obligation  or  liability  of either
Borrower.  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 hereunder
and to proceed accordingly.

          7.7 Access to Premises.  From time to time as requested by Lender,  at
the cost and expense of Borrowers, (a) Lender or its designee, an identification
of which designee will be provided to Borrowers  upon request,  along with other
pertinent information with respect to the tasks to be performed by such designee
as may be reasonably  requested by Borrowers,  shall have complete access to all
of  Borrowers'  premises  during  normal  business  hours  and  after  notice to
Borrowers, or at any time and without notice to Borrowers if an Event of Default
exists or has  occurred  and is  continuing,  for the  purposes  of  inspecting,
verifying and auditing the Collateral  and all of Borrowers'  books and records,
including,  without  limitation,  the Records,  and (b) Borrowers shall promptly
furnish to Lender such copies of such books and records or extracts therefrom as
Lender may request,  and (c) use during normal business hours such of Borrowers'
personnel,  equipment,  supplies and premises as may be reasonably necessary for
the  foregoing  and  if an  Event  of  Default  exists  or has  occurred  and is
continuing for the collection of Accounts and realization of other Collateral.


SECTION 8.   REPRESENTATIONS AND WARRANTIES

          Borrowers  hereby,  jointly and  severally,  represent  and warrant to
Lender the  following  (which shall  survive the  execution and delivery of this
Agreement),  the truth and accuracy of which are a  continuing  condition of the
making of Loans and  providing  Letter  of  Credit  Accommodations  by Lender to
Borrowers:


                                                      

<PAGE>



          8.1  Corporate  Existence,  Power and  Authority;  Subsidiaries.  Each
Borrower is a corporation  duly organized and in good standing under the laws of
its state of incorporation and is duly qualified as a foreign corporation and in
good standing in all states or other  jurisdictions  where the nature and extent
of  the  business  transacted  by it or  the  ownership  of  assets  makes  such
qualification necessary,  except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on such Borrower's financial
condition, results of operation or business or the rights of Lender in or to any
of the  Collateral.  The execution,  delivery and performance of this Agreement,
the other Financing Agreements and the transactions  contemplated  hereunder and
thereunder  are all within  each  Borrower's  corporate  powers,  have been duly
authorized and are not in  contravention  of law or the terms of each Borrower's
certificate of incorporation, by-laws, or other organizational documentation, or
any indenture,  agreement or undertaking to which either  Borrower is a party or
by which either Borrower or its or their property or properties are bound.  This
Agreement and the other Financing Agreements constitute legal, valid and binding
obligations of Borrowers  enforceable in accordance with their respective terms.
Borrowers do not have any  subsidiaries  except as set forth on the  Information
Certificates.

          8.2 Financial  Statements;  No Material Adverse Change.  All financial
statements  relating to Borrowers  which have been or may hereafter be delivered
by Borrowers  to Lender have been  prepared in  accordance  with GAAP and fairly
present the financial  condition and the results of operation of Borrowers as at
the dates and for the  periods set forth  therein.  Except as  disclosed  in any
interim financial  statements furnished by Borrowers to Lender prior to the date
of this  Agreement,  there has been no  material  adverse  change in the assets,
liabilities,  properties and condition, financial or otherwise, of the Borrowers
on a consolidated  basis,  since the date of the most recent  audited  financial
statements furnished by Borrowers to Lender prior to the date of this Agreement.

          8.3 Chief Executive Office;  Collateral Locations. The chief executive
office of each  Borrower  is located at the address  set forth  below,  and each
Borrower's  Records  concerning  Accounts and Inventory are primarily located at
the address set forth below and its only other  places of business  and the only
other

                                                       

<PAGE>



locations of Collateral,  if any, are the addresses set forth in the Information
Certificates,  subject to the right of Borrowers to establish  new  locations in
accordance  with  Section  9.2 below.  The  Information  Certificates  correctly
identifies any of such locations which are not owned by Borrowers and sets forth
the owners and/or operators thereof.

          8.4 Priority of Liens; Title to Properties. The security interests and
liens granted to Lender under this Agreement and the other Financing  Agreements
constitute  valid and perfected  first priority liens and security  interests in
and upon the Collateral  subject only to the liens  indicated on the Information
Certificates and Schedule 8.4 hereto and the other liens permitted under Section
9.8 hereof. Each Borrower has good and marketable title to all of its properties
and  assets  subject  to  no  liens,  mortgages,  pledges,  security  interests,
encumbrances  or charges of any kind,  except  those  granted to Lender and such
others as are specifically  listed on the Information  Certificates and Schedule
8.4 hereto or permitted under Section 9.8 hereof.

          8.5 Tax Returns.  Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed  by it,  except  where  the  failure  to do so does  not,  and  could  not
reasonably  be  expected  to,  result  in  any  Material  Adverse  Effect.   All
information  in such tax  returns,  reports and  declarations  is  complete  and
accurate in all material  respects.  Each Borrower has paid or caused to be paid
all taxes due and payable or claimed due and payable in any assessment  received
by it,  and has  collected,  deposited  and  remitted  in  accordance  with  all
applicable  laws all sales  and/or use taxes  applicable  to the  conduct of its
business,  except taxes the validity of which are being  contested in good faith
by appropriate proceedings diligently pursued and available to such Borrower and
with  respect  to which  adequate  reserves  have been set  aside on its  books.
Adequate  provision  has been made for the  payment  of all  accrued  and unpaid
Federal,  State,  county,  local, foreign and other taxes whether or not yet due
and  payable  and whether or not  disputed.  Each  Borrower  has  collected  and
remitted  when due to the  appropriate  tax authority all sales and/or use taxes
applicable to its business required to be collected under the laws of the United
States and each  possession  or territory  thereof,  and each State or political
subdivision thereof,

                                                       
<PAGE>



including any State in which Borrowers own any Inventory or own
or lease any other property.

          8.6 Litigation.  Except as set forth on the Information  Certificates,
there is no present investigation by any govern mental agency pending, or to the
best of either  Borrower's  knowledge  threatened,  against or affecting  either
Borrower,  its assets or business and there is no action,  suit,  proceeding  or
claim by any  Person  pending,  or to the best of  either  Borrower's  knowledge
threatened,  against  either  Borrower or its assets or goodwill,  or against or
affecting any  transactions  contemplated by this Agreement,  which if adversely
determined  against either Borrower would result in any material  adverse change
in the assets,  business or prospects of Borrowers on a consolidated  basis,  or
would impair the ability of either Borrower to perform its obligations hereunder
or under  any of the  other  Financing  Agreements  to which it is a party or of
Lender to enforce any Obligations or realize upon any Collateral.

          8.7  Compliance with Other Agreements and Applicable Laws.

                  (a) Neither Borrower is in default in any respect under, or in
violation  in any  respect  of any of the  terms  of,  any  material  agreement,
contract,  instrument,  lease or other  commitment  to which it is a party or by
which  it or any of its  assets  are  bound,  except  for any  such  default  or
violation  which does not, and could not  reasonably be expected to, result in a
Material Adverse Effect. Each Borrower is in compliance in all material respects
with the requirements of all applicable laws,  rules,  regulations and orders of
any  governmental  authority  relating  to  its  business,   including,  without
limitation,  those  set forth in or  promulgated  pursuant  to the  Occupational
Safety and Hazard Act of 1970, as amended, the Fair Labor Standards Act of 1938,
as  amended,  ERISA,  the  Code,  as  amended,  and the  rules  and  regulations
thereunder, all federal, state and local statutes, regulations, rules and orders
relating to consumer credit  (including,  without  limitation,  as each has been
amended, the Truth-in-Lending Act, the Fair Credit Billing Act, the Equal Credit
Opportunity Act and the Fair Credit  Reporting Act, and  regulations,  rules and
orders   promulgated   thereunder),   all  federal,   state  and  local  states,
regulations,  rules and orders pertaining to sales of consumer goods (including,
without limitation, the Consumer Products Safety Act of 1972, as amended,

                                                       

<PAGE>



and the Federal Trade  Commission Act of 1914, as amended,  and all regulations,
rules and orders promulgated thereunder).

                  (b) Each Borrower has obtained all material permits, licenses,
approvals, consents, certificates,  orders or authorizations of any governmental
agency  required for the lawful  conduct of its business and is in compliance in
all material  respects with the  requirements  of all  applicable  laws,  rules,
regulations and orders of any governmental  agency  (including,  but not limited
to, the Department of State, the Department of Commerce,  the Bureau of Alcohol,
Tobacco and Firearms,  and the Environmental  Protection Agency) relating to its
business  (including,  without  limitation,  those set  forth in or  promulgated
pursuant to ERISA, the  Occupational  Safety and Hazard Act of 1970, as amended,
the  Fair  Labor  Standards  Act  of  1938,  as  amended,   the  Code,  and  the
Environmental Laws). Each Borrower has all of the permits, licenses,  approvals,
consents,  certificates,  orders or authorizations (the "Permits") issued by the
appropriate  federal,  state or local  governmental  agency  necessary  for each
Borrower to own and operate its business as  presently  conducted or proposed to
be conducted,  except where the failure to have such Permits does not, and could
not  reasonably  be  expected  to,  result in a Material  Adverse  Effect or any
adverse effect on the legality,  validity or enforceability of this Agreement or
the other Financing  Agreements or the ability of either Borrower to perform its
obligations under the Agreement or any of the other Financing  Agreements or the
rights and remedies of Lender under this Agreement or any of the other Financing
Agreements.  All of the Permits are valid and  subsisting  and in full force and
effect.  There are no actions,  claims or proceedings pending or threatened that
seek the  revocation,  cancellation,  suspension or  modification  of any of the
Permits.

