UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 2, 1996
-------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 0-19526
Goody's Family Clothing, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 62-0793974
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
400 Goody's Lane, Knoxville, Tennessee 37922
(Address of principal executive offices) (Zip Code)
(423) 966-2000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, no par value, 16,140,212 shares outstanding as of
December 11, 1996.
Index to the exhibits is on page 12.
<PAGE>
Goody's Family Clothing, Inc.
Index to Form 10-Q
November 2, 1996
Part I - Financial Information:
<TABLE>
<CAPTION>
Item 1 - Financial Statements
<S> <C>
Statements of Operations...................................... 3
Balance Sheets................................................ 4
Statements of Cash Flows...................................... 5
Notes to Financial Statements................................. 6
Independent Accountants' Report............................... 7
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................. 8-11
Part II - Other Information............................................ 12
-----------------
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. (a) Exhibits
Item 6. (b) Reports on Form 8-K
Signatures.............................................................. 13
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
- ----------------------------------------------------------------------------
Item 1 - Financial Statements
Goody's Family Clothing, Inc.
Statements of Operations - Unaudited
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
--------------------------------------- ---------------------------------------
Thirteen Weeks Ended Thirty-nine Weeks Ended
--------------------------------------- ---------------------------------------
November 2, 1996 October 28, 1995 November 2, 1996 October 28, 1995
------------------ ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Sales $211,380 $168,104 $545,558 $468,166
Cost of sales and occupancy expenses 159,197 126,200 405,493 351,080
------------------ ------------------- ------------------ ------------------
Gross Profit 52,183 41,904 140,065 117,086
Selling, general and administrative expenses 46,954 38,693 129,471 109,187
------------------ ------------------- ------------------ -------------------
Earnings from Operations 5,229 3,211 10,594 7,899
Interest expense (233) (255) (513) (441)
Investment and other income 430 339 1,097 930
------------------ ------------------- ------------------ -------------------
Earnings before income taxes 5,426 3,295 11,178 8,388
Provision for income taxes 2,062 1,236 4,248 3,146
------------------ ------------------- ------------------ -------------------
Net earnings $3,364 $2,059 $6,930 $5,242
================== =================== ================== ===================
Weighted average common shares outstanding 16,134 16,124 16,129 16,122
================== =================== ================== ===================
Earnings per common share $0.21 $0.13 $0.43 $0.33
================== =================== ================== ===================
</TABLE>
See accompanying Notes to Financial Statements and Independent Accountants'
Report.
<PAGE>
Goody's Family Clothing, Inc.
Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
------------------- ------------------ ---------------
------------------
November 2, 1996 February 3, 1996 October 28, 1995
------------------- ------------------ ------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $25,321 $32,987 $12,928
Investments 1,421 1,386 1,370
Inventories 177,967 78,267 115,327
Accounts receivable and other current assets 12,174 6,617 9,890
------------------
------------------- ------------------- ------------------
Total current assets 216,883 119,257 139,515
Property and equipment, net 92,508 85,715 85,108
Other assets 3,442 3,471 3,469
------------------- ------------------- ------------------
Total assets $312,833 $208,443 $228,092
=================== =================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $124,983 $68,238 $81,471
Accrued expenses 37,474 21,345 20,849
Income taxes payable 921 1,671 -
Current portion of long- term debt 217 217 198
------------------- -------------------- ------------------
Total current liabilities 163,595 91,471 102,518
Long-term debt 25,110 1,110 16,327
Other long-term liabilities 2,354 2,239 1,624
Deferred income taxes 8,867 7,748 6,970
------------------- -------------------- ------------------
Total liabilities 199,926 102,568 127,439
------------------- -------------------- ------------------
Commitments and Contingencies
Shareholders' Equity
Preferred stock $1.00 par value;
Authorized - 2,000,000 shares; issued and outstanding - none Class B
Common stock no par value;
Authorized - 50,000,000 shares; issued and outstanding - none
Common stock no par value;
Authorized - 50,000,000 shares;
Issued - 16,336,012, 16,325,212 and 16,325,212 shares
Outstanding - 16,136,012, 16,125,212 and 16,125,212 shares 26,142 26,040 26,040
Paid-in capital 3,135 3,135 3,135
Retained earnings 86,732 79,802 74,580
Treasury stock, at cost - 200,000 shares (3,102) (3,102) (3,102)
------------------- -------------------- ------------------
Total shareholders' equity 112,907 105,875 100,653
------------------- -------------------- ------------------
Total liabilities and shareholders' equity $312,833 $208,443 $228,092
=================== ==================== ==================
</TABLE>
See accompanying Notes to Financial Statements and Independent Accountants'
Report.
<PAGE>
Goody's Family Clothing, Inc.
Statements of Cash Flows - Unaudited
(In thousands)
<TABLE>
<CAPTION>
------------------------------------------
Thirty-nine Weeks Ended
------------------------------------------
November 2, 1996 October 28, 1995
------------------- -------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings $6,930 $5,242
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 7,280 6,291
Net loss (gain) on asset disposals and write-down 734 (57)
Changes in assets and liabilities:
Inventories (99,701) (50,919)
Accounts payable 59,415 35,746
Income taxes 506 (3,432)
Other assets & liabilities 9,613 (3,202)
-------------------- --------------------
Cash used in operating activities (15,223) (10,331)
-------------------- --------------------
Cash Flows from Investing Activities:
Acquisitions of property and equipment (15,067) (7,093)
Proceeds from sale of property and equipment 260 350
-------------------- --------------------
Cash used in investing activities (14,807) (6,743)
-------------------- --------------------
Cash Flows from Financing Activities:
Net payments on notes payable - (10,000)
Net advances on long-term debt 24,000 15,000
Issuance of common stock 92 201
Redemption of preferred stock purchase rights - (161)
Changes in cash management accounts (1,728) 1,831
-------------------- --------------------
Cash provided by financing activities 22,364 6,871
-------------------- --------------------
Cash and cash equivalents :
Net decrease for the period (7,666) (10,203)
Balance, beginning of period 32,987 23,131
-------------------- --------------------
Balance, end of period $25,321 $12,928
==================== ====================
Supplemental Disclosures:
Interest payments $362 $365
Income tax payments $3,988 $6,829
</TABLE>
See accompanying Notes to Financial Statements and Independent Accountants'
Report.
<PAGE>
Goody's Family Clothing, Inc.
Notes to Financial Statements
(Unaudited)
(1) Unaudited Financial Information
In the opinion of the Company's management, the accompanying unaudited financial
statements include all adjustments, consisting only of normal and recurring
adjustments, necessary for a fair presentation of the results of operations for
the interim periods presented. Due to the seasonal nature of the Company's
business, the results of operations for the interim periods are not necessarily
indicative of the results that may be achieved for the entire year. These
financial statements should be read in conjuction with the audited financial
statements of the Company included in its Form 10-K for the year ended February
3, 1996.
(2) Accounting for Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation," which is effective for the Company beginning February 4, 1996.
SFAS No. 123 requires expanded disclosure of stock-based compensation
arrangements with employees and encourages (but does not require) compensation
costs to be measured based on the fair value of the equity instrument awarded.
Companies are permitted, however, to continue to apply APB Opinion No. 25, which
recognizes compensation costs based on the intrinsic value of the equity
instrument awarded. The Company will continue to apply APB Opinion No. 25 to its
stock-based compensation awards to employees and will disclose the required pro
forma effect on net earnings and earnings per common share in its annual
financial statements for the fiscal year ending February 1, 1997.
(3) Credit Arrangements
The Company has a credit agreement with a consortium of banks for an unsecured
revolving line of credit that provides for cash borrowings for general corporate
purposes as well as for the issuances of letters of credit of up to
$100,000,000. On May 20, 1996, the expiration date of this credit agreement was
extended to May 31, 1998. This credit agreement was further amended and restated
on October 31, 1996. The Company is committed to pay (i) interest on the cash
borrowings at a fluctuating base rate or LIBOR plus an applicable margin, as
defined, (ii) letter of credit fees based on the number of days a letter of
credit is outstanding times the applicable rate, and (iii) a commitment fee
payable quarterly in advance. The terms of this credit facility require, among
other things, maintenance of minimum levels of shareholders' equity and
compliance with certain financial ratios and place restrictions on additional
indebtedness, asset disposals, investments and capital expenditures. In
addition, the Company is prohibited from paying dividends.
(4) Reclassifications
Certain reclassifications have been made to the financial statements of prior
periods to conform to the current period presentation.
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Shareholders
Goody's Family Clothing, Inc.
Knoxville, Tennessee:
We have reviewed the accompanying balance sheets of Goody's Family Clothing,
Inc. as of November 2, 1996 and October 28, 1995, and the related statements of
operations and cash flows for the thirteen week and thirty-nine week periods
then ended. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole.
Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to such financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet of Goody's Family Clothing, Inc. as of February 3,
1996, and the related statements of operations, shareholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
March 15, 1996, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
balance sheet as of February 3, 1996 is fairly stated, in all material respects,
in relation to the balance sheet from which it has been derived.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
November 19, 1996
<PAGE>
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table sets forth unaudited results of operations as a percent of
sales for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Thirty-nine
Weeks Ended Weeks Ended
November 2, October 28, November 2, October 28,
1996 1995 1996 1995
------------ ----------- ----------- -------
<S> <C> <C> <C> <C>
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales and occupancy expenses 75.3 75.1 74.3 75.0
---- ---- ---- ----
Gross profit 24.7 24.9 25.7 25.0
Selling, general and administrative expenses 22.2 23.0 23.7 23.3
---- ---- ---- ----
Earnings from operations 2.5 1.9 2.0 1.7
Interest expense (0.1) (0.2) (0.1) (0.1)
Investment and other income 0.2 0.2 0.2 0.2
--- --- --- ---
Earnings before income taxes 2.6 1.9 2.1 1.8
Provision for income taxes 1.0 0.7 0.8 0.7
--- --- --- ---
Net earnings 1.6% 1.2% 1.3% 1.1%
=== === === ===
</TABLE>
Third Quarter Fiscal 1996 Compared with Third Quarter Fiscal 1995
Overview - During the third quarter of fiscal 1996, the Company opened four new
stores, relocated one store and closed one store, bringing the total number of
stores in operation at quarter end to 197 compared with 178 at the end of the
third quarter of fiscal 1995. In the corresponding period of the previous fiscal
year, the Company opened four new stores and relocated four stores. Net earnings
for the third quarter of fiscal 1996 were $3,364,000 compared with $2,059,000
for the third quarter of fiscal 1995.
Sales - Sales for the third quarter of fiscal 1996 were $211,380,000, a 25.7%
increase over the $168,104,000 for the third quarter of the previous fiscal
year. Comparable store sales for the quarter increased 13.4% from the comparable
prior year period. Sales for the quarter were driven by customer acceptance of
the Company's merchandising strategies and significant promotions of fall
transitional fashions and denim products.
Gross Profit - Gross profit for the third quarter of fiscal 1996 was
$52,183,000, or 24.7% of sales, a $10,279,000 increase over the $41,904,000, or
24.9% of sales, in gross profit for the third quarter of the previous fiscal
year. The 0.2% decrease in gross profit, as a percent of sales, consists of (i)
a decrease in margins by 0.3% due to certain aggressive promotional events and
(ii) a decrease in occupancy costs, as a percent of sales, by 0.1% because of
the quarter's strong sales performance.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the third quarter of fiscal 1996 were $46,954,000,
or 22.2% of sales, an increase of $8,261,000 from $38,693,000, or 23.0% of
sales, for the third quarter of the previous fiscal year. Selling, general and
administrative expenses decreased by 0.8%, as a percent of sales, for the third
quarter of fiscal 1996 compared with the third quarter of the previous fiscal
year. This net decrease is comprised of (i) a 0.4% decrease in advertisement and
promotion expenses, (ii) a 0.1% decrease in depreciation expenses, (iii) a 0.7%
decrease in other selling, general and administrative expenses and (iv) a 0.4%
increase in payroll expenses.
Interest Expense - Interest expense for the third quarter of fiscal 1996
decreased by $22,000 compared with the third quarter of the previous fiscal
year. This net decrease consists of (i) a decrease in interest expense resulting
from lower borrowings during the third quarter of fiscal 1996 compared with the
corresponding period of the previous fiscal year and (ii) an increase in the
fees paid in connection with the credit agreement entered into by the Company
with a consortium of banks.
Investment and Other Income - Investment and other income for the third quarter
of fiscal 1996 was $430,000 compared with $339,000 for the third quarter of the
previous fiscal year. The increase in investment income is primarily due to an
increase in invested funds during the period.
<PAGE>
Income Taxes - The provision for income taxes for the third quarter of fiscal
1996 was $2,062,000, for an effective tax rate of 38.0% of earnings before
income taxes, compared with $1,236,000, for an effective tax rate of 37.5% of
earnings before income taxes, for the third quarter of the previous fiscal year.
Thirty-nine Weeks Ended November 2, 1996, Compared with Thirty-nine Weeks Ended
October 28, 1995
Overview - During the thirty-nine weeks ended November 2, 1996, the Company
opened 14 new stores, relocated five stores, remodeled one store and closed one
store, bringing the total number of stores in operation at November 2, 1996 to
197 compared with 178 at October 28, 1995. In the corresponding period of the
previous fiscal year, the Company opened seven new stores, relocated six stores
and opened a clearance store with an existing lease from a previously relocated
store. Net earnings for the thirty-nine weeks ended November 2, 1996 were
$6,930,000 compared with $5,242,000 for the thirty-nine weeks ended October 28,
1995.
Sales - Sales for the thirty-nine weeks ended November 2, 1996 were
$545,558,000, a 16.5% increase over the $468,166,000 for the corresponding
period of the previous fiscal year. The sales contribution from comparable
stores represents a 3.7% increase from same store sales in the previous fiscal
year. Sales increases for the period were driven by the addition of new and
transitional stores and the overall customer acceptance of the Company's
merchandising strategies.
Gross Profit - Gross profit for the thirty-nine weeks ended November 2, 1996 was
$140,065,000, or 25.7% of sales, a $22,979,000 increase over the $117,086,000,
or 25.0% of sales, in gross profit generated for the corresponding period of the
previous fiscal year. The 0.7% increase in gross profit, as a percent of sales,
consists of (i) a 0.6% increase in margins as a result of successful
merchandising strategies and a concerted effort by management to improve pricing
strategies and well-positioned inventories at the beginning of fiscal 1996 and
(ii) a decrease in occupancy costs by 0.1% as a result of the period's strong
sales performance in relation to the same period of the prior year.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the thirty-nine weeks ended November 2, 1996 were
$129,471,000, or 23.7% of sales, an increase of $20,284,000 from $109,187,000,
or 23.3% of sales, for the corresponding period of the previous fiscal year.
Selling, general and administrative expenses increased by 0.4% as a percent of
sales compared with the corresponding period of the previous fiscal year. This
increase is primarily comprised of (i) a 0.3% increase in payroll expenses and
(ii) a 0.1% increase in advertisement and promotion expenses. Selling, general
and administrative expenses include a provision of $691,000, or 0.1% as a
percent of sales, in connection with the early termination of a lease of one of
the Company's stores which closed in August 1996.
Interest Expense - Interest expense for the thirty-nine weeks ended November 2,
1996 increased by $72,000 compared with the corresponding period of the previous
fiscal year. This increase is primarily attributable to the fees paid in
connection with the credit agreement entered into by the Company with a
consortium of banks.
Investment and Other Income - Investment and other income for the thirty-nine
weeks ended November 2, 1996 was $1,097,000 compared with $930,000 for the
corresponding period of the previous fiscal year. The increase in investment
income is primarily due to an increase in invested funds during the period.
Income Taxes - The provision for income taxes for the thirty-nine weeks ended
November 2, 1996 was $4,248,000, for an effective tax rate of 38.0% of earnings
before income taxes, compared with $3,146,000, for an effective tax rate of
37.5% of earnings before income taxes, for the corresponding period of the
previous fiscal year.
Liquidity and Capital Resources
Financial Position - The Company's primary sources of liquidity are cash
flows from operations, including credit terms from vendors, and borrowings under
its credit agreement with a consortium of banks. At November 2, 1996, the
Company's working capital was $53,288,000 compared with $36,997,000 at October
28, 1995. At the end of the third quarter of fiscal 1996 compared with the end
of the third quarter of the previous year, (i) cash, cash equivalents and
investment securities increased by $12,444,000, (ii) net property and equipment
increased by $7,400,000, (iii) inventories increased by $62,640,000 and (iv)
accounts payable increased by $43,512,000. The increase in inventories primarily
consists of (i) additional inventories needed for the new and transitional
stores, (ii) merchandise received in the last week of the third quarter of
fiscal 1996 (which ended on November 2, 1996) that comparably would have been
received during the first week of the fourth quarter in the previous fiscal year
(which commenced on October 29, 1995) as a result of a change in the retail
calendar and (iii) the Company's strategic build-up of inventories in various
departments and certain other new businesses, such as, Men's sport coats,
blazers and dress pants and Misses classic collections in dresses. Trade
payables, as a percent of inventories, were 70.6% at October 28, 1995 compared
with 70.2% at November 2, 1996.
<PAGE>
At November 2, 1996, the Company had an unsecured $100,000,000 revolving line of
credit from a consortium of banks, of which $24,000,000 was in use for cash
borrowings and $35,774,000 was in use for outstanding letters of credit.
Borrowings under the Company's bank line of credit, consisting of cash
borrowings and letters of credit, averaged $43,762,000 during the third quarter
of fiscal 1996, with the highest balance for the quarter of $62,214,000 in
October 1996. On May 20, 1996, the Company amended its credit agreement to
extend the expiration date of the agreement to May 31, 1998. See Note 3 to Notes
to Financial Statements.
Cash Flows - Operating activities used cash of $15,223,000 in the thirty-nine
weeks ended November 2, 1996, compared with cash used of $10,331,000 by
operating activities in the corresponding period of the previous fiscal year.
Cash used in operating activities during the thirty-nine weeks ended November 2,
1996, for inventory increases was $99,701,000 compared with $50,919,000 for the
corresponding period of the previous fiscal year. Accounts payable provided cash
of $59,415,000 during the thirty-nine weeks ended November 2, 1996, compared
with $35,746,000 for the corresponding period of the previous fiscal year.
Depreciation and amortization amounted to $7,280,000 for the thirty-nine weeks
ended November 2, 1996, compared with $6,291,000 for the corresponding period of
the previous fiscal year.
Cash flows from investing activities for the thirty-nine weeks ended November 2,
1996 reflected a net use of cash amounting to $14,807,000 compared with
$6,743,000 for the corresponding period of the previous fiscal year. The cash
was primarily used to fund capital expenditures incurred relating to new stores
opened during the first three quarters of fiscal 1996 and 1995.
Cash provided by financing activities for the thirty-nine weeks ended November
2, 1996 was $22,364,000 compared with $6,871,000 for the corresponding period of
the previous fiscal year. The cash management program maintained by the Company
used cash of $1,728,000 in the thirty-nine weeks ended November 2, 1996 compared
with cash provided of $1,831,000 for the corresponding period of the previous
fiscal year. Net payments on notes payable under previous revolving lines of
credit amounted to $10,000,000 in the thirty-nine weeks ended October 28, 1995
with no amounts outstanding at the period end. The Company's net borrowings,
under its new two-year credit agreement as described above, were $24,000,000 for
the thirty-nine weeks ended November 2, 1996 compared with $15,000,000 for the
corresponding period of the previous fiscal year, with the same amounts
outstanding at the respective quarter ends. The Company received $92,000 from
the issuance of common stock on the exercise of stock options during the
thirty-nine weeks ended November 2, 1996 compared with $201,000 received during
the corresponding period of the previous year.
Outlook - During November 1996, the Company opened six new stores and relocated
two stores, bringing the total number of new stores opened in fiscal 1996 to 20
and the total number of stores currently operating to 203. There are no plans
for any new store openings or relocations during the remainder of fiscal 1996.
Management estimates that capital expenditures of approximately $3,5000,000 will
be incurred relating to new stores opened as well as stores relocated in
November 1996 and for the purchase of computer systems and equipment and for
other capital expenditure requirements for the remainder of fiscal 1996.
The Company's primary needs for capital resources are for the purchase of store
inventories, capital expenditures and for normal operating expenses. Management
believes that cash flows from operations, including credit terms from vendors
and the borrowings available under the credit facility, will be sufficient to
meet the Company's operating and capital expenditure requirements.
This Quarterly Report may include forward-looking statements that may or may not
materialize. All forward-looking statements made by the Company involve material
risks and uncertainties and are subject to change based on factors beyond the
Company's control, including, without limitation, retail market conditions and
consumer acceptance of the Company's products. Accordingly, the Company's future
performance and financial results may differ materially from those expressed or
implied in any such forward-looking statements. Such factors include, but are
not limited to, those described in the Company's filings with the Securities and
Exchange Commission.
<PAGE>
Seasonality and Inflation
The Company's business is seasonal by nature. The Christmas season (beginning on
the Sunday before Thanksgiving and ending on the second Saturday after
Christmas), the back-to-school period (beginning approximately the second week
of August and continuing through the second week of September) and the Easter
season (beginning approximately two weeks before Easter Sunday and ending on the
Saturday preceding Easter) collectively accounted for approximately 37% of the
Company's annual sales, based on the Company's last three fiscal years. In
general, sales volume varies directly with customer traffic, which is heaviest
during the third and fourth quarters of a fiscal year.
The Company does not believe inflation has had a material effect on its results
of operations during the past three fiscal years. However, there can be no
assurance that the Company's business will not be affected by inflation in the
future.
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings - None
- ----------------------------
Item 2. - Changes in Securities - None
Item 3. - Defaults Upon Senior Securities - None
Item 4. - Submission of Matters to a Vote of Security Holders - None
- ---------------------------------------------------------------
Item 5. - Other Information - None
Item 6. - Exhibits and Reports on Form 8-K.......
a) Exhibits -
10.43 Amended and Restated Credit Agreement dated October 31, 1996
between the Registrant, Goody's MS, L.P. and Goody's IN, L.P.
as borrowers, SYDOOG, Inc., TREBOR of TN Inc., and
GOFAMCLO, Inc. as guarantors, Lenders as identified therein
and First Tennessee Bank National Association as Administrative
Agent
15 - Accountants' Awareness Letter
27 - Financial Data Schedule
b) Reports on Form 8-K - None
<PAGE>
GOODY'S FAMILY CLOTHING, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GOODY'S FAMILY CLOTHING, INC.
(Registrant)
Date: December 11, 1996 /s/ Harry M. Call
------------------------ -----------------
Harry M. Call
Director, President and
Chief Operating Officer
Date: December 11, 1996 /s/ Edward R. Carlin
------------------------ --------------------
Edward R. Carlin
Executive Vice President,
Chief Financial Officer and
Secretary
(Principal Financial Officer)
Date: December 11, 1996 /s/ David G. Peek
------------------------ -----------------
David G. Peek
Corporate Controller and Chief
Accounting Officer
(Principal Accounting Officer)
<PAGE>
EXHIBIT - 10.43
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of October 31, 1996
Among
GOODY'S FAMILY CLOTHING, INC.,
GOODY'S MS, L.P. and
GOODY'S IN, L.P.,
as Borrowers
SYDOOG, INC.,
TREBOR OF TN, INC. and
GOFAMCLO, INC.,
as Guarantors
the Lenders identified herein, and
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as Administrative Agent
$ 100,000,000
<PAGE>
#1008662.11
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as
of October 31, 1996, is made and entered into on the terms and conditions
hereinafter set forth, by and among GOODY'S FAMILY CLOTHING, INC., a Tennessee
corporation ("GFC"), GOODY'S MS, L.P., a Tennessee limited partnership ("Goody's
MS"), GOODY'S IN, L.P., a Tennessee limited partnership ("Goody's IN"; GFC,
Goody's MS and Goody's IN are hereinafter collectively referred to as the
"Borrowers"), SYDOOG, INC., a Delaware corporation ("SYDOOG"), TREBOR of TN,
Inc., a Tennessee corporation ("TREBOR"), and GOFAMCLO, INC., a Delaware
corporation ("GOFAMCLO"; SYDOOG, TREBOR and GOFAMCLO are hereinafter referred to
collectively as the "Guarantors"), those several lenders who are or become
parties to this Agreement (collectively, the "Lenders" and, individually, a
"Lender") and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association with principal offices in Memphis, Tennessee ("First Tennessee"), as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS, ACCOUNTING TERMS
AND PRINCIPLES OF CONSTRUCTION
1.2 Defined Terms. In addition to terms defined elsewhere herein, the
following terms, as used in this Agreement, shall have the respective meanings
set forth below (terms defined in the singular to have the same meaning when
used in the plural, and vice versa, unless otherwise expressly indicated):
"Administrative Agent" shall mean First Tennessee Bank
National Association or such successor Administrative Agent as may be appointed
by the Lenders pursuant to Section 12.10 hereof.
"Affiliate" shall mean, as to any Person, any other Person,
directly or indirectly controlling (including all directors, officers and
employees of such Person), directly or indirectly controlled by or under direct
or indirect common control with such Person.
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"Affiliate Agreements" shall mean the following agreements (a)
License Agreements, substantially in the form of Exhibit 4.1B, between SYDOOG
and GFC, Goody's MS and Goody's IN respectively, each dated October 31, 1996,
(b) Master Supply Agreements, substantially in the form of Exhibit 4.1C, between
Goody's MS and GFC and Goody's IN respectively, each dated October 31, 1996, (c)
Management Services Agreements, substantially in the form of Exhibit 4.1D,
between GFC and Goody's MS, TREBOR and Goody's IN respectively, each dated
October 31, 1996, and (d) Tax Sharing Agreements, substantially in the form of
Exhibit 4.1E, between GFC and SYDOOG, GOFAMCLO and TREBOR respectively, each
dated October 31, 1996.
"Applicable Bankruptcy Law" shall mean, with respect to any
Guarantor, Title 11 of the United States Code, as amended from time to time, and
any other laws governing bankruptcy, suspension of payments, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency or
other similar laws applicable to such Guarantor.
"Applicable Commercial Letter of Credit Fee Percentage" shall
mean the percentage to be used to calculate Letter of Credit Fees for Commercial
Letters of Credit from time to time, as provided in Section 2.13.
"Applicable Standby Letter of Credit Fee Percentage" shall
mean the percentage to be used to calculate Letter of Credit Fees for Standby
Letters of Credit from time to time, as provided in Section 2.13.
"Applicable LIBOR Margin" shall mean the margin to be added to
LIBOR for purposes of determining the interest rate(s) applicable to LIBOR Loans
from time to time, as provided in Section 2.13.
"Asset Acquisition" shall mean (a) any investment by any
Borrower or Guarantor in any other Person pursuant to which such Person shall
become a Subsidiary of such Borrower or Guarantor or shall be merged with any
Borrower or Guarantor or (b) any acquisition by any Borrower or Guarantor of the
assets of any Person that constitutes substantially all of an operating unit or
business of such Person.
"Assignment and Acceptance" shall mean an assignment and
acceptance, substantially in the form of Exhibit 13.2, between a transferor
Lender and a proposed transferee, regarding the sale, assignment, transfer or
other disposition (other than the sale of a participation) of all or any amount
of the Commitments, Loans and participations in the Letters of Credit of such
Lender.
"Base LIBOR" shall mean the rate per annum for offered Dollar
deposits in the interbank Eurodollar market appearing on page 3750 of the
TELERATE rate reporting system at about 11:00 a.m., Eastern time, on the
Interest Rate Determination Date immediately prior to the beginning of the
Interest Period for the corresponding LIBOR Loan, for the number of months
comprised therein and in an amount equal to the amount of such LIBOR Loan to be
outstanding during such Interest Period. Without limiting the provisions of
Section 2.14.3, in the event that prior to the Termination Date TELERATE quotes
for Base Libor are discontinued or become unascertainable, the Administrative
Agent shall designate a comparable resource for use in determining Base LIBOR
for purposes hereof.
"Base Rate" shall mean, for any period, the fluctuating rate
of interest per annum from time to time established by the Administrative Agent
as its "prime rate", regardless of whether published or publicly announced. Each
change in the Base Rate shall be effective as of the opening of business on the
day such change occurs. The parties hereto acknowledge that the rate established
by the Administrative Agent as its "prime rate" is an index or base rate and is
not necessarily the lowest rate charged to its customers or other banks. In the
event that prior to the Termination Date the Administrative Agent discontinues
or abandons the practice of establishing a prime rate, or should the same become
unascertainable, the Administrative Agent shall designate a comparable reference
rate for use in determining the Base Rate for purposes hereof.
"Base Rate Loans" shall mean Loans bearing interest at rates
determined by reference to the Base Rate.
"Borrowing" shall mean a Revolving Credit Borrowing or a Letter of Credit
Borrowing.
"Business Day" shall mean any day on which commercial banks in
Knoxville, Tennessee, are neither authorized nor required by law or executive
order to close and on which the New York Stock Exchange is not closed.
"Capital Expenditures" shall mean, as to the Borrowers and
Guarantors for any period, the aggregate capital expenditures recorded by the
Borrowers and Guarantors in conformity with GAAP, including charges in respect
of Capitalized Lease Obligations exclusive of imputed interest on such
Capitalized Lease Obligations.
"Capitalized Lease" shall mean, as to any Person, any lease of
property by such Person as lessee that would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" shall mean, as to any Person,
the capitalized amount of the obligations of such Person and its Subsidiaries
under all Capitalized Leases.
"Cash Equivalents" shall mean, at any time,
(a) Government Obligations having a maturity not exceeding ninety (90)
days;
(b) commercial paper rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Services, Inc., having a
maturity not exceeding ninety (90) days;
(c) certificates of deposit or time deposits and bankers
acceptances of (i) the Lenders or (ii) other commercial banks with
capital and undivided surplus of at least $300,000,000 issuing
commercial paper rated as described in the preceding clause (b) and
organized and existing under, or chartered or otherwise qualified to do
business under, the laws of the United States of America or any State
thereof or the District of Columbia, having a maturity not exceeding
one hundred and eighty (180) days;
(d) repurchase agreements or investment contracts having a
maturity not exceeding ninety (90) days with a financial institution
insured by the Federal Deposit Insurance Corporation, or any broker or
dealer (as defined in the Securities Exchange Act of 1934) that is a
dealer in government bonds and that is recognized by, trades with and
reports to, a Federal Reserve Bank as a primary dealer in government
securities; provided that in any case (i) collateral is pledged for the
repurchase agreement or investment contract, which collateral consists
of (A) Government Obligations or evidences of ownership of
proportionate interests in future interest and principal payments on
Government Obligations held by a bank or trust company as custodian,
under which the owner of the investment is the real party in interest
and has the right to proceed directly and individually against the
obligor on such obligations, and which underlying obligations are held
in a segregated account and not available to satisfy any claim of the
custodian or any person claiming through the custodian or to whom the
custodian may be obligated or (B) evidences of indebtedness issued by
any of the following: Bank of Cooperatives, Export-Import Bank of the
United States, Farmers Home Administration, Federal Financing Bank,
Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation
(including participation certificates), Federal Housing Administration,
Federal Farm Credit Banks, Federal National Mortgage Association,
Government National Mortgage Association, Inter-American Development
Bank, International Bank for Reconstruction and Development, Small
Business Administration or any other agency or instrumentality of the
United States of America created by an act of Congress that is
substantially similar to the foregoing in its legal relationship to the
United States of America, (ii) the current market value of the
collateral securing the repurchase agreement or investment contract is
at least equal to the amount of the repurchase agreement or investment
contract and (iii) the current market value of the collateral is
determined not less frequently than monthly;
(e) investments in money market funds substantially all of whose assets
consist of securities of the types described in the foregoing clauses (a)
through (d);
(f) investments in obligations the return with respect to
which is excludable from gross income under Section 103 of the Code,
having a maturity of not more than six (6) months or providing the
holder the right to put such obligations for purchase at par upon not
more than twenty-eight (28) days' notice, which are rated at least A-1
by Standard & Poor's Corporation or P-1 by Moody's Investors Services,
Inc.;
(g) bonds and debentures issued by domestic corporations which are rated at
least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Services,
Inc. with a maturity of not more than ninety (90) days;
(h) investments in tax free money market funds all of whose assets consist
of securities of the types described in the foregoing clause (f); and
(i) investments, redeemable upon not more than seven (7) days'
notice, in money market preferred municipal bond funds that are rated
at least A by Standard & Poor's Corporation or by Moody's Investors
Services, Inc.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Account" shall mean the Collateral Account described in Section
11.3.1.
"Commercial Letter of Credit Support Obligations" shall mean
obligations of the any Borrower incurred in the ordinary course of its business
to purchase inventory to be sold by such Borrower.
"Commercial Letters of Credit" shall mean Letters of Credit issued in
connection with Commercial Letter of Credit Support Obligations.
"Commission" shall mean the Securities and Exchange Commission or any
successor entity.
"Commitment Fee" shall mean the fee payable pursuant to Section 2.11.2.
"Commitment Period" shall mean that period commencing on the
date hereof and continuing to, but not including, the Termination Date.
"Commitments" shall mean the Revolving Credit Commitments and
the Letter of Credit Commitments, which collectively are in the aggregate amount
set forth in Section 2.1 and in the case of each Lender are in the initial
amount set forth with such Lender's signature on this Agreement or the
Assignment and Acceptance pursuant to which such Lender became a party hereto.
"Commonly Controlled Entity" shall mean a Person that is under
common control with any Borrower or Guarantor within the meaning of subsection
414(b), (c), (m), (n) or (o) of the Code.
"Consolidated Net Income" shall mean the net income (or loss)
after taxes of the Borrowers and Guarantors on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
subject to customary exclusions with respect to extraordinary and nonrecurring
items.
"Contingent Obligations" shall mean, as to any Person, any
contingent obligation calculated in accordance with GAAP, and in any event shall
include (without duplication) all indebtedness, obligations or other liabilities
of such Person guaranteeing or in effect guaranteeing the payment or performance
of any indebtedness, obligation or other liability, whether or not contingent
(collectively, the "primary obligations"), of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
indebtedness, obligation or other liability of such Person, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss with respect thereto.
"Contractual Obligations" shall mean, as to any Person, any
and all indebtedness, obligations or other liabilities of such Person, now
existing or hereafter arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied, individually
or jointly with others, pursuant to the provisions of any security issued by
such Person or any document, instrument or agreement to which such Person is a
party or by which such Person or any of its property is or may be bound or
affected.
"Credit Fees" shall mean the credit fees payable as provided
in Section 2.11.
"Current Assets" shall have the meaning afforded such term
under GAAP.
"Current Liabilities" shall have the meaning afforded such
term under GAAP.
"Current Ratio" shall mean the ratio of (a) Current Assets of
the Borrowers and Guarantors to (b) (i) Current Liabilities of the Borrowers and
Guarantors plus (ii) the outstanding amount of Loans.
"Default" shall mean any of the events specified in Section
11.1, regardless of whether any requirement for the giving of notice, the lapse
of time or both has been satisfied.
"Default Rate" shall mean the rate(s) per annum otherwise
applicable to Loans from time to time plus two percentage points (2.00).
"Dividends" shall mean, as to any Person for any period, (a)
dividends, other distributions and other payments on account of the capital
stock, or any warrants, options or other rights in respect of any capital stock,
of such Person or its Subsidiaries that are recorded by such Person and its
Subsidiaries on a consolidated basis (excluding any such dividends,
distributions and other payments made solely to such Person or a wholly-owned
Subsidiary of such Person by a Subsidiary of such Person), (b) amounts paid to
purchase, redeem, retire or otherwise acquire for value any of the capital stock
or any warrants, options or other rights in respect of the capital stock of such
Person now or hereafter outstanding (excluding any such amounts paid solely to
such Person or a wholly-owned Subsidiary of such Person by a Subsidiary of such
Person) and (c) any assets segregated or set apart by such Person or its
Subsidiaries, if any, for a sinking or analogous fund for the purchase,
redemption or retirement or other acquisition of any capital stock, or any
warrants, options or other rights in respect of any capital stock, of such
Person or its Subsidiaries (excluding any assets so segregated or set apart with
respect to any stock, warrants, options or other rights held by a wholly-owned
Subsidiary of such Person); all determined in conformity with GAAP.
"Dollars" and "$" shall mean lawful money of the United States of America.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" shall mean any of the events specified in Section 11.1.
"Facilities" shall mean the Revolving Credit Facility and the Letter of
Credit Facility.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for each
day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York.
"Fiscal Quarter" shall mean any three (3) month accounting
period in a Fiscal Year.
"Fiscal Year" shall mean the period ending on the Saturday
nearest the last day of January of each year.
"Funding Date" shall mean each of the respective dates on
which the funding of a Borrowing made under this Agreement occurs.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Government Obligations" shall mean direct obligations of the
United States of America or obligations for the full and prompt payment of which
the full faith and credit of the United States of America is pledged.
"Governmental Authority" shall mean any nation, province,
state or other political subdivision thereof and any government or any natural
person or entity exercising executive, legislative, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Obligations" shall mean all the obligations of the
Borrowers guaranteed by the Guarantors pursuant to Article 5.
"Guarantors" shall mean those Subsidiaries of GFC that now or
hereafter execute this Agreement or any amendment hereto and agree to guarantee
the Obligations of the Borrowers.
"Guaranty" shall mean the guaranty of the Obligations of the Borrowers set
forth in Article 5.
"Hazardous Materials" shall mean any hazardous, toxic or
dangerous materials, substances, chemicals, wastes or pollutants that from time
to time are defined by or pursuant to or are regulated under any Hazardous
Materials Laws, including asbestos, polychlorinated biphenyls, petroleum,
petroleum derivatives or by-products, other hydrocarbons, urea formaldehyde and
any material, substance, pollutant or waste that is defined as a hazardous waste
under RCRA or defined as a hazardous substance under CERCLA.
"Hazardous Materials Laws" shall mean all federal, state,
regional, county or local laws, statutes, rules, regulations or ordinances, now
or hereafter in effect, relating to the generation, recycling, use, reuse, sale,
storage, handling, transport, treatment or disposal of Hazardous Materials,
including the Comprehensive Environmental Response Compensation Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. ss.9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
ss.6901 et seq. ("RCRA"), the Clean Air Act, 42 U.S.C. ss. 7401, et seq.
("CAA"), the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq. ("TSCA")
and any rules, regulations and guidance documents promulgated or published
thereunder, and any state, regional, county or local statute, law, rule,
regulation or ordinance now or hereafter in effect that relates to public
health, safety or the discharge, emission or disposal of Hazardous Materials in
or to air, water, land or groundwater, to the withdrawal or use of groundwater,
to the use, handling or disposal of asbestos, polychlorinated biphenyls,
petroleum, petroleum derivatives or by-products, other hydrocarbons or urea
formaldehyde, to the treatment, storage, disposal or management of Hazardous
Materials, to exposure to Hazardous Materials or to the transportation, storage,
disposal, management or release of gaseous or liquid substances, and any
regulation, order, injunction, judgment, declaration, notice or demand issued
thereunder.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on debts
outstanding hereunder or under the Notes, as the case may be, under the laws
applicable to such Lender that are presently in effect or, to the extent allowed
by law, under such applicable laws that may hereafter be in effect and that
allow a higher maximum nonusurious interest rate than applicable laws now allow.
"Indebtedness" shall mean, as to any Person, all items that in
accordance with GAAP would be material and would be shown on the balance sheet
of such Person as a liability and in any event shall include (without
duplication) (a) indebtedness for borrowed money or for notes, debentures or
other debt securities, (b) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(c) liabilities for all or any part of the deferred purchase price of property
or services, (d) liabilities secured by any lien on any property or asset owned
or held by such Person regardless of whether the indebtedness secured thereby
shall have been assumed by or is a primary liability of such Person, (e)
Capitalized Lease Obligations and (f) Contingent Obligations.
"Interest Payment Date" shall mean, (a) with respect to any
Base Rate Loan, January 1, April 1, July 1 and October 1 of each year,
commencing on the first such date after the applicable Funding Date, (b) with
respect to any LIBOR Loan, the last day of the Interest Period applicable to
such Loan, and (c) with respect to any Base Rate Loan or LIBOR Loan, the
Termination Date.
"Interest Period" shall mean any interest period applicable to
a LIBOR Loan as determined pursuant to Section 2.14.1.
"Interest Rate Determination Date" shall mean each date for
calculating LIBOR for purposes of determining the interest rate in respect of an
Interest Period, which in each case shall be the second (2nd) Business Day prior
to the first (1st) day of the corresponding Interest Period.
"Investment" shall have the meaning given such term in Section 9.4.
"Issuing Bank" shall mean any Lender which issues one or more
Letters of Credit pursuant to a Letter of Credit Request made by Borrowers
pursuant to Section 2.3.
"Last Four Fiscal Quarters" shall mean, as at any time, the
Fiscal Quarter most recently ended plus the immediately preceding three Fiscal
Quarters.
"Lending Office" shall mean with respect to any Lender or the
Administrative Agent the office of each such Lender at the address specified on
the signature pages hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office as any such Lender from time to time
may specify to the Borrowers and the Administrative Agent.
"Letter of Credit Borrowing" shall mean a borrowing consisting
of Letter of Credit Loans made to the Borrowers on the same day by the Lenders
ratably according to their respective Commitments pursuant to the provisions of
Section 2.3.3.
"Letter of Credit Commitments" shall mean, at any time, (a)
the commitment of the Lenders to issue Letters of Credit pursuant to the
provisions of Section 2.3.1 and (b) the aggregate commitments of all the Lenders
to (i) purchase participations in the Letter of Credit Liabilities pursuant to
the provision of Section 2.4 and (ii) make Letter of Credit Loans to the
Borrowers during the Commitment Period pursuant to the provisions of Section
2.3.4, and the "Letter of Credit Commitment" of any Lender at any time shall
mean an amount equal to such Lender's Percentage multiplied by the then
effective aggregate Letter of Credit Commitments under clause (b) above. The
Letter of Credit Commitments are in the aggregate amount set forth in Section
2.1.