         8.8  Environmental Compliance.

                  (a) Except as set forth on Schedule 8.8 hereto, to the best of
Borrowers'  knowledge,  Borrowers have not  generated,  used,  stored,  treated,
transported,  manufactured,  handled,  produced  or  disposed  of any  Hazardous
Materials,  on or off their premises  (whether or not owned by it) in any manner
which at any time  violates  any  applicable  Environmental  Law or any license,
permit, certificate, approval or similar authorization thereunder and the

                                                       

<PAGE>



operations of Borrowers comply in all material  respects with all  Environmental
Laws  and  all   licenses,   permits,   certificates,   approvals   and  similar
authorizations thereunder.

                  (b) Except as set forth on Schedule 8.8 hereto, to the best of
Borrowers' knowledge,  there has been no investigation,  proceeding,  complaint,
order, directive, claim, citation or notice by any governmental authority or any
other  person nor is any pending or to the best of either  Borrower's  knowledge
threatened,  with  respect  to  any  non-compliance  with  or  violation  of the
requirements  of any  Environmental  Law by Borrowers  or the release,  spill or
discharge,  threatened or actual,  of any Hazardous  Material or the generation,
use, storage, treatment,  transportation,  manufacture,  handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter,  which affects either Borrower or its business,  operations or assets or
any properties at which either Borrower has  transported,  stored or disposed of
any Hazardous Materials.

                  (c) To the best of  Borrowers'  knowledge,  Borrowers  have no
material liability (contingent or otherwise) in connection with a release, spill
or  discharge,   threatened  or  actual,  of  any  Hazardous  Materials  or  the
generation,  use, storage,  treatment,  transportation,  manufacture,  handling,
production or disposal of any Hazardous Materials.

                  (d) To the best of Borrowers'  knowledge,  Borrowers  have all
licenses, permits, certificates, approvals or similar authorizations required to
be obtained or filed in connection  with the  operations of Borrowers  under any
Environmental Law and all of such licenses, permits, certificates,  approvals or
similar authorizations are valid and in full force and effect.

         8.9  Credit  Card  Agreements.  Set forth in  Schedule  8.9 hereto is a
correct and complete list of (a) all of the Credit Card Agreements and all other
agreements,  documents and instruments existing as of the date hereof between or
among Borrowers,  any of their affiliates,  the Credit Card Issuers,  the Credit
Card  Processors  and any of their  affiliates,  (b) the percentage of each sale
payable to the Credit Card Issuer or Credit  Card  Processor  under the terms of
the Credit Card Agreements,  (c) all other fees and charges payable by Borrowers
under or in connection with the Credit Card Agreements and (d)

                                                      

<PAGE>



the term of such Credit Card Agreements.  The Credit Card Agreements  constitute
all of such  agreements  necessary for  Borrowers to operate  their  business as
presently conducted with respect to credit cards and debit cards and no Accounts
of Borrowers arise from purchases by customers of Inventory with credit cards or
debit cards,  other than those which are issued by Credit Card Issuers with whom
Borrowers  have  entered  into one of the Credit  Card  Agreements  set forth on
Schedule  8.9  hereto or with whom  Borrowers  has  entered  into a Credit  Card
Agreement  in  accordance  with  Section  9.13  hereof.  Each of the Credit Card
Agreements constitutes the legal, valid and binding obligations of Borrowers and
to the best of Borrowers' knowledge,  the other parties thereto,  enforceable in
accordance  with their  respective  terms and are in full force and  effect.  No
default or event of default,  or act,  condition  or event which after notice or
passage of time or both, would constitute a default or an event of default under
any of the Credit Card  Agreements  exists or has  occurred.  Borrowers  and the
other parties  thereto have complied with all of the terms and conditions of the
Credit Card  Agreements to the extent  necessary for Borrowers to be entitled to
receive all  payments  thereunder.  Borrowers  have  delivered,  or caused to be
delivered to Lender, true, correct and complete copies of all of the Credit Card
Agreements.

         8.10  Employee Benefits.

                  (a)  Borrowers   have  not  engaged  in  any   transaction  in
connection  with  which  Borrowers  or any of their  ERISA  Affiliates  could be
subject to either a civil  penalty  assessed  pursuant to ERISA or a tax imposed
the Code,  including any  accumulated  funding  deficiency  described in Section
8.10(c)  hereof  and any  deficiency  with  respect to vested  accrued  benefits
described in Section 8.10(d) hereof.

                  (b) No liability to the Pension Benefit  Guaranty  Corporation
has been or is expected by Borrowers to be incurred with respect to any employee
benefit plan of Borrowers  or any of their ERISA  Affiliates.  There has been no
reportable  event  (within the meaning of ERISA) or any other event or condition
with  respect to any  employee  benefit  plan of Borrowers or any of their ERISA
Affiliates  which presents a risk of termination of any such plan by the Pension
Benefit Guaranty Corporation.


                                                      

<PAGE>



                  (c) Full payment has been made of all amounts which  Borrowers
or any of their ERISA  Affiliates  are required under ERISA and the Code to have
paid under the terms of each employee benefit plan as contributions to such plan
as of the last day of the most  recent  fiscal  year of such plan ended prior to
the date hereof, and no accumulated  funding deficiency (as defined in ERISA and
the Code),  whether or not waived,  exists with respect to any employee  pension
benefit plan,  including any penalty or tax described in Section  8.10(a) hereof
and any deficiency with respect to vested accrued benefits  described in Section
8.10(d) hereof.

                  (d) The current value of all vested accrued benefits under all
employee pension benefit plans maintained by Borrowers that are subject to Title
IV of ERISA  does not  exceed  the  current  value of the  assets of such  plans
allocable  to  such  vested  accrued  benefits,  including  any  penalty  or tax
described  in Section  8.10(a)  hereof and any  accumulated  funding  deficiency
described in Section  8.10(c)  hereof.  The terms  "current  value" and "accrued
benefit" have the meanings specified in ERISA.

                  (e) Neither  Borrowers nor any of their ERISA Affiliates is or
has ever been obligated to contribute to any "multiemployer  plan" (as such term
is defined in ERISA) that is subject to Title IV of ERISA.

          8.11  Accuracy  and  Completeness  of  Information.   All  information
furnished by or on behalf of either  Borrower in writing to Lender in connection
with this Agreement or any of the other Financing  Agreements or any transaction
contemplated hereby or thereby,  including,  without limitation, all information
on the Information  Certificates is true and correct in all material respects on
the date as of which such  information  is dated or certified  and does not omit
any material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected
to have a material adverse affect on the business, assets or prospects of either
Borrower,  which  has not been  fully  and  accurately  disclosed  to  Lender in
writing.

          8.12  Interrelated Business.  One Price is the direct and
beneficial owner and holder of all of the issued and outstanding
shares of Capital Stock of one Price PR.  Borrowers share an

                                                       

<PAGE>



identity of interests such that any benefit received by either Borrower benefits
the other. Each Borrower (a) renders services to or for the benefit of the other
Borrower,   (b)  makes  loans  and  advances  and   provides   other   financial
accommodations  to or for the benefit of the other  Borrower  (including,  inter
alia, the payment and or guaranties by one Borrower of indebtedness of the other
Borrower),  and (c) provides administrative,  marketing,  payroll and management
services to or for the benefit of the other Borrower. Borrowers have centralized
purchasing, collection, distribution, accounting, legal and other services.

          8.13 Survival of  Warranties;  Cumulative.  All  representa  tions and
warranties  contained in this Agreement or any of the other Financing Agreements
shall survive the  execution and delivery of this  Agreement and shall be deemed
to have been made again to Lender on the date of each  additional  borrowing  or
other credit accommodation  hereunder and shall be conclusively presumed to have
been relied on by Lender  regardless of any  investigation  made or  information
possessed by Lender. The  representations  and warranties set forth herein shall
be cumulative and in addition to any other  representations  or warranties which
Borrowers shall now or hereafter give, or cause to be given, to Lender.


SECTION 9.   AFFIRMATIVE AND NEGATIVE COVENANTS

          9.1  Maintenance  of  Existence.  Each  Borrower  shall  at all  times
preserve,  renew and keep in full, force and effect its corporate  existence and
rights and franchises with respect thereto and maintain in full force and effect
all permits, licenses, trademarks, tradenames, approvals, authorizations, leases
and contracts  necessary to carry on the business as presently or proposed to be
conducted. Each Borrower shall give Lender thirty (30) days prior written notice
of any proposed change in its corporate  name,  which notice shall set forth the
new name and such  Borrower  shall  deliver to Lender a copy of the amendment to
the Certificate of Incorporation of such Borrower  providing for the name change
certified by the Secretary of State of the jurisdiction of incorporation of such
Borrower as soon as it is available.

          9.2  New Collateral Locations.  A Borrower may open any new
location within the continental United States or Puerto Rico

                                                      

<PAGE>



provided such Borrower (a) gives Lender  fourteen (14) days prior written notice
of the intended  opening of any such new location and (b) executes and delivers,
and, to the extent  within such  Borrower's  control,  causes to be executed and
delivered, to Lender such agreements,  documents,  and instruments as Lender may
deem  reasonably  necessary  or  desirable  to  protect  its  interests  in  the
Collateral  at such  location,  including,  without  limitation,  UCC  financing
statements;  provided,  that the  inability or failure of such Borrower to cause
any of such  agreements,  documents or  instruments  to be executed or delivered
because the same are not within such  Borrower's  control or otherwise shall not
affect any of Lender's other rights hereunder,  including,  without  limitation,
Lender's  rights to establish or increase  Availability  Reserves in  accordance
herewith.

          9.3  Compliance with Laws, Regulations, Etc.

                  (a) Each Borrower shall, at all times,  comply in all material
respects with all laws, rules,  regulations,  licenses,  permits,  approvals and
orders  applicable  to it and duly  observe  all  material  requirements  of any
Federal, State or local governmental authority,  including,  without limitation,
the Employee  Retirement  Security  Act of 1974,  as amended,  the  Occupational
Safety and Hazard Act of 1970, as amended, the Fair Labor Standards Act of 1938,
as  amended,  and  all  statutes,  rules,   regulations,   orders,  permits  and
stipulations relating to environmental pollution and employee health and safety,
including, without limitation, all of the Environmental Laws.

                  (b)  Each  Borrower  shall  establish  and  maintain,  at  its
expense,  a system to assure  and  monitor  its  continued  compliance  with all
Environmental  Laws in all of its operations,  which system shall include annual
reviews of such  compliance  by  employees  or agents of such  Borrower  who are
familiar  with  the  requirements  of  the  Environmental  Laws.  Copies  of all
environmental surveys, audits,  assessments,  feasibility studies and results of
remedial  investigations shall be promptly furnished, or caused to be furnished,
by Borrowers to Lender.  Borrowers shall take prompt and  appropriate  action to
respond  to any  non-compliance  with any of the  Environmental  Laws and  shall
regularly report to Lender on such response.


                                                       

<PAGE>



                  (c) Each Borrower  shall give both oral and written  notice to
Lender  immediately  upon such  Borrower's  receipt  of any  notice  of, or such
Borrower's  otherwise  obtaining  knowledge of, (i) the  occurrence of any event
involving  the  release,  spill  or  discharge,  threatened  or  actual,  of any
Hazardous  Material or (ii) any  investigation,  proceeding,  complaint,  order,
directive,  claims,  citation or notice with respect to: (A) any  non-compliance
with or violation of any  Environmental Law by such Borrower or (B) the release,
spill or discharge,  threatened or actual, of any Hazardous  Material or (C) the
generation,  use, storage,  treatment,  transportation,  manufacture,  handling,
production   or  disposal  of  any   Hazardous   Materials   or  (D)  any  other
environmental,  health or safety matter,  which materially affects such Borrower
or its business,  operations or assets or any  properties at which such Borrower
transported, stored or disposed of any Hazardous Materials.

                  (d) Without limiting the generality of the foregoing, whenever
Lender  reasonably  determines  that there is  non-compliance,  or any condition
which  requires  any action by or on behalf of a Borrower  in order to avoid any
material  non-compliance,  with any  Environmental  Law, such Borrower shall, at
Lender's  request  and  such  Borrower's  expense:   (i)  cause  an  independent
environmental  engineer  acceptable  to Lender to conduct such tests of the site
where  such  Borrower's  non-compliance  or  alleged  non-compliance  with  such
Environmental  Laws has  occurred  as to such  non-compliance  and  prepare  and
deliver to Lender a report as to such  non-compliance  setting forth the results
of such tests,  a proposed  plan for  responding to any  environmental  problems
described  therein,  and an  estimate of the costs  thereof and (ii)  provide to
Lender  a  supplemental  report  of such  engineer  whenever  the  scope of such
non-compliance,  or such  Borrower's  response  thereto or the  estimated  costs
thereof, shall change in any material respect.

                  (e) Borrowers  shall indemnify and hold harmless  Lender,  its
directors,  officers, employees, agents, invitees,  representatives,  successors
and assigns, from and against any and all losses, claims, damages,  liabilities,
costs, and expenses  (including  attorneys' fees and legal expenses) directly or
indirectly arising out of or attributable to the use,  generation,  manufacture,
reproduction,  storage, release, threatened release, spill, discharge,  disposal
or presence of a Hazardous Material,

                                                       

<PAGE>



including,  without  limitation,  the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of Borrowers and the
preparation and implementation of any closure, remedial or other required plans.
All representations,  warranties, covenants and indemnifications in this Section
9.3  shall  survive  the  payment  of the  Obligations  and the  termination  or
non-renewal of this Agreement.

          9.4  Payment of Taxes and  Claims.  Each  Borrower  shall duly pay and
discharge all taxes, assessments, contributions and governmental charges upon or
against it or its  properties or assets,  except for taxes the validity of which
are being contested in good faith by appropriate  proceedings diligently pursued
and available to Borrowers and with respect to which adequate reserves have been
set aside on its books,  and except for any such  failure to pay taxes that does
not,  and could not  reasonably  be expected  to,  result in a Material  Adverse
Effect. Each Borrower shall be liable for any tax or penalties imposed on Lender
as a result of the  financing  arrangements  provided  for herein and  Borrowers
agrees to indemnify and hold Lender harmless with respect to the foregoing,  and
to repay to Lender on demand the  amount  thereof,  and until paid by  Borrowers
such amount shall be added and deemed part of the Loans, provided, that, nothing
contained  herein shall be  construed to require  Borrowers to pay any income or
franchise taxes attributable to the income of Lender from any amounts charged or
paid hereunder to Lender.  The foregoing  indemnity shall survive the payment of
the Obligations and the termination or non-renewal of this Agreement.

          9.5  Insurance.  Each  Borrower  shall,  at all times,  maintain  with
financially  sound  and  reputable   insurers  insurance  with  respect  to  the
Collateral  against  loss or damage and all other  insurance of the kinds and in
the  amounts   customarily   insured  against  or  carried  by  corporations  of
established  reputation  engaged in the same or similar businesses and similarly
situated. Said policies of insurance shall be satisfactory to Lender as to form,
amount and  insurer.  Each  Borrower  shall  furnish  certificates,  policies or
endorsements to Lender as Lender shall require as proof of such insurance,  and,
if either  Borrower fails to do so, Lender is authorized,  but not required,  to
obtain such  insurance at the expense of Borrowers.  All policies  shall provide
for at least thirty (30) days prior written notice to Lender of any cancellation
or reduction of

                                                       

<PAGE>



coverage and that Lender may act as attorney for Borrowers in obtaining,  and at
any  time  an  Event  of  Default  exists  or has  occurred  and is  continuing,
adjusting,  settling, amending and canceling such insurance. Each Borrower shall
cause Lender to be named as a loss payee and an additional  insured (but without
any liability for any premiums) under such insurance  policies and each Borrower
shall  obtain  non-contributory   lender's  loss  payable  endorsements  to  all
insurance policies in form and substance  satisfactory to Lender.  Such lender's
loss payable  endorsements  shall  specify  that the proceeds of such  insurance
shall be payable to Lender as its interests may appear and further  specify that
Lender shall be paid regardless of any act or omission by any Borrower or any of
its affiliates.  At its option, Lender may apply any insurance proceeds received
by Lender at any time to the cost of repairs or replacement of Collateral and/or
to payment of the Obligations, whether or not then due, in any order and in such
manner as Lender may determine or hold such proceeds as cash  collateral for the
Obligations; provided, however, that if no Event of Default or event or state of
facts,  which with notice or passage of time, or both, would constitute an Event
of Default,  exists or has occurred and is continuing,  (i) Lender shall release
to Borrowers or credit to the  applicable  Borrower's  Revolving  Loan  account,
insurance  proceeds so received by Lender with respect to Collateral  located at
the Retail Stores under  arrangements  satisfactory  to Lender for the repair or
replacement of such  Collateral and (ii) Lender shall not require that Lender be
the payee of any check  delivered to Borrowers in  settlement of a claim of less
than  $100,000,  provided  that such check shall  nevertheless  be  deposited by
Borrowers in one of the Blocked Accounts.

          9.6  Financial Statements and Other Information.

                  (a) Each Borrower shall keep proper books and records in which
true and complete entries shall be made of all dealings or transactions of or in
relation  to  the   Collateral  and  the  business  of  such  Borrower  and  its
subsidiaries (if any) in accordance with GAAP and such Borrower shall furnish or
cause to be  furnished to Lender:  (i) within  thirty (30) days after the end of
each fiscal  month,  except  within  forty-five  (45) days after the end of each
fiscal month that coincides with the end of a fiscal quarter,  monthly unaudited
consolidated  financial  statements,  and, if a Borrower has any subsidiaries or
any other

                                                       

<PAGE>



subsidiaries,  unaudited  consolidating  financial statements (including in each
case balance  sheets,  statements of income and loss statements of cash flow and
statements of shareholders' equity), all in reasonable detail, fairly presenting
the financial  position and the results of the  operations of Borrowers and each
of their  subsidiaries  as of the end of and through  such fiscal month and (ii)
within ninety (90) days after the end of each fiscal year, audited  consolidated
financial  statements  (including  in each case balance  sheets,  statements  of
income  and  loss,  statements  of cash  flow and  statements  of  shareholders'
equity),  and the accompanying notes thereto,  all in reasonable detail,  fairly
presenting the financial position and the results of the operations of Borrowers
and their subsidiaries as of the end of and for such fiscal year,  together with
the opinion of independent certified public accountants, which accountants shall
be  an  independent   accounting  firm  selected  by  Borrowers  and  reasonably
acceptable  to Lender,  that such  financial  statements  have been  prepared in
accordance with GAAP, and present fairly the results of operations and financial
condition  of  Borrowers  and  their  subsidiaries  as of the end of and for the
fiscal year then ended.

                  (b) Borrowers  shall promptly  notify Lender in writing of the
details of (i) any loss,  damage,  investigation,  action,  suit,  proceeding or
claim relating to the Collateral or any other property which is security for the
Obligations,  having a value in  excess  of  $25,000,  or which  does,  or could
reasonably be expected to, result in any Material  Adverse  Effect not involving
any Collateral, (ii) the occurrence of any Event of Default or act, condition or
event  which,  with the  passage  of time or giving  of  notice  or both,  would
constitute an Event of Default.

                  (c)  Borrowers  shall  promptly  after the  sending  or filing
thereof  furnish or cause to be furnished to Lender  copies of all reports which
Borrowers  send to their  stockholders  generally  and copies of all reports and
registration  statements  which  Borrowers file with the Securities and Exchange
Commission,  any national  securities  exchange or the National  Association  of
Securities Dealers, Inc.