"Letter of Credit Facility" shall mean the letter of credit
facility provided by the Lenders pursuant to the Letter of Credit Commitments as
more particularly set forth in Section 2.3.
"Letter of Credit Fees" shall have the meaning given such term
in Section 2.11.2.
"Letter of Credit Liabilities" shall mean all liabilities of
the Borrowers to any Issuing Bank in respect of Letters of Credit, regardless of
whether any such liability is contingent, and shall consist of the sum, without
duplication, of (a) the amount available to be drawn or that may become
available to be drawn under outstanding Letters of Credit (including all amounts
committed to be paid by the Issuing Bank thereunder) and (b) all amounts that
have been paid or made available by the Issuing Bank thereunder if and to the
extent the Issuing Bank has not received reimbursement from the Borrowers
pursuant to the terms hereof.
"Letter of Credit Loans" shall mean the Loans made by the
Lenders to the Borrowers pursuant to the provisions of Section 2.3.3.
"Letter of Credit Request" shall mean a request substantially
in the form of Exhibit 2.3.2 annexed hereto with respect to the proposed
issuance of a Letter of Credit hereunder.
"Letter of Credit Supportable Obligations" shall mean (a) Commercial Letter
of Credit Support Obligations and (b) Standby Letter of Credit Support
Obligations.
"Letters of Credit" shall mean all Letters of Credit issued by
an Issuing Bank pursuant to the provisions of Section 2.3.1.
"LIBOR" shall mean the rate per annum equal to the product of
Base LIBOR times Statutory Reserves.
"LIBOR Loans" shall mean Loans bearing interest at rates
determined by reference to LIBOR.
"Lien" shall mean, as to any asset, (a) any lien, charge,
claim, mortgage, security interest, pledge or other encumbrance of any kind with
respect to such asset, (b) any interest of a vendor or lessor under any
conditional sale agreement, Capitalized Lease or other title retention agreement
relating to such asset, (c) any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease or other title exception
affecting such asset, or (d) any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction); provided, however, that
the term Lien shall not include (i) the rights of Tishkoff Enterprises, Inc. in
shoes and related items owned by Tishkoff Enterprises, Inc. and located at any
of the Borrowers' stores pursuant to the License Agreement dated as of June 11,
1993 between GFC and Tishkoff Enterprises, Inc., and (ii) the interest of other
vendors in any goods placed with Borrowers for sale by Borrowers on consignment,
but only to the extent that the value of such goods in the aggregate does not
exceed $2,500,000 at any time.
"Loan Documents" shall mean this Agreement, the Notes, the
Pledge Agreement, the Letters of Credit and all other documents, instruments and
agreements now or hereafter executed or delivered pursuant hereto or in
connection herewith.
"Loans" shall mean Revolving Credit Loans and Letter of Credit Loans.
"Material Contract" shall mean each contract to which any
Borrower or Guarantor is a party (or by which it is bound) that requires
payments (either to or for the benefit of, or by or on behalf of such Borrower
or Guarantor) in excess of $2,500,000 in any twelve-month period (a) the
cancellation, non-performance or non-renewal of which by any party thereto would
have a material adverse effect on the condition (financial or otherwise),
operations or properties of such Borrower or Guarantor, or (b) which is a lease,
license, management or operating agreement, or other similar agreement that
creates a possessory interest in real property, or (c) pursuant to which such
Borrower or Guarantor may incur Indebtedness for borrowed money or Capitalized
Lease Obligations; provided, however, that Material Contract shall not include
purchase orders for the purchase of inventory entered into in the ordinary
course of a Borrower's business.
"Multi-Employer Plan" shall mean any multiple employer plan,
as defined in Section 4001(a)(3) of ERISA, that is maintained by any Borrower or
Guarantor, or Subsidiary of any Borrower or Guarantor or a Commonly Controlled
Entity.
"Notes" shall mean the promissory notes dated as of the date
hereof, executed by the Borrowers in favor of the Lenders which shall evidence
the indebtedness of the Borrowers to the Lenders in connection with the Loans
made pursuant to this Agreement.
"Notice of Borrowing" shall mean a notice substantially in the
form of Exhibit 2.2.4 annexed hereto with respect to a proposed Revolving Credit
Borrowing.
"Notice of Conversion/Continuation" shall mean a notice
substantially in the form of Exhibit 2.7.2 annexed hereto with respect to a
proposed conversion or continuation of Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis pursuant to Section 2.7.
"Obligations" shall mean, as to any Person, all Indebtedness,
obligations and other liabilities of such Person of any kind and description
owing to the Administrative Agent, an Issuing Bank or the Lenders, whether now
existing or hereafter arising, due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied, individually
or jointly with others, howsoever evidenced or acquired, pursuant to the
provisions of this Agreement, the Notes and the other Loan Documents.
"Operating Lease" shall have the meaning afforded such term
under GAAP.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to subtitle A of Title IV of ERISA.
"Percentage" shall mean, as to each Lender, the percentage set
forth with such Lender's signature on this Agreement or the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
"Permitted Liens" shall mean Liens permitted pursuant to the
provisions of Section 9.2.
"Person" shall mean an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental Authority or other form of entity not specifically
listed herein.
"Plan" shall mean an employee pension benefit plan covered by
Title IV of ERISA that is maintained by any Borrower or Guarantor or a Commonly
Controlled Entity, and shall include any Single Employer Plan or any
Multi-Employer Plan.
"Pledge Agreement" shall mean the Pledge and Security
Agreement, substantially in the form of Exhibit 4.1A, executed by GFC, granting
in favor of the Administrative Agent for the ratable benefit of the Lenders a
security interest in the Pledged Stock and all proceeds thereof, together with
all books and records pertaining thereto.
"Pledged Stock" shall mean all of the outstanding capital
stock of SYDOOG, TREBOR and GOFAMCLO owned by GFC and pledged in favor of the
Administrative Agent for the ratable benefit of the Lenders pursuant to the
Pledge Agreement.
"Principal Obligor" shall mean, with respect to a certain
indebtedness or obligation, the Person creating, incurring, assuming or
suffering to exist such indebtedness or obligation without becoming liable for
same as a surety or guarantor.
"Purchase Money Debt" shall mean (a) Indebtedness of any
Borrower or Guarantor that, within thirty (30) days of the purchase of equipment
that constitutes Capital Expenditures in which such Borrower or Guarantor at any
time prior to such purchase had no interest, is incurred to finance part or all
of (but not more than) the purchase price of such assets, and (b) Indebtedness
(i) that constitutes a renewal, extension or refunding of, but not an increase
in the principal amount of, Purchase Money Debt that is such by virtue of clause
(a), and (ii) that is binding only upon the obligor or obligors under the
Purchase Money Debt being renewed, extended or refunded.
"Replacement Lender" shall have the meaning given such term in
Section 2.16.
"Reportable Event" shall mean any of the events set forth under Section
4043(b) of ERISA or the PBGC regulations thereunder.
"Requirement of Law" shall mean, as to any Person (a) the
partnership agreement, certificate of incorporation, bylaws or other
organizational or governing documents of such Person; (b) any federal, state or
local law, treaty, ordinance, rule or regulation; (c) any order, decree or
determination of a court, arbitrator or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to
which such person or any of its property is subject.
"Requisite Lenders" shall mean at any time Lenders having at least
sixty-six and two-thirds percent (66 %) of the Commitments.
"Responsible Officer" shall mean, as to any Person, either (a)
its president or chief executive officer, or (b) with respect to financial
matters, its president or chief executive officer or any vice president
designated in writing by the chief executive officer to the Administrative
Agent.
"Revolving Credit Borrowing" shall mean a borrowing consisting
of Revolving Credit Loans made to the Borrowers on the same day by the Lenders
ratably according to their respective Commitments pursuant to the provisions of
Section 2.2.
"Revolving Credit Commitments" shall mean, at any time, the
commitment of all the Lenders, collectively, to make Revolving Credit Loans to
the Borrowers during the Commitment Period pursuant to the provisions of Section
2.2, and the "Revolving Credit Commitment" of any Lender at any time shall mean
an amount equal to such Lender's Percentage multiplied by the then effective
aggregate Revolving Credit Commitments. The Revolving Credit Commitments are in
the aggregate amount set forth in Section 2.1.
"Revolving Credit Facility" shall mean the revolving credit
facility provided by the Lenders pursuant to the Revolving Credit Commitments as
more particularly set forth in Section 2.2.
"Security Documents" shall mean the Pledge Agreement, together
with all documents, instruments and agreements now or hereafter executed or
delivered pursuant thereto or in connection therewith.
"Revolving Credit Loans" shall mean the Loans made by the
Lenders to the Borrowers pursuant to the provisions of Section 2.2.
"Shareholders' Equity" shall have the meaning afforded such
term under GAAP, provided, however, that the value of any intangible assets
shall be excluded in calculating such amount.
"Single Employer Plan" shall mean any Plan that is not a Multi-Employer
Plan.
"Solvent" shall mean, with respect to any Person on any
particular date, that on such date (a) the fair value of the assets of such
Person (both at fair valuation and at present fair saleable value) is, on the
date of determination, greater than the total amount of liabilities, including
contingent and unliquidated liabilities, of such Person, (b) such Person is able
to pay all liabilities of such Person as they mature, and (c) such Person does
not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can be
reasonably expected to become an actual or matured liability.
"Standby Letter of Credit Support Obligations" shall mean (a)
obligations of any Borrower incurred in the ordinary course of business with
respect to workers' compensation, surety bonds and other similar statutory
obligations and (b) other contractual obligations of any Borrower approved by
the Requisite Lenders.
"Standby Letters of Credit" shall mean Letters of Credit issued in
connection with Standby Letter of Credit Support Obligations.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves), expressed
as a decimal, established by the Federal Reserve Board and/or any other banking
authority to which any Lender or any member bank of the Federal Reserve System
is subject with respect to LIBOR, for Eurocurrency Liabilities (as defined in
Regulation D of the Federal Reserve Board). Such reserve percentages shall
include those imposed under such Regulation D. LIBOR Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets that may be available from time to time to the Lenders under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subordinated Indebtedness" shall mean, for any Borrower or
Guarantor, all Indebtedness subordinated in right of payment to the Indebtedness
incurred hereunder on terms satisfactory to Requisite Lenders in their sole
discretion.
"Subsidiaries" shall mean, as to any Person (a) a corporation
of which shares of stock having ordinary voting power (other than stock having
such power only by reason of the occurrence of a contingency) to elect a
majority of the board of directors or other managers thereof are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly, through one or more intermediaries, or both, by such Person or (b) a
partnership in which such Person is a general partner or the management of which
is otherwise controlled, directly or indirectly, through one or more
intermediaries or both, by such Person. The term "Subsidiaries" herein, when
used in reference to any Borrower or Guarantor shall be deemed to refer to and
include any and all Subsidiaries of the Subsidiaries of such Borrower or
Guarantor.
"Termination Date" shall mean May 31, 1998.
"Total Liabilities" shall have the meaning afforded such term
under GAAP.
"UCC" shall mean the Uniform Commercial Code in the State of Tennessee, as
in effect from time to time.
1.2. Accounting and Commercial Terms. As used in this Agreement, all
accounting terms used but not otherwise defined herein shall have the respective
meanings assigned to them in conformity with GAAP. All terms used but not
otherwise defined herein that are defined or used in Article 9 of the UCC shall
have the respective meanings assigned to them in such Article.
1.3. General Construction. As used in this Agreement, the masculine,
feminine and neuter genders and the plural and singular numbers shall be deemed
to include the others in all cases in which they would so apply. "Includes" and
"including" are not limiting, and shall be deemed to be followed by "without
limitation" regardless of whether such words or words of like import in fact
follow same. The word "or" is not intended and shall not be construed to be
exclusive.
1.4 Defined Terms; Headings. The use of defined terms in the Loan
Documents is for convenience of reference and shall not be deemed to be limiting
or to have any other substantive effect with respect to the persons or things to
which reference is made through the use of such defined terms. Article and
section headings and captions in the Loan Documents are included in such Loan
Documents for convenience of reference and shall not constitute a part of the
applicable Loan Documents for any other purpose.
1.5 References to this Agreement and Parts Thereof. As used in this
Agreement, unless otherwise specified the words "hereof," "herein" and
"hereunder" and words of similar import shall refer to this Agreement including
all schedules and exhibits hereto, as a whole, and not to any particular
provision of this Agreement, and the words "Article", "Section", "Schedule" and
"Exhibit" refer to articles, sections, schedules and exhibits to this Agreement.
1.6 Documentary References. Any reference herein to any instrument,
document or agreement, by whatever terminology used, shall be deemed to include
any and all amendments, modifications, supplements, extensions, renewals,
substitutions and/or replacements thereof as the context may require.
I. ARTICLE
LOANS AND LETTERS OF CREDIT
2.1. Commitments; Reductions.
. The aggregate amount of the Commitments is $100,000,000. The aggregate amount
of the Revolving Credit Commitments at any time is equal to the aggregate amount
of the Commitments in effect at such time less the aggregate amount of Letter of
Credit Loans and Letter of Credit Liabilities outstanding at such time. The
aggregate amount of the Letter of Credit Commitments at any time is equal to the
aggregate amount of the Commitments in effect at such time less the aggregate
amount of Revolving Credit Loans outstanding at such time provided that in no
event shall Letter of Credit Commitments with respect to Standby Letters of
Credit exceed $5,000,000.
. The Borrowers shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part, without premium or penalty,
the Commitments in an amount up to the amount by which the Commitments exceed
the aggregate amount of the then outstanding Loans and Letter of Credit
Liabilities. The Borrowers shall give not less than ten (10) Business Days'
prior written notice to the Administrative Agent designating the date (which
shall be a Business Day) of such termination or reduction and the amount of any
reduction. Promptly after receipt of a notice of such termination or reduction,
the Administrative Agent shall notify each Lender of the termination or
reduction. Such termination or reduction of the Commitments shall be effective
on the date specified in the Borrowers' notice and shall reduce the Commitment
of each Lender in proportion to its Percentage of the Commitments. Any such
reduction of the Commitments shall be in a minimum amount of $5,000,000 and in
integral multiples of $1,000,000 in excess thereof.
. In the event the Termination Date is not extended (which extension shall occur
only if mutually agreed upon in writing by the Borrowers and the Lenders and
which extension neither the Borrowers nor the Lenders shall have any obligation
to agree to) as of one year prior to the Termination Date for an additional
period of time of at least one (1) year, each Borrower shall have the right to
cause letters of credit to be issued for such Borrower's account by commercial
banks or other financial institutions, including any of the Lenders, for the
same purposes for which such Borrower is permitted to cause Letters of Credit to
be issued hereunder, provided, however, that (a) such Borrower shall give the
Administrative Agent notice of the issuance of each such letter of credit on the
day of issuance of such letter of credit, which notice shall include the amount
of the letter of credit and (b) such letters of credit must have an expiration
date not sooner than the Termination Date. The Commitments shall be permanently
and irrevocably reduced by the amount of all letters of credit issued on any
Borrower's behalf pursuant to this Section 2.1.3.
. 2.2. Revolving Credit Loans
. Subject to all of the terms and conditions of this Agreement (including the
conditions set forth in Sections 4.1 and 4.2) and in reliance upon the
representations and warranties of the Borrowers and Guarantors herein set forth,
each Lender hereby severally agrees to make Revolving Credit Loans to the
Borrowers from time to time during the Commitment Period, in amounts up to its
Percentage of the aggregate Revolving Credit Commitments, for the purposes
identified in Section 2.10. In no event shall (a) the aggregate principal amount
of the Revolving Credit Loans from any Lender outstanding at any time exceed
such Lender's Revolving Credit Commitment or (b) the aggregate principal amount
of the Revolving Credit Loans from all Lenders outstanding at any time exceed
the Revolving Credit Commitments. Each Lender's Revolving Credit Commitment
shall expire upon the expiration of the Commitment Period, and all Revolving
Credit Loans shall be paid in full no later than the Termination Date.
. The obligations of the Lenders to make Revolving Credit Loans under Section
2.2.1 shall be several and not joint and, subject to Section 2.14.4, all
Revolving Credit Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their respective Percentages of the
Revolving Credit Commitments. It is understood and agreed that the failure of
any Lender to make its Revolving Credit Loan as part of any Revolving Credit
Borrowing under Section 2.2.1 shall not relieve any other Lender of its
obligation to make its Revolving Credit Loan as provided in Section 2.2.1.
Neither the Administrative Agent nor any Lender shall be responsible for the
failure of any other Lender to make a Revolving Credit Loan as provided herein
nor shall the Revolving Credit Commitment of any Lender be increased as a result
of the default by any other Lender in such other Lender's obligation to make
Revolving Credit Loans hereunder.
. Amounts borrowed by the Borrowers under the Revolving Credit Commitments may
be prepaid and reborrowed from time to time to during the Commitment Period. The
aggregate amount of Revolving Credit Loans made on any Funding Date shall be in
the minimum amount of $5,000,000 and shall be in integral multiples of
$1,000,000 in excess thereof.
. 2.2.4 Notice of Borrowing
a) Delivery of Notice. Whenever the Borrowers desire to
borrow under Section 2.2, they shall deliver to the Administrative
Agent a Notice of Borrowing no later than 12:00 noon (Eastern time) at
least one (1) Business Day in advance of the proposed Funding Date. The
Notice of Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day), (ii) the amount of the proposed Revolving
Credit Borrowing, (iii) which Borrower shall receive the Borrowing,
(iv) whether the proposed Revolving Credit Borrowing shall be in the
form of Base Rate Loans or LIBOR Loans, and (v) in the case of LIBOR
Loans, the requested Interest Period. In lieu of delivering a Notice of
Borrowing, the Borrowers may give the Administrative Agent telephonic
notice by the required time of notice of any proposed Borrowing under
this Section 2.2.4; provided, however, that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
the Administrative Agent on or prior to the Funding Date of the
requested Revolving Credit Loans. The execution and delivery of each
Notice of Borrowing shall be deemed a representation and warranty by
the Borrowers that the requested Revolving Credit Loans may be made in
accordance with, and will not violate the requirements of, this
Agreement, including those set forth in Section 2.2.1.
(b) No Liability for Telephonic Notices. Neither the
Administrative Agent nor any Lender shall incur any liability to the
Borrowers in acting upon any telephonic notice given pursuant to this
Section 2.2.4 that the Administrative Agent believes in good faith to
have been given by a duly authorized officer or other person authorized
to borrow on behalf of the Borrowers or for otherwise acting in good
faith under this Section 2.2.4 and, upon the funding of Revolving
Credit Loans by the Lenders in accordance with this Agreement pursuant
to any telephonic notice, the Borrowers shall have effected a Revolving
Credit Borrowing hereunder.
(c) Notice Irrevocable. A Notice of Borrowing for LIBOR
Loans (or a telephonic notice in lieu thereof) shall be irrevocable on
and after the related Interest Rate Determination Date, and the
Borrowers shall be bound to make a Revolving Credit Borrowing in
accordance therewith.
. Promptly after receipt of a Notice of Borrowing (or telephonic notice in lieu
thereof), the Administrative Agent shall notify each Lender of the proposed
Revolving Credit Borrowing in writing, or by telephone promptly confirmed in
writing. Each Lender shall make the amount of its Revolving Credit Loan
available to the Administrative Agent, in immediately available (same day)
funds, at the Lending Office of the Administrative Agent, not later than 11:00
a.m. (Eastern time) on the Funding Date. The Administrative Agent shall make the
proceeds of such Revolving Credit Loans available to the Borrower specified in
the Notice of Borrowing on such Funding Date by causing an amount of immediately
available (same day) funds equal to the proceeds of all such Revolving Credit
Loans received by the Administrative Agent to be credited to the account of such
Borrower at such office of the Administrative Agent.
. 2.3. Letters of Credit
. The Borrowers may request any Lender (other than Wachovia Bank of Georgia,
N.A.) at any time and from time to time during the Commitment Period to issue,
and subject to and upon all of the terms and conditions of this Agreement
(including the conditions set forth in Sections 6.1 and 6.2) and in reliance
upon the representations and warranties of the Borrowers and Guarantors herein
set forth such Lender as an Issuing Bank shall issue, for the account of any
Borrower (as specified in the specific request of the Borrowers) and for the
benefit of the holder(s) (or any trustee, agent or other representative of such
holder(s)) of Letter of Credit Supportable Obligations of such Borrower one or
more irrevocable standby or direct-pay letters of credit in the form customarily
used by such Issuing Bank, or in such other form as has been approved by such
Issuing Bank and the Administrative Agent, in support of such Letter of Credit
Supportable Obligations; provided, however, that (a) each Letter of Credit by
its terms shall terminate no later than one (1) year after the date of issuance
(or the date of the most recent extension, as the case may be), but in no event
later than thirty (30) days prior to the Termination Date, and (b) in no event
shall any Letter of Credit be issued if the issuance thereof would cause the
aggregate amount of the then outstanding Letter of Credit Loans and Letter of
Credit Liabilities to exceed the aggregate amount of the Letter of Credit
Commitments then in effect.
. At least one (1) Business Day prior to (i) the date on which the Borrowers
desire that a Letter of Credit be issued hereunder or (ii) the date on which the
Borrowers desire that the expiration date of an outstanding Letter of Credit be
extended, as the case may be, the Borrowers shall deliver to the Issuing Bank
selected by Borrowers and to the Administrative Agent (who shall provide a copy
to each Lender) a Letter of Credit Request therefor. The execution and delivery
of each Letter of Credit Request shall be deemed a representation and warranty
by the Borrowers that the requested Letter of Credit issuance or extension may
be accomplished in accordance with, and will not violate the requirements of,
this Agreement, including those set forth in Section 2.3.1. Unless an Issuing
Bank has received notice from the Administrative Agent or Requisite Lenders
before it issues or extends the requested Letter of Credit that a Default exists
or that the requested issuance or extension would violate the requirements of
this Agreement, including those set forth in Section 2.3.1, then an Issuing Bank
may issue or extend, as the case may be, the requested Letter of Credit for the
account of the Borrower specified in the Borrowers' request in accordance with
the Issuing Bank's usual and customary practices. Upon the issuance or extension
of any Letter of Credit, the Issuing Bank shall promptly notify the
Administrative Agent and each Lender of such issuance or extension, which notice
to the Administrative Agent shall be accompanied by a copy of the Letter of
Credit so issued or the instrument(s) evidencing such extension. .
Notwithstanding anything to the contrary contained in Section 2.3 or Section
3.2, when an Issuing Bank shall make any payment under any Existing Letter of
Credit or Letter of Credit and the conditions set forth in Sections 6.1 and 6.2
shall have been fulfilled, the amount of such payment by the Issuing Bank,
unless immediately paid by Borrowers from their own funds or from a Swingline
Loan pursuant to Section 2.17.1 below, shall constitute a Letter of Credit
Borrowing by the Borrowers on the date of such payment, such Borrowing to
consist of Base Rate Loans made by each Lender in an amount equal to such
Lender's Percentage of the amount of such payment; provided, however, that if
the conditions of Sections 6.1 and 6.2 have not been fulfilled, the amount so
drawn shall be payable by the Borrowers in accordance with the terms of Section
3.2. Subject to all of the terms and conditions set forth in this Agreement,
upon receipt of notice of any such payment by the Issuing Bank under an Existing
Letter of Credit or Letter of Credit, the Administrative Agent shall establish
the appropriate Letter of Credit Borrowing effective on the date of the
corresponding payment under such Existing Letter of Credit or Letter of Credit.
. The obligations of the Lenders to make Letter of Credit Loans under Section
2.3.4 shall be several and not joint, and all Letter of Credit Loans under this
Agreement shall be made by the Lenders simultaneously and proportionately to
their respective Percentages of the Letter of Credit Commitments. It is
understood and agreed that the failure of any Lender to make its Letter of
Credit Loan as part of any Letter of Credit Borrowing under Section 2.3.3 shall
not relieve any other Lender of its obligation to make its Letter of Credit Loan
as provided in Section 2.3.3. Neither the Administrative Agent nor any Lender
shall be responsible for the failure of any other Lender to make a Letter of
Credit Loan as provided herein nor shall the Letter of Credit Commitment of any
Lender be increased as a result of the default by any other Lender in such other
Lender's obligation to make Letter of Credit Loans hereunder.
. 2.4. Participations in Letter of Credit Liabilities
. Each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from each Issuing Bank, without recourse or warranty and without
any further action on the part of any party, an undivided interest and
participation to the extent of such Lender's Percentage in all Letter of Credit
Liabilities as to each Letter of Credit and any security therefor or guarantee
relating thereto.
. The Issuing Bank shall notify the Administrative Agent and each Lender
promptly after the presentation of any draft and certificate or equivalent
documents to the Issuing Bank in connection with any drawing under a Letter of
Credit not reimbursed by or on behalf of the Borrowers on the date such drawing
is made.
. Each of the Lenders, shall, on or before 11:00 a.m. (Eastern time) on the date
of any drawing under a Letter of Credit (including any drawing or payment under
an Existing Letter of Credit that results in a Letter of Credit Loan),
unconditionally pay to the Administrative Agent, for distribution by the
Administrative Agent to the Issuing Bank, such Lender's Percentage of such
drawing; provided, however, that, if the Borrowers should pay in full or in part
such drawing on the date thereof, the obligation of each Lender to pay to the
Issuing Bank pursuant to this Section 2.4.3 such Lender's Percentage of such
drawing shall be reduced by the amount equal to such Lender's Percentage of such
payment by the Borrowers. Amounts paid in excess of the net amount so owed by
each Lender to the Issuing Bank shall promptly be refunded by the Issuing Bank
to the Administrative Agent for distribution by the Administrative Agent to the
respective Lenders.
. If any Lender shall fail to pay its Percentage of any drawing under a Letter
of Credit as provided in Section 2.4.3 above, the Issuing Bank shall be deemed
to have advanced funds on behalf of such Lender. Any advance made by the Issuing
Bank on behalf of a Lender hereunder and not paid by such Lender to the Issuing
Bank shall bear interest for each day from the day such payment is due until
such payment shall be paid in full at a rate per annum equal to the Federal
Funds Rate or any other rate customarily used by banks for the correction of
errors among banks, but in no event to exceed the Highest Lawful Rate, and shall
be repaid by application by the Administrative Agent (for the account of the
Issuing Bank) of any payment that such Lender otherwise is entitled to receive
under this Agreement. Pending repayment, each such advance shall be secured by
such Lender's participation interest in the Letter of Credit drawn upon, the
Letter of Credit Liabilities arising therefrom and any security therefor, and
the Issuing Bank shall be subrogated to such Lender's rights hereunder in
respect thereof.
. The obligation of each Lender to pay to the Administrative Agent, for the
benefit of the Issuing Bank and the other Lenders, its Percentage of each
drawing under a Letter of Credit not indefeasibly repaid by the Borrowers shall
be unconditional and irrevocable, shall not be subject to any qualification or
exception whatsoever, shall be made in accordance with the terms and conditions
of this Agreement under all circumstances and shall be binding in accordance
with the terms and conditions of this Agreement under all circumstances,
including the following circumstances:
(a) any lack of validity or enforceability of this
Agreement, or any other instrument, document or agreement relating to
the transactions that are the subject thereof;
(b) the existence of any claim, set-off, defense or other
right that the Borrowers or any Lender may have at any time against any
other, the Administrative Agent, the Issuing Bank, any Lender or any
other Person, whether in connection with this Agreement, the
transactions contemplated herein or therein or any related
transactions;
(c) any draft, statement or other document presented under
or in connection with any Letter of Credit, this Agreement or any other
Loan Document proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect;
(d) the surrender or impairment of any security for the performance or
observance of any of the terms of this Agreement;
(e) the occurrence or continuance of any Default or Event of Default;
(f) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit, except for any such payment
resulting from the Issuing Bank's gross negligence or willful
misconduct; or
(g) any other reason.
. Upon request by the Administrative Agent from time to time, the Issuing Bank
shall advise the Administrative Agent and the Lenders as to the various amounts
of the outstanding Letter of Credit Liabilities as shown on the records of the
Issuing Bank.
. 2.5. Borrowers' Obligations Absolute
. The obligations of the Borrowers under this Agreement in respect of any Letter
of Credit and under any other agreement or instrument relating to any Letter of
Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and such other agreement or
instrument under all circumstances, to the extent permitted by law, including
the following circumstances:
(a) any lack of validity or enforceability of any of the Loan Documents, or
any other instrument, document or agreement relating to the transactions that
are the subject thereof;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the Borrowers
in respect of the Letters of Credit or any other amendment or waiver of
or any consent to departure from all or any of the Loan Documents;
(c) the existence of any claim, set-off, defense or other
right that the Borrowers may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), any of the
Lenders, the Issuing Bank, the Administrative Agent, or any other
Person, whether in connection with the Loan Documents, or the
transactions contemplated hereby or by the other Loan Documents or any
unrelated transaction;
(d) any draft, statement or other document presented under
or in connection with any Letter of Credit, this Agreement or any other
Loan Document proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect;
(e) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit, except for any such payment
resulting from the Issuing Bank's gross negligence or willful
misconduct;
(f) any consequences arising from causes beyond the control of the Issuing
Bank; and
(g) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, that might otherwise constitute
a defense available to, or a discharge of, the Borrowers.
. No action taken or omitted by the Issuing Bank under or in connection with the
Letters of Credit or the related applications, agreements or certificates, if
taken or omitted in good faith and not as a result of gross negligence or
willful misconduct on the part of the Issuing Bank, shall put the Administrative
Agent, the Issuing Bank or any Lender under any resulting liability to the
Borrowers.
. 2.6. Interest
. Subject to Section 2.6.3, the unpaid principal balances of the Loans shall
bear interest from their respective Funding Dates through maturity (whether by
acceleration or otherwise) (including post-petition interest in any proceeding
under applicable bankruptcy laws) at a rate determined by reference to the Base
Rate or LIBOR. The applicable basis for determining the rate of interest for
Revolving Credit Loans shall be selected by the Borrowers at the time a Notice
of Borrowing is given pursuant to Section 2.2.4 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 2.7.2. Each Letter of
Credit Loan shall be a Base Rate Loan unless and until converted to a LIBOR Loan
as provided in Section 2.7. If on any day any Loan is outstanding with respect
to which notice has not been delivered to the Administrative Agent in accordance
with the terms of this Agreement specifying the basis for determining the rate
of interest, then for that day such Loan shall bear interest determined by
reference to the Base Rate. The Loans shall bear interest as follows:
(a) if a Base Rate Loan, then at a fluctuating rate per
annum equal to the Base Rate, as it varies from time to time; or
(b) if a LIBOR Loan, then at a rate per annum equal to the
sum of LIBOR plus the Applicable LIBOR Margin.
. Upon the occurrence and during the continuance of an Event of Default, the
unpaid principal balances of the Loans and, to the extent permitted by
applicable law, any unpaid interest accrued in respect of the Loans shall bear
interest at the Default Rate, but in no event to exceed the Highest Lawful Rate;
provided, however, that in the case of LIBOR Loans, upon the expiration of the
Interest Period in effect at the time any such increase in interest rate is
effective, such LIBOR Loans shall thereupon become Base Rate Loans and
thereafter bear interest at the corresponding Default Rate, but in no event to
exceed the Highest Lawful Rate. Interest accruing pursuant to this Section 2.6.2
shall be payable upon demand.
. Each determination by the Administrative Agent of an interest rate under this
Agreement shall be conclusive and binding for all purposes, absent manifest
error.
. 2.7. Conversion or Continuation
. Subject to the provisions of Section 2.14, the Borrowers shall have the option
(a) at any time to convert all or any part of any outstanding Base Rate Loans in
an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000
in excess of that amount from Base Rate Loans to LIBOR Loans and (b) upon the
expiration of any Interest Period applicable to a specific Borrowing of LIBOR
Loans, to continue all or any portion of such Loans in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount as LIBOR Loans, and the succeeding Interest Period of such continued
LIBOR Loans shall commence on the expiration date of the Interest Period
previously applicable thereto.
. The Borrowers shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 12:00 noon (Eastern time) at least one (1)
Business Day in advance of the proposed conversion/continuation date. A Notice
of Conversion/Continuation shall specify (a) the proposed
conversion/continuation date (which shall be a Business Day), (b) the aggregate
amount of Loans to be converted/continued, (c) the nature of the proposed
conversion/continuation, and (d) the requested Interest Period. In lieu of
delivering a Notice of Conversion/Continuation, the Borrowers may give the
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this Section 2.7; provided, however, that such
notice shall be promptly confirmed in writing by a Notice of
Conversion/Continuation delivered to the Administrative Agent on or before the
proposed conversion/continuation date. The execution and delivery of each Notice
of Conversion/Continuation shall be deemed a representation and warranty by the
Borrowers that the requested conversion/continuation may be made in accordance
with, and will not violate the requirements of, this Agreement, including those
set forth in Sections 2.7.1 and 2.14.1.
. Promptly after receipt of a Notice of Conversion/Continuation (or telephonic
notice in lieu thereof), the Administrative Agent shall notify each Lender of
the proposed conversion or continuation. Neither the Administrative Agent nor
the Lender shall incur any liability to the Borrowers in acting upon any
telephonic notice referred to above that the Administrative Agent believes in
good faith to have been given by a duly authorized officer or other person
authorized to act on behalf of the Borrowers or for otherwise acting in good
faith under this Section 2.7 and, upon conversion/continuation by the
Administrative Agent in accordance with this Agreement pursuant to any
telephonic notice, the Borrowers shall have effected a conversion/continuation
of Loans hereunder.
. Except as provided in Section 3.4.5, a Notice of Conversion/Continuation shall
be irrevocable on and after the related Interest Rate Determination Date, and
the Borrowers shall be bound to convert or continue such Loan in accordance
therewith.
. In the event any LIBOR Loan is unpaid upon the expiration of the Interest
Period applicable thereto and a Notice of Conversion/Continuation has not been
given in the manner provided in Section 2.7.2, such LIBOR Loan shall, effective
as of the last day of such Interest Period, become a Base Rate Loan.
. Each Loan made by a Lender to the Borrowers pursuant to this Agreement shall
be evidenced by a Note of each Borrower in the form attached hereto as Exhibit
2.8 payable to the order of such Lender in an amount equal to such Lender's
Percentage of the aggregate amount of the Commitments. Each Lender hereby is
authorized to record and endorse the date and principal amount of each Loan made
by it, and the amount of all payments and prepayments of principal and interest
made to such Lender with respect to such Loans, on a schedule annexed to and
constituting a part of such Lender's Note from each Borrower, which recordation
and endorsement shall constitute prima facie evidence of the Loans made by such
Lender to such Borrower and payments made by Borrowers to such Lender, absent
manifest error; provided, however, that (a) failure by any Lender to make any
such recordation or endorsement shall not in any way limit or otherwise affect
the obligations of such Borrower or the rights and remedies of the Lenders under
this Agreement or the Notes, and (b) payments of principal and interest on the
Loans to the Lenders shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, the Lenders hereby are authorized, at their option, to record the
payments or prepayments on their respective books and records in accordance with
their usual and customary practice, which recordation shall constitute prima
facie evidence of the Loans made by the Lenders to the Borrowers and the
payments and prepayments made by the Borrowers to the Lenders, absent manifest
error.
. The Administrative Agent may assume that each Lender has made the proceeds of
its Loans available to the Administrative Agent on the corresponding Funding
Date in the event the applicable conditions precedent to funding the requested
Loans set forth in Article 6 have been satisfied or waived in accordance with
Section 12.3, and the Administrative Agent, in its sole discretion, may, but
shall not be obligated to, advance all or any portion of the amount of any
requested Borrowing on such Funding Date to the Borrower designated by the
Borrowers to receive such requested Borrowing prior to receiving the proceeds of
the corresponding Loans from the Lenders. If the Administrative Agent has
advanced proceeds of any Loan to such Borrower on behalf of any Lender and such
Lender fails to make available to the Administrative Agent its Percentage share
of such Loan as required by Sections 2.2 or 2.3.4, the Administrative Agent
shall be entitled to recover such amount on demand from such Lender. If such
Lender does not pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall notify the Borrowers and the Borrowers
shall pay such amount to the Administrative Agent. The Administrative Agent also
shall be entitled to recover from such Lender interest at the Federal Funds Rate
or any other rate customarily used by banks for the correction of errors among
banks, but in no event to exceed the Highest Lawful Rate, on such amount so
advanced on behalf of a Lender for each day from the date such amount was made
available by the Administrative Agent to the Borrowers to the date such amount
is recovered by the Administrative Agent, with interest at the applicable rate
for such Loan. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill such Lender's Commitments or to prejudice any rights that
the Administrative Agent or the Borrowers may have against any Lender as a
result of any default by such Lender hereunder.
. The proceeds of the Revolving Credit Loans will be used by the Borrowers, for
working capital purposes and for other general corporate or partnership
purposes, and will not be used by the Borrowers for any purpose prohibited by
the terms of this Agreement or by any law. The proceeds of the Letter of Credit
Loans will be used solely to reimburse the Issuing Bank for amounts paid by it
in respect of drawings on Letters of Credit incurred for Letter of Credit
Supportable Obligations and will not be used by the Borrowers for any purpose
prohibited by the terms of this Agreement or by any law.
. In consideration for the obligations of the Administrative Agent, the Issuing
Bank and the Lenders set forth herein, the Borrowers shall pay the following
credit fees:
. In consideration of each Lender's agreement to participate in the Facilities
as provided herein, the Borrowers shall pay to each Lender a per annum fee in an
amount equal to twenty one-hundredths of one percent (0.20%) of such Lender's
Percentage of the Commitments hereunder. This fee shall be payable in
quarter-annual installments, in advance, on each January 1, April 1, July 1, and
October 1 of each year based upon the amount of Commitments as of each date and
calculated based upon a 365-day year and the actual number of days elapsed.
. The Borrowers agree to pay to each Issuing Bank annual letter of credit fees
with respect to each Standby Letter of Credit issued by such Issuing Bank on the
date of issuance of each such Standby Letter of Credit, equal to the stated
amount of each such Standby Letter of Credit multiplied by the Applicable
Standby Letter of Credit Fee Percentage and the fraction of a year that such
Standby Letter of Credit is to be outstanding calculated based upon a 365-day
year and the actual number of days to elapse. The Borrowers further agree to pay
to each Issuing Bank annual letter of credit fees with respect to each
Commercial Letter of Credit issued by such Issuing Bank on the earlier of (i)
the termination date of each such Commercial Letter of Credit or (ii) the date
each such Commercial Letter of Credit is drawn upon in an amount equal to the
stated amount of each such Commercial Letter of Credit multiplied by the
Applicable Commercial Letter of Credit Fee Percentage and the fraction of a year
that such Commercial Letter of Credit was outstanding (calculated based upon a
365-day year and the actual number of days elapsed). The fees to be paid
pursuant to this Section 2.11.2 are collectively referred to herein as "Letter
of Credit Fees". Each Issuing Bank shall pay to the Administrative Agent no
later than the last day of each quarter and on the Termination Date all Letter
of Credit Fees received by such Issuing Bank during such quarter, together with
a summary of how such fees were calculated, and the Administrative Agent shall
distribute all Letter of Credit Fees to each Lender in proportion to that
Lender's Percentage on January 1, April 1, July 1 and October 1 of each year,
and on the Termination Date.
. Pursuant to one or more separate agreements with the Issuing Bank, Borrowers
shall pay to the Issuing Bank its normal and customary fees charged by the
Issuing Bank upon the establishment of any Letter of Credit, upon any amendment
or transfer of a Letter of Credit and upon the payment of any drawing under any
Letter of Credit.
2.11.4 Amendment Fee. Borrowers agree to pay to the Lenders
as of the effective date of this Amended and Restated Credit Agreement a
one-time amendment fee in the aggregate amount of $25,000, which amount shall be
divided between the Lenders pro rata in accordance with each Lender's Percentage
of the Commitments hereunder.
. To the extent permitted by applicable law, all computations of fees and
interest under this Agreement payable in respect of any period shall be made by
the Administrative Agent (a) with respect to any LIBOR Loan on the basis of a
360-day year, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
is payable and (b) with respect to any Base Rate Loan and all Letter of Credit
Fees, on the basis of a 365-day year, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fees or interest are payable. In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest Period, as the
case may be, shall be included and the date of payment or the expiration date of
an Interest Period, as the case may be, shall be excluded; provided, however,
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.
. For purposes of interest and fee computations hereunder involving the
Applicable LIBOR Margin, the Applicable Commercial Letter of Credit Fee
Percentage and the Applicable Standby Letter of Credit Fee Percentage, such
margins and percentages shall be determined as follows:
. The Applicable LIBOR Margin shall be one percent (1.00%).
. The Applicable Commercial Letter of Credit Fee Percentage shall be ninety
one-hundredths of one percent (.90%).
. The Applicable Standby Letter of Credit Fee Percentage shall be one
percent (1.00%).
. Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to LIBOR Loans as to the matters covered:
. By giving a Notice of Borrowing pursuant to Section 2.2.4, the Borrowers shall
have the option, subject to the other provisions of this Section 2.14.1, to
specify whether the Interest Period commencing on the date specified therein
shall be a one, two, three, or six-month period; provided that:
(a) in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires;
(b) if any Interest Period otherwise would expire on a day
that is not a Business Day, that Interest Period shall be extended to
expire on the next succeeding Business Day; provided, however, that if
any such Interest Period would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business
Day occurs in that month, that Interest Period shall expire on the
immediately preceding Business Day;
(c) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to paragraph (d) below, end on the last Business
Day of a calendar month; and
(d) no Interest Period shall extend beyond the Termination Date.
. As soon as is practicable after 11:00 a.m. (Eastern time) on the Interest Rate
Determination Date, the Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the LIBOR Loans for
which an interest rate is then being determined for the applicable Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Borrowers and to each Lender.
. In the event the Administrative Agent shall have determined (which
determination shall be conclusive and binding absent manifest error) that by
reason of circumstances affecting the London interbank Eurodollar market,
adequate and reasonable means do not exist for ascertaining Base LIBOR, the
Administrative Agent forthwith shall give telephonic notice of such
determination and of the comparable source by which the rate of interest for
LIBOR Loans shall be determined, which notice shall be confirmed in writing, to
the Borrowers and to each Lender.