                  (d) Borrowers shall furnish or cause to be furnished to Lender
such  budgets,  forecasts,  projections  and other  information  respecting  the
Collateral and the business of

                                                       

<PAGE>



Borrowers,  as Lender  may,  from time to time,  reasonably  request.  Lender is
hereby  authorized  to deliver a copy of any  financial  statement  or any other
information  relating  to the  business  of  Borrowers  to any  court  or  other
government  agency or to any participant or assignee or prospective  participant
or assignee. Borrowers hereby irrevocably authorizes and directs all accountants
or auditors to deliver to Lender, at Borrowers' expense, copies of the financial
statements of Borrowers and any reports or management  letters  prepared by such
accountants  or auditors on behalf of  Borrowers  and to disclose to Lender such
information as they may have regarding the business of Borrowers. Any documents,
schedules,  invoices or other  papers  delivered  to Lender may be  destroyed or
otherwise  disposed  of by Lender one (1) year after the same are  delivered  to
Lender, except as otherwise designated by Borrowers to Lender in writing.

          9.7  Sale of Assets, Consolidation, Merger, Dissolution,
Etc.  Neither Borrower shall, directly or indirectly:

                  (a)      merge into or with or consolidate with any other
Person or permit any other Person to merge into or with or
consolidate with it, or

                  (b)  sell,  assign,  lease,  transfer,  abandon  or  otherwise
dispose of any stock or indebtedness to any other Person or any of its assets to
any other Person, except for:

                           (i)      sales and issuance by One Price of its
Capital  Stock or  issuance of Capital  Stock of One Price upon the  exercise of
stock  options  issued by One Price  (subject,  in each  case,  nevertheless  to
Section 10.1(j) hereof),

                           (ii) sales of Inventory in the ordinary course of
business and donations to charity of damaged and end of season
Inventory to the extent permitted under Section 7.3(c) hereof,

                           (iii) the disposition of worn-out or obsolete
Equipment  so long as (A) if an Event of Default  exists or has  occurred and is
continuing,  any  proceeds  are paid to Lender and (B) such sales do not involve
Equipment  having an  aggregate  fair market value in excess of $250,000 for all
such  Equipment  disposed of in any fiscal year of  Borrowers  under this clause
(iii) and/or clause (iv) of this Section 9.7(b), and

                                                       

<PAGE>



                           (iv) sales or other dispositions by Borrowers of
assets in  connection  with the closing or sale of a Retail Store  location of a
Borrower in the ordinary  course of such  Borrower's  business  which consist of
leasehold  interests in the premises of such store,  the  Equipment and fixtures
located at such  premises  and the books and records  relating  exclusively  and
directly to the  operations  of such store;  provided,  that, as to each and all
such sales,  (A) on the date of, and after giving  effect to, any such sale,  in
any calendar year,  Borrowers  shall not have closed or sold during the calendar
year in which this  Agreement  is  executed,  in addition to those  Retail Store
locations  listed on Schedule 9.7 hereto which are closed or sold,  Retail Store
locations  accounting  for more than five (5%) percent of all sales of Borrowers
in the  immediately  preceding  twelve (12) month period,  and in any subsequent
calendar year,  Borrowers  shall not have closed or sold Retail Store  locations
accounting  for more than ten (10%)  percent  of all sales of  Borrowers  in the
immediately  preceding twelve (12) month period,  (B) Lender shall have received
not less than ten (10) business days prior written  notice of such sale or other
disposition,  which notice shall set forth in reasonable detail  satisfactory to
Lender, the parties to such sale or other disposition,  the assets to be sold or
otherwise  disposed of, the purchase price and the manner of payment thereof and
such other information with respect thereto as Lender may request, (C) as of the
date of such sale or other disposition and after giving effect thereto, no Event
of  Default,  or act,  condition  or event  which with notice or passage of time
would  constitute an Event of Default,  shall exist or have  occurred,  (D) such
sale or other disposition,  shall be on commercially reasonable prices and terms
in a bona  fide  arm's  length  transaction,  and (E)  any and all net  proceeds
payable  or  delivered  to  such  Borrower  in  respect  of such  sale or  other
disposition,  if an Event of Default exists or has occurred and is continuing or
after the aggregate  amounts  thereof  received in any fiscal year of Borrowers,
plus the amounts received from dispositions  under Section  9.7(b)(iii)  hereof,
exceeds $250,000, shall be paid or delivered, or caused to be paid or delivered,
to Lender in accordance  with the terms of this  Agreement  either,  at Lender's
option,  for  application to the Obligations in accordance with the terms hereof
(except to the extent such proceeds  reflect  payment in respect of indebtedness
secured by a properly  perfected first priority  security interest in the assets
sold, in which case, such proceeds shall be applied to such indebtedness

                                                       

<PAGE>



secured thereby) or to be held by Lender as cash collateral for
the Obligations on terms and conditions acceptable to Lender; or

                  (c)      form or acquire any subsidiaries, or

                  (d)      wind up, liquidate or dissolve, or

                  (e) agree to do any of the  foregoing,  unless  Lender's prior
written consent is expressly  required as a condition of any binding effect upon
either Borrower of any such agreement.

          9.8  Encumbrances.  Neither  Borrower shall create,  incur,  assume or
suffer to exist any security interest,  mortgage,  pledge, lien, charge or other
encumbrance  of any  nature  whatsoever  on any of  its  assets  or  properties,
including,  without limitation,  the Collateral,  except: (a) liens and security
interests of Lender;  (b) liens  securing  the payment of taxes,  either not yet
overdue  or the  validity  of  which  are  being  contested  in  good  faith  by
appropriate  proceedings  diligently pursued and available to Borrowers and with
respect to which  adequate  reserves have been set aside on its books;  (c) non-
consensual  statutory  liens  (other than liens  securing  the payment of taxes)
arising in the ordinary  course of Borrowers'  business to the extent:  (i) such
liens  secure  indebtedness  which is not  overdue  or (ii)  such  liens  secure
indebtedness relating to claims or liabilities which are fully insured and being
defended  at the sole cost and  expense  and at the sole risk of the  insurer or
being contested in good faith by appropriate  proceedings diligently pursued and
available to Borrowers, in each case prior to the commencement of foreclosure or
other similar  proceedings and with respect to which adequate reserves have been
set aside on its books; (d) zoning restrictions,  easements, licenses, covenants
and other restrictions affecting the use of Real Property which do not interfere
in any material  respect with the use of such Real Property or ordinary  conduct
of the business of Borrowers as presently conducted thereon or materially impair
the value of the Real Property which may be subject thereto;  (e) purchase money
security  interests in Equipment  (including  capital leases) and purchase money
mortgages on real estate not to exceed  $2,500,000  in the aggregate at any time
outstanding so long as such security interests and mortgages do not apply to any
property of Borrowers other than the Equipment or real estate so acquired,  such
Equipment or real estate is acquired

                                                       

<PAGE>



contemporaneously with the granting of any such security interest or mortgage or
is  acquired  within one hundred  and eighty  (180) days  before  such  security
interest or mortgage lien is granted,  and the indebtedness secured thereby does
not exceed the cost of the Equipment or real estate so acquired, as the case may
be; (f) liens or rights of setoff or credit  balances of  Borrowers  with Credit
Card Issuers, but not liens on or rights of setoff against any other property or
assets of Borrowers, pursuant to the Credit Card Agreements (as in effect on the
date hereof) to secure the  obligations  of Borrowers to the Credit Card Issuers
as a result  of fees and  chargebacks;  (g)  deposits  of cash with the owner or
lessor of premises  leased and operated by  Borrowers in the ordinary  course of
the  business of  Borrowers  to secure the  performance  by  Borrowers  of their
obligations under the terms of the lease for such premises;  (h) a mortgage lien
solely upon the Real Property  covered by the Mortgage,  granted by One Price in
favor of the  holder  of,  and  securing  only,  Refinancing  Term  Indebtedness
permitted  hereunder,  to which mortgage lien, Lender shall subordinate the lien
of the Mortgage, provided the holder of such mortgage lien executes and delivers
in favor of Lender a written  agreement,  in form and substance  satisfactory to
Lender,  waiving any security interest in or lien upon any Inventory,  Equipment
and other personal  property  Collateral  located at or upon such Real Property,
permitting  Lender  access to, and the right to remain on, such Real Property to
exercise  its rights and remedies and  otherwise  deal with any such  Inventory,
Equipment and other personal property Collateral; and (i) the liens and security
interests set forth on Schedule 8.4 hereto.

         9.9 Indebtedness.  Neither Borrower shall incur, create, assume, become
or be liable in any manner with respect to, or permit to exist,  any obligations
or indebtedness, except:

                  (a)  the Obligations;

                  (b) trade  obligations  (other than trade  obligations  of One
Price PR to One Price),  obligations  under  operating  leases of real estate or
equipment and normal accruals in the ordinary course of business not yet due and
payable,  or with respect to which either  Borrower is  contesting in good faith
the amount or validity thereof by appropriate proceedings diligently pursued and
available to such Borrower and with respect to which adequate reserves have been
set aside on its books;

                                                      

<PAGE>



                  (c) purchase money indebtedness  (including capital leases) to
the  extent not  incurred  or secured  by liens  (including  capital  leases) in
violation of any other provision of this Agreement;

                  (d)  obligations or  indebtedness of One Price PR to One Price
for short term loans and advances, inventory purchases, overhead allocations and
other trade  obligations and  intercompany  accounts,  in the ordinary course of
business, in the aggregate amount not to exceed, at any one time outstanding, an
amount equal to $12,000,000  minus the amount of Revolving Loans  outstanding at
such time to One Price PR;

                  (e) obligations or indebtedness existing as of the date hereof
set forth on Schedule 9.9 hereto,  provided,  that,  (i) Borrowers may only make
regularly  scheduled  payments  of  principal  and  interest  in respect of such
indebtedness  in  accordance  with the  terms  of the  agreement  or  instrument
evidencing or giving rise to such  indebtedness as in effect on the date hereof,
(ii) Borrowers shall not, directly or indirectly,  (A) amend,  modify,  alter or
change the terms of such  indebtedness or any agreement,  document or instrument
related thereto as in effect on the date hereof, or (B) redeem, retire, defease,
purchase or  otherwise  acquire  such  indebtedness,  or set aside or  otherwise
deposit or invest any sums for such purpose,  and (iii)  Borrowers shall furnish
to Lender all notices or demands in  connection  with such  indebtedness  either
received by Borrowers or on its behalf,  promptly after the receipt thereof,  or
sent by Borrowers or on its behalf,  concurrently  with the sending thereof,  as
the case may be; and

                  (f)  indebtedness  of One Price issued in exchange for, or the
proceeds of which are used to refinance,  replace or substitute for indebtedness
to  Lender  evidenced  by  the  Term  Loan,  as  otherwise  permitted  hereunder
("Refinancing Term Indebtedness");  provided,  that, (i) the principal amount of
such Refinancing Term  Indebtedness  shall not be less than the then outstanding
principal  amount of  indebtedness  evidenced  by the Term  Loan,  nor more than
eighty (80%)  percent of the fair market value of the Real  Property  subject to
the Mortgage as shown on a then-current  appraisal in form,  scope,  methodology
and by an appraiser  acceptable  to Lender,  (ii) Lender shall have received not
less than fifteen (15) days prior written notice of the

                                                       

<PAGE>



intention  to incur  such  indebtedness  and  shall  have  received  such  other
information  and  documentation  with respect  thereto as Lender may request and
(iii) One Price may only make regularly scheduled or other mandatory payments of
principal and interest in respect of such indebtedness,  or, with Lender's prior
written  consent,  voluntary  prepayments of such  indebtedness,  (iv) One Price
shall not, directly or indirectly,  (A) amend, modify, alter or change the terms
of such indebtedness or any agreement,  document or instrument  related thereto,
or (B) as to such indebtedness,  redeem, retire, defease,  purchase or otherwise
acquire such  indebtedness or set aside or otherwise  deposit or invest any sums
for such purpose and (v) One Price shall furnish to Lender all notices,  demands
or other materials in connection with such  indebtedness  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.

          9.10 Loans,  Investments,  Guarantees,  Etc.  Neither  Borrower shall,
directly  or  indirectly,  make any loans or advance  money or  property  to any
person,  or  invest in (by  capital  contribution,  dividend  or  otherwise)  or
purchase or repurchase the stock or indebtedness or all or a substantial part of
the  assets or  property  of any  person,  or  guarantee,  assume,  endorse,  or
otherwise  become  responsible  for (directly or indirectly)  the  indebtedness,
performance,  obligations  or  dividends of any Person or agree to do any of the
foregoing,  except: (a) the endorsement of instruments for collection or deposit
in the ordinary course of business;  (b)  investments in: (i) short-term  direct
obligations of the United States  Government,  (ii)  negotiable  certificates of
deposit issued by any bank  satisfactory to Lender,  payable to the order of any
of Borrowers or to bearer and, upon Lender's request,  delivered to Lender,  and
(iii)  commercial  paper  rated  A1 or  P1;  provided,  that,  as to  any of the
foregoing,  unless waived in writing by Lender,  Borrowers shall,  upon Lender's
request,  take such  actions as are deemed  necessary  by Lender to perfect  the
security  interest  of Lender in such  investments;  (c) loans and  advances  by
Borrowers to employees of Borrowers for relocation and hardship  situations in a
manner  consistent  with the most recent past practices of Borrowers,  provided,
that, in no event shall the total amount of such loans and advances  outstanding
at any one time exceed $500,000;  (d) advances by Borrowers to lessors of Retail
Stores for the

                                                       

<PAGE>



construction  and/or renovation of Retail Store locations in a manner consistent
with the most recent past practices of Borrowers,  provided,  that, (i) 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 be
continuing, (ii) in no event shall the total amount of such advances outstanding
at any one time exceed  $250,000  and (iii)  Lender  shall have  received  prior
written  notice of any such  advance  made  after  the date  hereof in excess of
$50,000;  (e) advances by Borrowers to vendors of Inventory as deposits  against
purchase  orders of Inventory in a manner  consistent  with the most recent past
practices  of  Borrowers,  provided,  that,  (i) 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 be  continuing,  (ii) in no
event shall the total amount of such advances outstanding at any one time exceed
$1,000,000 and (iii) Lender shall have received prior written notice of any such
advance  made  after the date  hereof in excess of  $100,000;  (f)  advances  by
Borrowers to utility  providers as security deposits in a manner consistent with
the most recent  past  practices  of  Borrowers;  (g) loans and  advances by one
Borrower  to the  other  Borrower  constituting  permitted  indebtedness  of the
recipient  Borrower  under  Section  9.9  hereof;  and (h) the  existing  loans,
advances and  guarantees by Borrowers  outstanding  as of the date hereof as set
forth on Schedule 9.10 hereto and any guarantees by One Price of the Obligations
of One Price PR to lessors,  utility providers,  and construction suppliers with
respect to Retail Stores  operated by One Price PR;  provided,  that, as to such
loans, advances and guarantees, (i) Borrowers shall not, directly or indirectly,
(A)  amend,  modify,  alter or  change  the  terms of such  loans,  advances  or
guarantees or any agreement,  document or instrument related thereto,  or (B) as
to such guarantees,  redeem, retire, defease, purchase or otherwise acquire such
guarantee or set aside or otherwise  deposit or invest any sums for such purpose
and (ii)  Borrowers  shall  furnish  to Lender  all  notices,  demands  or other
materials in connection with such loans,  advances or guarantees either received
by Borrowers or on their behalf,  promptly after the receipt thereof, or sent by
Borrowers or on their behalf, concurrently with the sending thereof, as the case
may be.

         9.11  Dividends and Redemptions.  Neither Borrower shall,
directly or indirectly, declare or pay any dividends on account

                                                       
<PAGE>



of any  shares of class of Capital  Stock of either  Borrower  now or  hereafter
outstanding,  or set aside or  otherwise  deposit  or  invest  any sums for such
purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of
any class of Capital Stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any consideration  other than common stock or apply or set
apart any sum,  or make any other  distribution  (by  reduction  of  capital  or
otherwise)  in respect of any such  shares or agree to do any of the  foregoing,
except  that,  provided no Event of  Default,  and no event which with notice or
passage  of time or both would  constitute  an Event of  Default,  exists or has
occurred and is continuing,  a Borrower may declare and pay,  dividends  payable
solely in its common stock or rights to acquire its common stock.

         9.12 Transactions with Affiliates.  Neither Borrower shall, directly or
indirectly,  (a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to, any officer, employee, shareholder, director, agent or
any other  affiliate  of such  Borrower,  except  for sales of  Inventory  to or
purchases of Inventory by a Borrower,  as to which the selling or purchase price
is not less than the cost thereof to the seller thereof, except retail or sample
sales to employees in the ordinary course of business,  or (b) make any payments
of management,  consulting or other fees for management or similar services,  or
of any indebtedness  owing to any officer,  employee,  shareholder,  director or
other person  affiliated  with such Borrower  except (i) for repayments of short
term loans and  advances  made by one Borrower to the other  Borrower  otherwise
permitted  hereunder,  (ii) reasonable  compensation to officers,  employees and
directors  for  services  rendered to such  Borrower in the  ordinary  course of
business,  and  (iii)  termination,  severance  or  other  similar  payments  to
employees or officers of a Borrower in connection  with the termination of their
employment with a Borrower  determined by such Borrower to be payable  according
to past  practices of such  Borrower in the case of employees or officers  whose
employment  is not  subject  to  contractual  agreements,  and,  in the  case of
employees or officers of Borrowers  whose  employment is subject to  contractual
agreements,   according  to  contractual   obligations  of  Borrowers  for  such
termination,  severance  or other  similar  payments  incurred  when no Event of
Default or event or condition which, with notice or

                                                       

<PAGE>



passage of time, or both,  would  constitute an Event of Default,  exists or has
occurred and is continuing.

         9.13  Credit  Card  Agreements.  Each  Borrower  shall (a)  observe and
perform all material terms,  covenants,  conditions and provisions of the Credit
Card  Agreements  to be  observed  and  performed  by it at the  times set forth
therein; (b) not do, permit,  suffer or refrain from doing anything, as a result
of which there could be a default  under or breach of any of the terms of any of
the  Credit  Card  Agreements  and (c) at all times  maintain  in full force and
effect the Credit Card Agreements and not terminate,  cancel, surrender, modify,
amend,  waive or release  any of the Credit  Card  Agreements,  or consent to or
permit  to occur any of the  foregoing;  except,  that,  (i) each  Borrower  may
terminate or cancel any of the Credit Card  Agreements in the ordinary course of
the business of such  Borrower;  provided,  that,  each of Borrowers  shall give
Lender not less than fifteen (15) days prior written  notice of its intention to
so terminate or cancel any of the Credit Card Agreements; (d) not enter into any
new Credit Card  Agreements  with any new Credit  Card Issuer  unless (i) Lender
shall have received not less than fifteen (15) days prior written  notice of the
intention  of such  Borrower to enter into such  agreement  (together  with such
other  information  with respect thereto as Lender may request) and (ii) each of
Borrowers  delivers,  or  causes  to be  delivered  to  Lender,  a  Credit  Card
Acknowledgment  in favor of Lender;  (e) give Lender immediate written notice of
any Credit Card  Agreement  entered into by such Borrower after the date hereof,
together  with a  true,  correct  and  complete  copy  thereof  and  such  other
information  with  respect  thereto as Lender may  request;  and (f)  furnish to
Lender,  promptly upon the request of Lender,  such  information and evidence as
Lender may require from time to time concerning the observance,  performance and
compliance  by Borrowers  or the other party or parties  thereto with the terms,
covenants or provisions of the Credit Card Agreements.