. Notwithstanding any other provisions of this Agreement, if any law, treaty,
rule or regulation or determination of a court or other governmental authority,
or any change therein or in the interpretation or application thereof, shall
make it unlawful for any Lender to make or maintain LIBOR Loans, as contemplated
by this Agreement, then, and in any such event, such Lender shall be an
"Affected Lender" and shall promptly give notice (by telephone confirmed in
writing) to the Borrowers and the Administrative Agent (which notice the
Administrative Agent shall promptly transmit to each Lender in writing, or by
telephone confirmed in writing) of such determination, and the obligation of the
Affected Lender to make LIBOR Loans shall be terminated, and its obligation to
maintain its LIBOR Loans during such period shall be terminated at the earlier
to occur of the termination of the last Interest Period then in effect or when
required by law. Thereafter, and until such notice has been withdrawn by the
Affected Lender, the Affected Lender shall have no obligation to make LIBOR
Loans, and any LIBOR Loans of the Affected Lender then outstanding shall be
converted into Base Rate Loans as of the end of the corresponding Interest
Period for each.
. Unless all Lenders shall otherwise agree, after the occurrence of and during
the continuance of a Default or an Event of Default, the Borrowers may not elect
to have a Loan be made or continued as, or converted to, a LIBOR Loan.
. The Borrowers shall reimburse the Administrative Agent, on demand, for all
reasonable attorneys' and paralegals' fees and expenses of counsel to the
Administrative Agent, all fees and expenses for title, lien and other public
records searches, all duplicating expenses, corporation search fees, and all
other customary fees and expenses incurred in connection with (a) the
negotiation, documentation and closing of the transactions contemplated hereby,
and (b) the perfection of or the continued perfection of the security interests
contemplated hereby. The obligations described in this Section 2.15 regarding
the payment of expenses are independent of all other obligations of the
Borrowers hereunder, shall survive the expiration or termination of the
Commitments and shall be payable regardless of whether the financing
transactions contemplated by this Agreement shall be consummated.
. If the Administrative Agent (with a copy to each Lender) receives: (a) a
notice from the Borrowers that a Lender has defaulted under this Agreement by
failing to fund a Loan when required to do so or, with the exception of Wachovia
Bank of Georgia, N.A., to issue a Letter of Credit when requested to do so, and
such failure did, in fact, occur, (b) a notice from an affected Lender pursuant
to Section 3.4.7 claiming compensation, reimbursement or indemnity pursuant to
Section 3.4 or Section 3.5, and the aggregate amount of all such compensation,
reimbursement or indemnity payments made or required to be made by the Borrowers
pursuant to Section 3.4 or Section 3.5 to the Lender giving notice is materially
greater (as determined by the Borrowers in their reasonable judgment) than the
weighted average amount of payments made or required to be made to the other
Lenders pursuant to Section 3.4 or Section 3.5, or (c) a notice from an Affected
Lender stating that it is prevented from making additional LIBOR Loans due to
the occurrence of an event described in Section 2.14.4, then, so long as no
Default or Event of Default shall have occurred and be continuing, the Borrowers
may, within sixty (60) days after receipt of any such notice, elect to terminate
such Lender as a party to this Agreement. If the amount of such Lender's
Commitment, together with the amount of any other Commitments theretofore or
concurrently therewith to be reduced in accordance with this Section 2.16,
aggregates twenty-five percent (25%) or less of the aggregate Commitments, the
Borrowers may elect either to replace such Lender with another financial
institution reasonably satisfactory to the Administrative Agent (a "Replacement
Lender") or to reduce the Commitments by the amount of the Commitment of such
Lender; provided, however, that the right of Borrowers to replace the removed
Lender is subject to the right of each remaining Lender to succeed to its pro
rata portion of the removed Lender's Commitment hereunder as determined by the
proportion that each remaining Lender's Commitment bears to the total
Commitments after such removal. If the amount of such Lender's Commitment,
together with the amount of any other Commitments theretofore or concurrently
therewith to be reduced in accordance with this Section 2.16, aggregates in
excess of twenty-five percent (25%) of the aggregate Commitments, the Borrowers
may elect to terminate such Lender only if, together with its notice of
termination, it provides to the Administrative Agent a commitment from a
Replacement Lender to replace the Commitment of the terminated Lender on the
terms and conditions set forth herein if the other Lenders have not decided to
succeed to the removed Lender's obligations as provided above. The Borrowers'
election to terminate a Lender under this Section 2.16 shall be set forth in a
written notice from the Borrowers to the Administrative Agent (with a copy to
such Lender), setting forth (i) the basis for termination of such Lender, (ii)
whether the Borrowers intend to replace such Lender with a Replacement Lender
or, if the Borrowers are not required to replace such Lender, to reduce the
Commitments by the amount of the Commitment of such Lender, and (iii) the date
(not later than thirty (30) days after the date of such notice) when such
termination shall become effective. On the date on which such termination
becomes effective, (x) the Borrowers and/or the Replacement Lender, as
applicable, shall pay the terminated Lender an amount equal to all principal,
interest, fees and other amounts owed to such Lender pursuant to this Agreement
(including any amounts owed under Sections 3.4 and 3.5) through such date, and
(y) there shall have been received by the Administrative Agent an executed
Assignment and Acceptance and all other documents and supporting materials
necessary, in the reasonable judgment of the Administrative Agent, to evidence
the substitution of the Replacement Lender for such terminated Lender, or if
there is no Replacement Lender, to reflect the adjustment of the Commitments,
including any necessary or appropriate adjustments to the Lenders' Percentages
(adjustments to the Commitments and Percentages of the remaining Lenders to be
based upon the relative proportions of their respective Percentages) and the
correlative pro rata reduction of the amounts set forth in Section 2.1.2.
. 2.17. Non-Pro Rata Borrowing; Settlement Procedures
. Notwithstanding anything in this Article 2 to the contrary, the Borrowers may
deliver Notices of Borrowing in the form and in the manner provided by Section
2.2.4 (provided that the Borrowers cannot elect to have any borrowing described
herein to be a LIBOR Loan) to the Administrative Agent, in its individual
capacity as a Lender, in the minimum amount of $100,000 and integral multiples
of $100,000 in excess thereof. Provided all terms and conditions of this
Agreement (including the conditions set forth in Sections 6.1 and 6.2 are met)
and provided all representations and warranties of the Borrowers are true and
correct as of the date hereof, the Administrative Agent, in its individual
capacity as a Lender and without participation on the part of the other Lenders,
agrees to make Revolving Credit Loans pursuant to such Notices of Borrowing
(each a "Swingline Loan" and collectively the "Swingline Loans") and the other
Lenders shall not be required to fund a pro rata share of such Swingline Loans.
Swingline Loans shall bear interest at the rate that is mutually agreed upon by
the Borrowers and the Administrative Agent but in no event shall such rate
exceed the lesser of (i) the Base Rate, or (ii) LIBOR for a one-month period
plus one percentage point (1.00%). Swingline Loans shall be made solely by the
Administrative Agent, in its individual capacity as a Lender, provided, however,
that the Administrative Agent shall, upon the request of one or more of the
remaining Lenders, inform such Lender or Lenders of the current balance of all
outstanding Swingline Loans. The maximum amount that may be advanced by the
Administrative Agent at any time pursuant to this Section 2.17 shall be
$5,000,000, and the amount loaned to the Borrowers under this Section 2.17 from
time to time shall reduce the amount of the Commitments.
. Notwithstanding Section 3.1, the Borrowers may prepay any Swingline Loans
in whole or in part in integral multiples of $100,000.
. Upon any Default by the Borrowers under this Agreement, the Administrative
Agent may, in its sole discretion, give notice to the Lenders that its
outstanding Swingline Loans shall be funded with a Borrowing of Revolving Credit
Loans, in which case a Borrowing of Revolving Credit Loans constituting Base
Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made by all
Lenders pro rata, and the proceeds thereof shall be applied directly to the
Administrative Agent to repay the Administrative Agent for such outstanding
Swingline Loans. Advancement of funds by the remaining Lenders pursuant to this
Section 2.17.3, shall be made by the close of any Business Day in which written
notice is received from the Administrative Agent by 12:00 noon, otherwise such
funding shall be made by the close of the Business Day following the day on
which such written notice is received. All Swingline Loans shall begin to accrue
interest at the Base Rate upon advancement by the remaining Lenders to the
Administrative Agent of their pro rata share of the loan amount notwithstanding
the interest rate initially agreed upon by the Borrowers and the Administrative
Agent at the commencement of each Swingline Loan. Each Lender hereby irrevocably
agrees to advance funds as described above notwithstanding (i) the amount of the
Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Article 6
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) any reduction in the
Commitments after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above, each Lender hereby agrees that it shall forthwith purchase from the
Administrative Agent such participations in the outstanding Swingline Loans as
shall be necessary to cause the Lenders to share in such Swingline Loans ratably
based upon their respective Percentages, provided that all interest payable on
the Swingline Loans shall be for the account of the Administrative Agent until
the date the respective participation is purchased, and to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date of purchase. Notwithstanding anything to the contrary
in this Section 2.17, the Administrative Agent will not make a Swingline Loan
after it has received notice that an Event of Default exists.
ARTICLE 3
PAYMENTS, PREPAYMENTS AND COMPUTATIONS
. Except as specifically set forth in Section 3.2, the Loans shall be
repaid as provided in this Section 3.1.
. The interest accrued on each Loan shall be payable on each Interest Payment
Date applicable to such Loan, upon any prepayment of any LIBOR Loan (to the
extent accrued on the amount being prepaid) and at maturity.
. 3.1.2. Prepayments
(a) Voluntary Prepayments. The Borrowers may, upon not less
than one (1) Business Day's prior written or telephonic notice
confirmed in writing to the Administrative Agent (in the case of Base
Rate Loans), and upon not less than two (2) Business Days' prior
written or telephonic notice confirmed in writing to the Administrative
Agent (in the case of LIBOR Loans) (each of which notices the
Administrative Agent will promptly transmit to each Lender in writing,
or by telephone confirmed in writing), at any time and from time to
time prepay any Borrowing of Loans (as the Borrowers may specify to the
Administrative Agent) in whole or in part in integral multiples of
$1,000,000; provided, however, that LIBOR Loans may only be prepaid in
part if, after such prepayment, the unpaid portion of such Loans shall
have aggregate minimum balances of $5,000,000; and provided further
that, in connection with any prepayment of LIBOR Loans, the Borrowers
shall pay to the Administrative Agent, for distribution to the Lenders,
the accrued interest on such Loan required to be paid pursuant to
Section 3.1.1 and any amounts required to be paid pursuant to Section
3.4.5;
(b) Application of Prepayments. Any prepayment pursuant to
this Section 3.1.2 shall be applied to the Indebtedness in the manner
specified by Borrowers, provided, however, that if Borrowers have
failed to provide funds to pay all amounts required by Section 3.4.5,
such prepayments should be applied to any outstanding Base Rate Loans.
. In all events, the entire aggregate principal balances of, all accrued and
unpaid interest on and all fees and other sums due and payable in respect of the
Loans shall be due and payable in full on the Termination Date if not sooner
paid.
. On each day an Issuing Bank honors a drawing under a Letter of Credit (unless
a Letter of Credit Loan is made pursuant to Section 2.3.4), the Borrowers shall,
after the Issuing Bank has honored such drawing, immediately reimburse the
Issuing Bank for the account of the Lenders, by 12:00 noon (Eastern time) (or as
soon thereafter as the drawing has been honored) in an amount equal to the
amount of such drawing.
3.3. Payments and Computations, Etc.
. Except as otherwise expressly set forth herein, all payments of principal,
interest and fees hereunder and under the Notes shall be in lawful currency of
the United States of America, in immediately available (same day) funds, and
delivered to the Administrative Agent at its Lending Office for its account, the
account of the Lenders or the account of the Issuing Bank, as the case may be,
not later than 12:00 noon (Eastern time) on the date due. As soon as is
practicable thereafter, the Administrative Agent shall cause to be distributed
like funds relating to the payment of principal or interest or fees ratably to
the Lenders in accordance with their respective Percentages (other than amounts
payable pursuant to Sections 3.4 and 3.5, which are to be distributed other than
ratably). Funds received by the Administrative Agent after the time specified in
the first sentence of this paragraph shall be deemed to have been paid by the
Borrowers on the next succeeding Business Day.
. Whenever any payment to be made hereunder or under the Notes shall be stated
to be due on a day that is not a Business Day, the payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or under the Notes or of the
fees payable hereunder, as the case may be; provided, however, that in the event
that the day on which payment relating to a LIBOR Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in that
month, then the due date thereof shall be the next preceding Business Day.
. Aggregated principal and interest payments shall be apportioned among all
outstanding Loans to which such payments relate, and the aggregated payment of
the Commitment Fee shall be apportioned ratably among the Lenders, in each case
proportionately to their respective Percentages of the corresponding Loans and
Commitments, as the case may be. The Administrative Agent shall promptly
distribute to each Lender at its Lending Office its Percentage of all such
payments received by the Administrative Agent. Notwithstanding the foregoing
provisions of this Section 3.3.3, if, pursuant to the provisions of Section
2.14.4, any Notice of Borrowing is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Percentage of LIBOR Loans,
the Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
. Unless the Administrative Agent shall have received notice from the Borrowers
prior to the date on which any payment is due to the Administrative Agent for
the benefit of the Lenders hereunder that the Borrowers will not make such
payment in full, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrowers shall not have so made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate, but in no event to exceed the
Highest Lawful Rate.
. After the occurrence and during the continuance of an Event of Default, unless
otherwise set forth in this Agreement or the other Loan Documents, all payments
received by the Administrative Agent from the enforcement of remedies under the
Loan Documents or otherwise with respect to the Obligations shall be applied (a)
first, to the payment of any fees, expenses, reimbursements or indemnities then
due from the Borrowers to the Administrative Agent; (b) second, to the payment
of any fees, expenses, reimbursements or indemnities then due from the Borrowers
to the Lenders, or any of them; (c) third, to the ratable payment of interest
due from the Borrowers with respect to any of the Loans and fees in respect of
the Letters of Credit; (d) fourth, to the ratable payment of principal of any of
the Loans of the Borrowers and all obligations of the Borrowers to reimburse the
Issuing Bank and the Lenders in respect of drawings under Letters of Credit; (e)
fifth, to be held as cash collateral by the Administrative Agent for the ratable
benefit of the Lenders, as security for outstanding Letter of Credit
Liabilities, and (f) sixth, to pay all other Obligations.
. 3.4. Increased Costs, Capital Requirements and Taxes
3.4.1. Increased Costs. Except to the extent reimbursed
pursuant to other provisions of this Section 3.4, in the event that either (i)
the introduction of, or any change in, or in the interpretation of, any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other Governmental Authority (regardless of whether having the force of
law):
(a) does or shall subject any Lender to any additional
income, preference, minimum or excise tax or to any additional tax of
any kind whatsoever with respect to LIBOR Loans or Letters of Credit
issued hereunder or change the basis of taxation of payments to such
Lender of principal, commitment fees, interest or any other amount
payable in regard to LIBOR Loans or Letters of Credit (except for
changes in the rate of tax on the overall gross or net income of that
Lender or its foreign branch, agency or subsidiary); or
(b) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Lender
(except, with respect to LIBOR Loans, to the extent that the reserve
requirements are reflected in the definition of "LIBOR"); or
(c) does or shall impose on that Lender any other condition with respect to
LIBOR Loans or Letters of Credit; and the result of any of the foregoing is to
increase the cost to that Lender of issuing or participating in the Letters of
Credit or of making, renewing or maintaining the Loans or the Commitments or to
reduce any amount receivable hereunder or thereunder; then, in any such case,
the Borrowers shall promptly pay to such Lender, upon written demand made in
accordance with Section 3.4.7, such additional amounts as are sufficient to
compensate such Lender for any such additional cost or reduced amount received.
. If either (i) the introduction of, or any change in, or in the interpretation
by any governmental agency or court of applicable jurisdiction of, any law or
regulation or (ii) compliance with any guideline, demand or order from any
central bank or other Governmental Authority (regardless of whether having the
force of law), affects or would affect in any way the amount of capital required
or expected to be maintained with respect to LIBOR Loans or Letters of Credit by
any Lender or any corporation controlling such Lender with the effect of
reducing the rate of return on such capital to a level below the rate that such
Lender or such other corporation could have achieved but for such introduction,
change or compliance, and such Lender reasonably determines that such reduction
is based on the existence of such Lender's Commitments as to LIBOR Loans or
Letters of Credit hereunder and other commitments of this type, then upon
written demand by such Lender, the Borrowers shall further pay to such Lender
from time to time as specified by such Lender such additional amounts as are
sufficient to compensate such Lender or other corporation for such reduction.
. If any Issuing Bank or any Lender determines that either (i) the introduction
of, or any change in, or in the interpretation by any governmental agency or
court of applicable jurisdiction of, any law or regulation or (ii) compliance
with any guideline, demand or order from any central bank or other Governmental
Authority (regardless of whether having the force of law), affects or would
affect in any way the amount of capital required or expected to be maintained by
such Issuing Bank or such Lender or any corporation controlling such Issuing
Bank or such Lender with the effect of reducing the rate of return on such
capital below the rate that such Issuing Bank or such Lender or such other
corporation could have achieved but for such introduction, change or compliance,
and such Issuing Bank or such Lender reasonably determines that such reduction
is based on the existence of the Letters of Credit issued hereunder and other
commitments of this type, then upon written demand by such Issuing Bank or such
Lender, the Borrowers shall further pay to such Issuing Bank and such Lender
from time to time as specified by such Issuing Bank and such Lender such
additional amounts as are sufficient to compensate such Issuing Bank and such
Lender or other corporation for such reduction.
. If either (i) the introduction of, or any change in, or in the interpretation
by any governmental agency or court of applicable jurisdiction of, any law or
regulation or (ii) compliance with any guideline, demand or order from any
central bank or other Governmental Authority (regardless of whether having the
force of law), shall either (a) impose, modify or deem applicable any reserve,
special deposit or similar requirement against letters of credit or similar
instruments issued by, or assets held by, or deposits in or for the account of,
any Issuing Bank or any Lender or (b) impose on any Issuing Bank or any Lender
any other condition regarding this Agreement as it pertains to the Letters of
Credit, or any letter of credit, and the result of any event referred to in the
preceding clause (a) or (b) shall be to increase the cost to any Issuing Bank or
any Lender of issuing or maintaining any Letter of Credit or any participation
therein (which increase in cost shall be determined by such Issuing Bank's or
such Lender's, as the case may be, reasonable allocations of the aggregate of
such cost increases resulting from such event), then, upon written demand by
such Issuing Bank or such Lender, as the case may be, the Borrowers shall
forthwith pay to the Issuing Bank or such Lender, as the case may be, from time
to time as specified by such Issuing Bank or such Lender, as the case may be,
such additional amounts as are sufficient to compensate the Issuing Bank or such
Lender, as the case may be, for such increased cost.
. The Borrowers shall indemnify and hold each Lender free and harmless from all
losses, liabilities and reasonable expenses (including any loss sustained by
that Lender in connection with the re-employment of such funds), that such
Lender may sustain: (a) if by reason of any action or inaction by Borrowers a
Borrowing of LIBOR Loans does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing or a continuation of or
conversion to LIBOR Loans does not occur on a date specified therefor in a
Notice of Conversion/Continuation or in a telephonic request for
conversion/continuation, (b) if any prepayment of any of its LIBOR Loans occurs
on a date that is not the last day of an Interest Period, or (c) if any
prepayment of any of its LIBOR Loans is not made on any date specified in a
notice of prepayment given by the Borrowers.
. The Borrowers shall indemnify and hold each Lender free and harmless from, and
shall pay, prior to the date on which penalties attach thereto, all present and
future income, stamp and other taxes, levies or costs and charges whatsoever
imposed, assessed, levied or collected on or in respect of a Loan solely as a
result of the interest rate being determined by reference to LIBOR and/or the
provisions of this Agreement related to LIBOR and/or the recording,
registration, notarization or other formalization of any thereof and/or any
payments of principal, interest or other amounts made on or in respect of a Loan
when the interest rate is determined by reference to LIBOR (all such taxes,
levies, costs and charges being herein collectively called "LIBOR Taxes");
provided, however, that LIBOR Taxes shall not include: taxes imposed on or
measured by the overall gross or net income of such Lender or any foreign
branch, agency or subsidiary of such Lender by the United States of America or
any political subdivision or taxing authority thereof or therein, or taxes on or
measured by the overall gross or net income of that Lender or any foreign
branch, agency or subsidiary of that Lender by any foreign country or
subdivision thereof in which that Lender, branch, agency or subsidiary is doing
business. The Borrowers also shall indemnify and hold each Lender free and
harmless from, and shall pay such additional amounts equal to, increases in
taxes payable by that Lender described in the foregoing proviso that are
attributable to payments made by the Borrowers described in the immediately
preceding sentence or this sentence. Promptly after the date on which payment of
any such LIBOR Tax is due pursuant to applicable law, the Borrowers will, at the
written request of such Lender, furnish to such Lender evidence, in form and
substance satisfactory to such Lender, that the Borrowers have met their
obligation under this Section 3.4.6; and the Borrowers will indemnify each
Lender against, and reimburse each Lender on demand for, any LIBOR Taxes payable
by that Lender. Such Lender shall provide the Borrowers with appropriate
receipts for any payments or reimbursements made by the Borrowers pursuant to
this Section 3.4.6. If any Lender fails to give the Borrowers notice pursuant to
Section 3.4.7. so as to avoid the payment of any penalties or late charges with
respect to any payments required to be made by Borrowers to such Lender under
this Section 3.4.6, the Borrowers shall not be responsible for the payment of
any such penalties or late charges.
. Each Lender and Issuing Bank will promptly notify the Administrative Agent
(with a copy to the Borrowers) of any event of which it has knowledge, occurring
after the date hereof, that entitles such Lender or such Issuing Bank to
compensation, reimbursement or indemnity pursuant to this Section 3.4 or Section
3.5, and shall furnish to the Administrative Agent (with a copy to the
Borrowers) a certificate of such Lender or such Issuing Bank claiming
compensation, reimbursement or indemnity under this Section 3.4 or Section 3.5,
setting forth in reasonable detail the additional amount or amounts to be paid
to it hereunder if not theretofore paid by the Borrowers as provided in Section
3.5 (which certificate shall be presumed correct and binding in the absence of
manifest error). In determining such amount, such Lender and such Issuing Bank
may use any reasonable averaging, attribution or allocation methods. Within
fifteen (15) days following receipt of such notice, the Borrowers shall pay to
the Administrative Agent, for distribution to such Lender, or to such Issuing
Bank, as the case may be, the amount shown to be due and payable by such
certificate.
. 3.5. Taxes
. Any and all payments by the Borrowers hereunder or under the Notes or the
other Loan Documents shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect to such payments (including
interest, additions to tax and penalties thereon), excluding, in the case of
each Lender, the Administrative Agent and each Issuing Bank, (i) taxes imposed
on or measured by its income, assets or capital, and franchise taxes imposed on
it, by the jurisdiction of such Lender's Lending Office or any political
subdivision or taxing authority thereof, and (ii) withholding taxes that are the
subject of Sections 3.5.2 through 3.5.5. If the Borrowers shall be required by
law to deduct any such taxes from or in respect of any sum payable hereunder or
under any Note or any other Loan Document to any Lender or the Administrative
Agent, (a) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 3.5) such Lender or the Administrative Agent (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made and (b) the Borrowers shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law. If and to the extent that any Lender subsequently shall be
refunded or otherwise recover all or any part of any such deduction, it shall
refund to the Borrowers the amount so recovered.
. If any Lender is a "foreign corporation" within the meaning of the Code, such
Lender shall deliver to the Administrative Agent either: (a) if such Lender
qualifies for an exemption from or a reduction of United States withholding tax
under a tax treaty, a properly completed and executed Internal Revenue Service
form 1001 before the payment of any interest is due in the first calendar year
and in each third succeeding calendar year during which interest may be paid
under this Agreement, or (b) if such Lender qualifies for an exemption for
interest paid under this Agreement from United States withholding tax because it
effectively is connected with a United States trade or business of such Lender,
two properly completed and executed copies of Internal Revenue Service form 4224
before the payment of any interest is due in the first taxable year of such
Lender, and in each succeeding taxable year of such Lender, during which
interest may be paid under this Agreement, and (c) such other form or forms as
may be required or reasonably requested by the Administrative Agent to establish
or substantiate exemption from, or reduction of, United States withholding tax
under the Code or other laws of the United States. Each such Lender agrees to
notify the Administrative Agent of any change in circumstances that would modify
or render invalid any claimed exemption or reduction.
. If any Lender is entitled to a reduction in the applicable withholding tax,
the Administrative Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by Section 3.5.2
are not delivered to the Administrative Agent, then the Administrative Agent may
withhold from any interest payment to any Lender not providing such forms or
other documentation, an amount equivalent to the applicable withholding tax.
. If the Internal Revenue Service or any authority of the United States or other
jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
that rendered the exemption from or reduction of withholding tax ineffective, or
for any other reason) such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as tax
or otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs, and any out-of-pocket
expenses.
. If any Lender sells, assigns, grants participations in or otherwise transfers
its rights under this Agreement, the participant shall comply and be bound by
the terms of Sections 3.5.2, 3.5.3 and 3.5.4 as though it were such Lender.
. Any Lender may make, carry or transfer Loans at, to or for the account of, any
of its branch or agency offices, provided, however, that in the event that any
Lender transfers its Loans to another branch or agency office in a transaction
that does not involve the transfer by such Lender of any of its other loans to
such branch or agency office, such Lender shall not be entitled to reimbursement
for additional costs or taxes with respect to such Loans pursuant to Section 3.4
or Section 3.5 if the Borrowers would be subject to additional liability under
Section 3.4 or Section 3.5 to which it would not be subject if such Lender's
Loans were maintained at the office at which such Loans were carried prior to
such transfer.
The Borrowers acknowledge and agree that (a) each Lender's method of
funding its Loans hereunder shall be in the sole discretion of such Lender, so
long as such funding complies with all applicable requirements of this
Agreement, and (b) for purposes of any determination to be made pursuant to
Sections 2.14.4 or 3.4.5 of this Agreement, each Lender shall be presumed
conclusively to have funded its LIBOR Loans with the proceeds of Dollar deposits
obtained by such Lender in the interbank Eurodollar market.
ARTICLE 4
SECURITY; AFFILIATE AGREEMENTS
4.1. Security. The Obligations of the Borrowers shall be secured by:
(a) the Pledge Agreement; and
(b) the security interest in the Collateral Account herein granted in favor
of the Administrative Agent for the ratable benefit of the Lenders, and the
other Liens provided in this Agreement and the other Security Documents.
4.2. Further Assurances. The Borrowers and the Guarantors shall, and
shall cause each of their respective Subsidiaries to, at their sole cost and
expense, execute and deliver to the Administrative Agent for the ratable benefit
of the Lenders all such further documents, instruments and agreements and
perform all such other acts that reasonably may be required to enable the
Administrative Agent and the Lenders to exercise and enforce their respective
rights as the secured parties under the Security Documents and to carry out the
provisions or effectuate the purposes of this Agreement and the other Loan
Documents.
4.3. Affiliate Agreements; Notice and Cure. Notwithstanding any
provision in an Affiliate Agreement to the contrary, no default in the
performance of a Borrower's or Guarantor's obligations under such Affiliate
Agreement that is of such a nature as to give the other party thereto a right to
terminate such Affiliate Agreement shall entitle such party to exercise any such
right, power or remedy unless and until written notice of such default is given
to the Administrative Agent and unless and until thirty (30) days shall have
elapsed following receipt of such notice by the Administrative Agent, during
which period the Lenders shall have the right, but not the obligation, to remedy
or cure such default.
4.4. Lenders' Obligations. No Lender who exercises a right arising
under this Agreement with regard to an Affiliate Agreement shall thereby become
obligated to any party, or successor to a party, for the performance of any of
the terms, covenants, conditions and agreements of a Borrower or a Guarantor
under such Affiliate Agreement.
4.5. Representations and Warranties with Regard to Affiliate Agreements.
Borrowers and Guarantors, in order to induce Lenders to enter into this
Agreement, hereby affirm that:
(a) contemporaneously with or prior to the execution
of this Agreement, Borrowers delivered or caused to be delivered to the
Administrative Agent a full, true and complete copy of each Affiliate
Agreement as amended to date;
(b) each Affiliate Agreement is in full force and effect and has not been
modified; and
(c) no party is in default in the performance of any obligations under an
Affiliate Agreement.
4.6. Assignment of Affiliate Agreements. No Borrower or Guarantor may
assign its interest in any Affiliate Agreement to any Person other than another
Borrower or Guarantor without the prior written consent of the Lenders.
4.7. Amendment of Affiliate Agreements. The Borrowers and Guarantors shall
not effect any material amendment of an Affiliate Agreement without the prior
written consent of the Administrative Agent.
ARTICLE 5
GUARANTY
5.1. Guaranty. Each of the Guarantors hereby unconditionally and
irrevocably, jointly and severally, guarantees to the Administrative Agent, the
Lenders and each Issuing Bank the due and punctual payment and performance of
all of the Obligations, in each case as and when the same shall become due and
payable, whether at maturity, by acceleration, mandatory prepayment or
otherwise, according to their terms. In case of failure by Borrowers punctually
to pay or perform such Obligation, each of the Guarantors hereby unconditionally
and irrevocably agrees to cause such payment to be made punctually as and when
the same shall become due and payable, whether at maturity, by prepayment,
declaration or otherwise, and to cause such performance to be rendered
punctually as and when due, in the same manner as if such payment or performance
were made by Borrowers. This guaranty is and shall be a guaranty of payment and
performance and not merely of collection.
5.2. Maximum Guaranty Liability,
(a) Each Guarantor's respective obligations hereunder and
under the other Loan Documents shall be in an amount equal to, but not in excess
of, the maximum liability permitted under Applicable Bankruptcy Law (the
"Maximum Guaranty Liability"). To that end, but only to the extent such
obligations otherwise would be subject to avoidance under Applicable Bankruptcy
Law if any Guarantor is deemed not to have received valuable consideration, fair
value or reasonably equivalent value for its obligations hereunder or under the
other Loan Documents, each such Guarantor's respective obligations hereunder and
under the other Loan Documents shall be reduced to that amount which, after
giving effect thereto, would not render such Guarantor insolvent, or leave such
Guarantor with an unreasonably small capital to conduct its business, or cause
such Guarantor to have incurred debts (or to be deemed to have intended to incur
debts), beyond its ability to pay such debts as they mature, at the time such
obligations are deemed to have been incurred under Applicable Bankruptcy Law. As
used herein, the terms "insolvent" and "unreasonably small capital" shall
likewise be determined in accordance with Applicable Bankruptcy Law. This
Section 5.2 is intended solely to preserve the rights of the Lenders, the
Administrative Agent and the Issuing Bank hereunder and under the other Loan
Documents to the maximum extent permitted by Applicable Bankruptcy Law, and
neither the Guarantors nor any other Person shall have any right or claim under
this Section 5.2 that otherwise would not be available under Applicable
Bankruptcy Law.
(b) Each Guarantor agrees that the Guaranteed Obligations at
any time and from time to time may exceed the Maximum Guaranty Liability of such
Guarantor, and may exceed the aggregate Maximum Guaranty Liability of all
Guarantors hereunder, without impairing this Guaranty or affecting the rights
and remedies of the Lenders, the Administrative Agent or the Issuing Bank
hereunder.
5.3. Contribution. In the event any Guarantor (a "Funding Guarantor")
shall make any payment or payments under this Guaranty or shall suffer any loss
as a result of any realization upon any of its property granted as Collateral
under any Loan Document, each other Guarantor (each, a "Contributing Guarantor")
shall contribute to such Funding Guarantor an amount equal to such Contributing
Guarantor's "Pro Rata Share" of such payment or payments made, or losses
suffered, by such Funding Guarantor. For the purposes hereof, each Contributing
Guarantor's Pro Rata Share with respect to any such payment or loss by a Funding
Guarantor shall be determined as of the date on which such payment or loss was
made by reference to the ratio of (a) such Contributing Guarantor's Maximum
Guaranty Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) to (b) the aggregate
Maximum Guaranty Liability of all Guarantors (including such Funding Guarantor)
as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder). Nothing in this Section 5.3 shall affect each
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Guaranty Liability). Each Guarantor
covenants and agrees that its right to receive any contribution hereunder from a
Contributing Guarantor shall be subordinate and junior in right of payment to
all the Guaranteed Obligations.
5.4. Guaranty Unconditional. The obligations of each Guarantor under this
Article 5 shall be continuing, unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any Obligation of the Borrowers under this Agreement or any other
Loan Document, by operation of law or otherwise;
(b) any modification or amendment or supplement to this Agreement or any
other Loan Document;
(c) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guaranty or other
liability of any third party, for any Obligation of the Borrowers under this
Agreement or any other Loan Document;
(d) any change in the corporate existence, structure or ownership of any
Borrower or any Guarantor, or any insolvency, bankruptcy, reorganization or
other similar case or proceeding affecting any Borrower or any Guarantor or any
of their respective assets, or any resulting release or discharge of any
Obligation of any Borrower under this Agreement or any other Loan Document;
(e) the existence of any claim, set-off or other right that any Guarantor
at any time may have against any Borrower, the Administrative Agent, the Issuing
Bank, any Lender or any other Person, whether or not arising in connection with
this Agreement or any other Loan Document;
(f) any invalidity or unenforceability relating to or against any Borrower
for any reason of the whole or any provision of this Agreement or any other Loan
Document, or any provision of Applicable Bankruptcy Law purporting to prohibit
the payment or performance by such Borrower of any Obligation, or the payment by
such Borrower of any other amount payable by it under this Agreement or any
other Loan Document; or
(g) any other act or omission to act or delay of any kind by any Borrower,
the Administrative Agent, the Issuing Bank, any Lender or any other Person or
any other circumstance whatsoever that might but for the provisions of this
Section 5.4 constitute a legal or equitable discharge of the obligations of any
Guarantor under this Article 5.
5.5. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Article 5 shall remain in
full force and effect so long as any Obligations are unpaid or outstanding, any
Obligation under the Loan Documents is not performed or any of the Commitments
are in effect. If at any time any payment of the Obligations or any other amount
payable by the Borrowers under this Agreement or the other Loan Documents is
rescinded or otherwise must be restored or returned upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, each Guarantor's
obligations under this Article 5 with respect to such payment shall be
reinstated at such time as though such payment had become due but not been made
at such time.
5.6. Waiver. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, notice of any breach or default by the Borrowers
and any other notice not specifically provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Borrowers or any other Person or any Collateral granted as security for the
Obligations or the Guaranteed Obligations. Each Guarantor hereby specifically
waives any right to require that an action be brought against the Borrowers, or
any of them, with respect to the Obligations under the provisions of Title 47,
Chapter 12, Tennessee Code Annotated, as the same may be amended from time to
time.
5.7. Waiver of Reimbursement, Subrogation, Etc. Each Guarantor hereby
waives to the fullest extent possible as against each Borrower and its assets
any and all rights, whether at law, in equity, by agreement or otherwise, to
subrogation, indemnity, reimbursement, contribution, exoneration or any other
similar claim, right, cause of action or remedy that otherwise would arise out
of such Guarantor's performance of its obligations to the Administrative Agent
or any Lender under this Article 5. The preceding waiver is intended by the
Guarantors, the Administrative Agent, the Issuing Bank and the Lenders to be for
the benefit of the Borrowers or any of their successors and permitted assigns as
an absolute defense to any action by any Guarantor against the Borrowers or
their assets that arises out of such Guarantor's having made any payment to the
Administrative Agent, the Issuing Bank or any Lender with respect to any of the
Guaranteed Obligations.
5.8. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrowers under this Agreement is stayed upon the
insolvency, bankruptcy or reorganization of a Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Administrative Agent as directed by Requisite Lenders.
5.9. Subordination of Indebtedness. Any indebtedness of a Borrower for
borrowed money now or hereafter owed to any Guarantor or any other Borrower is
hereby subordinated in right of payment to the payment by the Borrowers of the
Obligations, and if a default in the payment of the Obligations shall have
occurred and be continuing, any such indebtedness of the Borrowers owed to any
Guarantor or any other Borrower, if collected or received by such Guarantor or
other Borrower, shall be held in trust by such Guarantor or other Borrower for
the holders of the Obligations and be paid over to the Administrative Agent for
application in accordance with this Agreement and the other Loan Documents.
ARTICLE 6
CONDITIONS PRECEDENT
. The obligations of the Lenders as Issuing Banks to issue Letters of Credit,
the obligations of the Lenders to purchase participations in Letters of Credit
and the obligations of the Lenders to make the Loans are all subject to the
satisfaction by the Borrowers and Guarantors, to the extent not waived by the
Lenders, of the following conditions precedent:
. The Administrative Agent shall have received, for the ratable benefit of each
Lender (and in such number of original counterparts or copies as the
Administrative Agent reasonably may specify), each of the following, in form and
substance satisfactory to the Administrative Agent, the Lenders and their
respective counsel:
(a) Agreement. Counterpart originals of this Agreement, each duly and
validly executed and delivered by or on behalf of all the appropriate parties
thereto;
(b) Notes. The Notes, each duly and validly executed and delivered on
behalf of the Borrowers;
(c) Pledge Agreement. The Pledge Agreement duly and validly executed and
delivered on behalf of all appropriate parties thereto;
(d) Pledged Stock. Certificates evidencing the Pledged Stock together with
any appropriate stock power from each certificate, duly executed in blank by
GFC;
(e) Charters; Certificates of Incorporation. Copies of the charters of GFC
and TREBOR, and certificates of incorporation of SYDOOG and GOFAMCLO, certified
by the Secretary of State or other appropriate public official in each
jurisdiction of incorporation all in form and substance satisfactory to the
Lenders;
(f) Bylaws. Copies of the bylaws, and all amendments
thereto, of GFC, SYDOOG, TREBOR and GOFAMCLO, together with
certificates of the Secretary or Assistant Secretary of such entities
dated the date hereof, stating that such copy is complete and correct;
(g) Certificates of Limited Partnership. Copies of certificates of limited
partnership of Goody's IN and Goody's MS, certified by the Secretary of State or
other appropriate public official in each jurisdiction of organization all in
form and substance satisfactory to the Lenders;
(h) Limited Partnership Agreements. Copies of the limited partnership
agreements of Goody's IN and Goody's MS, together with certificates of the
General Partner of such partnerships, dated the date hereof, stating that such
copies are complete and correct;
(i) Subscription Agreements; Conveyance and Assignment Documents. Copies of
all subscription agreements or other agreements whereby GFC subscribed for the
shares of SYDOOG, GOFAMCLO and TREBOR and whereby GOFAMCLO and TREBOR subscribed
for the partnership interests in Goody's MS and Goody's IN together with copies
of all deeds, bills of sale and all other documents evidencing on effecting any
transfers of assets made in consideration for the aforementioned shares and
partnership interests.
(j) Good Standing and Authority. Certificates of the
appropriate governmental officials of each jurisdiction as the
Administrative Agent reasonably may request, dated within ten (10) days
of the date hereof, stating that the Borrowers and Guarantors exist,
are in good standing with respect to the payment of franchise and
similar taxes and are duly qualified to transact business therein;
(k) Incumbency. Certificates of the Secretaries or Assistant
Secretaries or other officer or partner, as appropriate, of each
Borrower and Guarantor, dated the date hereof, as to the incumbency and
signature of all officers or partners (as appropriate) of such Borrower
or Guarantor authorized to execute or attest to this Agreement, the
Notes and the other Loan Documents to which such Borrower or Guarantor
is a party, together with evidence of the incumbency of each such
Secretary or Assistant Secretary or other officer of partner;
(l) Resolutions. With respect to each Borrower and Guarantor
(i) copies of the resolution authorizing, approving and ratifying this
Agreement, the Notes, and the other Loan Documents and the transactions
contemplated herein and therein to which such entity is a party, duly
adopted by the board of directors, with regard to corporate Borrowers
and Guarantors, and by the partners, with regard to partnership
Borrowers and Guarantors, together with (ii) certificates of the
Secretary or Assistant Secretary or other appropriate officer or
partner of each Borrower and Guarantor, dated the date hereof, stating
that each such copy is a true and correct copy of resolutions duly
adopted at a meeting, or by action taken on written consent, of the
board of directors or partners (as appropriate) of such Borrower or
Guarantor and that such resolutions have not been modified, amended,
rescinded or revoked in any respect and are in full force and effect as
of the date hereof;
(m) Legal Opinions of the Borrowers' and Guarantors'
Counsel. The favorable legal opinion of Messrs. Woolf, McClane, Bright,
Allen & Carpenter, counsel to the Borrowers and Guarantors, dated the
date hereof, and addressed to the Administrative Agent, and the
Lenders, substantially in the form of Exhibit 6.1.1A, together with a
letter from the Borrowers and Guarantors to such counsel, substantially
in the form of Exhibit 6.1.1B, requesting such counsel to deliver its
opinion to the Administrative Agent and the Lenders;
(n) Evidence of Indebtedness. If requested by the
Administrative Agent, (i) a copy of each indenture, loan agreement,
guaranty, promissory note or other evidence of Indebtedness (together
with all modifications, amendments, restatements or supplements
thereto), excluding orders for the purchase of inventory in the
ordinary course of GFC's, Goody's MS and Goody's IN's business, to
which each Borrower or Guarantor is a party constituting a liability
(contingent or otherwise) equal to or in excess of $100,000, the terms
and conditions of which shall be satisfactory to the Administrative
Agent, and (ii) a report certified by a Responsible Officer of each
Borrower and Guarantor and describing any default or failure of
performance or any event that with the giving of notice of, or the
lapse of time, or both, would become a default by such Borrower or
Guarantor under any of such documents, instruments or agreements;
(o) February 3, 1996 Financial Statements. The final
February 3, 1996 balance sheet of GFC and the related statement of
income and cash flow for the Fiscal Year then ended, which GFC has
already provided to Lenders;
(p) Securities and Exchange Commission Form 10-K. The
Securities and Exchange Commission Form 10-K with regard to GFC for the
year ending February 3, 1996 as filed with the Securities and Exchange
Commission, which GFC has already provided to Lenders;
(q) Proxy Statement for 1996 Annual Meeting. The proxy statement for the
GFC's 1996 annual meeting, which GFC has already provided to Lenders;
(r) Officer's Certificate. A certificate of a Responsible
Officer of each Borrower and Guarantor, dated the date hereof, stating
that (i) each of the representations and warranties contained in
Article 9 is true and correct at and as of the date hereof with the
same force and effect as if made on such date, (ii) all obligations,
covenants, agreements and conditions contained in this Agreement to be
performed or satisfied by such Borrower or Guarantor on or prior to the
date hereof have been performed or satisfied in all respects, (iii)
with regard to GFC only, since February 3, 1996, there has been no
material adverse change in the properties, businesses or results of
operations or in the financial or other condition of GFC and (iv) no
Default or Event of Default has occurred or is occurring, and in
addition setting forth in such detail as shall be required by the
Lenders calculations showing that as of the date hereof and after
giving effect to the transactions that are the subject hereof, the
Borrowers and Guarantors are in compliance with Article 10;
(s) No Default Certificate. A certificate duly executed by a Responsible
Officer of each Borrower and Guarantor, certifying that no Default or Event of
Default exists as of the date hereof;
(t) Consents. Evidence that each Borrower and each Guarantor
has obtained all requisite consents and approvals required to be
obtained from any Person to permit the transactions contemplated by
this Agreement, the Notes and the other Loan Documents to be
consummated in accordance with their respective terms and conditions;
and
(u) Other Matters. All other documents, instruments,
agreements, opinions, certificates, insurance policies, consents and
evidences of other legal matters, in form and substance satisfactory to
the Administrative Agent and its counsel, as the Administrative Agent
reasonably may request.
. Each Borrower and Guarantor shall not be in violation of, or have received
notice of any violation of, any applicable legal requirements, including any
building, zoning, occupational safety and health, pension, environmental
control, or similar law, ordinance or regulation relating to any of its
properties, or the operation thereof or of its business, or any applicable fair
employment, equal opportunity or similar law, ordinance or regulation, if such
violation or non-compliance could have a material adverse effect on the
properties, businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor.
. No material misrepresentation or omission shall have been made by or on behalf
of any Borrower or any Guarantor to the Lenders with respect to such Borrower's
or Guarantor's business operations or financial or other condition.
. Except as described in Section 7.6, no action, suit, proceeding or
investigation shall be pending before or threatened by any court or Governmental
Authority with respect to the transactions contemplated hereby or that may have
a material adverse effect (as determined by the Administrative Agent and the
Lenders, in their sole discretion) on any Borrower's or any Guarantor's business
operations or financial or other condition.
. The obligations of each of the Lenders to make any Loans (including Loans used
to refinance or repay other Loans) on any date (including the date hereof), and
the obligations of the Lenders as Issuing Banks to issue Letters of Credit on
any date (including the date hereof), are subject to the satisfaction of the
conditions set forth below in this Section 6.2. Each request for Loans or for a
Letter of Credit hereunder shall constitute a representation and warranty by
each Borrower to the Administrative Agent and each such Lender, as of the date
of the making of such Loans or the issuance of such Letter(s) of Credit, that
the conditions in this Section 6.2 have been satisfied.
. The conditions precedent set forth in Section 6.1 shall have been
satisfied as of the date of this Agreement.
. The representations and warranties of the Borrowers and Guarantors set forth
in this Agreement, the Notes and the other Loan Documents and in any
certificate, opinion or other statement provided at any time by or on behalf of
any Borrower or any Guarantor in connection herewith shall be true and correct
on and as of the date of the making of such Loans or the issuance of such
Letter(s) of Credit as if made on and as of such date, except for such changes
in the Schedules in this Agreement that are permitted to be made on a quarterly
basis pursuant to Section 8.1.2 hereof.
. No Default or Event of Default shall have occurred and be continuing on the
date of the requested Borrowing or Letter of Credit issuance or after giving
effect to such Borrowing or Letter of Credit issuance.
. No law or regulation shall prohibit the making of a requested Loan or the
issuance of a requested Letter of Credit; no order, judgment or decree of any
court or Governmental Authority shall prohibit the making of the requested Loan
or the issuance of the requested Letter of Credit; and no litigation shall be
pending that in the judgment of the Administrative Agent or Requisite Lenders
would, enjoin, prohibit or restrain any Lender or any Issuing Bank from making a
requested Loan or the Issuing Bank from issuing a requested Letter of Credit.
. All proceedings in connection with the making of any Loan, the issuance of any
Letter of Credit and the other transactions contemplated by this Agreement, the
Loan Documents and all documents incidental thereto shall be satisfactory to the
Administrative Agent, and the Administrative Agent shall have received all such
information and such counterpart originals or certified or other copies of such
documents as the Administrative Agent reasonably may request.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, each Issuing Bank and the
Lenders to enter into this Agreement, to make the Loans, to issue the Letters of
Credit and to provide the other financial accommodations provided for herein,
each Borrower and Guarantor hereby makes the following representations and
warranties to the Administrative Agent, each Issuing Bank and each Lender:
. GFC and TREBOR are corporations duly organized, validly existing and in good
standing under the laws of the State of Tennessee. SYDOOG and GOFAMCLO are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware. Goody's MS and Goody's IN are limited
partnerships duly organized, validly existing and in good standing under the
laws of the State of Tennessee. Each Borrower and Guarantor has the corporate or
partnership (as applicable) power and authority and the legal right to own and
operate its properties and assets, to lease the properties and assets it
operates under lease and to carry on its business as it is now being conducted
and intended to be conducted, and is duly qualified to transact business as a
foreign corporation or limited partnership in good standing under the laws of
each jurisdiction in which its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the extent that
failure to qualify to transact business would not have a material adverse effect
on the properties, business, results of operation or financial or other
condition of such Borrower or Guarantor.
. Each Borrower and Guarantor (a) has the corporate or partnership (as
applicable) power and authority and the legal right to enter into this Agreement
and the Loan Documents and to enter into and perform its respective obligations
hereunder and thereunder, and (b) has taken all necessary corporate action on
its part to authorize the execution and delivery of such documents, instruments
and agreements and the performance of its respective obligations hereunder and
thereunder. This Agreement, the Notes and the other Loan Documents have been
duly executed and delivered on behalf of each Borrower and Guarantor as are
parties to such Loan Documents and constitute legal, valid and binding
obligations, enforceable against each Borrower and Guarantor in accordance with
their respective terms.
. All necessary consents, approvals and authorizations of, filings with and acts
by or with respect to all Governmental Authorities and other Persons required to
be obtained, made or taken in connection with the transactions contemplated
hereby or the execution, delivery, performance, validity or enforceability of
this Agreement, the Notes and the other Loan Documents (a) have been obtained,
made or taken and (b) remain in effect.
. The execution and delivery of this Agreement, the Notes and the other Loan
Documents, the transactions contemplated hereby, the use of the proceeds thereof
and the performance by each Borrower and Guarantor (to the extent it is a party
to such Loan Document) of its obligations (a) do not conflict with or violate
any Requirement of Law or any Contractual Obligation of such Borrower or
Guarantor, except to the extent that any such violation or conflict would not
have a material adverse effect on the properties, businesses, results of
operations, management or financial or other condition of such Borrower or
Guarantor, and (b) do not conflict with, constitute a default or require any
consent under, or result in the creation of any Lien upon any property or assets
of such Borrower or Guarantor pursuant to any Contractual Obligation of such
Borrower or Guarantor.
. 7.5. Financial Statements; Solvency
(a) The balance sheet of GFC as of February 3, 1996, and the
related statement of income, shareholders' equity and cash flow for the
Fiscal Year then ended, together with the opinion of Deloitte & Touche
LLP with respect thereto, copies of which have been furnished to the
Administrative Agent, fairly present the assets, liabilities and
financial position of GFC as at such date and the results of its
operations and its cash flow for the Fiscal Year then ended. All such
financial statements, including the related schedules and notes
thereto, have been prepared in compliance with GAAP applied
consistently throughout the periods involved. At February 3, 1996, GFC
had no material Indebtedness, obligation or other unusual forward or
long-term commitment that is not fairly reflected in accordance with
GAAP in the foregoing financial statements or in the notes thereto.
(b) After giving effect to the consummation of the
transactions contemplated by this Agreement, the making of Loans
hereunder, the issuance of Letters of Credit hereunder, the incurrence
by each Borrower of the Obligations and the incurrence by each Borrower
and Guarantor of the Obligations, each Borrower and Guarantor is
Solvent.
(c) This Agreement and the other Loan Documents have been
executed and delivered to the Lenders and the Administrative Agent by
each Borrower and Guarantor in good faith, and the Obligations incurred
hereunder and under the other Loan Documents and the security interests
granted hereunder or pursuant thereto were incurred and granted in
exchange for fair consideration and reasonably equivalent value.
(d) Each Borrower and Guarantor does not intend to incur,
nor believes it will incur, debts beyond its ability to pay as they
mature or become due.
(e) Substantially all of each Borrower's and Guarantor's
trade and other accounts payable, if any, are current and are being
paid in accordance with their respective terms. The consummation of the
transactions contemplated by this Agreement and the other Loan
Documents will not impair the ability of each Borrower and Guarantor to
pay its trade and other accounts payable, if any, in accordance with
their terms.
(f) No Borrower or Guarantor contemplates filing a petition
in bankruptcy or for reorganization under the federal Bankruptcy Code,
nor does any Borrower or Guarantor have any knowledge of any threatened
bankruptcy or insolvency proceedings against it.
(g) The funds obtained from Lenders are to be used in
accordance with the provisions of this Agreement.
. Except as otherwise set forth in Schedule 7.6 or as otherwise disclosed by GFC
to the Lenders in writing subsequent to May 25, 1995, there are no actions,
suits, proceedings or other litigation (including proceedings by or before any
arbitrator or Governmental Authority) pending or threatened against or affecting
any Borrower or Guarantor nor to the knowledge of any Borrower or Guarantor is
there any basis therefor, (a) that challenge the validity or propriety of the
transactions contemplated hereby, (b) that could, if adversely determined,
individually or in the aggregate, have, in the reasonable judgement of the
Lenders, a reasonable likelihood to have a material adverse effect on the
properties, businesses, results of operations, management or financial or other
condition of any Borrower or Guarantor unless fully covered by insurance
(subject to reasonable deductibles), (c) that, if adversely determined, would
result in a material damage award against any Borrower or Guarantor which would
not be reimbursable by insurance, or (d) that could affect the ability of any
Borrower or Guarantor to perform its obligations under this Agreement, the Notes
or the other Loan Documents to which it is a party.
. No Borrower or Guarantor is in default (nor has any event occurred that with
notice or lapse of time or both would constitute a default) under any
Contractual Obligation of any Borrower or Guarantor if such default or event
could have a material adverse effect on the properties, businesses, results of
operations, management or financial or other condition of such Borrower or
Guarantor or on the ability of such Borrower or Guarantor to perform its
obligations under this Agreement, the Notes or the other Loan Documents to which
it is a party. No Default or Event of Default has occurred and is continuing.
. The capitalization of GFC, TREBOR, SYDOOG and GOFAMCLO consists of such number
of shares, authorized, issued and outstanding, of such classes and series, with
or without such par value, as are set forth in Schedule 7.8A. All such
outstanding shares have been duly authorized and validly issued and are fully
paid and nonassessable. There are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or
nature whatsoever that are convertible into, exchangeable for or otherwise
provide for the issuance of capital stock of GFC, TREBOR, SYDOOG or GOFAMCLO
except as described in Schedule 7.8A. The partners of Goody's IN and Goody's MS
and such partners' respective partnership interests are set forth in Schedule
7.8B. Other than the partnership agreements delivered to the Administrative
Agent pursuant to Section 6.1.1(h) above, there are no agreements between any
person and the partners at Goody's IN and Goody's MS with regard to the
disposition of the current partnership interests of Goody's IN and Goody's MS,
or the sale or creation of additional partnership interests in Goody's MS and
Goody's IN.
. Except as disclosed to Lenders in writing, each Borrower and Guarantor has
filed all tax returns that were required to be filed in any jurisdiction and has
paid all taxes shown thereon to be due or otherwise due upon such Borrower or
Guarantor or its properties, income or franchises, including interest,
assessments, fees and penalties (or have provided adequate reserves for the
payment thereof), except to the extent that the failure to file such returns or
pay such amounts would not result in a liability to such Borrower or Guarantor
which is equal to or greater than $200,000 for any one failure or $500,000 when
aggregated with all such other failures of the Borrowers and Guarantors. To the
knowledge of each Borrower and Guarantor, and except as previously disclosed in
writing to the Lenders, no claims are threatened, pending or being asserted with
respect to, or in connection with, any return referred to in this Section 7.9
that, if, adversely determined, in the reasonable judgement of the Lenders,
would have a reasonable likelihood of having a material adverse effect on the
properties, businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor taken as a whole, or could affect the
ability of such Borrower or Guarantor to perform its obligations under this
Agreement, the Notes and the other Loan Documents to which it is a party.
. No Contractual Obligation of any Borrower or Guarantor and no Requirement of
Law relating to or otherwise affecting any Borrower or Guarantor or any of its
properties, businesses or operations, materially and adversely affects, or
insofar as any of them may reasonably foresee could so affect, the properties,
businesses, results of operations, management or financial or other condition of
any Borrower or Guarantor or could affect the ability of any Borrower or
Guarantor to perform its obligations under this Agreement, the Notes and the
other Loan Documents to which it is a party.
. There are no outstanding or unpaid judgments against any Borrower or any
Guarantor in excess of $500,000.
. Except for Subsidiaries which become parties to this Agreement, the Borrowers
and Guarantors shall not create any Subsidiaries without the prior written
consent of the Requisite Lenders. Such new Subsidiaries shall become parties to
this Agreement as either Borrowers or Guarantors, as determined by the Lenders
in their sole discretion.
. No "prohibited transaction" or "accumulated funding deficiency" (each as
defined in ERISA) or Reportable Event has occurred with respect to any Single
Employer Plan, or to the knowledge of the Borrowers and Guarantors with respect
to any Multi-Employer Plan that would have a material adverse effect on any
Borrower's or Guarantor's financial condition or business. As of the most recent
actuarial valuation of any such Plan, the actuarial present value of all
benefits under each Plan (based on those assumptions used to fund the Plan) does
not exceed the fair market value of the assets of the Plan allocable to such
benefits. Each Borrower, Guarantor and Commonly Controlled Entity are in
compliance in all material respects with ERISA and the rules and regulations
promulgated thereunder.
. None of the Borrowers or Guarantors is engaged principally in, nor has as one
of its most important activities, the business of extending credit for the
purpose of purchasing or carrying "margin stock" as that term is defined in
Regulation U promulgated by the Board of Governors of the Federal Reserve
System, as now in effect. No part of the Indebtedness evidenced by the Notes, or
otherwise created in connection with this Agreement or the other Loan Documents,
shall be used, directly or indirectly, for the purpose of purchasing any such
margin stock. If requested by the Administrative Agent or any of the Lenders,
each Borrower and Guarantor shall furnish or cause to be furnished to the
Administrative Agent and each such Lender a statement, in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U, to the
foregoing effect.
. None of the Borrowers or the Guarantors is an investment company, or company
controlled by an investment company within the meaning of the Investment Company
Act of 1940, as now in effect.
. Except as disclosed by GFC to Lenders in writing subsequent to May 25, 1995,
set forth on Schedule 7.16A hereto is a complete and correct list of all
Indebtedness (other than Contingent Obligations, Indebtedness incurred under the
Loan Documents, trade debt incurred in the ordinary course of business and
obligations under Operating Leases) of each Borrower and Guarantor and the
aggregate principal amount thereof outstanding on the date hereof. Except as
disclosed by GFC to Lenders in writing subsequent to May 25, 1995, set forth on
Schedule 7.16B is a complete and correct list of all Contingent Obligations
(other than any Contingent Obligations created under the Loan Documents of each
Borrower and each Guarantor) and the aggregate amount thereof outstanding on the
date hereof.
. Set forth on Schedule 7.17A is a complete and correct list of the locations
where the Borrowers and Guarantors maintain their chief executive offices, their
principal places of business, an office, or any material financial records.
Except as disclosed by GFC to Lenders in writing subsequent to May 25, 1995, set
forth on Schedule 7.17B is a complete and correct list of each name under or by
which each of the Borrowers and Guarantors presently conducts its business or
has conducted its business since 1991.
. Each Borrower and Guarantor has good and marketable title (or, to the
knowledge of such Borrower and Guarantor, good and marketable leasehold
interests with respect to leased property) to all its respective assets
(including all assets of GFC reflected in the balance sheet as of February 3,
1996), subject to no Liens other than Permitted Liens.
. There are no disputes or controversies pending between any Borrower or
Guarantor and its employees, the outcome of which may have a material adverse
effect on the properties, businesses, results of operations, management or
financial or other condition of such Borrower or Guarantor.
. Each Borrower and Guarantor (a) to the best of its knowledge, has not been, is
not and will not be in material violation of any Requirement of Law binding upon
such Borrower and Guarantor or its respective properties and assets, including
any building, zoning, occupational safety, pension, environmental control, or
similar law, ordinance or regulation relating to its properties or the operation
thereof or of its businesses, or any applicable fair employment, equal
opportunity or similar law, ordinance or regulation, (b) to the best of its
knowledge, has not failed to obtain any material license, permit, certificate or
other governmental authorization necessary for the conduct of its business or
the ownership and operation of its properties, (c) has not received any notice
from any Governmental Authority, and to its knowledge no such notice is pending
or threatened, alleging that such Borrower or Guarantor has violated, or has not
complied with, any Requirement of Law, condition or standard applicable with
respect to any of the foregoing, and (d) is not a party to any agreement or
instrument, or subject to any judgment, order, writ, rule, regulation, code or
ordinance, except where any violation, noncompliance, failure, agreement,
judgment, etc. as described in this Section 7.20 would not have a material
adverse effect on the properties, businesses, results of operations, management
or financial or other condition of such Borrower or Guarantor.
. To the best of its knowledge, each Borrower and Guarantor has all licenses,
permits, approvals, registrations, contracts, consents, franchises,
qualifications, and other authorizations necessary for the lawful conduct of its
business or operations wherever now conducted and as planned to be conducted,
pursuant to all applicable statutes, laws, ordinances, rules and regulations of
all Governmental Authorities having, asserting or claiming jurisdiction over
such Borrower or Guarantor or over any part of its respective operations. Copies
of all such licenses, permits, approvals, registrations, contracts, consents,
franchises, qualifications, and other authorizations as may be reasonably
requested by the Administrative Agent, shall be provided, if available to such
Borrower or Guarantor, upon such request. Each Borrower and Guarantor is not in
default under any of such licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, and other authorizations, and
no event has occurred, and no condition exists, that with the giving of notice,
the passage of time or both would constitute a default thereunder or would
result in the suspension, revocation, impairment, forfeiture or non-renewal of
any thereof. The continuation, validity and effectiveness of all such licenses,
permits, approvals, registrations, contracts, consents, franchises,
qualifications, and other authorizations will not be adversely affected by the
transactions contemplated by this Agreement. No Borrower or Guarantor knows of
any reason why it will not be able to maintain after the date hereof all
licenses, permits, approvals, registrations, contracts, consents, franchises,
qualifications, and other authorizations necessary or appropriate to conduct the
businesses of such Borrower or Guarantor as now conducted and presently proposed
to be conducted.
. Except as set forth on Schedule 7.22 or as otherwise disclosed by GFC to
Lenders in writing subsequent to May 25, 1995, since the most recent audited or
unaudited financial statements provided by the Borrowers and Guarantors to
Lenders, there has been no material adverse change in the properties,
businesses, results of operations, management or financial or other condition of
any Borrower or Guarantor.
. Except as disclosed to Lenders by GFC subsequent to May 25, 1995, set forth on
Schedule 7.23 is a complete and accurate list, as of the date hereof, of (a) all
employment agreements and executive compensation arrangements to which the
Borrowers and Guarantors are a party and which provide for annual base
compensation to any Person (assuming compliance with or satisfaction of all
contingencies or conditions) of $250,000 or more per year and (b) to the
Borrowers' and Guarantors' knowledge, all agreements relating to the voting or
disposition of any outstanding shares of capital stock of GFC, SYDOOG, TREBOR or
GOFAMCLO or to any votes of the partners of Goody's MS and Goody's IN or to the
disposition of such partner's partnership interest or to the sale of additional
partnership interests in Goody's MS and Goody's IN.
. (a) To the best of each Borrower's and Guarantor's knowledge, none of the
Borrowers or Guarantors and any of their operations is in violation of any
applicable Hazardous Materials Law or any restrictive covenant or deed
restriction relating to environmental matters (recorded or otherwise), the
violation of which would be likely to have a material adverse effect on the
properties, businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor; (b) without limitation of clause (a)
above, to the best of each Borrower's and Guarantor's knowledge, none of the
Borrowers or Guarantors, their operations, nor any current or prior owner,
lessor or operator (other than such Borrower or Guarantor), is in violation of
any Hazardous Materials Law or subject to any existing, pending or threatened
investigation, inquiry or proceeding by any Governmental Authority or subject to
any remedial obligations under any Hazardous Materials Law; (c) to the best of
each Borrower's or Guarantor's knowledge, all material permits and licenses
required of such Borrower or Guarantor with respect to Hazardous Materials,
including past or present treatment, storage, disposal or release of any
Hazardous Materials or solid waste into the environment, have been obtained or
filed; (d) to the best of each Borrower's and Guarantor's knowledge, all
Hazardous Materials or solid waste generated by such Borrower or Guarantor has
in the past been, and will continue to be, transported, treated and disposed of
only by carriers maintaining valid permits under all applicable Hazardous
Materials Laws and only at treatment, storage and disposal facilities
maintaining valid permits under applicable Hazardous Materials Laws, which
carriers and facilities have been and are operating in compliance with such
permits; (e) each Borrower and Guarantor has taken all reasonable steps
necessary to determine, and has determined that no Hazardous Materials or solid
wastes have been disposed of or otherwise released by it except in compliance
with Hazardous Material Laws that would materially affect such Borrower's or
Guarantor's financial condition or business; and (f) no Borrower or Guarantor
has any material contingent liability in connection with any release of any
Hazardous Materials or solid waste into the environment.
. Neither this Agreement nor any of the other Loan Documents, nor any agreement,
instrument or other document executed pursuant hereto or thereto or in
connection herewith or therewith, nor any certificate, statement or other
information referred to herein or therein or furnished to the Administrative
Agent, each Issuing Bank or any of the Lenders pursuant hereto or thereto or in
connection herewith or therewith, contains any misstatement of a material fact
or omits to state any material fact necessary to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading on the date hereof or on the date furnished, as the case may be,
except as otherwise disclosed to the Administrative Agent, each Issuing Bank and
the Lenders in writing on or prior to the date hereof. No Borrower or Guarantor
is aware of any fact that it has not disclosed to the Lenders that materially
and adversely affects, or insofar as such Borrower or Guarantor can reasonably
foresee, could materially and adversely affect, the properties, businesses,
results of operations, management or financial or other condition of such
Borrower or Guarantor, or could affect the ability of such Borrower or Guarantor
to perform its obligations under this Agreement and the other Loan Documents to
which it is a party.
. Except as disclosed to Lenders by GFC subsequent to May 25, 1995, set forth on
Schedule 7.26 hereto is a complete and accurate list of all Material Contracts
of each Borrower and Guarantor. Other than as disclosed to Lenders by GFC
subsequent to May 25, 1995 and as set forth on Schedule 7.26, each such Material
Contract is in full force and effect in accordance with the terms thereof and
there are no material defaults by any Borrower or any Guarantor, to the
knowledge of any Borrower or any Guarantor, by any other party, under any such
Material Contract. Each Borrower and Guarantor has delivered to the
Administrative Agent a true and complete copy of each of its Material Contracts.
7.27 Acquisition of Assets. Each Borrower (other than GFC) and
Guarantor acknowledges that (a) the Facilities pre-existed such Borrower's or
Guarantor's formation; (b) the Lenders based their decision to extend the
Facilities to GFC based on the value of the assets of GFC and the income derived
therefrom; (c) such Borrower or Guarantor was capitalized by the transfer from
GFC of assets subject to the Facilities; and (d) such assets now titled in the
name of such Borrower or Guarantor remain subject to the negative pledge and
other restrictions imposed by this Agreement to the same extent as prior to the
formation and capitalization of such Borrower or Guarantor.
ARTICLE 8
AFFIRMATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation
under the Loan Documents is unperformed or any of the Commitments are in effect,
each Borrower and Guarantor shall:
. 8.1. Financial Statements
. Furnish to the Administrative Agent and each Lender, as soon as available and
in any event within ninety-five (95) days after the end of each Fiscal Year of
the Borrowers and Guarantors, a consolidated balance sheet of the Borrowers and
Guarantors, as of the end of such Fiscal Year and the related consolidated
statement of income, shareholders' equity and consolidated cash flow for such
Fiscal Year, audited and reported upon, without qualification, by Deloitte &
Touche, LLP, or other independent public accountants reasonably acceptable to
the Lenders, together with (a) a certificate of a Responsible Officer of such
Borrower or Guarantor stating that no Default or Event of Default has occurred
and is continuing or, if in the opinion of such officer, a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action that such Borrower or Guarantor proposes to take with respect
thereto, (b) a certificate of a Responsible Officer of such Borrower or
Guarantor stating that there has been no material change in the information
contained in the Schedules provided pursuant to Article 7, except as may be
attached to such certificate, (c) a schedule in form satisfactory to the
Administrative Agent and the Lenders of the computations used by the Borrowers
and Guarantors in determining, as of the end of such Fiscal Year, compliance
with all financial covenants contained herein and (d) a written discussion and
analysis by the management of GFC of the consolidated financial statements
furnished in respect of such annual fiscal period.
. Furnish to the Administrative Agent and each Lender, as soon as available and
in any event within fifty (50) days after the end of each Fiscal Quarter of the
Borrowers and Guarantors (other than the last Fiscal Quarter in any Fiscal Year)
an unaudited consolidated balance sheet of the Borrowers and Guarantors, as of
the end of such Fiscal Quarter, and the related consolidated statement of income
for the period commencing at the beginning of the current Fiscal Year and ending
with the end of such Fiscal Quarter and the related consolidated statement of
cash flow for the period commencing at the beginning of the current Fiscal Year
and ending with the end of such Fiscal Quarter, certified by a Responsible
Officer of such Borrower or Guarantor, together with (a) a certificate of said
Responsible Officer stating that no Default or Event of Default has occurred and
is continuing or, if in the opinion of such officer, a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action that such Borrower or Guarantor proposes to take with respect
thereto, (b) a certificate of a Responsible Officer of such Borrower or
Guarantor stating that there has been no material change in the information
contained in the Schedules provided pursuant to Article 7, except as may be
attached to such certificate, (c) a schedule in form satisfactory to the
Administrative Agent and the Lenders of the computations used by the Borrowers
and Guarantors in determining, as of the end of such period, compliance with all
financial covenants contained herein and (d) a written discussion and analysis
by the management of GFC of the financial statements furnished in respect of
such period.
. Take all actions necessary to cause all such financial statements to be
complete and correct in all material respects and to be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the periods
reflected therein (except as may be approved by such accountants or Responsible
Officer, as the case may be, and disclosed therein and except as to normal
year-end adjustments as to unaudited financial statements).
Additional Reports of Borrowers and Guarantors. Each Borrower and Guarantor
agrees to furnish to the Administrative Agent and each Lender, as soon as
available and in any event within 65 days after the end of each Fiscal Quarter
of the Borrowers and Guarantors, and within 110 days after the end of each
Fiscal Year of the Borrowers and Guarantors, an unaudited statement of assets,
liabilities and equity and related unaudited statement of income for such
Borrower or Guarantor signed by a Responsible Officer of such Borrower or
Guarantor stating that the statements are prepared from the books and records of
such Borrower or Guarantor but not necessarily in conformity with GAAP.
. Subject to normal year-end adjustments, furnish to the Administrative
Agent and each Lender:
. Promptly after the same are received by any Borrower or Guarantor, copies of
management letters provided to such Borrower or Guarantor by its independent
certified public accountants that describe or refer to any inadequacy, defect,
problem, qualification or other lack of satisfactory accounting controls
utilized by such Borrower or Guarantor.
. Together with the other Borrowers and Guarantors, (a) within five (5) Business
Days after the delivery of same to the shareholders of GFC, copies of all
financial statements and reports that GFC sends to the shareholders of GFC, and
(b) within five (5) business days of the filing thereof, copies of all reports
and statements of GFC (including final proxy and information statements,
quarterly, annual and current reports and registration statements, but excluding
those pertaining only to employee benefit plans) that it may make to, or file
with, the Commission.
. Together with the other Borrowers and Guarantors, as soon as available, and in
any event not later than sixty (60) days after the end of each Fiscal Year of
the Borrowers and Guarantors, twelve (12) month budgeted consolidated financial
statements (including balance sheet and statement of income, shareholders'
equity and cash flow, all on a consolidated basis) for the following Fiscal Year
of the Borrowers and Guarantors (including underlying assumptions) in a form
substantially the same as the budget provided the Lenders prior to the execution
of this Agreement. Any updates thereto shall be provided upon request of the
Administrative Agent.
. Promptly upon request by the Administrative Agent, copies of all material
agreements, instruments and/or documents evidencing or otherwise related to such
Borrower's or Guarantor's Indebtedness.
. Promptly, such additional financial and other information as the
Administrative Agent or any Lender from time to time may reasonably request.
. Notify the Administrative Agent and each Lender of the occurrence of any of
the following events not later than five (5) days after such Borrower or
Guarantor knows or has reason to know of such event:
. Any Default or Event of Default.
. (a) Any default or event of default or concurrent defaults or events of
default under one or more Contractual Obligations or Operating Leases of such
Borrower or Guarantor that if adversely determined could result in liability
equal to or greater than $2,500,000 per default or event of default and
$5,000,000 in the aggregate (together with defaults of the other Borrowers and
Guarantors) at any time or could otherwise have a material adverse effect on the
properties, businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor, (b) any litigation, investigation or
proceeding that may exist at any time between such Borrower or Guarantor and any
Governmental Authority (excluding, however, audits and inquiries made in the
ordinary course of business), that if adversely determined, would have a
material adverse effect on the properties, businesses, results of operations,
management or financial or other condition of such Borrower or Guarantor, or (c)
any other litigation that if adversely determined would (i) if the relief sought
does not include damages, have a material adverse effect on the properties,
businesses, results of operations, management or financial or other condition of
such Borrower or Guarantor, or (ii) if the relief sought includes damages, would
result in an uninsured liability to any Borrower or Guarantor equal to or in
excess of $2,500,000, or when aggregated with other pending litigation,
investigations or proceedings against all Borrowers and Guarantors, would result
in an aggregate uninsured liability to the Borrowers and Guarantors equal to or
in excess of $5,000,000.
. (a) Any Reportable Event with respect to any Plan, (b) the institution of
proceedings or the taking or expected taking of any other action by the PBGC,
any Borrower or Guarantor or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Plan and (c) with respect to any
Multi-Employer Plan, the reorganization or insolvency of such Plan; provided,
however, that no Borrower or Guarantor shall be required to provide notice to
the extent the occurrence of an event or events described above will not have a
material adverse effect on the properties, business, results of operations,
management, financial, or other condition of such Borrower or Guarantor. In
addition to such notice, each Borrower and Guarantor shall deliver or cause to
be delivered to the Administrative Agent and each Lender whichever of the
following may be applicable: (i) a certificate of a Responsible Officer of such
Borrower or Guarantor setting forth details as to such Reportable Event and the
action that it or the Commonly Controlled Entity proposes to take with respect
thereto, together with the copy of any notice of such Reportable Event that may
be required to be filed with the PBGC, or (ii) any notice delivered by the PBGC
evidencing its intent to institute such proceedings or any notice to the PBGC
that such Plan is to be terminated, as the case may be.
. (a) Any event that makes any of the representations set forth in Section 9.27
inaccurate in any material respect or (b) the receipt by any Borrower or
Guarantor of any notice, order, directive or other communication from a
Governmental Authority alleging a violation of or noncompliance with any
Hazardous Material Laws.
. (a) Any material amendment, change or modification to, or waiver of any
material provision of, or any termination of, any Material Contract and (b) any
default or event of default under any Material Contract.
. Any casualty loss or event not insured against in an amount in excess of
$2,500,000, or when aggregated with other casualty losses or events not insured
against, would result in an aggregate loss equal to or in excess of $5,000,000
with regard to all of the Borrowers and Guarantors.
. 8.4. Payment of Obligations and Performance of Covenants
(a) Make full and timely payment of the Obligations,
including the Loans and Letter of Credit Liabilities, whether now
existing or hereafter arising;
(b) Duly comply with all terms, covenants and conditions
contained in each of the Loan Documents, at the times and places and in
the manner set forth therein; and
. Pay or cause to be paid before the same shall become delinquent and before
penalties have accrued thereon, all taxes, assessments and governmental charges
or levies imposed on the income, profits, franchises, property or businesses of
such Borrower or Guarantor except to the extent and so long as (a) the same are
being contested in good faith by appropriate proceedings and (b) adequate
reserves with respect thereto in conformity with GAAP have been provided on the
books of such Borrower or Guarantor.
. Continue (a) with regard to GFC, Goody's MS and Goody's IN, to engage in the
business of selling apparel at retail and, with regard to Goody's MS, to provide
inventory and distribution services to GFC and Goody's IN, (b) with regard to
SYDOOG, to hold, acquire and license intellectual property to GFC, Goody's MS
and Goody's IN, (c) with regard to TREBOR and GOFAMCLO, to hold partnership
interests in Goody's MS and Goody's, IN, and (d) with regard to each Borrower
and Guarantor, except as permitted by Sections 9.3 and 9.4, to preserve, renew
and keep in full force and effect its existence and present corporate structure.
. Observe and comply with all present and future Requirements of Law relating to
the conduct of its business or to its properties or assets, except to the extent
and so long as the nonobservance thereof or noncompliance therewith will not
have a material adverse effect on the properties, business, results of
operations, management or financial or other condition of such Borrower or
Guarantor, and will not materially impair the Administrative Agent's or the
Lenders' rights or materially affect the ability of such Borrower or Guarantor
to perform its obligations under this Agreement, the Notes or the other Loan
Documents to which it is a party.
. Maintain, preserve and keep (a) all of its buildings, tangible properties,
equipment and other property and assets used and necessary in its business,
whether owned or leased, in good repair, working order and condition, from time
to time making all necessary and proper repairs and replacements so that at all
times the utility, efficiency and value thereof shall not be materially
impaired, and (b) all material rights, privileges and franchises necessary or
desirable in the normal conduct of its business.
. 8.9. Insurance
(a) Maintain:
(i) insurance on substantially all insurable property
and assets owned or leased by such Borrower or Guarantor in
the manner, to the extent and against at least such risks
(in any event including general liability, workers'
compensation, employers' liability, automobile liability and
physical damage coverage, "all risk" property, business
interruption, fidelity and crime insurance) usually
maintained by owners of similar businesses and properties in
similar geographic areas; provided that the amounts of such
physical damage insurance coverage shall not be less than
the replacement cost of all such insurable property and
assets, except for coverage limitations with respect to
flood, earthquake and windstorm perils that are acceptable
to the Administrative Agent and Requisite Lenders; and
(ii) self-insurance reserves covering those risks for
which such Borrower or Guarantor presently self-insure in
appropriate amounts as determined from time to time by
independent insurance claims auditors acceptable to the
Administrative Agent and Requisite Lenders.
All such insurance shall be in such amounts, in such form and with such
insurance companies as are reasonably satisfactory to the
Administrative Agent and Requisite Lenders.
(b) Furnish to the Administrative Agent not less frequently
than annually and at any time upon written request, (i) full
information as to such insurance carried, including the amounts of all
self-insurance reserves of each Borrower and Guarantor and (ii)
certificates of insurance from the insurance companies and, upon
request, certified copies of such insurance policies. All policies of
insurance shall provide for not less than fifteen (15) days' prior
written cancellation notice to the Administrative Agent.
. Use the proceeds of the Facilities for the purposes specified in Section
2.10 and for no other purpose.
. Keep and maintain full and accurate books of record and accounts of its
operations, dealings and transactions in relation to its business and
activities, in conformity with GAAP and all Requirements of Law.
. Upon reasonable prior notice, permit any employees, agents or other
representatives of the Administrative Agent or the Lenders and any attorneys,
accountants or other agents or representatives designated by the Administrative
Agent or the Lenders to (a) have access to and visit and inspect any of the
books of account, financial records and properties, real, personal or mixed, of
such Borrower or Guarantor (b) examine and make abstracts from any such books
and records and (c) discuss the affairs, finances and accounts of such Borrower
or Guarantor with its officers, employees or agents, all at such reasonable
business times as the Administrative Agent or the Lenders deem necessary or
advisable to protect their respective interests.
. Comply with all agreements, covenants, terms, conditions and provisions of all
Material Contracts and of the Affiliate Agreements, except to the extent and so
long as noncompliance therewith will not have a material adverse effect on the
properties, business, results of operations, management or financial or other
condition of such Borrower or Guarantor, and will not materially impair the
Administrative Agent's or the Lenders' rights or materially affect the ability
of such Borrower or Guarantor to perform its obligations under this Agreement,
the Notes or the other Loan Documents to which it is a party.
. Perform, make, execute and deliver all such additional and further acts,
deeds, occurrences and instruments as the Administrative Agent or the Lenders
reasonably may require to document and consummate the transactions contemplated
hereby and to vest completely in and to ensure the Administrative Agent and the
Lenders their respective rights under this Agreement, the Notes and the other
Loan Documents.
ARTICLE 9
NEGATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation
under the Loan Documents is unperformed or any of the Commitments are in effect,
each Borrower and Guarantor shall not:
. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of such Borrower or Guarantor under or pursuant to this
Agreement;
(b) Indebtedness existing, or relating to commitments
existing, on the date hereof, all as set forth in Schedules 7.16A and
7.16B or as disclosed in writing by GFC to Lenders subsequent to May
25, 1995, and any extensions, refundings or renewals thereof on terms
at least as favorable to such Borrower or Guarantor or other terms
satisfactory to Administrative Agent;
(c) Purchase Money Debt and Capitalized Lease Obligations
provided the incurrence of such Indebtedness does not cause the
Borrowers and Guarantors, taken as a whole, to be in default with its
covenant in Section 10.1.4 hereof;
(d) Subordinated Indebtedness;
(e) Indebtedness constituting current liabilities incurred
in the ordinary course of business and not represented by any note,
bond, debenture or other instrument, and which is not past due for a
period of more than sixty (60) days, or if overdue for more than sixty
(60) days, which are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP
have been established on the books of the primary obligor with respect
thereto;
(f) Contingent Obligations consisting of the indemnification
by each Borrower and Guarantor of (i) the officers, directors,
employees and agents of such Borrower or Guarantor to the extent
permissible under the corporation law of the jurisdiction in which such
Borrower or Guarantor is organized, (ii) commercial banks, investment
bankers and other independent consultants or professional advisors
pursuant to agreements relating to the underwriting of such Borrower's
or Guarantor's securities or the rendering of banking or professional
services to such Borrower or Guarantor and (iii) landlords, licensor,
licensees and other parties pursuant to agreements entered into in the
ordinary course of business by such Borrower or Guarantor; and
(g) Indebtedness with respect to financed insurance premiums not past due;
(h) Indebtedness with respect to letters of credit issued in accordance
with Section 2.1.3 hereof;
(i) Contingent Obligations consisting of the guaranteeing by GFC of the
Contractual Obligations of the other Borrowers and the Guarantors;
(j) Other Indebtedness, including Indebtedness that is not
material for purposes of GAAP, in an amount not to exceed $1,000,000 in
the aggregate which may be incurred by the Borrowers and Guarantors as
they deem necessary in the conduct of their business.
. Create, incur, assume or suffer to exist any Lien upon any real or personal
property, fixtures, revenues or other assets whatsoever, whether now owned or
hereafter acquired, of such Borrower or Guarantor except:
(a) Liens securing the Obligations;
(b) Liens for taxes not yet due or that are being contested
in good faith and by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been established on the books of
such Borrower or Guarantor;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than thirty (30)
days, or if overdue for more than thirty (30) days, (i) which are being
contested in good faith and by appropriate proceedings, (ii) for which
adequate reserves in accordance with GAAP have been established on the
books of such Borrower or Guarantor; or (iii) with respect to which the
obligations secured thereby are not material;
(d) pledges or deposits in connection with workers' compensation insurance,
unemployment insurance and like matters;
(e) Liens securing Purchase Money Debt or arising under
Capitalized Leases; provided, however, that any such Lien attaches only
to the item or items of property or asset financed with such Purchase
Money Debt or Capitalized Lease;
(f) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(g) easements, reservations, exceptions, rights-of-way,
covenants, conditions, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are
not substantial in amount, and that do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary conduct of business by such Borrower or Guarantor;
(h) Liens in respect of any writ of execution, attachment,
garnishment, judgment or award in an amount less than $500,000, the
time for appeal or petition for rehearing of which shall not have
expired, or in respect of which an appeal or appropriate proceeding for
review is being prosecuted in good faith and a stay of execution
pending such appeal or proceeding for review has been secured;
(i) Liens securing Indebtedness permitted under clause (b)
of Section 9.1, but only to the extent that such Indebtedness is
presently secured as set forth on Schedule 7.16A or as otherwise
disclosed by GFC in writing to Lenders; and
(j) Other Liens, other than Liens on real property in Knox
County, Tennessee, securing Indebtedness in an amount not to exceed
$1,000,000 in the aggregate which may be incurred by Borrowers and
Guarantors as they deem necessary in the conduct of their business.