         9.14  Adjusted Net Worth.  Borrowers shall, at all times,
maintain Adjusted Net Worth of not less than $34,000,000.

         9.15  Working Capital. Borrowers shall, at all times,
maintain Working Capital of not less than $5,000,000.


                                                       

<PAGE>



         9.16  Compliance  with  ERISA.  Except as set forth in the  Information
Certificates,  Borrowers shall not with respect to any "employee  benefit plans"
maintained by a Borrower or any of its ERISA Affiliates:

                  (a) (i) terminate any of such employee  pension plans so as to
incur any  liability to the Pension  Benefit  Guaranty  Corporation  established
pursuant  to ERISA,  (ii)  allow or suffer to exist any  prohibited  transaction
involving  any of such employee  benefit  plans or any trust created  thereunder
which would  subject  Borrowers  or such ERISA  Affiliate to a tax or penalty or
other liability on prohibited  transactions imposed under the Code or ERISA, (b)
fail to pay to any  such  employee  benefit  plan any  contribution  which it is
obligated to pay under ERISA,  the Code or the terms of such plan,  (i) allow or
suffer to exist any accumulated funding deficiency,  whether or not waived, with
respect to any such  employee  benefit  plan,  (ii) allow or suffer to exist any
occurrence of a reportable  event or any other event or condition which presents
a material risk of termination by the Pension  Benefit  Guaranty  Corporation of
any such employee benefit plan that is a single employer plan, which termination
could result in any liability to the Pension  Benefit  Guaranty  Corporation  or
(iii) incur any withdrawal  liability with respect to any multiemployer  pension
plan.

                   (c) As used in this Section 9.16, the term "employee  pension
benefit plans," "employee benefit plans",  "accumulated  funding deficiency" and
"reportable event" shall have the respective meanings assigned to them in ERISA,
and the term "prohibited  transaction"  shall have the meaning assigned to it in
the Code and ERISA.

         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,  but not limited to: (a)
all costs and expenses of filing or recording (including Uniform Commercial

                                                       
<PAGE>



Code financing statement filing taxes and fees,  documentary taxes,  intangibles
taxes and  mortgage  recording  taxes and fees,  if  applicable);  (b) costs and
expenses for all title  insurance and other  insurance  premiums,  environmental
audits,  surveys,  assessments,  engineering reports and inspections,  appraisal
fees and  search  fees;  (c) 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; (d) charges,  fees or expenses charged by any bank or issuer in
connection with the Letter of Credit  Accommodations;  (e) costs and expenses of
preserving  and  protecting  the  Collateral;  (f)  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,  without limitation,  preparations for and consultations  concerning
any such matters);  (g) 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 Borrowers' operations; and (h) the reasonable
fees and  disbursements  of counsel  (including  legal  assistants) to Lender in
connection with any of the foregoing.

         9.18 Further Assurances.  At the request of Lender at any time and from
time to time, Borrowers shall, at Borrowers' expense,  duly execute and deliver,
or cause to be duly executed and delivered,  such further agreements,  documents
and  instruments,  and do or  cause  to be  done  such  further  acts  as may be
necessary  or proper to  evidence,  perfect,  maintain  and enforce the security
interests and the priority thereof in the Collateral and to otherwise effectuate
the  provisions  or purposes  of this  Agreement  or any of the other  Financing
Agreements.  Lender may at any time and from time to time request a  certificate
from an officer of each Borrower  representing that all conditions  precedent to
the  making of Loans and  providing  Letter of Credit  Accommodations  contained
herein are satisfied. In the event of such request by Lender, Lender may, at its
option,  if such  certificate has not been delivered  within five (5) days after
such request, cease to make any further Loans or provide any

                                                       
<PAGE>



further  Letter  of  Credit   Accommodations  until  Lender  has  received  such
certificate  and, in addition,  Lender has determined  that such  conditions are
satisfied. Where permitted by law, each of Borrowers hereby authorizes Lender to
execute and file one or more UCC financing statements signed only by Lender.


SECTION 10.   EVENTS OF DEFAULT AND REMEDIES

          10.1 Events of Default. The occurrence or existence of any one or more
of the  following  events are  referred to herein  individually  as an "Event of
Default", and collectively as "Events of Default":

                  (a) (i)  either  Borrower  fails  to pay  when  due any of the
Obligations  or (ii) either  Borrower or any Obligor fails to perform any of the
terms, covenants, conditions or provisions contained in this Agreement or any of
the other Financing Agreements other than as described in Section 10.1(a)(i) and
such failure shall continue for twenty (20) days;  provided,  that,  such twenty
(20) day period  shall not apply in the case of: (A) any  failure to observe any
such term, covenant,  condition or provision which is not capable of being cured
at all or within  such twenty (20) day period or which has been the subject of a
prior  failure  within a six (6) month  period or (B) an  intentional  breach by
either  Borrower  or any  Obligor  of any  such  term,  covenant,  condition  or
provision,  or (C) the  failure to observe or perform  any of the  covenants  or
provisions  contained in Sections 9.1, 9.5, 9.7, 9.8, 9.10, 9.11 or 9.12 of this
Agreement or any covenants or agreements covering  substantially the same matter
as such sections in any of the other Financing Agreements; or

                  (b) any representation,  warranty or statement of fact made by
either Borrower to Lender in this Agreement,  the other Financing  Agreements or
any other agreement,  schedule,  confirmatory assignment or otherwise shall when
made or deemed made be false or misleading in any material respect;

                  (c) any Obligor revokes, terminates or fails to perform any of
the terms, covenants, conditions or provisions of any guarantee,  endorsement or
other agreement of such party in favor of Lender;

                                                       

<PAGE>



                  (d) any judgment for the payment of money is rendered  against
either  Borrower  or any  Obligor  in excess of  $250,000  in any one case or in
excess of $500,000 in the aggregate and shall remain  undischarged  or unvacated
for a period in excess of thirty (30) days or execution shall at any time not be
effectively  stayed,  or any  judgment  other than for the payment of money,  or
injunction,  attachment,  garnishment  or execution is rendered  against  either
Borrower  or any  Obligor  or any of their  assets,  and,  unless an  injunction
prevents  either  Borrower from  operating its business in the ordinary  course,
such injunction remains in effect for a period in excess of thirty (30) days;

                  (e) any Obligor (being a natural  person or a general  partner
of an Obligor which is a  partnership)  dies or either  Borrower or any Obligor,
which is a partnership  or  corporation,  dissolves or suspends or  discontinues
doing business;

                  (f) either Borrower or any Obligor becomes insolvent  (however
defined or evidenced),  makes an assignment for the benefit of creditors,  makes
or sends  notice of a bulk  transfer  or calls a  meeting  of its  creditors  or
principal creditors;

                  (g) a case or  proceeding  under  the  bankruptcy  laws of the
United  States of America now or  hereafter  in effect or under any  insolvency,
reorganization,  receivership,  readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against either Borrower or any Obligor or all or any part of
its properties  and such petition or application is not dismissed  within thirty
(30) days after the date of its filing or either  Borrower or any Obligor  shall
file any answer  admitting or not  contesting  such petition or  application  or
indicates  its consent to,  acquiescence  in or approval  of, any such action or
proceeding or the relief requested is granted sooner;

                  (h) a case or  proceeding  under  the  bankruptcy  laws of the
United  States of America now or  hereafter  in effect or under any  insolvency,
reorganization,  receivership,  readjustment of debt, dissolution or liquidation
law or statute of any  jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by either  Borrower or any Obligor or for all or any part of
its property; or

                                                       
<PAGE>



                  (i) any default by either  Borrower  or any Obligor  under any
agreement,  document or  instrument  relating to any  indebtedness  for borrowed
money  owing  to  any  person  other  than  Lender,  or  any  capitalized  lease
obligations,   Retail  Store  operating  leases,   contingent   indebtedness  in
connection  with any guarantee,  letter of credit,  indemnity or similar type of
instrument  in favor of any person  other  than  Lender,  in any case  involving
indebtedness in an amount in excess of $500,000 with respect to defaults arising
under  agreements,  documents and instruments  other than Retail Store operating
leases,  or $500,000 with respect to defaults in current rent,  additional rent,
maintenance, repair or other current lease obligations arising under one or more
Retail Store operating  leases,  in each case, which default  continues for more
than the applicable cure period, if any, with respect thereto, or any default by
any Borrower or any Obligor under any material contract, lease, license or other
obligation  to any person other than Lender,  which  default  continues for more
than the applicable cure period, if any, with respect thereto;

                  (j) any change in the ownership of One Price  resulting in any
one Person, directly or indirectly, becoming the beneficial owner of fifty (50%)
percent or more of the combined voting power of the then outstanding  securities
of One  Price,  or One Price PR ceases to be a  wholly-owned  subsidiary  of One
Price;

                  (k) the indictment or threatened indictment of either Borrower
or any  Obligor  under any  criminal  statute,  or  commencement  or  threatened
commencement  of criminal or civil  proceedings  against either  Borrower or any
Obligor,  pursuant to which  statute or  proceedings  the  penalties or remedies
sought or available include forfeiture of any of the Collateral of such Borrower
or such Obligor;

                  (l) any act,  condition or event shall exist or have  occurred
that results in a Material Adverse Effect relating to the Collateral or Lender's
rights or interests in or with respect to the Collateral; or

                  (m) there shall be an event of default  under any of the other
Financing Agreements which has not been cured by Borrowers within the applicable
cure period thereunder, if any.


                                                       
<PAGE>



          10.2  Remedies.

                  (a) At any time an Event of Default exists or has occurred and
is  continuing,  Lender  shall  have all rights and  remedies  provided  in this
Agreement, the other Financing Agreements, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or  consent  by either  Borrower  or any  Obligor,  except as such  notice or
consent is expressly  provided for hereunder or required by applicable  law. All
rights, remedies and powers granted to Lender hereunder,  under any of the other
Financing  Agreements,  the Uniform Commercial Code or other applicable law, are
cumulative,   not   exclusive   and   enforceable,   in   Lender's   discretion,
alternatively,  successively,  or concurrently on any one or more occasions, and
shall include,  without limitation,  the right to apply to a court of equity for
an injunction to restrain a breach or  threatened  breach by either  Borrower of
this Agreement or any of the other Financing Agreements. Lender may, at any time
or times, proceed directly against either Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.

                  (b) Without  limiting the  foregoing,  at any time an Event of
Default exists or has occurred and is continuing,  Lender may, in its discretion
and without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided,  that, upon the occurrence of any
Event of Default  described  in Sections  10.1(g) and 10.1(h),  all  Obligations
shall  automatically  become immediately due and payable),  (ii) with or without
judicial process or the aid or assistance of others,  enter upon any premises on
or in which any of the  Collateral  may be located  and take  possession  of the
Collateral  or  complete  processing,  manufacturing  and  repair  of all or any
portion of the Collateral,  (iii) require Borrowers,  at Borrowers'  expense, to
assemble and make  available to Lender any part or all of the  Collateral at any
place  and  time  designated  by  Lender,  (iv)  collect,  foreclose,   receive,
appropriate,  setoff and realize upon any and all Collateral,  (v) remove any or
all of the  Collateral  from any premises on or in which the same may be located
for the purpose of effecting the sale,  foreclosure or other disposition thereof
or for any other  purpose,  (vi)  sell,  lease,  transfer,  assign,  deliver  or
otherwise  dispose of any and all  Collateral  (including,  without  limitation,
entering into

                                                       
<PAGE>



contracts  with  respect  thereto,  public  or  private  sales at any  exchange,
broker's board, at any office of Lender or elsewhere) at such prices or terms as
Lender may deem reasonable,  for cash, upon credit or for future delivery,  with
the Lender having the right to purchase the whole or any part of the  Collateral
at any such  public  sale,  all of the  foregoing  being  free from any right or
equity of redemption of either Borrower,  which right or equity of redemption is
hereby  expressly  waived and released by each Borrower  and/or (vii)  terminate
this Agreement. If any of the Collateral is sold or leased by Lender upon credit
terms or for future delivery,  the Obligations  shall not be reduced as a result
thereof  until  payment  therefor is finally  collected by Lender.  If notice of
disposition  of  Collateral  is required by law,  five (5) days prior  notice by
Lender to  Borrowers  designating  the time and place of any public  sale or the
time after which any private sale or other intended disposition of Collateral is
to be made,  shall be deemed to be  reasonable  notice  thereof to Borrowers and
each of Borrowers  waives any other  notice.  In the event Lender  institutes an
action to recover any  Collateral or seeks  recovery of any Collateral by way of
prejudgment remedy, each of Borrowers waives the posting of any bond which might
otherwise be required.

                  (c) Lender may apply the cash proceeds of Collateral  actually
received by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations,  in whole or in part and in such order
as Lender may elect,  whether or not then due. Each Borrower shall remain liable
to Lender for the payment of any  deficiency  with  interest at the highest rate
provided for herein and all costs and  expenses of  collection  or  enforcement,
including reasonable attorneys' fees and legal expenses.

                  (d) Without limiting the foregoing,  upon the occurrence of an
Event of Default or an event  which with notice or passage of time or both would
constitute an Event of Default,  Lender may, at its option,  without notice, (i)
cease making Loans or arranging  for Letter of Credit  Accommodations  or reduce
the  lending  formulas  or amounts of Loans and Letter of Credit  Accommodations
available to Borrowers  and/or (ii)  terminate any  provision of this  Agreement
providing for any future Loans or Letter of Credit  Accommodations to be made by
Lender to Borrowers.


                                                       

<PAGE>



SECTION 11.   JURY TRIAL WAIVER; OTHER WAIVERS
                      AND CONSENTS; GOVERNING LAW

         11.1  Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver.

                  (a)  The  validity,  interpretation  and  enforcement  of this
Agreement and the other Financing  Agreements and any dispute arising out of the
relationship  between the parties hereto,  whether in contract,  tort, equity or
otherwise,  shall be  governed  by the  internal  laws of the  State of  Georgia
(without  giving effect to principles of conflicts of law),  except as expressly
provided in any other  Financing  Agreement  with respect to  governing  law for
purposes of such other Financing Agreement.

                  (b) Each Borrower and Lender irrevocably consent and submit to
the non-exclusive  jurisdiction of the Superior Court of Fulton County,  Georgia
and the United States  District  Court for the Northern  District of Georgia and
waive any objection  based on venue or forum non conveniens  with respect to any
action  instituted  therein  arising  under this  Agreement  or any of the other
Financing  Agreements or in any way  connected  with or related or incidental to
the  dealings of the parties  hereto in respect of this  Agreement or any of the
other Financing  Agreements or the  transactions  related hereto or thereto,  in
each case whether now existing or  hereafter  arising,  and whether in contract,
tort,  equity or otherwise,  and agree that any dispute with respect to any such
matters  shall be heard only in the courts  described  above (except that Lender
shall have the right to bring any action or proceeding against a Borrower or its
property in the courts of any other jurisdiction which Lender deems necessary or
appropriate  in order to realize on the  Collateral or to otherwise  enforce its
rights against such Borrower or its property).

                  (c)  Each Borrower hereby waives personal service of
any and all process upon it and consents that all such service of
process may be made by certified mail (return receipt requested)
directed to its address set forth on the signature pages hereof
and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails,
or, at Lender's option, by service upon Borrowers in any other
manner provided under the rules of any such courts.  Within

                                                       
<PAGE>



thirty (30) days after such service,  such  Borrowers  shall appear in answer to
such process,  failing which  Borrowers  shall be deemed in default and judgment
may be entered by Lender against Borrowers for the amount of the claim and other
relief requested.

                  (d) EACH  BORROWER AND LENDER  HEREBY WAIVE ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING  AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL  TO THE DEALINGS OF THE PARTIES  HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING  AGREEMENTS OR THE  TRANSACTIONS
RELATED  HERETO OR  THERETO  IN EACH CASE  WHETHER  NOW  EXISTING  OR  HEREAFTER
ARISING, AND WHETHER IN CONTRACT,  TORT, EQUITY OR OTHERWISE.  EACH BORROWER AND
LENDER HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,  ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL  WITHOUT A JURY AND THAT EITHER  BORROWER
OR LENDER MAY FILE AN ORIGINAL  COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY
COURT AS WRITTEN  EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

                  (e) Lender  shall not have any  liability  to either  Borrower
(whether in tort,  contract,  equity or otherwise) for losses suffered by either
Borrower  in  connection  with,  arising  out of, or in any way  related  to the
transactions  or  relationships  contemplated  by this  Agreement,  or any  act,
omission or event occurring in connection herewith, unless it is determined by a
final and  non-appealable  judgment or court order  binding on Lender,  that the
losses were the result of acts or omissions  constituting  gross  negligence  or
willful  misconduct.  In any such  litigation,  Lender  shall be entitled to the
benefit of the rebuttable  presumption  that it acted in good faith and with the
exercise  of  ordinary  care  in the  performance  by it of the  terms  of  this
Agreement.

         11.2 Waiver of Notices.  Each Borrower hereby  expressly waives demand,
presentment,  protest and notice of protest and notice of dishonor  with respect
to any and all instruments and commercial  paper,  included in or evidencing any
of the Obligations or the Collateral,  and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement,  except such as are expressly provided for herein. No notice
to or demand on

                                                       

<PAGE>



either  Borrower  which Lender may elect to give shall entitle  Borrowers to any
other or further notice or demand in the same,  similar or other  circumstances.
Without  limiting the  generality of the  foregoing,  each  Borrower  waives (i)
notice prior to Lender's  taking  possession or control of any of the collateral
or any bond or  security  which might be required by any court prior to allowing
Lender to  exercise  any of  Lender's  remedies,  including  the  issuance of an
immediate writ of possession and (ii) the benefit of all valuation, appraisement
and exemption laws.

         11.3  Amendments and Waivers.  Neither this Agreement nor any provision
hereof shall be amended,  modified,  waived or discharged orally or by course of
conduct,  but only by a written  agreement  signed by an  authorized  officer of
Lender.  Lender shall not, by any act, delay, omission or otherwise be deemed to
have  expressly or impliedly  waived any of its rights,  powers and/or  remedies
unless such waiver  shall be in writing and signed by an  authorized  officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein.  A waiver by Lender of any right,  power and/or remedy on any one
occasion  shall not be construed as a bar to or waiver of any such right,  power
and/or remedy which Lender would otherwise have on any future occasion,  whether
similar in kind or otherwise.

         11.4  Waiver of  Counterclaims.  Each  Borrower  waives  all  rights to
interpose any claims, deductions,  setoffs or counterclaims of any nature (other
then compulsory  counterclaims) in any action or proceeding with respect to this
Agreement,  the Obligations,  the Collateral or any matter arising  therefrom or
relating hereto or thereto.

         11.5  Indemnification.  Each Borrower shall  indemnify and hold Lender,
and its directors,  agents, employees and counsel, harmless from and against any
and all losses,  claims,  damages,  liabilities,  costs or expenses  imposed on,
incurred by or asserted  against any of them in connection  with any litigation,
investigation,  claim or  proceeding  commenced  or  threatened  related  to the
negotiation,  preparation,  execution,  delivery,  enforcement,  performance  or
administration  of  this  Agreement,  any  other  Financing  Agreements,  or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,

                                                       

<PAGE>



including, without limitation,  amounts paid in settlement, court costs, and the
fees and expenses of counsel.  To the extent that the  undertaking to indemnify,
pay and hold harmless set forth in this Section may be unenforceable  because it
violates any law or public policy,  each Borrower shall pay the maximum  portion
which it is permitted to pay under  applicable law to Lender in  satisfaction of
indemnified  matters under this Section.  The foregoing  indemnity shall survive
the  payment of the  Obligations  and the  termination  or  non-renewal  of this
Agreement.