9.2.1. Fundamental Changes. Directly or indirectly (whether
in one transaction or a series of transactions), to (a) enter into any
transaction of merger, consolidation or amalgamation; (b) liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution);
(c) make any Asset Acquisition; (d) make any material change in its
present method of conducting business; or (e) enter into any agreement
or transaction to do or permit any of the foregoing.
. Sell, lease, assign, transfer or otherwise dispose of any of its assets
except:
(a) sales of personal property assets in the ordinary course of business of
such Borrower or Guarantor;
(b) the disposition of obsolete or worn-out equipment or
other property no longer required by or useful to such Borrower or
Guarantor in connection with the operation of its business;
(c) the transfer by GFC of (i) all of its trademarks,
tradenames, service marks and other intellectual property and all
registrations and/or applications for registration associated therewith
to SYDOOG, (ii) its office and distribution facility in Knoxville,
Tennessee and all inventory located therein to Goody's MS, (iii) all of
its lease rights, fixtures, inventory and other assets used in the
operation of its retail stores in the state of Mississippi to Goody's
MS, (iv) all of its lease rights, fixtures, inventory and other assets
used in the operation of its retail stores in the state of Indiana to
Goody's IN.
(d) any sale, lease, assignment, or transfer of assets to
another Borrower or Guarantor, provided, however, that any sale,
assignment or transfer of assets by GFC under this Section 9.3(d) shall
not exceed in any Fiscal Year an aggregate amount of (i) $30,000,000
with regard to all of the other Borrowers and Guarantors as to the
sale, lease, assignment or transfer of assets of the type used in the
operation of a retail store, including lease rights, fixtures and
inventory, and, (ii) with regard to all other sales, leases,
assignments, or transfers, $2,500,000 with regard to a single Borrower
or Guarantor, or $5,000,000 with regard to all of the Borrowers and
Guarantors.
(e) any other sale(s) of assets during any period of four
consecutive Fiscal Quarters of such Borrower or Guarantor to the extent
that such assets in the aggregate did not account for more than
$1,000,000.
. Make, commit to make or suffer to exist any loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes, debentures or
other securities of, or make any other investment in any Person (all such
transactions being called "Investments"), except:
(a) Cash Equivalents;
(b) Investments existing on the date hereof; or
(c) accounts receivable representing trade credit extended in the ordinary
course of business; and
(d) loans pursuant to employment agreements and executive
compensation arrangements that do not exceed $300,000 to any one Person
and $1,000,000 in the aggregate including such loans by the other
Borrowers and/or Guarantors.
(e) With regard to GFC, Goody's MS and Goody's IN,
agreements to make advances pursuant to a construction contract for the
construction of building(s) to be leased to a Borrower or Guarantor
provided that (i) at no time shall GFC's obligations to advance funds
hereunder exceed in the aggregate at any one time $2,500,000, (ii) GFC
shall be entitled to be reimbursed by the landlord/developer in full
for the amount advanced upon the completion of the building (unless a
lesser amount is stipulated in the lease), and (iii) the Borrower or
Guarantor leasing such building shall have the absolute right to
set-off against all rental payments to be made under the lease the
amount, if any, that is not reimbursed to GFC when construction and
punch list items are completed and appropriate releases are obtained.
. 9.5. ERISA
(a) Terminate any Plan so as to result in any material liability to the
PBGC;
(b) engage in any "prohibited transaction" (as
defined in Section 4975 of the Code) involving any Plan that would
result in a material liability for an excise tax or civil penalty in
connection therewith;
(c) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
regardless of whether waived, involving any Plan; or
(d) allow or suffer to exist any event or condition
that presents a material risk of incurring a material liability to the
PBGC by reason of the termination of any Plan.
. (a) Declare, pay or make any dividends (other than stock dividends) or other
distributions with respect to, or any other payment on account of, the capital
stock or any warrants, options or other rights in respect of the capital stock
(or partnership interests, as the case may be) of such Borrower or Guarantor now
or hereafter outstanding unless such dividend, distribution or payment is made
to GFC; (b) purchase, redeem, retire or otherwise acquire for value any of the
capital stock or any warrants, options or other rights in respect of the capital
stock (or partnership interests, as the case may be) of such Borrower or
Guarantor now or hereafter outstanding; or (c) segregate or set apart assets for
a sinking or analogous fund for the purchase, redemption, retirement or other
acquisition of any shares of the capital stock or any warrants, options or other
rights in respect of the capital stock (or partnership interests, as the case
may be) of such Borrower or Guarantor now or hereafter outstanding.
. Enter into any transaction, including any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate or employee, except
transactions which are (a) described in the Affiliate Agreements; (b) listed on
Schedule 7.26 or otherwise disclosed to Lenders in writing subsequent to May 25,
1995, (c) described in the documents provided to the Administrative Agent
pursuant to Section 6.1.1(i) above, (d) loans to another Borrower or Guarantor,
provided, however, that with regard to loans from GFC to the other Borrowers and
Guarantors, the aggregate amount of such loans shall not exceed an aggregate
amount of $20,000,000 at any one time, or (e) in the ordinary course of such
Borrower's or Guarantor's business and that are upon fair and reasonable terms
no less favorable to such Borrower or Guarantor than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
. Pay or prepay any Subordinated Indebtedness prior to the time that same
is due and payable according to its stated terms.
. Issue any capital stock or permit any Subsidiary to issue any capital stock;
provided, however, that each Borrower and Guarantor may issue common stock and
preferred stock to the extent such stock does not require the payment of
dividends, and provided any preferred stock is not redeemable, payable or
subject to being required to be purchased or otherwise retired or extinguished
(i) at a fixed or determinable date, whether by operation of a sinking fund or
otherwise, (ii) at the option of any Person other than such Borrower or
Guarantor or (iii) upon the occurrence of a condition not solely within the
control of such Borrower or Guarantor, such as a redemption required to be made
out of future earnings.
. Enter into or become a party to any transactions the performance of which in
the future has any reasonable likelihood of resulting in a breach of any
covenant contained herein or any other Loan Document or give rise to any Default
or Event of Default.
ARTICLE 10
FINANCIAL COVENANTS
. So long as any Obligations are unpaid or outstanding, any Obligation under the
Loan Documents is unperformed or any of the Commitments are in effect, the
Borrowers and Guarantors shall not:
. Permit on a consolidated basis in accordance with GAAP the Current Ratio as of
the end of any Fiscal Quarter to be less than 1.05 to 1.00 or permit the Current
Ratio as of the end of any Fiscal Year to be less than 1.10 to 1.00.
. Permit on a consolidated basis in accordance with GAAP the ratio of Total
Liabilities of the Borrowers and Guarantors to Shareholders Equity of the
Borrowers and Guarantors as of the end of any Fiscal Year to exceed 1.10 to
1.00.
. Permit on a consolidated basis in accordance with GAAP the Shareholders Equity
of Borrowers and Guarantors (a) to be less than $104,000,000 as of the date
hereof, (b) to be less than $114,000,000 as of February 1, 1997, or (c) to be
less than $124,000,000 as of January 31, 1998.
. Permit Capital Expenditures made by Borrowers and Guarantors in the aggregate
to exceed (a) $16,500,000 during the Fiscal Year ended February 3, 1996 and (b)
$35,500,000 in the aggregate during the Fiscal Years ending February 3, 1996 and
February 1, 1997, and (c) $27,500,000 for the Fiscal Year ending January 31,
1998.
. In addition to the covenant set forth in Section 8.1.3, Borrowers and
Guarantors shall cause their consolidated Shareholders Equity to be increased by
(a) the amount of consolidated Net Income for Borrowers and Guarantors in each
Fiscal Year, plus (b) all of the net proceeds of the issuance of any capital
stock permitted to be issued by GFC hereunder, plus (c) all of the net proceeds
of the issuance of any Subordinated Debt permitted to be issued hereunder that
is convertible to capital stock of GFC.
ARTICLE 11
EVENTS OF DEFAULT AND LENDERS' REMEDIES
. Any one or more of the following described events shall constitute an Event of
Default hereunder, whether such occurrence shall be voluntary or involuntary, or
come about or be effected by operation of law or otherwise:
. The Borrowers shall fail to pay any amount of principal of or interest payable
on or in respect of the Loans, the Letter of Credit Liabilities, the Credit
Fees, any other Obligations or any other amount payable under this Agreement,
the Notes, or the other Loan Documents within three (3) Business Days of the
date notice is given such Borrower or Guarantor of such failure to pay.
. Any Borrower or Guarantor shall fail to perform or observe any of its
covenants and agreements set forth in Sections 8.6, 8.10 and 8.12 and in
Articles 9 (other than Section 9.5) and 10.
. Any Borrower or Guarantor shall fail to perform or observe any of its other
covenants and agreements set forth in this Agreement (other than those described
in Sections 11.1.1 and 11.1.2) or the other Loan Documents, and such failure
shall continue for more than thirty (30) days after the earlier of (a) written
notice from the Administrative Agent to such Borrower or Guarantor, as
applicable, of the existence of such Default or (b) the date any Responsible
Officer of such Borrower or Guarantor, as applicable, first obtains knowledge of
such failure.
. Any Borrower or Guarantor (a) shall commence a voluntary case or other
proceeding seeking dissolution, liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a receiver,
trustee, liquidator, custodian or other similar official with respect to it or
any substantial part of its property, (b) shall consent to any such relief or to
the appointment of, or the taking of possession of any of its property by, any
such official in any involuntary case or other proceeding commenced against it,
(c) shall make a general assignment for the benefit of creditors, (d) shall take
any action to authorize any of the foregoing, or (e) shall become insolvent or
fail generally to pay its debts as they become due.
. Any involuntary case or other proceeding shall be commenced against any
Borrower or Guarantor seeking dissolution, liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a receiver,
trustee, liquidator, custodian or other similar official with respect to it or
any substantial part of its property, and (a) an order for relief (or the
equivalent) shall be entered in such involuntary case or other proceeding or (b)
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of thirty (30) days after the commencement thereof.
. Any representation or warranty of any Borrower or Guarantor set forth in this
Agreement, the Notes, the other Loan Documents or in any other certificate,
opinion or other statement at any time provided by or on behalf of Borrower or
Guarantor in connection herewith or therewith shall prove to be false or
misleading in any material respect at the time made or given.
. Any judgment lien shall be filed, or any writ of execution, attachment,
garnishment or other legal process shall be issued, against any of the property
of any Borrower or Guarantor which by itself or together with all other such
legal processes with regard to all of the Borrowers and Guarantors is for an
amount in excess of $500,000, and which shall remain unvacated, unbonded or
unstayed for a period of thirty (30) days, or in any event later than five (5)
days prior to the date of any proposed sale thereunder.
. All or substantially all of the property of any Borrower or Guarantor shall be
condemned, seized or otherwise appropriated, and the condemnation award is
materially less than the book value of such property at the date hereof (if such
property was owned by such Borrower or Guarantor on the date hereof) or at the
time such property was acquired by such Borrower or Guarantor (if such property
was acquired by such Borrower or Guarantor after the date hereof).
. GFC, Goody's MS or Goody's IN shall voluntarily suspend the transaction of its
business for more than five (5) consecutive Business Days in any Fiscal Year
after the date hereof without the prior express written consent of Requisite
Lenders.
. Any Borrower or Guarantor shall (a) fail to pay any amount of any Indebtedness
or interest thereon, or (b) fail to observe or perform any term, covenant or
agreement contained in any Contractual Obligation (including Contractual
Obligations evidencing, securing or relating to any Indebtedness) executed by
it, which failure (i) would cause or permit the holder or holders or beneficiary
or beneficiaries of such Indebtedness (or any agent or trustee on their behalf)
to cause such Indebtedness to become due or otherwise payable prior to its
stated maturity, so long as the aggregate principal amount of all such
Indebtedness that would then become due or payable would equal or exceed
$500,000, or (ii) would impair the Lenders' rights or the performance of the
obligations of such Borrower or Guarantor under this Agreement, the Notes, the
other Loan Documents or the business or operations of such Borrower or
Guarantor; unless in the case of a Contractual Obligation that is not for
borrowed money, such failure of performance is being contested by such Borrower
or Guarantor in good faith and adequate reserves with respect thereto have been
established on the books of such Borrower or Guarantor in conformity with GAAP.
. (a) Each Borrower or Guarantor or any Commonly Controlled Entity shall engage
in any "prohibited transaction" (as defined in ERISA or Section 4975 of the
Code) involving any Plan, (b) any "accumulated funding deficiency" (as defined
in ERISA), whether or not waived, shall exist with respect to any Plan, (c) a
Reportable Event shall occur with respect to, or a proceeding shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or proceeding
presents a material risk of termination of such Plan for purposes of Title IV of
ERISA, and, in the case of a Reportable Event, shall continue unremedied for ten
(10) days after notice of such Reportable Event is given pursuant to Section
4043(a), (c) or (d) of ERISA and, in the case of such proceeding, shall continue
for ten (10) days after commencement thereof, (d) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (e) the withdrawal or partial
withdrawal by any Borrower or Guarantor or any Commonly Controlled Entity from
any Multi-Employer Plan, or (f) the reorganization or insolvency of a Plan or
any other event or condition shall occur or exist with respect to a Plan and in
each case in clauses (a) through (f) above, such event or condition together
with all other such events or conditions, if any, could subject such Borrower or
Guarantor to any tax, penalty or other liability in excess of $500,000 or
otherwise would have a material adverse affect on the properties, businesses,
results of operations, management or financial or other condition of such
Borrower or Guarantor.
. Any of the Loan Documents or any provision thereof, for any reason whatsoever,
cease to be binding on any Borrower or Guarantor or any Borrower or Guarantor
shall so assert.
. Any default or event of default shall occur under any Material Contract, and,
if subject to a cure right, shall fail to be cured or corrected within the
applicable cure period.
. There shall occur after the date hereof any material adverse change in the
condition (financial or otherwise), operations or properties of such Borrower or
Guarantor, and such change shall have the effect of impairing the ability of
such Borrower or Guarantor to satisfy and discharge its Obligations in a timely
manner; provided, however, that the event described in this Section 11.1.14
shall constitute an Event of Default only upon the unanimous agreement of all
Lenders.
. An event or series of events by which (a) Robert M. Goodfriend ceases to
directly own more than fifty percent (50%) of the combined voting power of all
securities of GFC entitled to vote in the election of directors, other than
securities having such power only by reason of the happening of a contingency
(other than the passage of time), (b) the Borrowers (other than GFC) and
Guarantors cease to be direct or indirect wholly-owned subsidiaries of GFC, or
(c) any Borrower or Guarantor consolidates with or merges into another Person or
conveys, transfers or leases all or substantially all of its assets to any
Person, or any corporation consolidates with or merges into any Borrower or
Guarantor pursuant to a transaction in which the outstanding securities of such
Borrower or Guarantor entitled to vote in the election of directors are changed
into or exchanged for cash, securities or other property, other than mergers or
consolidation between two or more Borrowers and/or Guarantors, or a transaction
between the Borrowers, Guarantors and any Subsidiary of the Borrowers or
Guarantors provided, however, that such transaction does not violate Sections
9.3 and 9.7, and provided, further, that any merger, consolidation or
transaction allowed under this Section 11.1.15 does not result in the
termination of GFC's corporate existence.
. Upon the occurrence of an Event of Default or at any time thereafter, and in
each and every case, unless such Event of Default shall have been remedied or
waived in writing by Requisite Lenders, any one or all of the following actions
may be taken:
(a) upon the request of Requisite Lenders, the
Administrative Agent shall, by notice to the Borrowers terminate any or
all of the Commitments, whereupon such Commitments of the Lenders
thereunder immediately shall terminate; provided, however, that upon
the occurrence of any event specified in either Section 11.1.4 or
Section 11.1.5 the Commitments shall terminate automatically without
further action by the Administrative Agent or the Lenders;
(b) upon request of Requisite Lenders, the Administrative
Agent shall declare all outstanding Obligations and other amounts owing
under this Agreement, the Notes and the other Loan Documents to be due
and payable immediately, and all such Obligations and other amounts
immediately shall be due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived
to the extent permitted by applicable law; provided, however, that upon
the occurrence of any event specified in either Section 11.1.4 or
Section 11.1.5 all such Obligations and other amounts immediately shall
be due and payable in full without declaration or other notice;
(c) the Administrative Agent immediately, and without
expiration of any period of grace, may enforce payment of all
Obligations of the Borrowers and Guarantors to the Administrative Agent
and the Lenders under this Agreement, the Notes and the other Loan
Documents, and the Administrative Agent shall be entitled to all
remedies available hereunder or thereunder; and
(d) the Administrative Agent shall be entitled to exercise,
for the ratable benefit of the Lenders, all other rights, powers,
privileges, options and remedies available under or by virtue of the
Loan Documents or otherwise available at law or in equity.
. 11.3. Actions in Respect of Letters of Credit
. If an Event of Default shall have occurred and be continuing, the
Administrative Agent may, and upon the request of Requisite Lenders shall,
whether in addition to the taking by the Administrative Agent of any of the
actions described in Section 11.2 or otherwise, make demand upon the Borrowers
and Guarantors to, and forthwith upon such demand such Person(s) will, pay to
the Administrative Agent at its Lending Office, for its benefit and the ratable
benefit of the Lenders, in immediately available (same day) funds for deposit in
a Collateral Account to be maintained for the benefit of the Administrative
Agent and the ratable benefit of the Lenders at such place as shall be
designated by the Administrative Agent, an amount equal to the amount of the
Letter of Credit Liabilities; provided, however, that in lieu of the creation of
such Collateral Account, or the continuation of such Collateral Account if
already created, the Borrowers and Guarantors may provide the Lenders with a
letter of credit issued by a commercial bank acceptable to the Lenders in an
amount equal to the stated amount of the Letters of Credit.
. The Borrowers and Guarantors hereby pledge and assign to the Administrative
Agent, for its benefit and the ratable benefit of the Lenders, and grant to the
Administrative Agent for its benefit and the ratable benefit of the Lenders, a
lien on and a security interest in the Collateral Account, all cash deposited
therein, all notes, certificates and instruments, if any, from time to time
representing or evidencing the Collateral Account and all interest and other
earnings thereon, additions thereto, substitutions therefor and proceeds
thereof. The lien and security interest granted hereby secures the payment of
all of the Obligations.
. The Borrowers and Guarantors hereby authorize the Administrative Agent to
apply, from time to time after funds are deposited in the Collateral Account,
funds then held in the Collateral Account to the payment of any amounts, in such
order as the Administrative Agent may elect, as shall have become or shall
become due and payable by the Borrowers and Guarantors to the Lenders in respect
of the Letter of Credit Liabilities and thereafter to the satisfaction of the
other Obligations.
. Neither the Borrowers and Guarantors nor any Person claiming or acting on
behalf of or through the Borrowers and Guarantors shall have any right to
withdraw any of the funds held in the Collateral Account, except as provided in
Section 11.3.8; provided, however, that with the consent of the Administrative
Agent, and to the extent that there is an amount in excess of $50,000 in the
Collateral Account at the end of any Business Day after taking into account
applications of funds, if any, from the Collateral Account made pursuant to
Section 11.3.8, the Administrative Agent may, at the written request of the
Borrowers and Guarantors, from time to time invest amounts on deposit in the
Collateral Account in Cash Equivalents; provided, further that in order to
provide the Administrative Agent with a perfected security interest therein,
each investment in Cash Equivalents shall be evidenced by negotiable
certificates or instruments of which the Administrative Agent shall take
physical possession. If the Borrowers and Guarantors shall have the right to
have any amounts on deposit in the Collateral Account invested by the
Administrative Agent, but shall have failed to request the Administrative Agent
to invest such amounts, the Administrative Agent will endeavor to invest such
amounts in such Cash Equivalents as the Administrative Agent shall select;
provided, however, that in order to provide the Administrative Agent with a
perfected security interest therein, each such investment in Cash Equivalents
shall be evidenced by negotiable certificates or instruments of which the
Administrative Agent shall take physical possession. Any interest or other
proceeds received by the Administrative Agent in respect of Cash Equivalents
that are not invested or reinvested in Cash Equivalents as provided above shall
be deposited and held in cash in the Collateral Account under the sole dominion
and control of the Administrative Agent and shall be applied as provided in
Section 11.3.3.
. The Borrowers and Guarantors agree that they will not (a) sell or otherwise
dispose of any interest in the Collateral Account or (b) create or permit to
exist any Lien on or with respect to the Collateral Account or the funds on
deposit therein except for the security interest created by this Section 11.3.
. 11.3.6.Remedies
(a) Requisite Lenders may, in their sole discretion, without
notice to the Borrowers and Guarantors except as required by law and at
any time and from time to time, direct any Lender to charge, set-off
and otherwise apply all or any part of first, the Letter of Credit
Liabilities and second, the other Obligations, against the Collateral
Account, or any part thereof, in such order as the Administrative Agent
shall elect. The Administrative Agent agrees to notify promptly the
Borrowers and Guarantors after any such set-off and application made by
any Lender, at the direction of Requisite Lenders, provided that the
failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lenders under this Section
11.3.6 are in addition to other rights and remedies (including other
rights of set-off) which any Lender may have.
(b) The Administrative Agent may exercise, in its sole
discretion, in respect of the Collateral Account, in addition to the
other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party upon default under
the UCC, and the Administrative Agent may, without notice except as
specified below, sell any assets of Borrowers and Guarantors in its
possession or any part thereof at public or private sale, at any office
of the Administrative Agent or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. The Borrowers and Guarantors agree
that to the extent notice of sale shall be required by law, at least
ten (10) days' notice of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notice. The Administrative Agent shall not be obligated to
make any sale of any Borrower's or Guarantor's assets or any part
thereof, regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(c) Any cash or other property held in the Collateral
Account, and all proceeds received by the Administrative Agent in
respect of any sale of, collection from or other realization upon all
or any part of the Collateral Account may, in the discretion of the
Administrative Agent, then or at any time thereafter be applied (after
payment of any amounts payable pursuant to this Section 11.3) in whole
or in part by the Administrative Agent for the ratable benefit of the
Lenders against all or any part of the Obligations in such order as the
Administrative Agent may elect.
. The Administrative Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral Account if the Collateral Account
is accorded treatment substantially equal to that which the Administrative Agent
accords its own property, it being understood that the Administrative Agent
shall not have any responsibility or liability (a) for ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Cash Equivalents, whether or not the
Administrative Agent has or is deemed to have knowledge of such matters, (b) for
taking any necessary steps to preserve rights against any parties with respect
to the Collateral Account, (c) for the collection of any proceeds from Cash
Equivalents, (d) by reason of any invalidity, lack of value or uncollectability
of any of the payments received by the Administrative Agent from obligors with
respect to Cash Equivalents, (e) for any loss resulting from investments made in
compliance with Section 11.3.4, except to the extent such loss was attributable
to the Administrative Agent's gross negligence or willful misconduct in
complying with Section 11.3.4, as determined by a final judgment of a court of
competent jurisdiction, or (f) in connection with any investments made in
compliance with Section 13.3.4 without a written request from the Borrowers and
Guarantors, or any failure by the Administrative Agent to make any such
investment.
. Any surplus funds held in the Collateral Account and remaining after the
Obligations are fully satisfied shall be paid to the Borrowers and Guarantors or
such other Person(s) as may be lawfully entitled to receive such surplus.
ARTICLE 12
THE ADMINISTRATIVE AGENT
. Each Lender hereby (a) irrevocably appoints First Tennessee Bank National
Association as the Administrative Agent for such Lender and the other Lenders
under this Agreement, the Notes and the other Loan Documents, and (b)
irrevocably authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the Notes and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement, the Notes
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent shall, among other things, take
such actions as the Administrative Agent is authorized to take pursuant to this
Agreement, the Notes and the other Loan Documents. As to any matters not
expressly provided for in this Agreement, the Administrative Agent may, but
shall not be required to, exercise any discretion or take any action; however,
the Administrative Agent shall be required to act or to refrain from acting upon
the written instructions of Requisite Lenders if the Administrative Agent shall
be indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of so acting or refraining from
acting. Notwithstanding anything to the contrary herein, the Administrative
Agent shall have no duties, responsibilities or fiduciary relationships with any
Lender except those expressly set forth in this Agreement, the Notes and the
other Loan Documents, and no implied covenants, responsibilities, duties,
obligations or liabilities shall be read into this Agreement, the Notes or the
other Loan Documents or otherwise exist against the Administrative Agent.
. The Administrative Agent may exercise any of its powers or execute any of its
duties under this Agreement, the Notes and the other Loan Documents by or
through one or more agents or attorneys-in-fact and shall be entitled to obtain,
and to rely on, advice of counsel concerning all matters pertaining to such
rights and duties. The Administrative Agent may utilize the services of such
agents and attorneys-in-fact as the Administrative Agent in its sole discretion
reasonably determines, and all reasonable fees and expenses of such agents and
attorneys-in-fact shall be paid by the Borrowers on demand. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent in good faith.
. Neither the Administrative Agent nor its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any
waiver, consent or approval given or any action taken or omitted to be taken by
it or by such Person under or in connection with this Agreement, the Notes, or
the other Loan Documents, if authorized or permitted hereunder, except for its
or such Person's own gross negligence or willful misconduct, or (b) responsible
for the consequences of any oversight or error in judgment by it or such Person
whatsoever, except for its or such Person's own gross negligence or willful
misconduct. The Administrative Agent shall not be responsible for (i) the
execution, validity, genuineness, effectiveness, sufficiency, enforceability,
perfection or priority of this Agreement, the Notes, or the other Loan
Documents, (ii) the collectability of any amounts owing under this Agreement,
the Notes or the other Loan Documents, (iii) the value, sufficiency,
enforceability, perfection or collectability of any assets of the Borrowers or
Guarantors , (iv) the failure by any Borrower or Guarantor to perform its
obligations under this Agreement, the Notes or the other Loan Documents or to
observe any conditions hereof or thereof, (v) the truth, accuracy and
completeness of the recitals, statements, representations or warranties made by
any Borrower or Guarantor or any officer or agent thereof contained in this
Agreement, the Notes, or the other Loan Documents, or in any certificate,
report, statement, document or other writing referred to or provided for in, or
received by the Administrative Agent in connection with, this Agreement, the
Notes, or the other Loan Documents believed by the Administrative Agent to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons.
. The Administrative Agent shall not have any obligation (a) to ascertain or to
inquire as to the observance or performance of any of the conditions, covenants
or agreements in this Agreement, the Notes or the other Loan Documents or in any
document, instrument or agreement, (b) to ascertain or inquire as to whether any
notice, consent, waiver or request delivered to it shall have been duly
authorized or is genuine, accurate and complete or (c) to inspect the
properties, books or records of the Borrowers and Guarantors. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying (i)
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document, instrument or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and (ii) upon advice and statements of legal counsel (including counsel
to the Borrowers and Guarantors), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of the assignment, negotiation or transfer thereof, in accordance
with the provisions of this Agreement, shall have been delivered to the
Administrative Agent identifying the name of the subsequent payee or holder
thereof. The Administrative Agent shall be entitled to fail or refuse, and shall
be fully protected in failing or refusing, to take any action required or
permitted by it under this Agreement, the Notes or the other Loan Documents
unless (A) it first shall receive such advice or concurrence of Requisite
Lenders as it deems appropriate, or (B) it first shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. In
all cases the Administrative Agent shall be fully protected in acting, or in
refraining from acting, under this Agreement, the Notes or the other Loan
Documents in accordance with a request of Requisite Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
. The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default unless the Administrative
Agent has received notice from a Lender, a Borrower or Guarantor referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "Notice of Default." If the Administrative Agent receives such
a notice, the Administrative Agent shall give telephonic and written notice
thereof to the Lenders as soon as is practicable. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by Requisite Lenders; provided, however, that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it deems advisable in the best interests of the Lenders.
. Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to such Lender. The
Administrative Agent shall have no obligation, responsibility or liability to
any of the Lenders regarding the creditworthiness or financial condition of the
Borrowers and Guarantors or for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Loan Document. No act by the
Administrative Agent hereinafter taken, including any review of the Borrowers
and Guarantors shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, it has made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and Guarantors and has made its
own decision to enter into this Agreement and to make its Loans and otherwise
participate in the transactions hereunder. Each Lender also represents that,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it deems appropriate at
the time, it shall continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement, the Notes and the
other Loan Documents and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and Guarantors. The
Administrative Agent shall not be required to make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Loan Document, or the financial condition of the
Borrowers and Guarantors or the existence or possible existence of any Default
or Event of Default. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall have no obligation or liability to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrowers and
Guarantors that may come into the possession of the Administrative Agent or any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.
. Each of the Lenders shall indemnify, defend and hold harmless the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers or Guarantors and without limiting the obligation of the Borrowers
and Guarantors to do so), ratably according to their respective Percentages,
from and against any and all claims, demands, lawsuits, costs, expenses, fees,
liabilities, obligations, losses, damages, actions, recoveries, judgments,
suits, costs, expenses or disbursements of any kind whatsoever, including
interest, penalties and reasonable attorneys' and paralegals' fees and costs and
amounts paid in settlement of any of the foregoing, whether direct, indirect,
consequential or incidental, that at any time (including at any time following
the satisfaction of the Obligations) may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to, resulting from or
arising out of this Agreement, the Notes or the other Loan Documents, the
transactions contemplated hereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment of any portion of such
claims, demands, lawsuits, costs, expenses, fees, liabilities, obligations,
losses, damages, actions, remedies, judgments, suits, costs, expenses or
disbursements to the extent such result arose solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this Section
12.7 shall survive the repayment of the Loans and the satisfaction of the other
Obligations and shall be in addition to and not in lieu of any other
indemnification agreements set forth in the Loan Documents.
. If in the opinion of the Administrative Agent, the distribution of any amount
received by the Administrative Agent in such capacity under this Agreement, the
Notes or the other Loan Documents might involve it in liability, the
Administrative Agent may refrain from making the distribution thereof until the
Administrative Agent's right to make such distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received from and distributed by the
Administrative Agent in such capacity as Administrative Agent is to be repaid,
each Person to whom any such distribution shall have been made either (a) shall
repay to the Administrative Agent its proportionate share of the amount so
adjudged to be repaid, or (b) shall repay the same in such manner and to such
Persons as shall be determined by such court.
. The Administrative Agent in its individual capacity, and its Affiliates, may
unless otherwise prohibited by this Agreement, make loans and other financial
accommodations to, accept deposits from and generally engage in any kind of
business with the Borrowers and Guarantors as though the Administrative Agent
were not the Administrative Agent hereunder. With respect to Loans made or
renewed by it, any Notes issued to it and its participation in the Letter of
Credit Liabilities, the Administrative Agent in its individual capacity shall
have the same benefits, rights, powers and privileges under this Agreement, the
Notes and the other Loan Documents as any other Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender",
"Lenders" and "Requisite Lenders" shall include the Administrative Agent in its
individual capacity.
. The Administrative Agent may resign as such upon thirty (30) days' prior
written notice to the Lenders and Borrowers. If the Administrative Agent shall
resign as such under this Agreement, then Requisite Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent shall
be reasonably acceptable to Borrowers; provided, however, that acceptability to
Borrowers shall not be required if a Default or Event of Default has occurred
and is continuing. Upon acceptance of its appointment as successor agent, (a)
such successor agent shall succeed to the rights, powers, privileges and duties
of the Administrative Agent, (b) the retiring Administrative Agent shall be
discharged of all its obligations and liabilities in such capacity under this
Agreement, the Notes and the other Loan Documents, (c) the term Administrative
Agent shall mean such successor agent effective upon its appointment and (d) the
retiring Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such retiring Administrative Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article 10 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.
ARTICLE 13
ASSIGNMENTS AND PARTICIPATIONS
. This Agreement, the Notes and the other Loan Documents shall be binding on and
shall inure to the benefit of the Borrowers and Guarantors, the Administrative
Agent, the Lenders and their respective successors and assigns, except as
otherwise provided herein or therein. The Borrowers and Guarantors may not
assign, transfer, hypothecate or otherwise convey their respective rights,
benefits, obligations or duties hereunder or thereunder without the prior
express written consent of the Lenders. Any purported assignment, transfer,
hypothecation or other conveyance by the Borrowers and Guarantors without the
prior express written consent of all the Lenders shall be void. Neither the
Administrative Agent nor any of the Lenders may sell, assign, transfer, grant a
participation in or otherwise dispose of all or any portion of its interest in
this Agreement, the Notes or the other Loan Documents except as expressly
provided herein.
. 13.2. Assignments
. Each Lender may assign (other than the sale of a participation) up to one
hundred percent (100%) of its right, title and interest under this Agreement,
the Notes, the Letters of Credit and the other Loan Documents (including all or
a portion of its Commitments and the same portion of the Loans at the time owing
to it) to one or more banks or other financial institutions; provided, however,
that the right of each Lender to make such assignment is subject to the right of
each remaining Lender to succeed to its pro rata portion of the assigning
Lender's Commitment as determined by the proportion that each remaining Lender's
Commitment bears to the total Commitments; and provided further, that (a) each
such assignment shall be of a constant, and not a varying, percentage of all
such Lender's right, title and interest hereunder and thereunder, (b) such share
equals no less than $10,000,000 in the case of any one assignee, (c) any
assignee shall execute and deliver to the Administrative Agent an Assignment and
Acceptance in the form attached hereto as Exhibit 13.2, and (d) a Lender may not
assign any interest without the prior approval of the Administrative Agent and
Borrowers and Guarantors, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, any Lender may assign, as collateral or
otherwise, any of its rights (including such Lender's rights to payments of
principal and/or interest on the Notes) under this Agreement to any Federal
Reserve Bank without notice to or consent of the Administrative Agent or the
Borrowers and Guarantors.
. Upon the sale, assignment, transfer or other disposition (other than the sale
of a participation) of any of a Lender's right, title and interest under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents to any
assignee in accordance with this Section 13.2, then upon the execution, delivery
and acceptance of the Assignment and Acceptance, from and after the effective
date specified therein, (a) the transferor Lender no longer shall have the
rights, benefits and obligations under this Agreement, the Notes, the Letters of
Credit or the other Loan Documents to the extent of the interest transferred
(except for such rights, benefits and obligations that such Lender would retain
under or with respect to this Agreement, the Notes, the Letters of Credit or the
other Loan Documents upon payment in full of the Obligations), and (b) the
assignee shall become a Lender, shall succeed to the rights and benefits and
assume the obligations of such transferor Lender hereunder and thereunder to the
extent of the interest transferred.
. Each Borrower and Guarantor hereby agrees that it shall execute and deliver,
at the request of the Administrative Agent (a) with regard to each Borrower, one
or more substitute Notes to the order of such Lenders to evidence the portions
of the Loans retained and sold and (b) with regard to each Borrower and
Guarantor, any amendment to any Loan Document to which it is a party to
effectuate the provisions of this Section 13.2.
. Subject to the provisions of this Section 13.3, each Lender shall have the
right at any time to sell undivided participating interests in all or any part
of its Commitments, the Loans and the Letters of Credit to one or more banks or
other financial institutions; provided, however, that (a) such sale or transfer
shall not relieve such Lender of any obligation or liability hereunder, (b) such
Lender shall make and receive all payments for the account of its participants
and shall retain exclusively, and shall continue to exercise exclusively, all
rights of approval and administration available hereunder with respect to such
Lender's Commitments, the Loans and the Letters of Credit, even after giving
effect to the sale of any such participation (although such Lender may at its
option agree with its participants that it will not consent to any matter
described in clauses (a) through (g) of Section 14.3.4 without their
concurrence), and (c) such Lender shall make such arrangements with its
participants as may be necessary to accomplish the foregoing. No such
participant shall be a Lender for any purpose of this Agreement, other than for
purposes of Section 14.13, without the consent of the Administrative Agent.
. Lenders may disclose such information as to the Borrowers and Guarantors that
is within their possession only as is permitted by the next sentence or as is
required by applicable law or by an appropriate governmental agency. In
connection with any assignments, participations or offers therefor pursuant to
this Article 13, each Lender may disclose to only any assignee or participant or
prospective assignee or participant such information pertaining to the Borrowers
and Guarantors as such Lender may deem appropriate or such assignee or
participant or prospective assignee or participant may request; provided,
however, that prior to any such disclosure such assignee or participant or
prospective assignee or participant shall agree to preserve the confidentiality
of any confidential information relating to the Borrowers and Guarantors
received by it, except as permitted by this Section.
. No Lender shall assign or sell any participation in its Commitments, the Loans
or the Letters of Credit, except in the form of units consisting of pro rata
interests in its Commitments, the Loans and the Letters of Credit.
<PAGE>
ARTICLE 14
GENERAL PROVISIONS
. Any notice, request, demand or other communication required or permitted under
this Agreement, the Notes or the other Loan Documents shall be in writing and
shall be deemed to be properly given (a) when received, if personally delivered
or sent by overnight courier with appropriate confirmation of delivery, (b)
three (3) Business Days after deposit in the mail, if mailed by United States
first class, certified or registered mail, postage prepaid, or (c) when
received, if given by telecopy, with appropriate confirmation, each to the
appropriate address set forth below or to such other address that any such party
or the Administrative Agent may designate by written notice to other parties.
If to GFC:
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37923-2000
Attn: Edward R. Carlin
Regis J. Hebbeler
Telecopy No. 423-671-4071
with a copy to:
Dennis R. McClane, Esq.
Woolf, McClane, Bright, Allen & Carpenter
900 S. Gay Street, Suite 900
Knoxville, Tennessee 37902
Telecopy No. 423-215-1001
If to SYDOOG:
13 North Market Street, Suite 817
Wilmington, Delaware 19801
Attn: President
with a copy to:
Gordon Stewart, Esq.
Stewart & Associates
1201 Market Street, Suite 1700
Wilmington, Delaware 19801
Telecopy No. 302-652-7211
If to TREBOR:
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37923-2000
Attn: Edward R. Carlin
Regis J. Hebbeler
Telecopy No. 423-671-4071
with a copy to:
Dennis R. McClane, Esq.
Woolf, McClane, Bright, Allen & Carpenter
900 S. Gay Street, Suite 900
Knoxville, Tennessee 37902
Telecopy No. 423-215-1001
If to GOFAMCLO:
900 Market Street, Suite 200
Wilmington, Delaware 19801
Attn: President
with a copy to:
Gordon Stewart, Esq.
Stewart & Associates
1201 Market Street, Suite 1700
Wilmington, Delaware 19801
Telecopy No. 302-652-7211
If to Goody's MS:
c/o TREBOR of TN, Inc., General Partner
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37923-2000
Attn: Edward R. Carlin
Regis J. Hebbeler
Telecopy No. 423-671-4071
with a copy to:
Dennis R. McClane, Esq.
Woolf, McClane, Bright, Allen & Carpenter
900 S. Gay Street, Suite 900
Knoxville, Tennessee 37902
Telecopy No. 615-215-1001
<PAGE>
If to Goody's IN:
c/o TREBOR of TN, Inc., General Partner
400 Goody's Lane
P.O. Box 22000
Knoxville, Tennessee 37923-2000
Attn: Edward R. Carlin
Regis J. Hebbeler
Telecopy No. 423-671-4071
with a copy to:
Dennis R. McClane, Esq.
Woolf, McClane, Bright, Allen & Carpenter
900 S. Gay Street, Suite 900
Knoxville, Tennessee 37902
Telecopy No. 615-215-1001
If to any of the Lenders:
Their respective addresses as set forth with their
signatures on this Agreement.
If to First Tennessee Bank National Association as Administrative Agent:
First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee 37929
Attn: James H. Atchley
Telecopy No. 615-971-2883
. The execution and delivery of this Agreement and the other Loan Documents
supersede all the negotiations or stipulations concerning the matters that
preceded or accompanied the execution and delivery hereof and thereof (other
than with respect to fees payable pursuant to separate agreements among the
Borrowers, Guarantors, the Administrative Agent and each Issuing Bank). This
Agreement, the Notes and the other Loan Documents also are intended, by the
parties hereto and thereto, as a complete and exclusive statement of the terms
and conditions hereof and thereof.
. 14.3. Amendments, Waivers and Consents
. Except as otherwise set forth in this Agreement, the provisions of (a) this
Agreement may not be modified, amended, restated or supplemented, except by a
written instrument duly executed and delivered on behalf of the Borrowers,
Guarantors and Requisite Lenders, and (b) the Notes and all Loan Documents other
than this Agreement may not be modified, amended, restated or supplemented,
except by a written instrument duly executed and delivered on behalf of each
Borrower and Guarantor, to the extent that such Borrower or Guarantor is a
signatory party to such Note or such Loan Document, and on behalf of the
Administrative Agent, with the written consent of Requisite Lenders.
Notwithstanding anything to the contrary herein, the Administrative Agent and
Requisite Lenders may modify, amend, restate, supplement or waive any provision
of Article 12 without the consent of the Borrowers and Guarantors provided that
it does not affect the rights of the Borrowers and Guarantors.
. Except as otherwise set forth in this Agreement, any waiver of the terms and
conditions of this Agreement, the Notes, or the other Loan Documents, or any
waiver of any Default or Event of Default and its consequences hereunder or
thereunder, and any consent or approval required or permitted by this Agreement,
the Notes, or the other Loan Documents to be given by the Lenders, may be made
or given with, but only with, the written consent of Requisite Lenders on such
terms and conditions as specified in the written instrument granting such
waiver, consent or approval. A waiver, to be effective, must be in writing and
signed by the party making the waiver.
. In the case of any waiver, the Borrowers, the Guarantors, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
under this Agreement, the Notes, or the other Loan Documents to the extent of
such waiver, and any Default or Event of Default waived shall be deemed to be
cured and not continued; provided, however, that no waiver shall constitute the
waiver of any subsequent or other Default or Event of Default or impair any
right consequent thereon. No failure or delay on the part of the Administrative
Agent or any Lender to exercise or enforce any right or remedy under or in
connection with this Agreement, the Notes or the other Loan Documents, whether
by their respective terms, at law, in equity or otherwise, shall operate as a
waiver thereof. No single or partial exercise of any such right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy.