SECTION 12.  TERM OF AGREEMENT; MISCELLANEOUS

          12.1  Term.

                  (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 March 31,  1998 (the
"Renewal  Date"),  and from year to year  thereafter,  unless sooner  terminated
pursuant to the terms hereof;  provided, that, Lender may, at its option, extend
the  Renewal  Date to March 31, 1999 by giving  Borrowers  notice at least sixty
(60) days  prior to March 31,  1998.  Lender or  Borrowers  may  terminate  this
Agreement and the other Financing Agreements effective on the Renewal Date or on
the  anniversary of the Renewal Date in any year by giving to the other party at
least sixty (60) days prior written notice;  provided,  that, this Agreement and
all other  Financing  Agreements  must be  terminated  simultaneously.  Upon the
effective  date of  termination  or  non-renewal  of the  Financing  Agreements,
Borrowers shall pay to Lender,  in full, all outstanding and unpaid  Obligations
and shall furnish cash collateral to Lender in such amounts as Lender determines
are reasonably  necessary to secure Lender from loss,  cost,  damage or expense,
including attorneys' fees and legal expenses,  in connection with any contingent
Obligations,  including issued and outstanding  Letter of Credit  Accommodations
and checks or other payments provisionally credited to the Obligations and/or as
to which  Lender  has not yet  received  final and  indefeasible  payment.  Such
payments and cash collateral shall be remitted by wire transfer in Federal funds
to such bank account of Lender,  as Lender may, in its discretion,  designate in
writing to Borrowers for such purpose. Interest shall be due until and including
the next business day, if the amounts so paid

                                                       

<PAGE>



by Borrowers to the bank account  designated by Lender are received in such bank
account later than 12:00 noon, Atlanta, Georgia time.

                  (b) No termination  of this  Agreement or the other  Financing
Agreements shall relieve or discharge either Borrower of its respective  duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all  Obligations  have been fully and  finally  discharged  and paid,  and
Lender's  continuing  security  interest  in the  Collateral  and the rights and
remedies  of  Lender  hereunder,   under  the  other  Financing  Agreements  and
applicable  law,  shall  remain in effect until all such  Obligations  have been
fully and finally discharged and paid.

                  (c) If for any reason this  Agreement is  terminated  prior to
the end of the then current term or renewal term of this  Agreement,  in view of
the impracticality and extreme difficulty of ascertaining  actual damages and by
mutual agreement of the parties as to a reasonable  calculation of Lender's lost
profits  as a  result  thereof,  Borrowers  agree  to pay to  Lender,  upon  the
effective date of such  termination,  an early termination fee in the amount set
forth below if such termination is effective in the period indicated:
<TABLE>
<S>       <C>            <C>                                            <C>
                                    Amount                                              Period

         (i)             1.5% of the Inventory                          March 25, 1996 to and
                         Loan Limit                                     including March 25, 1997

         (ii)            1% of the Inventory                            March 26, 1997 to and
                         Loan Limit                                     including March 30, 1998
</TABLE>

Such  early  termination  fee shall be  presumed  to be the  amount  of  damages
sustained by Lender as a result of such early  termination  and Borrowers  agree
that it is reasonable  under the  circumstances  currently  existing.  The early
termination  fee provided  for in this Section 12.1 shall be deemed  included in
the Obligations.  Notwithstanding  anything to the contrary contained in Section
12.1,  no  early  termination  fee  shall  be  payable  if all of the  following
conditions  have been met upon the effective date of termination and the payment
and performance of all Obligations in connection therewith:  (i) Borrowers elect
to terminate the Agreement and the other  Financing  Agreements,  (ii) Borrowers
have

                                                       

<PAGE>



entered into an agreement  with only  CoreStates  Bank,  N.A. or with a group or
syndicate of banks of which  CoreStates Bank, N.A. is the lead or agent bank, to
replace the financing  arrangements  with Lender,  pursuant to which  CoreStates
Bank, N.A. or such group or syndicate of banks as to which CoreStates Bank, N.A.
is agent or lead bank, agrees to make loans and provide financial accommodations
to  Borrowers  for working  capital,  and (iii) no Event of Default has occurred
that is  continuing  and no event has occurred or  condition  exists that would,
with notice or passage of time or both, constitute an Event of Default.

         12.2 Notices.  All notices,  requests and demands hereunder shall be in
writing  and (a) made to  Lender  at its  address  set  forth  below and to each
Borrower at its chief executive office set forth below, or to such other address
as either party may designate by written notice to the other in accordance  with
this  provision,  and (b) deemed to have been  given or made:  if  delivered  in
person,   immediately  upon  delivery;   if  by  telex,  telegram  or  facsimile
transmission,  immediately upon sending and upon confirmation of receipt;  if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.

         12.3 Partial Invalidity.  If any provision of this Agreement is held to
be invalid or  unenforceable,  such  invalidity  or  unenforceability  shall not
invalidate  this Agreement as a whole,  but this Agreement shall be construed as
though  it did not  contain  the  particular  provision  held to be  invalid  or
unenforceable  and the rights and  obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

         12.4 Successors. This Agreement, the other Financing Agreements and any
other document  referred to herein or therein shall be binding upon and inure to
the benefit of and be  enforceable  by Lender,  Borrowers  and their  respective
successors and assigns,  except that Borrowers may not assign their rights under
this Agreement,  the other Financing  Agreements and any other document referred
to herein or therein  without the prior written  consent of Lender.  Lender may,
after notice to Borrowers, assign its rights and delegate its obligations under

                                                       

<PAGE>



this Agreement and the other  Financing  Agreements  and further may assign,  or
sell  participations  in,  all or any part of the  Loans,  the  Letter of Credit
Accommodations or any other interest herein to another financial  institution or
other person,  in which event,  the assignee or  participant  shall have, to the
extent of such assignment or  participation,  the same rights and benefits as it
would have if it were the Lender hereunder,  except as otherwise provided by the
terms of such  assignment  or  participation.  If Lender  assigns its rights and
obligations  hereunder  or all or any  part of the  Loans  to a  foreign  lender
(excluding  United States  subsidiaries,  affiliates,  agencies or branches of a
foreign bank) and Borrowers incur  additional  borrowing  costs  attributable to
Borrowers' obligations hereunder to gross up payments subject to tax withholding
requirements  applicable  to  such  foreign  lender  as  to  interest  or  other
compensation paid hereunder, then the early termination fee that would otherwise
be payable by Borrowers  upon their  voluntary  termination  under  Section 12.1
hereof shall not be payable.

         12.5  Confidentiality.

                  (a)  Lender   shall  use  all   reasonable   efforts  to  keep
confidential,   in  accordance  with  its  customary   procedures  for  handling
confidential  information and safe and sound lending  practices,  any non-public
information  supplied to it by  Borrowers  pursuant to this  Agreement  which is
clearly and conspicuously marked as confidential at the time such information is
furnished by a Borrower to Lender,  provided,  that,  nothing  contained  herein
shall limit the disclosure of any such  information:  (i) to the extent required
by statute,  rule,  regulation,  subpoena or court order, (ii) to bank examiners
and other regulators,  auditors and/or accountants, (iii) in connection with any
litigation to which Lender is a party,  (iv) to any assignee or participant  (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) shall have first agreed in writing to treat
such information as confidential in accordance with this Section 12.5, or (v) to
counsel for Lender or any participant or assignee (or prospective participant or
assignee).

                  (b)      In no event shall this Section 12.5 or any other
provision of this Agreement or applicable law be deemed:  (i) to
apply to or restrict disclosure of information that has been or

                                                       

<PAGE>



is made public by a Borrower or any third party  without  breach of this Section
12.5 or  otherwise  become  generally  available  to the public  other than as a
result  of a  disclosure  in  violation  hereof,  (ii) to apply  to or  restrict
disclosure  of  information  that  was  or  becomes  available  to  Lender  on a
non-confidential basis from a person other than a Borrower, (iii) require Lender
to return any materials furnished by a Borrower to Lender or (iv) prevent Lender
from responding to routine informational requests in accordance with the Code of
Ethics for the Exchange of Credit  Information  promulgated by The Robert Morris
Associates or other applicable  industry  standards  relating to the exchange of
credit  information.  The  obligations  of Lender  under this Section 12.5 shall
supersede and replace the obligations of Lender under any confidentiality letter
signed prior to the date hereof.

         12.6 Entire Agreement.  This Agreement, the other Financing Agreements,
any supplements hereto or thereto,  and any instru ments or documents  delivered
or to be delivered in  connection  herewith or therewith  represents  the entire
agreement and  understanding  concerning  the subject  matter hereof and thereof
between  the  parties  hereto,   and  supersede  all  other  prior   agreements,
understandings,  negotiations  and  discussions,  representations,   warranties,
commitments,  proposals,  offers and  contracts  concerning  the subject  matter
hereof, whether oral or written.

         IN WITNESS  WHEREOF,  Lender and each of  Borrowers  have caused  these
presents to be duly executed as of the day and year first above written.


                                                      

<PAGE>

<TABLE>

<S>                                                         <C>
LENDER                                                     BORROWERS

CONGRESS FINANCIAL CORPORATION                             ONE PRICE CLOTHING STORES, INC.
  (SOUTHERN)

By:    /s/ B. Griffith                                     By: /s/ Stephen A. Feldman

Title:  V. P.                                              Title:  Executive Vice President 

Address:                                                   Chief Executive Office:

1000 Parkwood Circle                                       1875 East Main Street
Suite 800                                                  Duncan, South Carolina 29334
Atlanta, Georgia 30339

                                                           ONE PRICE CLOTHING OF PUERTO
                                                             RICO, INC.

                                                           By: /s/ C. Burt Duren

                                                           Title:   Treasurer

                                                           Chief Executive Office:

                                                           1875 East Main Street
                                                           Duncan, South Carolina 29334
</TABLE>
<PAGE>