. Without in each instance the prior express written consent of the
Administrative Agent and all the Lenders, no such modification, amendment,
restatement, supplement, waiver or consent shall:
(a) increase the aggregate Commitments, or increase the Commitment of any
Lender without such Lender's approval;
(b) reduce the amounts or extend the dates for the payment
of any Credit Fees that are payable ratably to all of the Lenders in
accordance with their respective Percentages of the Commitments;
(c) extend the maturity of the Notes or the date of any scheduled principal
payments or mandatory prepayments hereunder or thereunder;
(d) reduce the rate or extend the time of payment of interest hereunder or
under the Notes;
(e) waive the payment of any principal, interest or Credit Fees payable
hereunder or under the Notes;
(f) extend the termination dates of any of the Commitments or the
Termination Date;
(g) consent to the assignment or transfer by any Borrower or Guarantor of
any of its Obligations under this Agreement, the Notes or the other Loan
Documents;
(h) amend or modify the definitions of "Percentages" or "Requisite Lenders"
contained in this Agreement.
. Any such modification, amendment, restatement, supplement, waiver or consent
shall apply equally to each of the Lenders and shall be binding upon the
Borrowers, the Guarantors, the Lenders, the Administrative Agent and all future
holders of the Notes.
. All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or otherwise would be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists.
. Neither this Agreement, the Notes or the other Loan Documents, nor any
uncertainty or ambiguity herein or therein, shall be construed or resolved
against the Administrative Agent, the Lenders, the Borrowers or Guarantors
whether under any rule of construction or otherwise. This Agreement, the Notes
and the other Loan Documents have been reviewed by all the parties hereto and
thereto and shall be construed and interpreted according to the ordinary meaning
of the words used as to accomplish fairly the purposes and intentions of all
such parties.
. In the event there is a conflict or inconsistency between this Agreement, the
Notes or the other Loan Documents or any prior agreements or summaries of terms,
the terms of this Agreement shall control.
. If any portion of this Agreement, the Notes or any of the other Loan Documents
shall be judged by a court of competent jurisdiction to be unenforceable, the
remaining portions shall be valid and enforceable to the extent that the
remaining terms thereof provide for the creation of the Obligations and the
consummation of the issuance of the Notes, the grant of collateral security
therefor, the guarantee thereof and the payment of principal and interest in
respect of the Obligations substantially on the same terms and subject to the
same conditions as set forth herein and therein.
. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE
EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REFERENCE TO THE
CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF, EXCEPT TO THE EXTENT THAT THE
LAWS OF A PARTICULAR JURISDICTION GOVERN THE CREATION, PERFECTION, PRIORITY AND
ENFORCEMENT OF LIENS ON AND SECURITY INTERESTS IN ANY COLLATERAL.
NOTWITHSTANDING THE FOREGOING, IF AT ANY TIME THE LAWS OF THE UNITED STATES OF
AMERICA PERMIT ANY LENDER TO CONTRACT FOR, TAKE, RESERVE, CHARGE OR RECEIVE
INTEREST OR LOAN CHARGES IN AMOUNTS GREATER THAN ARE ALLOWED BY THE LAWS OF SUCH
STATE (WHETHER SUCH FEDERAL LAWS DIRECTLY SO PROVIDE OR REFER TO THE LAW OF THE
STATE WHERE SUCH LENDER IS LOCATED), THEN SUCH FEDERAL LAWS SHALL TO SUCH EXTENT
GOVERN AS TO THE INTEREST AND LOAN CHARGES THAT SUCH LENDER IS ALLOWED TO
CONTRACT FOR, TAKE, RESERVE, CHARGE OR RECEIVE UNDER THIS AGREEMENT, THE NOTES
AND THE OTHER LOAN DOCUMENTS. REFERENCES TO LAWS IN THIS SECTION ARE TO SUCH
LAWS AS ARE NOW IN EFFECT, AND, WITH RESPECT TO USURY LAWS, IF ANY, APPLICABLE
TO ANY LENDER AND TO THE EXTENT ALLOWED THEREBY, TO SUCH LAWS AS HEREAFTER MAY
BE IN EFFECT THAT ALLOW A HIGHER MAXIMUM NONUSURIOUS INTEREST RATE THAN SUCH
LAWS NOW ALLOW.
. THE ADMINISTRATIVE AGENT, EACH LENDER, AND THE BORROWERS AND GUARANTORS HEREBY
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION, CLAIM, COUNTERCLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. The scope of this waiver is intended to be all-encompassing
with respect to any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each of the parties hereto (i) acknowledges that this waiver
is a material inducement for the parties to the Loan Documents to enter into a
business relationship, that the parties to the Loan Documents have already
relied on this waiver in entering into same and the transactions that are the
subject thereof, and that they will continue to rely on this waiver in their
related future dealings, and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing, and this waiver shall apply to any subsequent amendments,
modifications, supplements, extensions, renewals and/or replacements of this
Agreement. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
. All rights and remedies provided in or contemplated by this Agreement, the
Notes and the other Loan Documents are cumulative and not exclusive of any right
or remedy otherwise provided herein, therein, at law or in equity.
. The Borrowers and Guarantors shall pay on demand all reasonable expenses of
the Administrative Agent in connection with this Agreement, the Notes and the
other Loan Documents, and the preparation of any modifications, amendments,
restatements, supplements or waivers, including all attorneys' and paralegals'
fees and expenses, all fees and expenses for title, lien and other public
records searches, filing and recordation fees and taxes, duplicating expenses,
corporation search fees, appraisal fees, escrow agent fees and expenses, and all
other customary expenses. If there shall occur a Default or Event of Default,
all reasonable out-of-pocket expenses incurred by the Lenders and the
Administrative Agent (including administrative expenses of the Administrative
Agent and the Lenders and fees and disbursements of in-house and outside
counsel) in connection with such Default or Event of Default and collection and
other enforcement proceedings (including bankruptcy proceedings) resulting
therefrom shall be paid by the Borrowers and Guarantors, or any of them,
regardless of whether suit is actually commenced to obtain any relief provided
hereunder. Each Borrower and Guarantor shall indemnify, defend and hold harmless
the Administrative Agent, each Issuing Bank and each of the Lenders from and
against any and all documentary or filing taxes, assessments or charges by any
Governmental Authority by reason of the execution and delivery of this
Agreement, the Notes and the other Loan Documents and the consummation of the
transactions that are the subject thereof.
. In addition to and not in limitation of the obligations imposed on each
Borrower and Guarantor under Section 3.4.5 above, each Borrower and Guarantor
shall indemnify, defend and hold harmless the Administrative Agent and the
Lenders (to the fullest extent permitted by law) from and against any and all
claims, demands, lawsuits, costs, expenses, fees, obligations, liabilities,
losses, damages, recoveries and deficiencies, including interest, penalties and
reasonable attorneys' and paralegals' fees and costs and amounts paid in
settlement of any of the foregoing, whether direct, indirect, consequential or
incidental, that the Administrative Agent or the Lenders may incur or suffer or
that may arise out of, result from or relate to (a) this Agreement, the Notes,
the Letters of Credit or the other Loan Documents or the transactions
contemplated hereby or thereby (excluding actions arising out of the
Administrative Agent's or the Lenders' own gross negligence, breach of contract
or willful misconduct and actions arising out of claims made by the
Administrative Agent, each Issuing Bank or any Lender against any of the
others), or (b) any action under this Agreement, the Notes, the Letters of
Credit or the other Loan Documents or the transactions contemplated hereby or
thereby (excluding actions arising out of the Administrative Agent's or the
Lenders' own gross negligence, breach of contract, or willful misconduct and
actions arising out of claims made by the Administrative Agent, each Issuing
Bank or any Lender against any of the others). In no event shall the
Administrative Agent or the Lenders be liable to any Borrower or Guarantor for
any matter or thing in connection with this Agreement, the Notes, the Letters of
Credit or the other Loan Documents other than to account for monies actually
received by them in accordance with the terms hereof. This Section 14.13 shall
survive termination of this Agreement.
. If any Lender (a "Benefitted Lender") at any time shall receive any payment of
all or part of its Loans or its participation in the Letter of Credit
Liabilities or the interest thereon or receive any collateral therefor, whether
voluntarily or involuntarily, by set-off or otherwise, in a greater portion of
any such payment to and collateral received by any other Lender, if any, in
respect of such other Lender's Loans or its participation in the Letter of
Credit Liabilities or the interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each Lender's Loan and
participation in the Letter of Credit Obligations, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
thereafter is recovered from such benefitted Lender, such purchase shall be
rescinded and the purchase price and benefit returned to the extent of such
recovery, but without interest. Each Lender so purchasing a portion of another
Lenders' Loan and participation in the Letter of Credit Obligations may exercise
all rights of payment (including rights of setoff) with respect to such portion
as fully as if such Lender were the direct holder of such portion.
. In addition to any rights and remedies of the Lenders provided by law, the
Lenders each shall have a security interest in any and all deposits of the
Borrowers and Guarantors (general or special, time or demand, provisional or
final) at any time held by any Lender or any Affiliate thereof, which security
interest shall secure the Obligations. Upon the occurrence and during the
continuance of any Event of Default subject to any applicable cure period, with
the consent of the Administrative Agent without prior notice to the Borrowers
and Guarantors, any notice being specifically waived by the Borrowers and
Guarantors to the fullest extent permitted by applicable law, each Lender may
set off and apply, subject to Section 14.13, against any indebtedness, whether
matured or unmatured, of the Borrowers and Guarantors to the Lenders, any amount
owing from any Lender or any Affiliate thereof to the Borrowers and Guarantors,
or at any time after, the occurrence of an Event of Default (and each Affiliate
of any Lender is irrevocably authorized to permit such setoff and application),
and the aforesaid right of setoff may be exercised by any Lender against any of
the Borrowers and Guarantors or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver or execution,
judgment, or attachment creditor of any of the Borrowers or Guarantors, or
against anyone else claiming through or against any of the Borrowers or
Guarantors or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or other attachment
creditor, notwithstanding the fact that such right of setoff shall not have been
exercised by any Lender prior to the making, filing or issuance, or service upon
any Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Lender promptly shall
notify the Borrowers and Guarantors and the Administrative Agent after any such
setoff and application made by any Lender; provided, however, that failure to
give such notice shall not affect the validity of such setoff and application.
14.15. Other Accommodations to the Borrowers and Guarantors; No Rights By
Virtue of Each Lender (including the Administrative Agent) may, without notice
to or consent by any other Lender, unless otherwise prohibited by the terms of
this Agreement, make or participate in loans, extensions of credit or other
financial accommodations to or for the benefit of any Borrower or Guarantor on
any terms that it deems desirable, and engage in other business transactions, in
the same manner as if this Agreement were not in existence, all without
limiting, waiving or otherwise impairing any rights of such Lender or any other
Lender under this Agreement. Without limiting the generality of the foregoing,
the Lenders acknowledge and agree that unless otherwise prohibited by the terms
of this Agreement, so long as a Lender acts in good faith and the other Lenders'
interests in the Obligations are not impaired thereby, (i) such Lender may be
preferred or secured in any manner that it deems advisable with respect to such
other loans, extensions of credit, financial accommodations and transactions,
(ii) such Lender shall be under no obligation to collect or attempt to collect
any payments in respect of the Obligations in preference to the collection or
enforcement of any other borrowings or obligations of such Borrower or Guarantor
to such Lender, and (iii) any amounts collected by such Lender from such
Borrower or Guarantor that are not expressly designated (or reasonably
determinable to be intended) as being in payment of the Obligations may be
applied to any of the obligations of such Person to such Lender in any manner
deemed appropriate by such Lender.
. All representations and warranties of each Borrower and Guarantor set forth in
this Agreement, the Notes and the other Loan Documents and in any other
certificate, opinion or other statement provided at any time by or on behalf of
each Borrower and Guarantor in connection herewith shall survive the execution
of the delivery of this Agreement, the Notes and the other Loan Documents, the
purchase and sale of the Notes hereunder and the payment or other satisfaction
of the Obligations.
. None of the Administrative Agent or the Lenders shall be deemed partners
or joint venturers with any Borrower or Guarantor or any Affiliate thereof in
making this Agreement or by any action taken hereunder. This Section 14.18 shall
survive termination of this Agreement.
. Any documents, schedules, invoices or other papers delivered to the
Administrative Agent or the Lenders at their option may be destroyed or
otherwise disposed of by them six (6) months after they are delivered to or
received by them, unless the Borrowers and Guarantors request, in writing, the
return of such documents, schedules, invoices or other papers and makes
reasonably acceptable arrangements, at the Borrowers' and Guarantors' expense,
for their return.
. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same document. This Agreement shall become effective when (a) the
Administrative Agent shall have received counterparts executed by the Borrowers,
Guarantors, the Lenders and the Administrative Agent, or (b) in the case of any
Lender, the Administrative Agent shall have received telecopied notice from such
Lender that it has executed a counterpart thereof and forwarded the same to the
Administrative Agent by first class, registered or certified mail as set forth
in Section 14.1. A set of the copies of this Agreement or counterparts signed by
all of the parties shall be lodged with GFC, on behalf of itself, and the
Administrative Agent.
. It is the intention of the Borrowers, the Guarantors, and the Lenders to
conform strictly to all laws applicable to the Lenders that govern or limit the
interest and loan charges that may be charged in respect of the Obligations.
Anything in this Agreement, the Notes or any of the other Loan Documents to the
contrary notwithstanding, in no event whatsoever, whether by reason of
advancement of proceeds of the Loans or the Letters of Credit, acceleration of
the maturity of the unpaid balance of any of the Obligations or otherwise, shall
the interest and loan charges agreed to be paid to any of the Lenders for the
use of the money advanced or to be advanced hereunder exceed the maximum amounts
collectible by such Lender pursuant to applicable law. If for any reason
whatsoever the interest or loan charges paid or contracted to be paid by the
Borrowers to any of the Lenders in respect of the Loans shall exceed the maximum
amounts collectible under the law applicable to such Lender, then, in that
event, and notwithstanding anything to the contrary in this Agreement, the Notes
or any other Loan Document: (a) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such Lender
that is contracted for, taken, reserved, charged or received under this
Agreement, the Notes or any other Loan Document or otherwise in connection with
the Obligations under no circumstances shall exceed the maximum amounts allowed
by such applicable law, and any excess shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal amount
outstanding under this Agreement, the Notes and the other Loan Documents has
been or thereby would be paid in full, refunded to the Borrowers); and (b) in
the event that the maturity of any or all of the Obligations is accelerated by
reason of an election of the Lenders resulting from any Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest or loan charges under law
applicable to any Lender may never include more than the maximum amounts allowed
by the law applicable to such Lender, and any excess interest or loan charges
provided for in this Agreement or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited by such Lender on the principal amount of the Obligations (or, to
the extent the principal amount of the Obligations has been or thereby would be
paid in full, refunded by such Lender to the Borrowers). All sums paid or agreed
to be paid to the Lenders for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until payment
in full so that the rate or amount of interest and loan charges on account of
the Obligations will not exceed any applicable legal limitation. The right to
accelerate the maturity of the Obligations does not include the right to
accelerate the maturity of any interest or loan charges not otherwise accrued on
the date of such acceleration, and the Lenders do not intend to charge or
collect any unearned interest or loan charges in the event of any such
acceleration.
. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
BORROWERS:
GOODY'S FAMILY CLOTHING, INC.,
a Tennessee corporation
By:/s/ Harry M. Call
Name: Harry M. Call
Title: President
Attest: /s/Regis J. Hebbeler
Name: Regis Hebbeler
Title: Assistant Secretary
GOODY'S MS, L.P.
By: TREBOR of TN, Inc., General Partner
By: /s/Harry M. Call
Name: Harry M. Call
Title: President.
GOODY'S IN, L.P.
By: TREBOR of TN, Inc., General Partner
By: /s/Harry M. Call
Name: Harry M. Call
Title: President.
<PAGE>
GUARANTORS:
SYDOOG, INC., a Delaware corporation
By: /s/Francis B. Jacobs II
Name: Francis B. Jacobs II
Title: President.
Attest: /s/Gordon W. Stewart
Name: Gordon W. Stewart
Title: Secretary.
GOFAMCLO, INC., a Delaware corporation
By: /s/Francis B. Jacobs II
Name: Francis B. Jacobs II
Title: President.
Attest: /s/Gordon W. Stewart
Name: Gordon W. Stewart
Title: Secretary.
TREBOR OF TN, INC., a Tennessee corporation
By: /s/Harry M. Call
Name: Harry M. Call
Title: President.
Attest: /s/Regis J. Hebbeler
Name: Regis J. Hebbeler
Title: Secretary.
PAGES FOLLOW]ATURE
<PAGE>
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as a Lender and as
Administrative Agent
By:_/s/JamesA Atchley
Title: Vice President
Address: First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee 37929
Attn: James H. Atchley
Telecopy No. 615-971-2883
Initial Commitment: $ 20,000,000
Percentage: 20.00%
<PAGE>
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
FIRST AMERICAN NATIONAL BANK, as a Lender
By:/s/Eric V. Schwarzentraub
Title: Vice President
Address: 505 S. Gay Street, Mezzanine
Knoxville, Tennessee 37902
Attn: Eric V. Schwarzentraub
Telecopy No. 615-521-5352
Initial Commitment: $ 15,000,000
Percentage: 15.00%
<PAGE>
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
AMSOUTH BANK OF ALABAMA, as a Lender
By: Therese Sheehy
Title: Vice President_______________________
Address: 1900 5th Avenue North, 7th floor
Birmingham, Alabama 35203
Attn: Bob Dehaven
Telecopy No. 205-583-4436
Initial Commitment: $17,500,000
Percentage: 17.50%
<PAGE>
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
SOUTHTRUST BANK OF ALABAMA, N.A., as a
Lender
By:/s/James T. Chester, III
Title: Commercial Loan Officer
Address: 420 North 20th Street
Birmingham, Alabama 35203
Attn: James T. Chester, III
Telecopy No. 205-254-5022
Initial Commitment: $17,500,000
Percentage: 17.50%
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee November 1, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of FIRST UNION NATIONAL BANK OF TENNESSEE ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100THS DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated November 1, 1996, by and among Maker, First Tennessee Bank
National Association, a national banking association, as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Amended and Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1017890.02
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
FIRST UNION NATIONAL BANK OF TENNESSEE,
as a Lender
By:/s/J. Gregory Bowers
Title: Senior Vice President
Address: 150 Fourth Avenue North
First Union Tower, 2nd Floor
Nashville, Tennessee 37219
Attn: Mr. Timothy B. Fouts
Telecopy No. 615-251-0894
Initial Commitment: $17,500,000
Percentage: 17.50%
<PAGE>
[Lender's Signature Page to $100,000,000
Amended and Restated Credit Agreement dated October 31, 1996]
WACHOVIA BANK OF GEORGIA, N.A., as a Lender
By:/s/ John B. Tibe
Title: Assistant Vice President
Address: 191 Peachtree Street, NE, 29th floor
Atlanta, Georgia 30303
Attn: John Tibe
Telecopy No. 404-332-5016
Initial Commitment: $12,500,000
Percentage: 12.50%
<PAGE>
SCHEDULES AND EXHIBITS
Schedules
Schedule 7.6 Pending Litigation
Schedule 7.8 Capitalization
Schedule 7.16A Indebtedness
Schedule 7.16B Contingent Obligations
Schedule 7.17A Business Locations
Schedule 7.17B Trade Names
Schedule 7.22 Material Adverse Change
Schedule 7.23 Employment Agreements and Executive Compensation
Arrangements
Schedule 7.26 Material Contracts
<PAGE>
Exhibits
Exhibit 2.2.4 Form of Notice of Borrowing
Exhibit 2.3.2 Form of Letter of Credit Request
Exhibit 2.7.2 Form of Notice of Conversion/Continuation
Exhibit 2.8 Form of Note
Exhibit 4.1A Form of Pledge and Security Agreement
Exhibit 4.1B Form of License Agreement
Exhibit 4.1C Form of Master Supply Agreement
Exhibit 4.1D Form of Management Services Agreement
Exhibit 4.1E Form of Tax Sharing Agreement
Exhibit 6.1.1A Form of Opinion of Counsel to the Borrowers and
Guarantors
Exhibit 6.1.1B Form of Borrowers' and Guarantors' Letter to Counsel
Requesting Opinion
Exhibit 13.2 Form of Assignment and Acceptance
<PAGE>
EXHIBIT 2.2.4
[FORM OF NOTICE OF BORROWING]
First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee 37929
Attention: James H. Atchley
Gentlemen:
Pursuant to that certain Amended and Restated Credit Agreement dated as
of November 1, 1996, among Goody's Family Clothing, Inc., a Tennessee
corporation, Goody's MS, L.P., a Tennessee limited partnership, and Goody's IN,
L.P., a Tennessee limited partnership (the "Borrowers"), the several guarantors
who are or become parties thereto, the several lenders who are or become parties
thereto (the "Lenders") and First Tennessee Bank National Association, as
administrative agent for the Lenders (the "Administrative Agent") (the "Credit
Agreement"; capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Credit Agreement), [notice is hereby given of
the Borrowers'] [the Borrowers hereby confirm their prior telephonic] request to
borrow on __________________ __, 19__ from the Lenders on a pro rata basis
$____________ as [Base Rate] [LIBOR] Loans (the "Loans"). [The initial Interest
Period for such LIBOR Loans is requested to be a _____________ month period.]
The proceeds of such Loans are to be deposited in or wired to ___________'s
[specify Borrower to receive loans] account #____________ at
_____________________________________________________ Bank.
The undersigned officers of the Borrowers hereby certify that (1) all
of the conditions to the making of the foregoing Loans set forth in Section 6.2
of the Credit Agreement have been satisfied, and (2) the foregoing Loans are
permitted by and will not violate any provision or requirement of the Credit
Agreement, including those set forth in Section 2.2.1 thereof.
DATED: __________________ __, 19__.
GOODY'S FAMILY CLOTHING, INC.
By:________________________________
Title: ______________________________
GOODY'S MS, L.P.
BY: TREBOR of TN, Inc.
General Partner
By: __________________________
Title:_________________________
GOODY'S IN, L.P.
BY: TREBOR of TN, Inc.
General Partner
By:___________________________
Title:__________________________
1009040.03
<PAGE>
EXHIBIT 2.3.2
FORM LETTER OF CREDIT REQUEST
No._________________________1 Dated_____________________2
To:________________________________________3, in its capacity as an Issuing Bank
under the Amended and Restated Credit Agreement dated as of November 1, 1996 (as
amended, restated, supplemented, replaced or otherwise modified from time to
time, the "Agreement"; the terms defined therein are used herein as therein
defined), among Goody's Family Clothing, Inc., Goody's MS, L.P. and Goody's IN,
L.P. (the "Borrowers"), the Guarantors party thereto, the Lenders party thereto
and First Tennessee Bank National Association, as Administrative Agent
Ladies and Gentlemen:
We hereby request that you [issue a [Standby] [Commercial] Letter of
Credit in favor of ________________________________4 on
____________________________5, which shall have an aggregate stated amount of
$___________________6 and a stated termination date of _________________7]
[extend the expiration date of the Issuing Bank's existing Letter of Credit No.
__________8 in the stated amount of $__________ to ________________, ____9.]
[The text of the Letter of Credit requested hereby is attached hereto.]
The undersigned officers of the Borrowers hereby certify that (1) the
[issuance/extension] of the foregoing Letter of Credit is permitted by, and will
not violate, the provisions or requirements of the Credit Agreement, including
those set forth in Section 2.3.1 thereof, and (2) all of the conditions to the
[issuance/extension] of the foregoing Letter of Credit in the Credit Agreement
(including those set forth in Section 6.2 thereof) have been satisfied.
GOODY'S FAMILY CLOTHING, INC.
By:________________________________
Title: ____________________________
GOODY'S MS, L.P.
BY: TREBOR of TN, Inc.
By: ___________________________
Title:__________________________
GOODY'S IN, L.P.
BY: TREBOR of TN, Inc.
By: ____________________________
Title:___________________________
1009041.03
<PAGE>
EXHIBIT 2.7.2
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee 37929
Attention: James H. Atchley
Gentlemen:
Pursuant to that certain Amended and Restated Credit Agreement dated as
of November 1, 1996 (the "Credit Agreement") among Goody's Family Clothing,
Inc., a Tennessee corporation Goody's MS, L.P., a Tennessee limited partnership,
and Goody's IN, L.P., a Tennessee limited partnership (the "Borrowers"), the
several guarantors who are or become parties thereto, the several lenders who
are or become parties thereto (the "Lenders") and First Tennessee Bank National
Association, as administrative agent for the Lenders (the "Administrative
Agent") [notice is hereby given of the Borrowers'] [the Borrowers hereby confirm
their prior telephonic] request to [convert $______________ in principal amount
of Base Rate Loans to LIBOR Loans on __________________ __, 19__.] [continue as
LIBOR Loans $_____________ in principal amount of presently outstanding LIBOR
Loans with an Interest Period expiring on __________________ __, 19__.] The
Interest Period for such [converted] [continued] LIBOR Loans is requested to be
a ____________ month period.
The undersigned officers of the Borrowers hereby certify that the
[conversion] [continuation] set forth above is permitted by and will not violate
the provisions or requirements of the Credit Agreement, including those set
forth in Sections 2.7.1 and 2.14.1 thereof.
DATED: __________________ ___, 19__.
GOODY'S FAMILY CLOTHING, INC.
By:________________________________
Title: ______________________________
<PAGE>
GOODY'S MS, L.P.
BY: TREBOR of TN, Inc.
General Partner
By: _________________________
Title:________________________
GOODY'S IN, L.P.
BY: TREBOR of TN, Inc.
General Partner
By: _________________________
Title:________________________
<PAGE>
EXHIBIT 4.1A
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of
October 31, 1996, is made and entered into by GOODY'S FAMILY CLOTHING, INC., a
Tennessee corporation (the "Pledgor"), in favor of FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, a national banking association (the "Administrative Agent"), as
administrative agent for the Lenders under the Credit Agreement (as hereinafter
defined).
RECITALS:
A. Pursuant to an Amended and Restated Credit Agreement of even date
herewith, among Pledgor, the Lenders listed therein and the Administrative Agent
(as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time, the "Credit Agreement"), the Lenders will make Loans
to the Borrowers and issue (with the exception of Wachovia Bank of Georgia,
N.A.) Letters of Credit for the account of the Borrowers, all as more
specifically described in the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings assigned to them in the Credit Agreement, as the
context may require.
C. It is a condition precedent to the obligations of the Lenders to make
the Loans and issue (with the exception of Wachovia Bank of Georgia, N.A.) the
Letters of Credit under the Credit Agreement that Pledgor execute and deliver
this Agreement to the Administrative Agent.
D. Pledgor desires to execute this Agreement to satisfy the condition
described in the preceding paragraph.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and in order to insure
the Borrowers' compliance with and to induce the Lenders to extend credit under
the Credit Agreement, and in consideration of the benefits accruing to Pledgor,
the receipt and sufficiency of all of which are hereby acknowledged, Pledgor
hereby makes the following representations and warranties to the Administrative
Agent and hereby covenants and agrees with the Administrative Agent, all for the
benefit of the Lenders and the Administrative Agent as provided in the Credit
Agreement, as follows:
SECTION 1. Security for Obligations, Etc. This Agreement is for the
benefit of the Administrative Agent and the Lenders to secure the payment and
performance in full when due, whether at stated maturity, by acceleration,
mandatory prepayment, declaration or otherwise, of all the Obligations of the
Borrowers and the Guaranteed Obligations of the Guarantors as described and
defined in the Credit Agreement (the Obligations and the Guaranteed Obligations
being collectively referred to herein as the "Secured Obligations"); subject,
however, to the proviso that the liability of each Guarantor under this
Agreement, the Credit Agreement, the Notes and the other Loan Documents shall
never exceed its Maximum Guaranty Liability.
SECTION 2. Definition of Securities. As used herein, the term
"Securities" shall mean all of the issued and outstanding shares of every class
of capital stock of SYDOOG, TREBOR and GOFAMCLO and each corporate Subsidiary of
Pledgor that is hereafter acquired or formed by Pledgor and hereafter made
subject to the pledge and security interest of this Agreement (collectively, the
"Pledged Stock"). Pledgor represents and warrants that on the date hereof (a)
the Pledged Stock consists of the number and type of shares of the common stock
of the Subsidiaries as described in Annex I attached hereto, and (b) Pledgor is
the holder of record and sole beneficial owner of the Pledged Stock as set forth
on Annex I; and (c) except as specifically set forth in Annex I, the Pledged
Stock constitutes 100% of the issued and outstanding capital stock of each such
Subsidiary.
SECTION 3. Pledge of Securities, Assignment of Certain Agreements, Etc.
SECTION 3.1. Pledge. To secure the payment and performance of
the Secured Obligations and for the purposes set forth in Section 1, Pledgor
hereby pledges, assigns, transfers, hypothecates, sets over and delivers to the
Administrative Agent, and grants to the Administrative Agent a security interest
in, all Pledgor's right, title and interest in and to the Securities, whether
now or hereafter acquired, (including without limitation those Securities
described on Annex I, as the same are amended or supplemented from time to
time), together with (a) any and all dividends, cash, certificates, instruments,
additional securities or other property from time to time received, receivable,
distributed or distributable in respect of, in exchange for, or in substitution
for any and all such Securities, and (b) all proceeds of any of the foregoing
(the foregoing and all such proceeds being referred to herein collectively as
the "Collateral");
TO HAVE AND TO HOLD the Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Administrative Agent, its successors and assigns; subject, however, to
the terms, covenants and conditions set forth in this Agreement.
In furtherance of the foregoing, Pledgor hereby delivers to the
Administrative Agent the certificates representing the Pledged Stock,
accompanied by stock powers and proxies, duly executed in blank by Pledgor.
SECTION 3.2. Subsequently-Acquired Securities. If at any time or from
time to time after the date hereof Pledgor shall acquire any additional
Securities (by purchase, stock dividend, other distribution or otherwise) or
Pledgor shall possess any additional Securities by virtue of possessing capital
stock of a Person that becomes a Subsidiary, Pledgor will forthwith deposit such
Securities with the Administrative Agent in pledge hereunder and deliver to the
Administrative Agent all certificates or instruments therefor, endorsed in blank
by Pledgor and accompanied by stock powers and proxies duly executed in blank by
Pledgor, and will promptly thereafter deliver to the Administrative Agent a
certificate (which shall be deemed to supplement Annex I attached hereto)
executed by an authorized officer of Pledgor describing such Securities and
certifying that the same have been duly delivered to the Administrative Agent in
pledge hereunder and that Administrative Agent has a first-priority perfected
security interest therein pursuant to this Agreement.
SECTION 3.3. Additional Subsidiaries. Simultaneously with the
acquisition or creation by Pledgor of any corporate Subsidiary subsequent to the
date hereof, Pledgor shall pledge and deliver to the Administrative Agent and
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in all of the issued and outstanding shares of every class of capital
stock of such Subsidiary and shall enter into an amendment of this Agreement to
pledge such securities pursuant to the terms of this Agreement.
SECTION 4. Appointment of Sub-Agents; Endorsements, Etc. The
Administrative Agent shall upon notice to the Pledgor have the right to appoint
one or more sub-agents for the purpose of retaining physical possession of the
Securities, which may be held (if applicable and in the discretion of the
Administrative Agent) in the name of Pledgor, endorsed or assigned in blank or
in favor of the Administrative Agent or any nominee or nominees of the
Administrative Agent appointed by the Administrative Agent.
SECTION 5. Voting, Etc. Unless and until a Default shall have occurred
and be continuing, Pledgor shall be entitled to vote any and all of its Pledged
Stock and to give consents, waivers or ratifications in respect thereof;
provided that no vote shall be cast or any consent, waiver or ratification given
or any action taken that would violate or be inconsistent with any of the terms
of this Agreement, the Credit Agreement or the other Loan Documents. All rights
of Pledgor to vote and to give consents, waivers and ratifications shall cease
in case a Default shall occur and be continuing, and Section 7 hereof shall
become applicable.
SECTION 6. Dividends and Other Distributions. Unless a Default shall have
occurred and be continuing, all cash dividends payable in respect of the
Securities shall be paid to Pledgor. The Administrative Agent shall be entitled
to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or other securities and, after the
occurrence and during the continuance of a Default, all other property
(including cash) paid or distributed in respect of the Securities by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(b) all other or additional stock or other securities and, after the
occurrence and during the continuance of a Default, all other property
(including cash) that may be paid or distributed in respect of the Securities by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization, or any bankruptcy or similar
reorganization, or any other disposition of Collateral.
SECTION 7. Remedies in Case of Event of Default. If an Event of Default
shall have occurred and be continuing, the Administrative Agent shall be
entitled to exercise all of its rights, powers and remedies (whether vested in
it by this Agreement, the Credit Agreement or the other Loan Documents or by
law, including all rights and remedies of a secured party of a debtor in default
under the Uniform Commercial Code (the "U.C.C.") in effect in any relevant
jurisdiction at that time, for the protection, preservation and enforcement of
its rights in respect of the Collateral, and to the extent permitted by
applicable law the Administrative Agent shall be entitled, without limitation,
to exercise the following rights, which Pledgor hereby agrees to be commercially
reasonable:
(a) The Administrative Agent shall be entitled to receive all amounts
payable in respect of the Collateral otherwise payable under Section 6 to
Pledgor.
(b) The Administrative Agent shall be entitled to transfer all or any
part of the Collateral into the Administrative Agent's name or the name of its
nominee or nominees.
(c) The Administrative Agent shall be entitled to vote all or any part
of the Securities (whether or not transferred into the name of the
Administrative Agent) and give all consents, waivers and ratifications in
respect of the Securities and otherwise act with respect thereto as though it
were the sole beneficial owner thereof.
(d) The Administrative Agent shall be entitled at any time or from time
to time to sell, assign and deliver, or grant options to purchase, all or any
part of the Collateral or any interest therein, at any public or private sale at
any exchange or broker's board or at any of the Administrative Agent's offices
or elsewhere, without demand for performance, advertisement or notice of
intention to sell or of the time or place of sale or adjournment thereof (all of
which are hereby expressly and irrevocably waived by Pledgor), for cash, on
credit or for other property, for immediate or future delivery, without any
assumption of credit risk, and for such price or prices and on such terms as the
Administrative Agent in its reasonable discretion may determine. Pledgor agrees
that to the extent that notice of sale shall be required by law that at least
ten (10) days' notice to Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of whether notice of sale has been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and any such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, to marshalling the
Collateral and any other security for the Secured Obligations or otherwise. At
any such sale, unless prohibited by applicable law, the Administrative Agent may
bid for and purchase all or any part of the Collateral so sold free from any
such right or equity of redemption. The Administrative Agent shall not be liable
for failure to collect or realize upon any or all of the Collateral or for any
delay in so doing nor shall the Administrative Agent or any Lender be under any
obligation to take any action whatsoever with regard thereto.
(e) The Administrative Agent shall be entitled to settle, adjust,
compromise and arrange all accounts, controversies, questions, claims and
demands whatsoever in relation to all or any part of the Collateral, in its
reasonable discretion.
(f) The Administrative Agent shall be entitled, in respect of the
Collateral, to execute all such contracts, agreements, deeds, documents and
instruments, to bring, defend and abandon all such actions, suits or
proceedings, and to take all other actions in relation to all or any part of the
Collateral as the Administrative Agent in its reasonable discretion may
determine.
(g) The Administrative Agent shall be entitled to appoint managers,
sub-agents, officers and servants for any of the purposes mentioned in the
foregoing provisions of this Section 7 and to dismiss the same, all as the
Administrative Agent in its reasonable discretion may determine.
(h) The Administrative Agent shall be entitled generally to take all
such other action as the Administrative Agent in its reasonable discretion may
determine as incidental or conducive to any of the matters or powers mentioned
in the foregoing provisions of this Section 7 and that the Administrative Agent
may or can do lawfully and to use the name of Pledgor for the purposes aforesaid
and in any proceedings arising therefrom.
SECTION 8. Remedies, Etc. Cumulative. Each right, power and remedy of
the Administrative Agent provided for in this Agreement, the Credit Agreement or
any of the other Loan Documents, or now or hereafter existing at law or in
equity or by statute or otherwise, shall be cumulative and concurrent and shall
be in addition to every other such right, power or remedy. The exercise or the
commencement of the exercise by the Administrative Agent of any one or more of
the rights, powers or remedies provided for in this Agreement, the Credit
Agreement or any of the other Loan Documents, or now or hereafter existing at
law or in equity or by statute or otherwise, shall not preclude the simultaneous
or later exercise by the Administrative Agent of all such other rights, powers
or remedies, and no failure or delay on the part of the Administrative Agent to
exercise any such right, power or remedy shall operate as a waiver thereof.
SECTION 9. Application of Proceeds. All moneys collected by the
Administrative Agent upon any sale or other disposition of the Collateral,
together with all other moneys received by the Administrative Agent hereunder
shall be applied as follows:
(a) first, to the payment of any and all expenses and fees (including
reasonable attorney's and paralegal's fees and expenses) actually incurred by
the Administrative Agent in obtaining, taking possession of, removing, storing
and disposing of the Collateral and any and all amounts incurred by the
Administrative Agent in connection therewith or owing to the Administrative
Agent hereunder;
(b) next, any surplus then remaining to the payment of the other
Secured Obligations in such order as required or permitted by the Credit
Agreement; and
(c) if all of the Commitments are then terminated under the Credit
Agreement, all Secured Obligations have been indefeasibly paid and performed in
full and no Obligations remain unpaid, outstanding or unperformed, any surplus
then remaining shall be paid to the Pledgor; subject, however, to the rights of
the holder of any then existing Lien encumbering same of which the
Administrative Agent has actual notice (without investigation);
it being understood that Pledgor shall, subject to Section 1 hereof and Article
5 of the Credit Agreement, remain liable to the extent of any deficiency between
the amount of the proceeds of the Collateral and the aggregate amount of the
sums referred to in clauses (a) and (b) of this Section 9.
SECTION 10. Purchases of Collateral. Upon any sale of any of the
Collateral hereunder (whether by virtue of the power(s) of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Administrative
Agent or the officer or agent making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Administrative Agent or such officer or be
answerable in any way for the misapplication or nonapplication thereof.
SECTION 11. Further Assurances. Pledgor agrees to do such further acts
and things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments, as the Administrative Agent at any time reasonably
may request in connection with the administration and enforcement of this
Agreement or relative to the Collateral or any part thereof, or to effectuate
the purposes hereof or in order better to assure and confirm unto the
Administrative Agent its rights, powers and remedies hereunder. Without limiting
the foregoing, Pledgor agrees that it will join with the Administrative Agent in
executing and, at its own expense, file and refile under the U.C.C. such
financing statements, continuation statements and other documents in such
offices as the Administrative Agent may deem necessary or appropriate and
wherever required or permitted by law in order to perfect and preserve the
Administrative Agent's security interest in the Collateral, and Pledgor hereby
authorizes the Administrative Agent to file financing statements and amendments
thereto relative to all or any part of the Collateral without the signature of
Pledgor where permitted by law.
SECTION 12. Responsibilities of the Administrative Agent.
(a) The Administrative Agent will hold all items of the
Collateral at any time received under this Agreement in accordance with, and
subject to, the provisions of this Agreement. It is expressly understood and
agreed that the obligations of the Administrative Agent as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and, to the extent not specifically waived hereunder, as required
under applicable law.
(b) The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, it being understood that the
Administrative Agent shall have no responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, regardless of whether the
Administrative Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
SECTION 13. Transfer by Pledgor. Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as otherwise
expressly permitted by the Credit Agreement).
SECTION 14. Representations and Warranties. Pledgor hereby represents
and warrants that (a) it is the legal, record and beneficial owner of, and has
good and marketable title to, the Securities designated on Annex I as its
property, subject to no Lien or restriction whatsoever, except the pledges,
liens and security interests created by this Agreement and the restrictions
noted on the certificates representing the Pledged Stock; (b) it has full power,
authority and legal right to pledge and assign its Collateral, to grant a
security interest in its Collateral and to enter into and perform its
obligations under this Agreement; (c) Pledgor has obtained all requisite
consents required to be obtained from any other party (including, without
limitation, any stockholder or creditor of Pledgor or any of its Subsidiaries)
and no order, consent, license, permit, approval, validation or authorization
of, exemption by, notice to or registration, recording, filing or declaration
with, any governmental or public body or authority is required to be obtained by
Pledgor in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby,
including, without limitation, the exercise by the Administrative Agent of the
voting or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement (except as may he required in
connection with the disposition of the Collateral by laws affecting the offering
and sale of securities generally); (d) all shares of Pledged Stock have been
duly and validly issued, are fully paid and nonassessable; and (e) the pledge,
assignment and delivery of the Collateral pursuant to this Agreement creates a
valid and perfected first priority security interest in the Collateral including
all proceeds thereof superior to and prior to the rights of all other Persons
therein (as provided in the U.C.C.).
SECTION 15. Covenants of Pledgor. Pledgor covenants and agrees that (a)
Pledgor will defend the Administrative Agent's right, title and security
interest in and to the Collateral against the claims and demands of all Persons
whomever; (b) Pledgor will have like title to and right to pledge any other
property at any time hereafter constituting Collateral and likewise will defend
the right thereto and security interest therein of the Administrative Agent; and
(c) Pledgor will not, with respect to any Collateral, enter into any shareholder
agreements, voting agreements, voting trusts, trust deeds, irrevocable proxies
or any other similar agreements or instruments.
SECTION 16. Pledgor's Obligations Absolute, Etc. The obligations of
Pledgor under this Agreement shall be absolute and unconditional in accordance
with the terms hereof and shall remain in full force and effect without regard
to, and shall not be released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever, including, without
limitation: (a) any change in the time, place or manner of payment of, or in any
other term of, all or any of the Secured Obligations, any waiver, indulgence,
renewal, extension, amendment or modification of or addition, consent or
supplement to or deletion from or any other action or inaction under or in
respect of this Agreement, the Credit Agreement or any of the other Loan
Documents or any other instrument or agreement referred to therein or any
assignment or transfer of any thereof; (b) any lack of validity or
enforceability of this Agreement, the Credit Agreement or any of the other Loan
Documents or any other documents, instruments or agreement referred to therein
or any assignment or transfer of any thereof; (c) any limitation on any party's
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; (d) any furnishing of any additional security to
the Administrative Agent or its assignees or any acceptance thereof or any
release of any security by the Administrative Agent or its assignees; (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, regardless of whether Pledgor shall have notice or
knowledge of any of the foregoing; (f) any exchange, release or nonperfection of
any Lien on any other collateral, or any release or amendment or waiver of or
consent to departure from any guarantee or security, for all or any of the
Secured Obligations; or (g) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, Pledgor.
SECTION 17. Registration, Etc. If at any time when the Administrative
Agent shall determine to exercise its right to sell all or any part of the
Securities pursuant to Section 7, such Securities or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Administrative Agent may, in its
reasonable discretion, sell such Securities or part thereof by private sale in
such manner and under such circumstances as the Administrative Agent may deem
necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any such
event the Administrative Agent, in its reasonable discretion (a) may proceed to
make such private sale notwithstanding that a registration statement for the
purpose of registering such Securities or part thereof shall not have been filed
under such Securities Act, (b) may approach and negotiate with a single possible
purchaser to effect such sale, and (c) may restrict such sale to a purchaser who
will represent and agree that such purchaser is purchasing for its own account,
for investment and not with a view to the distribution or sale of such
Securities or part thereof. In the event of any such sale, the Administrative
Agent shall incur no responsibility or liability for selling all or any part of
the Securities at a price the Administrative Agent, in its discretion, deems
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid.
SECTION 18. Notices, Etc. All notices and other communications hereunder
shall be given to Pledgor and the Administrative Agent at the addresses and in
the manner specified in the Credit Agreement.
SECTION 19. Power of Attorney. Pledgor hereby absolutely and
irrevocably makes, constitutes and appoints the Administrative Agent Pledgor's
true and lawful agent and attorney-in-fact, with full power of substitution, in
the name of Pledgor, upon the occurrence and during the continuance of an Event
of Default: (a) to execute and do all such assurances, acts and things that
Pledgor should do but has failed to do under the covenants and provisions
contained in this Agreement; (b) to take any and all such action as the
Administrative Agent or any of its sub-agents or attorneys may, in its or their
discretion, reasonably determine to be necessary or advisable for the purpose of
maintaining, preserving or protecting the security constituted by this Agreement
or any of the rights, remedies, powers or privileges of the Administrative Agent
under this Agreement; and (c) generally, in the name of Pledgor, to exercise all
or any of the rights, powers, authorities and discretion conferred on or
reserved to the Administrative Agent by or pursuant to this Agreement, and
(without prejudice to the generality of any of the foregoing) to execute and
deliver or otherwise perfect any deed, financing statement, assurance,
agreement, instrument or act as the Administrative Agent may deem proper in or
for the purpose of exercising any of such powers, authorities or discretion.
Pledgor hereby ratifies and confirms, and hereby agrees to ratify and confirm,
whatever lawful and reasonable acts the Administrative Agent or any of the
Administrative Agent's sub-agents or attorneys shall do or purport to do in the
exercise of this power of attorney, which power of attorney, being given for
security, is irrevocable for the term of this Agreement.
SECTION 20. Termination, Release. After all of the Commitments have
been terminated under the Credit Agreement, all Secured Obligations have been
indefeasibly paid and performed in full and no Obligations remain unpaid,
outstanding or unperformed, this Agreement shall terminate, and the
Administrative Agent will execute and deliver to Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Administrative Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
proceeds at the time held by the Administrative Agent hereunder.
SECTION 21. Miscellaneous. Pledgor agrees with the Administrative Agent
that each of the obligations and liabilities of Pledgor to the Administrative
Agent under this Agreement may be enforced against Pledgor without the necessity
of joining any other Person as a party. This Agreement shall create a continuing
security interest in the Collateral and shall be binding upon the respective
successors and assigns of Pledgor and the Administrative Agent, and shall inure
to the benefit of and be enforceable by the Administrative Agent and its
successors and assigns. Without limiting the generality of the foregoing
sentence, any Lender or the Administrative Agent may assign or otherwise
transfer any right, title or interest under the Credit Agreement, the Notes, the
Letters of Credit and the other Loan Documents to any other Person in accordance
with the provisions of the Credit Agreement, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the
Administrative Agent herein. This Agreement may be amended, changed or waived
only as provided in Section 14.3 of each of the Credit Agreement and may be
terminated only as provided in Section 20 hereof. Unless otherwise defined
herein or in the Credit Agreement, terms defined in Article 9 of the U.C.C. in
the State of Tennessee are used herein as therein defined. The headings in this
Agreement are for convenience of reference only and shall not limit or define
the meaning of the substantive provisions hereof. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement, which shall
remain binding on all parties hereto.
SECTION 22. GOVERNING LAW. UNLESS OTHERWISE EXPRESSLY SET FORTH HEREIN,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF, EXCEPT TO THE EXTENT THAT THE LAWS OF A
PARTICULAR JURISDICTION GOVERN THE CREATION, PERFECTION AND ENFORCEMENT OF LIENS
ON AND SECURITY INTERESTS IN THE COLLATERAL.
SECTION 23. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH LENDER
AND PLEDGOR HEREBY IRREVOCABLY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT, THE CREDIT AGREEMENT, THE NOTES OR THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. The scope of this waiver is intended
to be all-encompassing with respect to any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each of the parties hereto (i)
acknowledges that this waiver is a material inducement for the parties to the
Loan Documents to enter into a business relationship, that the parties to the
Loan Documents have already relied on this waiver in entering into same and the
transactions that are the subject thereof, and that they will continue to rely
on this waiver in their related future dealings, and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, modifications, supplements, extensions, renewals and/or
replacements of this Agreement. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
SECTION 24. Conflicts. In the event of any conflict between the Credit
Agreement and this Agreement, the Credit Agreement shall control.
SECTION 25. FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, Pledgor and the Administrative Agent have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
GOODY'S FAMILY CLOTHING, INC.,
as Pledgor
By:_________________________________
Title:______________________________
Attest:
Title:______________________________
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION,
as Administrative Agent
By
Title:______________________________
1021251.02
<PAGE>
ANNEX I
(to Pledge Agreement)
Capital
Authorized Stock Issued
Name Capital Stock and Outstanding
<PAGE>
EXHIBIT 13.2
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance"),
dated as of the date set forth in Item 1 of Schedule I hereto, is made and
entered into among the Transferor Lender set forth in Item 2 of Schedule I
hereto (the "Transferor Lender"), each Purchasing Lender set forth in Item 3 of
Schedule I hereto (each, a "Purchasing Lender"), and First Tennessee Bank
National Association as administrative agent for the several lenders (the
"Lenders") who are or become parties to the Credit Agreement (as hereinafter
defined) (in such capacity, the "Administrative Agent").
RECITALS:
This Assignment and Acceptance is being executed and delivered in
accordance with Section 13.2 of the Amended and Restated Credit Agreement dated
as of November 1, 1996, among Goody's Family Clothing, Inc., a Tennessee
corporation, Goody's MS, L.P., a Tennessee limited partnership, and Goody's IN,
L.P., a Tennessee limited partnership (the "Borrowers"), the Guarantors, the
Administrative Agent and the Lenders (as the same may be amended, restated,
supplemented, replaced or otherwise modified from time to time, the "Credit
Agreement"; except as otherwise defined herein, terms used herein and defined in
the Credit Agreement shall be used herein as so defined).
Each Purchasing Lender (if it is not already a Lender party to the
Credit Agreement) wishes to become a Lender party to the Credit Agreement.
The Transferor Lender is selling and assigning to each Purchasing
Lender certain rights, obligations, Loans, and Commitments under the Credit
Agreement, the Notes, and the other Loan Documents.
AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION From and after the Transfer Effective Date set forth in Item 4
of Schedule I hereto (the "Transfer Effective Date"), each Purchasing Lender
shall be a Lender party to the Credit Agreement for all purposes thereof.
SECTION On the Transfer Effective Date, each Purchasing Lender shall
pay to the Transferor Lender, in immediately available funds, an amount equal to
the purchase price, as agreed between the Transferor Lender and such Purchasing
Lender (the "Purchase Price"), for the percentage set forth in Item 5 of
Schedule I hereto (such Purchasing Lender's "Purchased Percentage") of (i) the
Transferor Lender's Commitment and (ii) the outstanding principal amount of the
Loans and other amounts owing to the Transferor Lender under the Credit
Agreement, the Notes or the other Loan Documents.
On the Transfer Effective Date, each Purchasing Lender shall assume all
liability with respect to outstanding Letters of Credit issued by the Transferor
Lender under the Credit Agreement.
(c) As of the Transfer Effective Date, the Transferor Lender hereby
irrevocably sells, assigns and transfers to each Purchasing Lender, without
recourse, representation or warranty, and each Purchasing Lender hereby
irrevocably purchases, takes and assumes from the Transferor Lender such
Purchasing Lender's Purchased Percentage of (i) the Transferor Lender's
Commitment, (ii) the Loans outstanding as of the Transfer Effective Date held by
the Transferor Lender, and (iii) any other amounts owing as of the Transfer
Effective Date to the Transferor Lender under the Credit Agreement, the Notes or
the other Loan Documents.
SECTION From and after the Transfer Effective Date, principal,
interest, Credit Fees, other fees and other amounts that otherwise would be
payable to or for the account of the Transferor Lender pursuant to the Credit
Agreement, the Notes, and the other Loan Documents shall instead be payable to
or for the account of the Transferor Lender and the Purchasing Lenders, as the
case may be, in accordance with their respective percentages as set forth on
Schedule II hereto, whether such amounts have accrued prior to the Transfer
Effective Date or accrue subsequent to the Transfer Effective Date. The
Transferor Lender and the Purchasing Lenders shall make appropriate adjustments
in payments under, or with respect to, the Credit Agreement for periods prior to
the Transfer Effective Date directly between themselves.
SECTION The Note of each Borrower payable to the order of the
Transferor Lender (an "Exchanged Note") is being delivered to the Administrative
Agent concurrently with this Assignment and Acceptance. On or prior to the
Transfer Effective Date, each Borrower shall execute and deliver to the
Administrative Agent, in exchange for (but not in payment of) the Exchanged Note
(a) a new Note payable to the order of each Purchasing Lender in an amount equal
to its Percentage, as set forth on Schedule II hereto, of the Commitments, and
(b) if the Transferor Lender has retained a portion of the Commitments, a new
Note to the order of the Transferor Lender in an amount equal to its retained
Percentage of the Commitments, as set forth on Schedule II hereto. Such new
Notes shall be dated as of the date of the Credit Agreement and otherwise shall
be substantially in the form of the respective Note(s) replaced thereby. Each
Exchanged Note shall be returned by the Administrative Agent to such Borrower
marked "exchanged".
SECTION Concurrently with the execution and delivery hereof, the
Administrative Agent will, at the request of any Purchasing Lender but at the
expense of the Transferor Lender, provide to such Purchasing Lender (if it is
not already a Lender party to the Credit Agreement) photocopies or conformed
copies of all documents delivered to the Administrative Agent on the date of the
initial Loans under the Credit Agreement in satisfaction of the conditions
precedent set forth in the Credit Agreement.
SECTION Each of the parties to this Assignment and Acceptance agrees
that at any time and from time to time upon written request of any other party,
it will execute and deliver such further documents and do such further acts and
things as such other party reasonably may request in order to effect the
purposes of this Assignment and Acceptance.
SECTION By executing and delivering this Assignment and Acceptance, the
Transferor Lender and each Purchasing Lender confirm to and agree with each
other and with the Administrative Agent and the Lenders as follows: (a) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned hereby free and clear of any adverse claim, the
Transferor Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the Notes, or any other Loan Document or any other instrument or
document furnished pursuant thereto; (b) the Transferor Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or the performance or observance by, or
enforceability against the Borrowers of any of their obligations under the
Credit Agreement, the Notes, or any other Loan Document or any other instrument
or document furnished pursuant thereto; (c) each Purchasing Lender confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 7.5 of the Credit Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (d)
each Purchasing Lender will, independently and without reliance upon the
Administrative Agent, the Transferor Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (e) each Purchasing Lender appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, all in accordance with Article 12
of the Credit Agreement; and (f) each Purchasing Lender agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender, and (g) following the consummation of the
transactions contemplated by this Assignment and Acceptance, the Transferor
Lender and each Purchasing Lender shall be in compliance with Section 13.2 of
the Credit Agreement.
SECTION Schedule II hereto sets forth the revised Percentages of the
Transferor Lender and each Purchasing Lender as well as administrative
information with respect to each Purchasing Lender.
SECTION This Assignment and Acceptance shall be governed by and
construed and enforced in accordance with the laws of the State of Tennessee,
without reference to the conflicts or choice of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
[SCHEDULES I AND II FOLLOW]
<PAGE>
SCHEDULE I TO
ASSIGNMENT AND ACCEPTANCE
COMPLETION OF INFORMATION AND
SIGNATURES FOR ASSIGNMENT AND ACCEPTANCE
Item 1 Date of Assignment [Insert date of
and Acceptance: Assignment and
Acceptance]
Item 2 Transferor Lender: [Insert name of
Transferor Lender)
Item 3 Purchasing Lender(s): [Insert name(s) of
Purchasing Lender(s)]
Item 4 Transfer Effective (Insert Transfer Effective
Date: Date) [To be a date not
less than five business
days after date of Assign-
ment and Acceptance]
Item 5 Purchased [Insert Percentage of
Percentage: Transferor Lender's
Commitments to be sold)
Item 6 Signatures of Parties
to Assignment and
Acceptance: ___________________________,
as Transferor Lender
By:_________________________
Title:______________________
---------------------------,
as a Purchasing Lender
By:_________________________
Title:___________________
<PAGE>
CONSENTED TO AND ACKNOWLEDGED:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as Administrative Agent
By:____________________________
Title:______________________
ACCEPTED FOR RECORDATION
IN REGISTER:
GOODY'S FAMILY CLOTHING, INC.
By:____________________________
Title:______________________
GOODY'S MS, L.P.
By: TREBOR of TN, Inc.
General Partner
By:____________________________
Title:______________________
GOODY'S IN, L.P.
By: TREBOR of TN, Inc.
General Partner
By:____________________________
Title:______________________
<PAGE>
SCHEDULE II
TO
ASSIGNMENT AND ACCEPTANCE
LIST OF ADDRESSES
FOR NOTICES AND PERCENTAGES
[Name of Transferor Lender] Revised Percentage: ____%
[Name(s) of
Purchasing Lender(s)] New Percentage: ____%
Address(es) of Purchasing
Lender(s) for Notices
under Section 14.1 of
Credit Agreement:
=================================
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Attn:____________________________
Telecopy No.:____________________
1009177.03
<PAGE>
SCHEDULE 7.6
to
AMENDED and RESTATED
CREDIT AGREEMENT
Actions, suits, proceedings or other litigation described in Section 7.6:
1. The Internal Revenue Service audited Goody's Family Clothing, Inc.
("GFC") for the period February 1, 1990 through January 31, 1993.
Following the audit, the Service sent to GFC a notice of certain
adjustments resulting in additional taxes due of approximately
$200,000. GFC took exception to two of the adjustments--legal fees and
expenses for preparing operating leases and depreciation on certain
equipment. GFC has filed a formal protest as to those two adjustments.
GFC compromised this matter with the IRS and a closure letter has been
executed.
2. On November 24, 1993, a lawsuit was filed against GFC and certain
executive officers of GFC in the United States District Court for the Eastern
District of Tennessee, Northern Division, at Knoxville. The case is styled
Deborah Landes, on behalf of herself and all others similarly situated, vs.
Robert M.Goodfriend, Robert L. Jenkins, Donald A. VandenBerg, Harry M. Call,
and Goody's Family Clothing, Inc.
- ---------------------------------------------------------------------------
The class action complaint alleges that the price of common stock of GFC was
artificially inflated as a result of false and misleading statements concerning
GFC s liquidity and financial condition. The allegations related to a
transaction in which Mr. Goodfriend purchased from GFC at GFC s cost of $6.6
million an investment that GFC held in its portfolio, which had declined in
value and with respect to which GFC would incur a loss. Mr. Goodfriend tendered
a $6.6 million check to GFC as payment for the investments, which was held
uncashed by GFC for a number of months. The check was subsequently covered by
the proceeds of a personal loan to Mr. Goodfriend from a commercial bank. Upon
maturity of such personal loan, GFC paid the loan s $6.6 million principal
balance, together with interest in the amount of $69,869, and took another check
from Mr. Goodfriend in the amount of $6.6 million. This check was held by GFC
and remained uncashed and recorded in GFC s cash on hand accounts until October
1993. In October 1993, Mr. Goodfriend repaid the $6.6 million loan and related
interest of $447,000 calculated at a market rate of interest.
GFC and counsel for the plaintiffs have reached an agreement in
principle to settle this case. The proposed settlement was
preliminarily approved by the Court on April 6, 1995, and, under the
terms of the proposed settlement, GFC paid into escrow a sum of
$3,200,000 in full and final settlement of the plaintiffs claims for
damages. GFC s insurer reimbursed a sum of $1,300,000 to GFC under its
Directors and Officers Indemnification and Liability coverage. GFC has,
therefore, expensed the net amount of $1,900,000 as unusual items
relating to this lawsuit in fiscal 1994. This settlement was subject to
final court and class approval and certain other contingencies, and has
now been approved and effected.
3. GFC has filed an application with the U.S. Patent and Trademark Office
for registration of the trademark IVY CREW. The manufacturer of J.CREW clothing
has filed an opposition to the registration.
4. The Securities Exchange Commission has concluded an informal inquiry
regarding GFC s accounting treatment of the acquisition and sale of the
investment described in paragraph 2 above. GFC settled with the
Commission by agreeing to comply with Commission filing requirements.
<PAGE>
71314-1
71314-1
SCHEDULE 7.8
to
AMENDED and RESTATED
CREDIT AGREEMENT
Capitalization of Goody's Family Clothing, Inc. ("GFC") at May 3, 1995:
Authorized shares, 50,000,000 shares of common stock without par value and
2,000,000 shares of preferred stock $1.00 par value. Issued, 16,324,012 shares
of common stock, 200,000 shares of which are held in treasury. Series A Junior
Participating Preferred Stock was authorized by the former directors of GFC on
October 25, 1994; none was ever issued. The Series A Preferred Stock was
issuable in connection with the exercise of certain preferred stock purchase
rights distributed to the Shareholders on October 16, 1994 pursuant to a Share
Purchase Rights Plan. On March 28, 1995, the Board of Directors authorized the
redemption of such rights, prior to exercise, at a redemption price of $0.01 per
right payable on June 6, 1995 to Shareholders of record as of the Record Date
(May 3, 1995), and therefore under the terms of the plan no more rights may be
issued. The aggregate redemption price payable to Shareholders is approximately
$162,000. Stock options outstanding under various stock option plans which
provide for the issuance of common shares in accordance with the terms of the
plans, 1,079,421 shares.
At the annual meeting of GFC held on Wednesday, June 21, 1995, the shareholders
authorized the amendment of the charter of GFC to authorize 50,000,000 shares of
a new class of common stock designated as Class B Common Stock , increasing the
authorized shares of capital stock of GFC to 102,000,000 (100,000,000 shares of
common stock and 2,000,000 shares of preferred stock).
<PAGE>
71314-1
71314-1
SCHEDULE 7.16A
to
AMENDED and RESTATED
CREDIT AGREEMENT
Indebtedness of Goody's Family Clothing, Inc. described in Section 7.16:
Promissory Note dated January 23, 1991 to M.D. Goodfriend in the original
principal amount of $2,151,000.
<PAGE>
71314-1
71314-1
SCHEDULE 7.16B
to
AMENDED and RESTATED
CREDIT AGREEMENT
Contingent Obligations of Borrowers and Guarantors:
None
<PAGE>
71314-1
71314-1
SCHEDULE 7.17A
to
AMENDED and RESTATED
CREDIT AGREEMENT
Locations where Borrowers and Guarantors maintain their chief executive offices,
their principal places of business, an office, or any material financial
records:
Goody's Family Clothing, Inc.
400 Goody s Lane
Knoxville, Tennessee 37933-2000
Goody's MS, L.P.
400 Goody s Lane
Knoxville, Tennessee 37933-2000
Goody's IN, L.P.
400 Goody s Lane
Knoxville, Tennessee 37933-2000
TREBOR of TN, Inc.
400 Goody s Lane
Knoxville, Tennessee 37933-2000
SYDOOG, Inc.
913 North Market Street, Suite 817
Wilmington, Delaware 19801
GOFAMCLO, Inc.
913 North Market Street, Suite 817
Wilmington, Delaware 19801
<PAGE>
71314-1
71314-1
SCHEDULE 7.17B
to
AMENDED and RESTATED
CREDIT AGREEMENT
Each name under or by which Borrowers and Guarantors presently conduct their
business or has conducted its business since 1991:
Goody s
Goody s Family Clothing
Goody s Family Clothing, Inc.
Goody's MS, L.P.
Goody's IN, L.P.
TREBOR of TN, Inc.
SYDOOG, Inc.
GOFAMCLO, Inc.
<PAGE>
71314-1
71314-1
SCHEDULE 7.22
to
AMENDED and RESTATED
CREDIT AGREEMENT
Material adverse changes in properties business, results of operations,
management or financial condition of Borrowers and Guarantors since most recent
audited or unaudited financial statements provided to Lenders:
On January 5, 1995, GFC s Chairman, Robert M. Goodfriend, and Wendy E.
Goodfriend (his wife) reached an agreement with GFC s Board of Directors
concerning disputes as to the validity of Article XIII of GFC s Charter and
other management issues of GFC for which they filed a suit against GFC on
November 22, 1994 in the Chancery Court for Knox County in Knoxville, Tennessee.
As part of the settlement, GFC s Board of Directors adopted amendments to GFC s
Bylaws codifying and supplementing certain of GFC s corporate governance
practices. The settlement also placed certain restrictions on Mr. Goodfriend s
ability to purchase or sell GFC s Common Stock, or to initiate any action to
repeal, alter or amend GFC s Bylaws until the year 2000. The settlement also
provided that Mrs. Goodfriend could reinstate her individual complaint solely
for the purpose of obtaining declaratory relief with respect to the validity of
Article XIII (b), (c), (d) and (e) of GFC s Charter; this suit does not assert a
claim for monetary damages. On April 10, 1995, the court, with GFC's consent,
declared that subsections (b), (d) and (e) of Article XIII of GFC s Charter (but
not subsection (c)) violate Tennessee law and are therefore void.
There have been some changes in management of GFC which have been disclosed to
Lenders, but which GFC does not believe were material and adverse.
<PAGE>
12
13
3-1399
3-1399
SCHEDULE 7.23
to
AMENDED and RESTATED
CREDIT AGREEMENT
List of employment agreements and executive compensation arrangements described
in Section 7.23:
Robert M. Goodfriend
Carmen Monaco
David R. Mullins
Thomas R. Kelly, Jr.
Harry M. Call
Marcus H. Smith, Jr.
Edward R. Carlin
John Sullivan
Bob Whaley
John Payne
List of agreements regarding stock described in Section 7.23:
None
Goody s Family Clothing, Inc. ("GFC") Benefit Protection Trust Agreement. GFC
entered into such trust agreement with Bank South, N.A., as trustee, on November
15, 1994. Pursuant to this trust agreement, GFC established an irrevocable
grantor trust to, among other things, assist it in meeting its obligations to
pay certain severance payments to certain executives of GFC upon a Change of
Control (as defined in the trust agreement) in accordance with employment
agreements between GFC and each such executive. Upon establishment of the trust
in November 1994, GFC made an initial contribution to the trust of $10,000 and
provided an irrevocable letter of credit in the amount of $500,000. On or prior
to a Change of Control, GFC is obligated to contribute an amount equal to all
severance payments that are or may become due to covered executives as a result
of such Change of Control. Under the trust agreement, the Trustee shall hold and
invest any contribution by GFC as a single trust but shall maintain separate
accounts for each covered executive. Subject to certain notice requirements and
other conditions (in each case as more fully described in the trust agreement),
a covered executive shall become entitled to a distribution from the trust at
any time such executive is entitled to receive certain severance payments from
GFC as a result of a Change of Control in accordance with the employment
agreement between such executive and GFC. As a result of the Change of Control
that occurred on January 5, 1995, GFC contributed an additional $1,272,800 in
investment securities to the trust.
<PAGE>
SCHEDULE 7.26
to
AMENDED and RESTATEDCREDIT AGREEMENT
List of Material Contracts described in Section 7.26:
License Agreement dated June 14, 1993 between Goody's Family Clothing, Inc.
("GFC") and Tishkoff Enterprises, Inc./JBI, Inc. d/b/a Shoe Corporation of
America, as amended.
On January 5, 1995, GFC s Chairman, Robert M. Goodfriend, and Wendy E.
Goodfriend (his wife) reached an agreement with GFC s Board of Directors
concerning disputes as to the validity of Article XIII of GFC s Charter and
other management issues of GFC for which they filed a suit against GFC on
November 22, 1994 in the Chancery Court for Knox County in Knoxville, Tennessee.
As part of the settlement, GFC s Board of Directors adopted amendments to GFC s
Bylaws codifying and supplementing certain of GFC s corporate governance
practices. The settlement also placed certain restrictions on Mr. Goodfriend s
ability to purchase or sell GFC s Common Stock, or to initiate any action to
repeal, alter or amend GFC s Bylaws until the year 2000. The settlement also
provided that Mrs. Goodfriend could reinstate her individual complaint solely
for the purpose of obtaining declaratory relief with respect to the validity of
Article XIII (b), (c), (d) and (e) of GFC s Charter; this suit does not assert a
claim for monetary damages. On April 10, 1995, the court, with Goody s consent,
declared that subsections (b), (d) and (e) of Article XIII of GFC s Charter (but
not subsection (c)) violate Tennessee law and are therefore void.
Construction contract between GFC and Centex Forcum Lannom, Inc. for the
expansion of GFC s facility in Knoxville, Tennessee in the amount of
approximately $6,300,000, which has been substantially performed by both parties
(including payment by GFC to the contractor of approximately $6,000,000).
Master Service Agreement (for security and surveillance) between GFC and Knogo
North America, Inc., dated April 9, 1996.
Master Service Agreement (for energy management services) between GFC and
Entergy Integrated Solutions, Inc. dated as of April 9, 1996.
<PAGE>
Exhibit 4.1B
LICENSE AGREEMENT
This License Agreement (this "Agreement") is dated as of
October 31, 1996, by and between SYDOOG, INC., a Delaware corporation having its
only place of business at 913 Market Street, Suite 817, Wilmington, Delaware
19801 (the "Licensor"), and GOODY'S FAMILY CLOTHING, INC., a Tennessee
corporation having a place of business at 400 Goody's Lane, Knoxville, Tennessee
37933 (the "Licensee").
BACKGROUND
The background of this Agreement is as follows:
1. Licensor is the proprietor of the tradenames, trademarks
and service marks, together with all registrations and/or applications for
registration associated therewith, identified on Exhibit A hereto, which may be
amended from time to time by consent of the parties hereto (all such tradenames,
trademarks and service marks are hereinafter collectively referred to as the
"Trademarks").
2. It is the desire and intention of the parties that Licensee
be permitted to use the Trademarks on a non-exclusive basis in the United States
in a manner reasonably related to the conduct of its retail and distribution
operations.
3. Licensor and Licensee have agreed to the terms of such non-exclusive
license of the Trademarks on the terms provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
contained herein and for other good and valuable consideration received, the
receipt and sufficiency of which is hereby acknowledged, and of the
representations and covenants hereinafter set forth, the parties hereby agree as
follows:
1. GRANT OF LICENSE.
A. License of Trademarks for Use in Corporate Name and Business. Subject to
the provisions of this Agreement, Licensor hereby grants to Licensee the
non-exclusive right to make use of the Trademarks and all goodwill associated
therewith in its corporate name and its business throughout the United States.
B. Identification of Status and Ownership of the Trademarks.
(i) Licensee acknowledges that Licensor owns the Trademarks and agrees
never to impugn or challenge, or to assist in any challenge of the validity of
the Trademarks, the registration of the Trademarks, or Licensor's ownership of
the Trademarks.
(ii) The Trademarks shall be clearly denoted as being trademarks by
utilizing the appropriate symbol of an encircled R "(R)" (for registered
trademarks) or the designation "(TM)" (for common law trademarks) or such other
symbol or legend as Licensor may designate from time to time.
(iii) As requested by Licensor in writing, Licensee shall also incorporate
an asterisk by each use of the Trademarks and shall incorporate a statement
which reads:
*Trademark of SYDOOG, Inc.
C. Rights of Licensee. Subject to the provisions of this
Agreement, Licensor hereby grants to Licensee the non-exclusive right to utilize
the Trademarks and all goodwill associated therewith in connection with the
manufacture, distribution and sale of such products and services as are approved
by Licensor (such approved products and services are collectively referred to as
"Approved Products"). It is expressly understood that the Approved Products
shall include all products and services which were provided, manufactured,
distributed or sold by Licensee in conjunction with one or more of the
Trademarks prior to the date of this Agreement and shall also include such other
products and services which fall within the description of goods of the
corresponding registrations or common law usages of the Trademarks, provided
that such products and services comply with the standards determined by Licensor
as set forth herein and/or issued pursuant to this Agreement. The standards to
be determined by Licensor shall include, without limitation, the quality of the
goods or services, the labeling and advertising uses of the Trademarks, and the
performance requirements of new products or services intended to be provided
under the Trademarks. Licensor acknowledges that the standards and policies
currently followed by Licensee are satisfactory to Licensor, but Licensor
reserves the right to withdraw its approval or amend its standards at any time.
2. QUALITY CONTROLS.
A. In General. Licensee and Licensor acknowledge that
maintaining the high quality of the Approved Products provided in conjunction
with the Trademarks, in order to enhance goodwill as symbolized by the
Trademarks, is the essence of this Agreement. Notwithstanding anything in this
Agreement to the contrary, Licensee agrees that its services and products shall
be of such high standards and quality as to be adequate and suited to the
utilization to their best advantage and to the protection and enhancement of the
Trademarks, that such services shall be performed and such products shall be
completed and delivered in accordance with all applicable federal, state and
local laws and regulations, and that the policy of performance of such services
and of completion and delivery of such products by Licensee shall be one
requiring high standards and shall in no manner reflect adversely upon the good
name of Licensor or upon the reputation or value of the Trademarks.
B. Advertising. Licensor reserves the right to approve all
advertising in connection with the Approved Products and the use of the
Trademarks, including the type, color, size and design of signs or symbols
depicting the Trademarks. Accordingly, the quality and style of advertising,
promotional and other materials bearing the Trademarks, at the request of
Licensor, shall be subject to the prior written approval of Licensor, which may
be granted or withheld in Licensor's sole discretion. Licensor agrees that the
format used presently is satisfactory to Licensor, but Licensor reserves the
right to withdraw such approval or to amend its requirements with respect to
advertising at any time. All advertising, promotional or other materials bearing
the Trademarks to be used by Licensee and differing substantially from those
approved herein shall be submitted to Licensor or its authorized representative
for its prior written approval. Any such advertising, promotional or other
materials submitted to and not disapproved by Licensor or its authorized
representative within ten (10) days after receipt by Licensor shall be deemed to
be approved. The entire cost of advertising and promoting the products and
services undertaken by Licensee shall be the sole obligation of Licensee, and
Licensor assumes no financial or other responsibility therefor. In advertising
and promoting the Approved Products, Licensee shall comply with all applicable
laws, rules and regulations.
C. Consumer Complaints. Licensee agrees to cause a prompt
response to be made to consumer complaints received by Licensee or Licensor
(upon prompt notice to Licensee) pertaining to Approved Products bearing the
Trademarks. Licensee shall promptly permit Licensor to inspect, upon request,
any written product liability claims and government reports in respect of any of
the products covered by this Agreement.
D. Quality Control Standards. With respect to any provision in this
Agreement referring to quality control standards, Licensor shall have the right
at all times and in good faith to issue standards in addition to, in amendment
of, or in replacement of, the standards set forth herein, together with
accompanying quality control policies and procedures, all of which shall be
attached hereto as Exhibit B (as it may be amended or supplemented from time to
time) and made a part hereof upon written consent of Licensee (to be evidenced
by its execution of such amendments or supplements to this Agreement), which
consent will not be unreasonably withheld.
E. Personnel Training. Both parties agree that high quality
personnel training programs covering quality control, customer relations policy,
sales and marketing techniques, and other matters are of prime importance to
this Agreement and are essential to the success of the sale of Approved Products
bearing the Trademarks. To accomplish this, the Licensee shall be responsible at
its cost for implementing and maintaining such programs and policies, including
providing a sufficient number of training sessions for Licensee's employees,
which training sessions shall be in accordance with the standards set forth
herein and issued pursuant to the terms of this Agreement. Licensor agrees that
the current practices with respect to training sessions are satisfactory to
Licensor, but Licensor reserves the right to withdraw its approval or to amend
the programs and policies at any time.
F. Compliance Reports. From time to time, and upon the written
request of Licensor, Licensee shall furnish to Licensor or its authorized
representative, free of cost, for its written approval as aforesaid,
descriptions of all activities currently performed and/or being completed by
Licensee relating to the Approved Products and of the manner of performing the
same, in order that Licensor may determine whether the high standards and
quality control measures are being maintained by Licensee. Licensor (or its
authorized representative) shall be the sole judge of whether the activities of
Licensee have complied or are complying with the aforesaid high standards and
quality control measures.
G. Records. Licensee shall keep accurate records in sufficient
detail to enable Licensor (or its authorized representative) to determine the
extent and the manner in which Licensee has used the Trademarks and Licensee
shall permit Licensor (or its authorized representative) to examine and make
copies of such records at all reasonable times. Licensee shall provide Licensor
(or its authorized representative) with access to the business offices,
factories, sales locations and other premises of Licensee at all reasonable
times, in order that Licensor may determine whether Licensee's uses of the
Trademarks conform with the quality control standards set forth herein and
issued in accordance herewith, and Licensee shall abide by the decision of
Licensor (or its authorized representative) in this respect. Upon Licensor's
request (or upon the request of Licensor's authorized representative), Licensee
shall deliver to Licensor (or its authorized representative) such reports, in
the form requested, which confirm for Licensor that such quality control
standards are being satisfied.
H. Change of Business Practices. In the event that Licensee at
any time makes any material changes in its business procedures that may alter
the performance of any of the services or the delivery of products upon or in
relation to which Licensee uses or intends to use the Trademarks, Licensee shall
promptly give notice in writing thereof to Licensor or its authorized
representative, so that Licensor or its authorized representative may determine
through supplemental investigation, if necessary, in the Licensor's sole
judgment, whether Licensee is conforming to the high standards and quality
control measures which have been set forth herein, and Licensee shall abide by
the decision of Licensor or its authorized representative in this respect.
I. Right to Obtain Samples. At the request of Licensor, Licensee shall
submit to Licensor representative samples from Licensee's production of Approved
Products and of raw materials used in the Approved Products for such quality
testing and review as Licensor in its sole discretion shall deem appropriate.
J. Right to Inspect Premises. Licensor, upon reasonable notice to Licensee,
shall have the right to inspect the equipment, materials and production
facilities of Licensee to ensure compliance with Licensor's standards of quality
for the Approved Products.
3. FEES.
A. Privilege Fee. For the privilege of having the right to use
the Trademarks under the terms and conditions of this Agreement, Licensee agrees
to pay to Licensor annually during the term of this Agreement a privilege fee
(the "Privilege Fee") equal to $4,227,000 per fiscal year without regard to the
level of Licensee's sales volume during such fiscal year. The first annual
Privilege Fee shall be due and payable on the execution and delivery of this
Agreement, and, thereafter, the annual Privilege Fee shall be due and payable
annually on the first (1st) day of the fourth (4th) fiscal quarter of each
fiscal year (based upon a fiscal year which ends on the Saturday nearest to the
last day of January of each year). The Privilege Fee shall not be pro-rated or
refunded to Licensee.
B. Royalty Fees. During the term of this Agreement, Licensee
agrees to pay Licensor for the license of the Trademarks for each fiscal quarter
(based upon a fiscal year which ends on the Saturday nearest to the last day of
January of each year) royalty fees ("Royalty Fees") equal to one-half of one
percent (0.5%) of Licensee's Royalty Base, as defined in Section 3C of this
Agreement. Royalty Fees shall be payable quarterly as set forth in Section 3E of
this Agreement.
C. Royalty Base. For purposes of this Agreement, "Royalty Base" shall mean
the Licensee's net sales during the applicable fiscal quarter less:
(i) Allowances for returns, discounts or rebates as actually granted to a
customer on account of quantity purchased (but not discounts granted for
promptness of payment); and
(ii) All taxes levied, directly or indirectly, on the sale of Approved
Products by any government or governmental agency.
D. Report Requirements. On or before Forty-Five (45) days
after the last day of each fiscal period (based upon a fiscal year which ends on
the Saturday nearest to the last day of January of each year) through the date
of expiration or termination of this Agreement, Licensee shall produce and
forward to Licensor an itemized statement setting forth an sales report in
sufficient detail to show the basis upon which Royalty Fees are payable to
Licensor for such fiscal period. Licensor has the right to appoint a Certified
Public Accountant to audit Licensee's books and records, at Licensee's expense,
at any time.
E. Payment Requirements. On or before thirty (30) days after invoice to
Licensee sent by Licensor, Licensee shall pay to Licensor the amount of Royalty
Fees due to Licensor under Section 3B hereof on account of the activities of
Licensee under this Agreement during the period covered by the invoice.
4. TRADEMARK PROTECTION.
A. Notice of Infringement. Licensee shall promptly give notice
to Licensor of any infringement of the Trademarks in the United States which
shall come to Licensee's attention during the term of this Agreement. Licensee
agrees, at Licensor's expense, to cooperate with Licensor, when requested, in
stopping such infringement, but Licensee shall not take any action against an
infringer in its own name or on behalf of Licensor without Licensor's prior
written approval.
B. Maintenance of Trademarks. Licensor agrees to pay all
governmental and legal fees involved in maintaining the continuing validity and
enforceability of the Trademarks within the United States, including the
maintenance and renewal of all registrations therefor in the United States,
provided, however, that Licensor shall determine at its sole option which of the
Trademarks shall be renewed. Without limiting the provisions of the preceding
sentence, Licensee acknowledges the validity of and Licensor's exclusive
ownership of all right, title and interest, in and to the Trademarks and agrees
that any use by Licensee of the Trademarks shall inure solely to the benefit of
Licensor. Licensee shall not at any time (either during or after the termination
of this Agreement) directly or indirectly take any action which might impair the
validity of or the rights of Licensor in the Trademarks, but Licensor makes no
representation or warranty that the Trademarks are valid or validly registered
in the United States or any other country. Licensee shall not at any time during
the term of this Agreement use any mark which shall be identical or confusingly
similar to any of the Trademarks, except as expressly permitted by this
Agreement. The termination of this Agreement shall not affect the obligation of
Licensee under this Section 4B.
C. Infringement of Other Marks by Licensee. Licensee shall
promptly notify Licensor in the event that Licensee shall acquire knowledge of
any claim that use of the Trademarks by Licensee infringes the rights of others
or of the institution of any action or proceeding against Licensee or otherwise
arising out of the use of the Trademarks by Licensee. Licensor and its duly
authorized representative shall have the right (but not the obligation), upon
written notification to Licensee within sixty (60) days of receipt of Licensee's
notification to Licensor of such infringement claim, to take charge of the
defense of any such claim, action or proceeding (and of any negotiations for the
settlement thereof). If Licensor declines, or fails to respond within sixty (60)
days after receipt of notification from Licensee, to defend any such claim,
action or proceeding, Licensee may do so. Licensor and Licensee each shall pay
their own expenses and retain any costs or damages awarded to each in any such
claim, action or proceeding. Licensor shall not make any settlement of any such
claim, action or proceeding, brought against Licensee involving a monetary
payment by Licensee without the consent in writing of Licensee. Licensor shall
not be liable in any event to Licensee in respect of any damages assessed or
asserted against Licensee in, or any liability incurred by or imposed upon
Licensee in connection with, any such claim, action or proceeding. Licensor and
Licensee agree to cooperate with each other in all respects in any such claim,
action or proceeding.
D. Infringement of the Trademarks. In the event that Licensee
shall acquire knowledge of any use by a third party (other than any party known
to have a license agreement with Licensor) of the Trademarks, it shall not take
any action whatsoever, unless otherwise authorized by Licensor, but shall
promptly notify Licensor in writing of such use. Licensor (and its duly
authorized representative) shall have the right (but not the obligation) to take
whatever action it deems appropriate, including the institution of any action or
proceeding against such third party or otherwise, to obtain a discontinuance of
such use. Licensor's (or its authorized representative's) right to take such
action, however, shall expire if Licensor (or its authorized representative)
does not notify Licensee in writing within thirty (30) days of receipt of the
aforementioned notice from Licensee of such third party use. If Licensor
exercises its right to take such action, Licensor shall pay its own expenses and
retain any costs or damages awarded to it therein. If Licensor does not exercise
its right to take such action, or such right expires, then Licensee may take
whatever action Licensee, in its sole opinion, deems to be necessary and
appropriate and Licensor shall reimburse Licensee for all costs, including but
not limited to attorneys' fees incurred by Licensee with respect to such action
in the form of a credit against fees due or to become due under this Agreement
or in such other form as mutually agreed between Licensor and Licensee. Licensee
and Licensor agree to cooperate with each other in all respects and to provide
each other with all assistance requested by the other with respect to all such
actions.
5. INDEMNIFICATION BY LICENSEE. Licensee shall indemnify, defend and
hold Licensor harmless against and from all claims, demands, actions and rights
of action that shall or may arise by virtue of anything done or omitted to be
done by the Licensee or by any of Licensee's agents, employees or other
representatives unless the claim, demand, action or right arises solely from an
act or omission of Licensor or any of its agents, employees or other
representatives. The rights and obligations of the parties hereto under this
Section 5 shall survive the termination of this Agreement.
6. TAXES. Licensee Responsible for Payment of Taxes. All payments or
reimbursements under this Agreement shall be made without setoff or counterclaim
and free and clear of and without deduction for any and all present and future
taxes, levies, imposts, duties or any other charges of a similar nature
("Taxes"). Licensee agrees to cause all Taxes imposed in connection with the
purchase and sale of the Approved Products to be paid directly to the
appropriate governmental authority.
7. TERM, TERMINATION AND DEFAULT.
A. Term. This Agreement shall continue in effect for a period
of one (1) year from the date of this Agreement and, unless terminated as
hereinafter provided, shall automatically renew for an additional one-year
period on each anniversary date of the date of this Agreement. This Agreement
may be terminated by either party upon Thirty (30) days prior written notice of
termination. This Agreement may be terminated at any time by written consent of
the parties.
B. Default and Termination. This Agreement shall terminate at
the election of either party to this Agreement if the other party (the
"Defaulting Party") shall breach or default in the performance of any of its
obligations under this Agreement or any other agreement between Licensor and
Licensee, and such breach or default is not cured after notice is given as
provided in Section 7C of this Agreement or as provided in such other agreement.
Regardless of the foregoing provisions, the Licensor may terminate the Agreement
at any time if any of the following circumstances occur:
(i) Declaration of bankruptcy by Licensee.
(ii) Failure of the Licensee to pay royalties over a term in excess of six
(6) months following the due date.
(iii) In case of a transfer of rights by Licensee to a third party in
violation of Section 11 of this Agreement.
(iv) In case of any material breach of any provision of this Agreement, or
an intentional violation of the Licensor's rights in any Trademarks covered by
this Agreement.
C. Notice of Default. If either party desires to terminate
this Agreement in the event of a breach or default, such party shall give
written notice to the Defaulting Party of the breach or default by the
Defaulting Party and allow the Defaulting Party thirty (30) days thereafter
within which to cure such breach or default. Failure by either party to
terminate this Agreement for any one or more acts or omissions of the Defaulting
Party which constitute a breach or default hereunder shall in no way whatsoever
be construed as a waiver, express or implied, of that party's right to terminate
the Agreement for any other breach or default or for the same breach or default
at a later time.
D. Rights on Termination. Upon termination of this Agreement for any
reason, the rights, privileges and obligations of the parties shall be as
follows:
(i) Such termination shall be without prejudice to Licensor's rights to
recover royalties or other sums due from Licensee under the terms of this
Agreement.
(ii) Any remedy for any breach or default which has not previously been
cured shall be preserved.
(iii) Licensee shall immediately cease to use the Trademarks for any and
all purposes, and thereafter shall not adopt or use any similar trademarks or
combinations thereof which so resemble the Trademarks as to be likely to cause
confusion or mistake or to deceive, in connection with any products or services.
E. Survival. Without limiting any other provision of this Agreement, the
provisions of this Section 7 shall survive the termination of this Agreement.
8. SERVICES PERFORMED BY AUTHORIZED REPRESENTATIVE. Notwithstanding
anything in this Agreement to the contrary, Licensor may engage the services of
an authorized representative to act for and on behalf of Licensor for any part
of or all aspects of this Agreement. Accordingly, Licensee agrees to deal with
such representative upon written notice from Licensor, which notice shall
describe the scope of such representative's responsibilities.
9. AMENDMENT. This Agreement may be amended only by written amendment
executed by an authorized officer or agent of Licensee and Licensor. No
approval, permission or consent by either party to this Agreement shall have any
effect unless it is made in writing by an authorized representative of such
party.
10. PROHIBITION ON ASSIGNMENT. Nothing in this Agreement shall be deemed to
constitute or result in an assignment of the Trademarks to Licensee or the
creation of an equitable or any other interest in the Trademarks in Licensee.
11. TRANSFERABILITY OF RIGHTS. Licensor's rights and obligations under
this Agreement shall be freely transferable and such rights and obligations
shall inure to the benefit of and be binding upon its respective successors and
assigns. Licensee's rights and obligations under this Agreement shall not,
without the prior written consent of Licensor, be transferred, sublicensed,
assigned or alienated in any manner, except as expressly provided hereunder.
12. GOVERNING LAW AND JURISDICTION; ARBITRATION. The validity,
interpretation and enforceability of this Agreement shall be determined in
accordance with the laws of the State of Delaware. All disputes arising from
this Agreement shall be finally decided by arbitration consisting of three (3)
arbitrators according to the Delaware Arbitration Act, 10 Del. C. ss. 5701, et
seq. All legal costs incurred to enforce the terms of this Agreement shall be
borne by the party responsible in accordance with the applicable laws and
customs.
13. SEVERABILITY. If any provision or any portion of any provision of this
Agreement shall be held to be void or unenforceable, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part are to continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement to be effective as of the day and year first above written.
[SEAL] LICENSEE:
Attest: GOODY'S FAMILY CLOTHING, INC.
By:___________________________ By:________________________________
Name: Name:
Title: Title:
[SEAL] LICENSOR:
Attest: SYDOOG, INC.
By:___________________________ By:_________________________________
Name: Name:
Title: Title:
<PAGE>
EXHIBIT A
TO LICENSE AGREEMENT
LICENSED TRADEMARKS
Mark Registration No. Issuance Date
Goody's Family Clothing 1,606,015 July 10, 1990
Goody's Family Clothing, Inc.
& Design 1,949,198 January 16, 1996
<PAGE>
36
20
EXHIBIT B
TO LICENSE AGREEMENT
QUALITY CONTROL STANDARDS
[See attached Quality Control Standards]
<PAGE>
Exhibit 4.1C
MASTER SUPPLY AGREEMENT
(GFC)
This MASTER SUPPLY AGREEMENT (this "Agreement") is made and entered
into this 1st day of November, 1996, to be effective as of November 3, 1996, by
and between GOODY'S MS, L.P., a Tennessee limited partnership ("Seller") and
GOODY'S FAMILY CLOTHING, INC., a Tennessee corporation ("Purchaser").
WHEREAS, Purchaser operates one or more Goody's Family Clothing retail
locations, and in connection therewith, Purchaser desires to purchase on a
continuing basis, and Seller desires to sell on a continuing basis, various
items of inventory to be offered for sale in such locations, as well as various
supplies and other products (hereinafter, collectively, the "Products") that may
be used in connection with such retail operations, all as may be selected by
Purchaser and communicated to Seller from time to time; and
WHEREAS, to avoid repetitive negotiations, the parties desire to enter
into this Agreement establishing the terms and conditions of purchase and sale
which will be applicable to the Products.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereby agree as follows:
1. Scope of Agreement.
a. Unless otherwise agreed in writing by both parties hereto,
this Agreement shall apply to all purchase orders, electronic communications,
and other purchase documents or communications (hereinafter, collectively, the
"Orders") relating to the purchase of Products which may be placed with Seller
by or on behalf of Purchaser on and after the effective date of this Agreement.
The terms and conditions of this Agreement shall apply to any Order, whether or
not this Agreement or its terms and conditions are expressly referred to in the
Order.
b. Unless otherwise agreed in writing by both parties hereto
with respect to a specific purchase transaction, no inconsistent or additional
term or condition in any Order shall be applicable to a transaction within the
scope of this Agreement. Both parties hereto specifically agree that any terms
and conditions on any of their purchase or sale documents or other
communications utilized as Orders hereunder which are in any way inconsistent
with this Agreement shall not be applicable, and the terms of this Agreement
shall govern.
2. Duration and Termination.
a. Unless earlier terminated according to the provisions of
paragraph 2.b below, this Agreement shall be in force and effect for a period of
one (1) year from the effective date of this Agreement set forth above, and
shall thereafter be automatically renewed for successive terms of one (1) year
each.
b. Either party hereto may terminate this Agreement upon
thirty (30) days advance written notice to the other party of such election to
terminate; provided, however, that the parties hereto may agree in writing to a
shorter or longer notice period.
c. The termination of this Agreement will not affect any Order which has
been communicated and acknowledged prior to the date of termination.
3. General Terms and Conditions.
a. Orders.
i. Orders will generally be limited to the Products constituting the
saleable inventory, or otherwise utilized in the operations, of Goody's Family
Clothing retail locations. Orders may, however, be issued for products handled
by Seller which are not so utilized. In such event, the presumption will be that
the terms and conditions of this Agreement apply to any such Order unless Seller
shall notify Purchaser of its objection to having such product covered under
this Agreement.
ii. Orders may be made in any form, including typewritten, telephonic,
electronic and telex. An Order may be unpriced or pre-priced.
iii. Purchaser shall be entitled to engage one or more other parties to
place Orders with Seller on Purchaser's behalf; provided, however, that Seller
shall not fulfill any Order placed by any party other than Purchaser unless
Purchaser has previously communicated written authorization to Seller to accept
Orders from such party. In such event, Purchaser shall remain responsible for
payment of any such Order.
iv. Purchaser shall be entitled to establish dollar limits above which
individual unpriced Orders are not to be accepted by Seller without specific
approval by a designated officer or representative of Purchaser. Such dollar
limits shall be set forth in a writing signed by both parties hereto. In such
event, when an unpriced Order exceeds the established dollar limit, not
including freight, Seller shall return the Order to Purchaser properly priced
within ten (10) days, with an estimated delivery date. Purchaser shall then have
the option of either accepting or rejecting the prices and delivery dates set
forth by Seller.
v. Pre-priced Orders, and unpriced Orders whose amount falls below any
limit that may be established pursuant to the preceding paragraph 2.b.iv, shall
be considered as Orders by Seller, and Seller may accept such Orders and
fulfill the same without any further approvals of Purchaser.
b. Acknowledgments.
i. Within ten (10) days following Seller's receipt of any Order placed by
or on behalf of Purchaser, Seller shall respond either by accepting such Order
as submitted (subject to the above provisions regarding pricing) or by notifying
Purchaser or Purchaser's authorized representative of proposed modifications.
When an acknowledgment contains additions or modifications to the Order, the
acknowledged Order shall not become effective until Seller is notified
electronically or in writing by or on behalf of Purchaser that the proposed
additions or modifications are acceptable.
ii. Seller agrees to make every reasonable effort to meet the delivery
dates specified on any Order. Each Order acknowledgment shall contain either
Seller's confirmation of the delivery dates as requested by or on behalf of
Purchaser, or Seller's own estimated delivery dates.
c. Follow-Up.
i. Seller agrees to provide follow-up with Seller's distribution facility
or its third-party suppliers on each acknowledged Order to ensure that the
delivery dates given are met, or that Purchaser is notified of any rescheduling.
Such notification of any possible rescheduling shall be provided to Purchaser as
soon as possible, and in any event before the confirmed delivery dates contained
in the acknowledged Order.
ii. Seller agrees to give special attention and frequent follow-up on
acknowledged Orders designated as "rush," since these represent emergency
requirements on the part of Purchaser.
iii. Purchaser or Purchaser's representative will contact Seller on all
"rush" Orders to establish the earliest delivery dates Seller can meet. Seller
agrees to give top priority to all "rush" Orders.
d. Shipping and Invoicing.
i. Seller and Purchaser will mutually agree upon detailed delivery
invoicing instructions. Since this Agreement and such delivery and invoicing
instructions will not be furnished with each Order, Seller shall undertake all
such actions as are reasonably necessary or appropriate to ensure that all of
Seller's personnel in charge of fulfilling Purchaser's Orders are aware of such
delivery and invoicing instructions. Seller shall be entitled to have Products
purchased by Seller hereunder delivered directly from third-party vendors.
ii. Unless otherwise agreed between Seller and Purchaser with respect to
the fulfillment of an Order, ownership, legal title and all risk of loss or
damage with respect to Products shipped from Seller's facilities shall pass to
Purchaser at the time the Products are placed into transit, F.O.B. Seller's
place of shipment.
e. Payment.
i. Unless otherwise agreed between Purchaser and Seller with respect to an
Order, Purchaser or Purchaser's authorized representative shall render to Seller
any and all payments required to be made with respect to a filled Order within
thirty (30) days following Seller's notice to Purchaser of all charges with
respect to the Order. Payments may be made by check, electronically by
inter-bank or intra bank transfer, or (where Purchaser and Seller are
affiliates) by inter-company transfer.
ii. Seller may from time to time advise Purchaser of any deposit required
to be made by Purchaser prior to or at the time of Seller's acceptance of any
Order.
iii. Unless otherwise agreed between Purchaser and Seller, at any time
before, during or after termination of this Agreement, Seller shall have the
absolute right to set-off any and all amounts owed to it hereunder by Purchaser,
its subsidiaries and affiliates against any and all amounts then owed by Seller
to Purchaser.
4. Standard Terms and Conditions.
a. Modification and Assignment.
i. Any modification of this Agreement must be in writing and signed by the
authorized representatives of both Purchaser and Seller. Neither this Agreement,
nor any of the rights or interests of Purchaser or Seller hereunder may be
assigned, transferred or conveyed by operation of law or otherwise without the
prior written consent of the other party, except to a parent or subsidiary
thereof, or an entity wholly controlled thereby, in which event the party so
assigning shall remain obligated and liable to the other party for the full and
complete performance of this Agreement by the parent or subsidiary or wholly
controlled entity to which this Agreement is assigned.
b. Delays or Non-Delivery.
i. If after acknowledgment of an Order, Seller finds that the Products
cannot be delivered within the time specified in the Order, Seller shall
promptly notify Purchaser and advise Purchaser of the revised delivery date.
Purchaser shall then have the option of terminating the Order without obligation
for payment or of accepting the revised delivery date.
ii. In the event of delays in delivery due to a cause beyond Seller's
reasonable control, including acts of God, acts of Purchaser, acts of civil or
military authorities or governmental priorities, strikes, or other labor
disturbances, floods, epidemics, war, riot, delay in transportation or
transportation problems, the date of delivery shall be extended for a period
equal to the time lost by reason of such occurrence, provided, however,
Purchaser may, at its option, cancel the acknowledged Order, and any appropriate
cancellation charges will be negotiated between the parties.
c. Taxes. In addition to any price specified in any Order, Purchaser shall
pay the gross amount of any present or future sales, use, excise, value-added,
or other similar tax, applicable to the purchase sale, or delivery of any
Product or its use by Purchaser, unless Purchaser has furnished Seller evidence
of exemption acceptable to the taxing authorities.
d. Applicable Law. All aspects of any Order, this Agreement, and the
contract embodied herein including, but not limited to, its essential validity,
formation, content, performance or nonperformance, breach, damages, and
construction, shall be governed by the laws of the State of Tennessee.
e. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties hereto and it may not be released, discharged,
changed, or modified except by an instrument in writing signed by duly
authorized representative of the parties. Any representation, promise, or
condition not contained herein shall not be binding upon Seller nor Purchaser.
Acceptance of this Agreement is expressly limited to the terms hereof and, in
the event of any conflict, the terms and conditions of this Agreement shall take
precedence over any terms or conditions appearing in any Order placed by or on
behalf of Purchaser with Seller.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by
authorized representatives as of the date first set forth above.
SELLER:
GOODY'S MS, L.P.
By: TREBOR of TN, Inc.
General Partner
By:___________________
Harry M. Call
President
PURCHASER:
GOODY'S FAMILY CLOTHING, INC.
By:________________________________
Harry M. Call
President
<PAGE>
Exhibit 4.1E
TAX SHARING AGREEMENT
This Tax Sharing Agreement (this "Agreement") is made as of the 31st
day of October, 1996 by and between SYDOOG, Inc., a Delaware corporation
("Subsidiary"), with its only place of business at 913 Market Street, Suite 817,
Wilmington, Delaware 19801, and Goody's Family Clothing, Inc., a Tennessee
corporation ("Parent"), with its principal place of business at 400 Goody's
Lane, P.O. Box 22000, Knoxville, Tennessee 37933.
BACKGROUND
The background of this Agreement is as follows:
A. Subsidiary is a member of an "affiliated group", as defined
in ss. 1504 of the Internal Revenue Code of 1986, as amended from time to time,
and the regulations thereunder (the "Code"), of which Parent is the common
parent corporation.
B. Parent and Subsidiary desire that Subsidiary be included in the
consolidated Federal income tax return of Parent.
C. A purpose of this Agreement is to set forth the obligations
to be fulfilled by Subsidiary under the consolidated reporting rules of the
Code, as directed by Parent, including without limitation the provisions of
Treas. Regs. ss. 1.1502-33(d)(2) and ss. 1.1552-1(b)(2), and to provide for
payment by Subsidiary to Parent of all such tax liability properly allocated to
Subsidiary. An additional purpose of this Agreement is to set forth the
obligation of Subsidiary to bear the full burden of its state tax liability, if
any, to the extent that Parent is required to pay state taxes based on
Subsidiary's income.
AGREEMENT
For valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. This Agreement is to be effective beginning with the tax
year ending the Saturday nearest to the last day of January 1997, or February 1,
1997. The term of this Agreement shall continue until terminated in accordance
with the terms hereof.
2. Subsidiary agrees to comply with all requests of Parent in connection
with this Agreement and pursuant to the consolidated reporting requirements of
the Code.
3. Subsidiary agrees to execute or cause the execution of any
further documentation, including returns or elections, necessary or appropriate
in connection with or pursuant to the terms of this Agreement.
4. Subsidiary agrees to pay to Parent within 45 days of
receipt of written request therefor all amounts sufficient to pay for
Subsidiary's allocable share of federal income tax liabilities as calculated
pursuant to Treas. Reg. ss.1.1552-1(a), under such method consistent therewith
as adopted by Parent from time to time, including, without limitation, amounts
satisfying quarterly estimated tax liabilities, as well as annual tax
liabilities.
5. Any federal income tax liability of Subsidiary which arises
by reason of the provisions of this Agreement will be reported by Subsidiary in
accordance with generally accepted accounting principles.
6. If adjustments are made to a consolidated federal income
tax return in which Parent and Subsidiary are included that result in a final
deficiency or overpayment that would have required a larger or smaller payment
by Subsidiary to Parent, or by Parent to Subsidiary, if made on the original
return in accordance with the method of computations described herein, Parent
shall pay to Subsidiary or Subsidiary shall pay to Parent within 45 days of
receipt of written request therefor, an appropriate amount to reflect such
deficiency or overpayment, as the case may be.
7. If Parent is found liable to pay any state corporate tax
with respect to income earned by Subsidiary, Subsidiary agrees to pay to Parent
the entire amount of such state corporate tax liability within 45 days of
written request therefor, under such method as shall be adopted by Parent and
Subsidiary from time to time.
8. This Agreement shall be applicable only with respect to
periods for which Subsidiary and Parent are members of the same affiliated group
filing a consolidated federal income tax return. No adjustments shall be made
with respect to periods for which either Subsidiary or Parent filed or files a
separate return or is a member of another affiliated group filing a consolidated
return.
9. This Agreement may be terminated by mutual written
agreement, or if either party ceases to be a member of the same affiliated
group, or if the affiliated group to which Parent and Subsidiary belong elects
not to file a consolidated federal return for any taxable year. However,
notwithstanding termination, this Agreement shall continue to be effective with
respect to any period during the tax year in which termination occurred for
which the income of Subsidiary is includable in such consolidated return.
Notwithstanding any such termination, if upon audit by the Internal Revenue
Service of the consolidated return for a period during which Subsidiary and
Parent were members of an affiliated group, or as a result of any final
administrative or judicial proceedings for any such period, there is any
adjustment to federal taxable income, special deductions or credits, then such
resulting change in the affiliated group's consolidated return will be allocated
to Subsidiary in accordance with the provisions of this Agreement.
This Agreement may not be assigned by either party without the prior
written consent of the other.
The parties hereto have executed this Agreement as of the date
set forth above.
SYDOOG, INC.
By:
Name:
Title:
GOODY'S FAMILY CLOTHING, INC.
By:
Name:
Title:
<PAGE>
Exhibit 6.1.1.A
October 31, 1996
First Tennessee Bank National Association
First American National Bank
AmSouth Bank of Alabama
SouthTrust Bank of Alabama, N.A.
First Union National Bank of Tennessee
Wachovia Bank of Georgia, N.A.
Re: $100,000,000 Credit Facility for Goody s Family Clothing, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Goody s Family Clothing, Inc., a Tennessee
corporation ("GFC"), Goody's MS, L.P., a Tennessee limited partnership ("Goody's
MS"), Goody's IN, L.P., a Tennessee limited partnership ("Goody's IN") (GFC,
Goody's MS, and Goody's IN are sometimes referred to herein as the "Borrowers"),
SYDOOG, INC., a Delaware corporation ("SYDOOG"), TREBOR of TN, Inc., a Tennessee
corporation ("TREBOR") and GOFAMCLO, Inc., a Delaware corporation ("GOFAMCLO")
(SYDOOG, TREBOR and GOFAMCLO are sometimes referred to herein as the
"Guarantors"), in connection with the execution and delivery of the Amended and
Restated Credit Agreement dated as of October 31, 1996, by and among the
Borrowers, the Guarantors, First Tennessee Bank National Association, First
American National Bank, AmSouth Bank of Alabama, SouthTrust Bank of Alabama,
N.A., First Union National Bank of Tennessee and Wachovia Bank of Georgia, N. A
(the Lenders ), and First Tennessee Bank National Association as Administrative
Agent (the Credit Agreement ). We have been requested by the Borrowers and the
Guarantors to render this opinion pursuant to Section 6.1.1 of the Credit
Agreement. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Credit Agreement, as the context may require.
In connection with this opinion, we have reviewed, among other things, the
following agreements and instruments (individually a Transaction Document and
individually and collectively the Transaction Documents ):
1. the Credit Agreement;
2. the Notes delivered pursuant to the Credit Agreement; and
3. the Pledge Agreement.
We have also reviewed such corporate and partnership documents and records of
the Borrowers and the Guarantors, such certificates of public officials, and
such other matters as we have deemed necessary or appropriate for purposes of
this opinion.
As to various issues of fact, we have relied upon the representations and
warranties of the Borrowers and the Guarantors contained in the Transaction
Documents and upon statements and certificates of officers of the Borrowers and
the Guarantors, without independent verification or investigation. For purposes
of the opinions on the good standing of the Borrowers and TREBOR, we have relied
solely upon good standing certificates of recent date from the Secretary of
State of Tennessee, copies of which have been delivered to the Administrative
Agent. For puposes of the opinions on the good standing of, corporate power and
authority of, execution and delivery, and authorization of the Transaction
Documents by, SYDOOG and GOFAMCLO, we have relied solely upon the opinion of
Stewart & Associates, a copy of which is attached hereto.
We have assumed, regarding documents executed by parties other than the
Borrowers and the Guarantors, that such documents are the valid and binding
obligations of, and enforceable against, such other parties. We have also
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures (other than signatures on behalf of the Borrowers
and the Guarantors), the conformity to authentic original documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
legal capacity of all natural persons.
Based on the foregoing, and subject to the assumptions, limitations and
qualifications set forth herein, we are of the opinion that:
1. Each of GFC and TREBOR is a corporation duly organized and validly
existing and in good standing under the laws of the State of Tennessee;
has the requisite corporate power and corporate authority under
Tennessee law to own, lease, license and use its properties and carry
on its business as presently conducted; and has the requisite corporate
power and corporate authority to enter into and perform its obligations
under each of the Transaction Documents.
2. Each of Goody's MS and Goody's IN is a limited partnership duly
organized and validly existing and in good standing under the laws of
the State of Tennessee; has the requisite power and authority under
Tennessee law to own, lease, license and use its properties and carry
on its business as presently conducted; and has the requisite power and
authority to enter into and perform its obligations under each of the
Transaction Documents.
3. Each of SYDOOG and GOFAMCLO is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware;
has the requisite corporate power and corporate authority under
Delaware law to own, lease, license and use its properties and carry on
its business as presently conducted; and has the requisite corporate
power and corporate authority to enter into and perform its obligations
under each of the Transaction Documents.
4. The execution and delivery by the Borrowers and the Guarantors of, and
the performance by the Borrowers and the Guarantors of their
obligations under, the Transaction Documents to which each is a party
have been duly authorized by all necessary corporate action on the part
of the Borrowers and the Guarantors. Each such Transaction Document has
been duly executed and delivered by the Borrowers and the Guarantors.
5. Each Transaction Document to which a Borrower or Guarantor is a party is
a valid and binding obligation of such Borrower or the Guarantor, enforceable
against such Borrower and Guarantor in accordance with its terms, subject to (a)
the effect of bankruptcy, insolvency, reorganization, receivership, arrangement,
moratorium, fraudulent conveyance, fraudulent transfer and other similar laws
relating to or affecting the rights of creditors, and (b) the application of
general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief and other equitable
remedies), regardless of whether considered in a proceeding at law or in equity.
6. The execution and delivery by each of the Borrowers and the Guarantors
of the Transaction Documents and the performance of its obligations thereunder
do not (a) contravene the charter or articles of incorporation, as applicable,
or bylaws of GFC, TREBOR, SYDOOG or GOFAMCLO or the limited partnership
agreement of Goody's MS or Goody's IN or any judgment, order or decree of any
court or arbitrator known to us specifically directed to the Borrowers or the
Guarantors or their property, or (b) constitute a default under or breach of the
terms or, or an event that with the lapse of time or the giving of notice or
both would constitute a default under or a breach of the terms of, or require
any consent (that has not been obtained) of any person under the terms of, or
result in the creation or imposition of (or the obligation to create or impose)
a Lien upon any property of the Borrowers or the Guarantors under, any Material
Contract identified on Schedule 7.26 to the Credit Agreement.
The opinion of Stewart & Associates as counsel to SYDOOG and GOFAMCLO
attached hereto includes a qualification or limitation as to clause
(ii) of Article Tenth of the Certificates of Incorporation of each of
SYDOOG and GOFAMCLO. In our opinion, if presented with the issue, a
Tennessee court of proper jurisdiction should hold that the execution
and performance of their obligations under the Credit Agreement, in and
of themselves, do not subject SYDOOG and GOFAMCLO to tax in Tennessee.
7. To the best of our knowledge, no approval, order, consent, license,
authorization or other action by or filing with any federal or
Tennessee governmental authority, commission, agency or board is
required for the execution and delivery by the Borrowers or the
Guarantors of the Transaction Documents to which it is a party or the
consummation by the Borrowers or the Guarantors of the transactions
that are the subject of the Transaction Documents.
8. None of the Borrowers or the Guarantors is an investment company or a
company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
9. None of the Borrowers or the Guarantors is a holding company , or a
subsidiary company of a holding company , or an affiliate of a holding
company or of a subsidiary company of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
10. Assuming that (a) the Transaction Documents are executed and delivered
to the Administrative Agent in the State of Tennessee, (b) the subject Loans
will be disbursed and repaid in the State of Tennessee, (c) the Administrative
Agent has its principal place of business in the State of Tennessee, and (d) as
to GFC and Goody's MS, such parties own or lease property and conduct business
in the State of Tennessee, and as to Goody's IN, SYDOOG, TREBOR and GOFAMCLO,
that this transaction otherwise bears a reasonable relationship to the State of
Tennessee, a Tennessee court of proper jurisdiction applying applicable
Tennessee choice of law principles should enforce the choice of law provisions
contained in the Transaction Documents that expressly provide that the terms and
provisions thereof (including, without limitation, those provisions subject to
usury limitations) will be governed by and construed in accordance with the laws
of the State of Tennessee.
11. To our knowledge, and except as set forth on Schedule 7.6 to the Credit
Agreement, there is no litigation or other legal proceeding pending
before any court, governmental agency or arbitrator, or overtly
threatened in writing, against any of the Borrowers or the Guarantors
or any of their properties, that seeks to affect the enforceability of
any Transaction Document or that if adversely determined could affect
the ability of such Borrower or Guarantor to perform its obligations
under any Transaction Document.
The opinions expressed herein are qualified and limited as follows:
a. Our opinion in numbered Paragraph 5 is subject to the further
qualification that certain waivers, procedures, remedies and other provisions of
the Transaction Documents may be unenforceable under or limited by applicable
law; however, the inclusion of such waivers, procedures, remedies and other
provisions does not render the Transaction Documents invalid as a whole and,
subject to the other qualifications and limitations set forth herein, there
exist, in the Transaction Documents or pursuant to applicable law, legally
adequate remedies for the practical realization of the principal benefits
reasonably intended to be provided by the Transaction Documents, subject to the
consequences of any delay that may result from limitations imposed by applicable
law;
b. We express no opinion herein as to compliance, or the effect of any
noncompliance, with applicable laws governing interest and usury, except as
specifically set forth in numbered Paragraph 10 above;
c. We express no opinion herein as to provisions of the Transaction
Documents releasing a party from, or indemnifying a party against,
liability for its own wrongful or negligent acts and/or waiving
defenses arising as a result of such acts which provisions may be
unenforceable if such release, indemnification or waiver contained
therein is contrary to law or the public policy underlying such law;
d. We express no opinion regarding the application of federal or state tax
laws or securities laws to the transactions contemplated in the Transaction
Documents;
e. We express no opinion as to the effect of or the compliance by the
Lenders, the Agent or the Issuing Bank with any state or federal laws
that are applicable to this transaction because of the nature of the
business or capacity of the Lenders, the Agent or the Issuing Bank;
f. We express no opinion as to the effect of the constitutional exercise of
sovereign police powers of the United States and other governmental bodies;
g. We express no opinion as to the enforceability of any waiver of trial by
jury, or agreement for acceptance of process by mail;
h. We express no opinion as to the enforceability of any waiver of rights
afforded under Tennessee Code Annotated, Section 47-12-101, et seq.;
i. We express no opinion as to the enforceability of any provision
specifying that provisions of the Transaction Documents may only be
waived in writing, to the extent that an oral agreement or an implied
agreement by trade practice or course of dealing or course of
performance has been created;
j. We express no opinion as to the enforceability of any appointment of an
attorney in fact; and
k. We express no opinion as to the effect of laws governing and affording
judicial discretion regarding the determination of damages and
entitlement to attorneys fees and other costs.
We express no opinion herein other than as to the law of the State of Tennessee
and the federal law of the United States of America. We do not purport to be
experts in matters of law of jurisdictions other than the State of Tennessee and
the federal law of the United States of America.
Our opinions are rendered as of the date hereof and we assume no obligation to
advise you of changes in law or fact (or the effect thereof on the opinions
expressed herein) that hereafter may come to our attention.
As used herein, known to us, to our knowledge and any similar phrase refers
solely to the current, actual knowledge, acquired during the course of the
representation described in the introductory paragraph of this letter, of those
attorneys in this firm who have rendered legal services in connection with such
representation (excluding any lawyers whose involvement has been limited to
reviewing this opinion as part of our firm s opinion review procedure). We are
not general counsel to the Borrower. We presently represent the Borrower only in
connection with this matter and certain other specific matters as to which we
have been consulted by the Borrower.
The opinions expressed herein represent our best legal judgment and are based
upon the facts and assumptions set forth herein and upon existing Tennessee law
and currently applicable Tennessee rules, regulations and court decisions, which
are subject to change either prospectively or retrospectively. Our opinions are
in no way binding on any jurisdiction, court, government or agency. Our opinions
are limited to the matters expressly stated herein, and no opinion is to be
inferred or may be implied beyond the matters expressly stated.
This opinion is rendered solely for the benefit of the addressees (including any
Persons who may subsequently become Lenders, participants of any Lender, any
successors to the Administrative Agent or Issuing Bank and their respective
counsel) in connection with the above-referenced transactions, and may not be
delivered or quoted to any other person (other than to any regulatory agency
having jurisdiction over any Lender or any participant or any prospective Lender
or participant) or relied upon for any other purpose without our prior written
consent.
Very truly yours,
WOOLF, MCCLANE, BRIGHT,
ALLEN & CARPENTER, PLLC
By:_____________________________
Dennis R. McClane
<PAGE>
Exhibit 6.11B
As of October 31, 1996
Woolf, McClane, Bright, Allen
& Carpenter, PLLC
900 Riverview Tower
900 South Gay Street
Knoxville, Tennessee 37902-1810
Re: $100,000,000 Credit Facility for Goody's Family Clothing, Inc.
Ladies and Gentlemen:
We have acted as special counsel to SYDOOG, Inc., a Delaware
corporation ("SYDOOG") and GOFAMCLO, Inc., a Delaware corporation ("GOFAMCLO")
in connection with the execution and delivery of the Amended and Restated Credit
Agreement (the "Credit Agreement") dated as of October 31, 1996 by and among
Goody's Family Clothing, Inc., a Tennessee corporation ("GFC"), Goody's MS,
L.P., a Tennessee limited partnership ("Goody's MS") and Goody's IN, L.P., a
Tennessee limited partnership ("Goody's IN"), as Borrowers (GFC, Goody's MS, and
Goody's IN are hereinafter collectively referred to as the "Borrowers"), SYDOOG,
GOFAMCLO and TREBOR of TN, Inc., a Tennessee corporation ("TREBOR"), as
Guarantors (SYDOOG, GOFAMCLO and TREBOR are hereinafter collectively referred to
as the "Guarantors"), First Tennessee Bank National Association, First American
National Bank, AmSouth Bank of Alabama, SouthTrust Bank of Alabama, N.A., First
Union National Bank of Tennessee and Wachovia Bank of Georgia, N.A., as Lenders
(hereinafter collectively referred to as the "Lenders"), and First Tennessee
Bank National Association, as administrative agent for the Lenders (the
"Administrative Agent"). We have been requested by SYDOOG and GOFAMCLO to render
this opinion pursuant to Section 6.1.1 of the Credit Agreement. Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Credit Agreement, as the context may require.
In connection with this opinion, we have reviewed, among other things,
unexecuted drafts the following agreements and instruments (each a "Transaction
Document" and collectively the "Transaction Documents"):
<PAGE>
1. the Credit Agreement (without Exhibits and Schedules); and
2. the Notes delivered pursuant to the Credit Agreement.
We also have reviewed such corporate documents and records of SYDOOG
and GOFAMCLO, such certificates of public officials, and such other matters as
we have deemed necessary or appropriate for purposes of this opinion.
As to various issues of fact, we have relied upon the representations
and warranties of SYDOOG and GOFAMCLO contained in the Transaction Documents and
upon statements and certificates of officers of SYDOOG and GOFAMCLO, without
independent verification or investigation. For purposes of the opinions on the
good standing of SYDOOG and GOFAMCLO, we have relied solely upon a good standing
certificate of recent date from the Secretary of State of Delaware, a copy of
which has been delivered to you.
We have assumed, regarding documents executed by parties other than
SYDOOG and GOFAMCLO, that such documents are the valid and binding obligations
of, and enforceable against, such other parties. We have also assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures (other than signatures on behalf of SYDOOG and GOFAMCLO), the
conformity to authentic original documents of all documents submitted to us as
certified, conformed, photostatic or unexecuted draft copies, and the legal
capacity of all natural persons.
Based on the foregoing, and subject to the assumptions, limitations and
qualifications set forth herein, we are of the opinion that:
1. Each of SYDOOG and GOFAMCLO: (i) is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has the requisite
corporate power and corporate authority under Delaware law to
own, lease, license and use its properties and to carry on its
business as presently conducted and (iii) has the requisite
corporate power and corporate authority to enter into and
perform its obligations under the Credit Agreement.
2. The execution and delivery by SYDOOG and GOFAMCLO of, and the
performance by SYDOOG and GOFAMCLO of their respective
obligations under, the Credit Agreement have been duly
authorized by all necessary corporate action on the part of
SYDOOG and GOFAMCLO. The Credit Agreement has been duly
executed and delivered by each SYDOOG and GOFAMCLO.
3. The execution and delivery by SYDOOG and GOFAMCLO of the
Credit Agreement and the performance of their respective
obligations thereunder do not contravene the Certificate of
Incorporation or bylaws of SYDOOG and GOFAMCLO, respectively.
The opinions expressed herein are qualified and limited as follows:
(a) We express no opinion herein other than as to the law of the State
of Delaware. We do not purport to be experts in matters of laws of jurisdictions
other than the State of Delaware.
(b) Our opinions are rendered as of the date hereof, and we assume no
obligation to advise you of changes in law or fact (or the effect thereof on the
opinions expressed herein) that hereafter may come to our attention.
(c) The opinions expressed herein represent our best legal judgment and
are based upon the facts and assumptions set forth herein and upon existing
Delaware law and currently applicable Delaware rules, regulations and court
decisions, which are subject to change either prospectively or retrospectively.
Our opinions are in no way binding on any jurisdiction, court, government or
agency. Our opinions are limited to the matters expressly stated herein, and no
opinion is to be inferred or may be implied beyond the matters expressly stated.
(d) We call your attention to Article Tenth of the Certificate of
Incorporation for both SYDOOG and GOFAMCLO, which provides as follows:
The corporation shall have no power and may not be authorized
by its stockholders or directors (i) to perform or omit to do any act
that would prevent or inhibit the corporation from qualifying, or cause
the corporation to lose its status, as a corporation exempt from the
Delaware Corporation Income Tax under Section 1902(b)(8) of Title 30 of
the Delaware Code, or under the corresponding provision of any
subsequent law, or (ii) to conduct any activities outside of Delaware
which could result in the corporation being subject to tax outside of
Delaware.
We express no opinion herein with respect to clause (ii), since the scope of the
foregoing opinions is limited to matters of Delaware law.
This opinion letter is rendered solely for your benefit in rendering
your opinion to the Lenders and the Administrative Agent as counsel to the
Borrowers and the Guarantors in connection with the transactions described
herein and may be relied upon by the addressees thereof (including any Persons
who may subsequently become Lenders, participants of any Lender, any successors
to the Administrative Agent or Issuing Bank and their respective counsel) in
connection with the above-referenced transactions, and may not be delivered or
quoted to any other person (other than to any regulatory agency having
jurisdiction over any Lender or any participant or any prospective Lender or
participant) or relied upon for any other purpose without our prior written
consent.
any Lender or any participant or any prospective Lender or participant) or
relied upon for any other purpose without our prior written consent.
Very truly yours,
STEWART & ASSOCIATES,
A Professional Law Association
By: ______________________
Gordon W. Stewart
President
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee November 1, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in the
hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of FIRST UNION NATIONAL BANK OF TENNESSEE ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100THS DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated November 1, 1996, by and among Maker, First Tennessee Bank
National Association, a national banking association, as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Amended and Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1017890.02
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$12,500,000 Knoxville, Tennessee November 1, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of WACHOVIA BANK OF GEORGIA, N.A. ("Payee"; Payee, and any subsequent holder[s]
hereof, being hereinafter referred to collectively as "Holder"), the principal
sum of TWELVE MILLION FIVE HUNDRED THOUSAND AND 00/100THS DOLLARS
($12,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated November 1, 1996, by and among Maker, First Tennessee Bank
National Association, a national banking association, as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Amended and Restated
Promissory Note in favor of Maker dated May 20, 1996 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1017891.02
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$20,000,000 Knoxville, Tennessee October 31, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of FIRST TENNESSEE BANK NATIONAL ASSOCIATION ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of TWENTY MILLION AND 00/100THS DOLLARS ($20,000,000.00) or, if
less, the aggregate unpaid principal amount of all Loans advanced here against
pursuant to that certain Amended and Restated Credit Agreement dated October 31,
1996, by and among Maker, First Tennessee Bank National Association, a national
banking association, as Administrative Agent, and the Lenders party thereto, as
amended by that certain Amendment Agreement of even date herewith (together with
any amendments thereto and/or modifications thereof, herein referred to as the
"Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid principal balance of the Loans evidenced hereby at the rate(s)
specified in the Credit Agreement; provided that in no event shall the interest
and loan charges payable in respect of the indebtedness evidenced hereby exceed
the maximum amounts from time to time allowed to be collected under applicable
law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Promissory Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1021806.01
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$15,000,000 Knoxville, Tennessee October 31, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of FIRST AMERICAN NATIONAL BANK ("Payee"; Payee, and any subsequent holder[s]
hereof, being hereinafter referred to collectively as "Holder"), the principal
sum of FIFTEEN MILLION AND 00/100THS DOLLARS ($15,000,000.00) or, if less, the
aggregate unpaid principal amount of all Loans advanced here against pursuant to
that certain Amended and Restated Credit Agreement dated October 31, 1996, by
and among Maker, First Tennessee Bank National Association, a national banking
association, as Administrative Agent, and the Lenders party thereto, as amended
by that certain Amendment Agreement of even date herewith (together with any
amendments thereto and/or modifications thereof, herein referred to as the
"Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid principal balance of the Loans evidenced hereby at the rate(s)
specified in the Credit Agreement; provided that in no event shall the interest
and loan charges payable in respect of the indebtedness evidenced hereby exceed
the maximum amounts from time to time allowed to be collected under applicable
law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Promissory Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1021807.01
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee October 31, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of AMSOUTH BANK OF ALABAMA ("Payee"; Payee, and any subsequent holder[s] hereof,
being hereinafter referred to collectively as "Holder"), the principal sum of
SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100THS DOLLARS ($17,500,000.00)
or, if less, the aggregate unpaid principal amount of all Loans advanced here
against pursuant to that certain Amended and Restated Credit Agreement dated
October 31, 1996, by and among Maker, First Tennessee Bank National Association,
a national banking association, as Administrative Agent, and the Lenders party
thereto, as amended by that certain Amendment Agreement of even date herewith
(together with any amendments thereto and/or modifications thereof, herein
referred to as the "Credit Agreement"; capitalized terms used but not otherwise
defined herein shall have the same meanings as in the Credit Agreement),
together with interest on the unpaid principal balance of the Loans evidenced
hereby at the rate(s) specified in the Credit Agreement; provided that in no
event shall the interest and loan charges payable in respect of the indebtedness
evidenced hereby exceed the maximum amounts from time to time allowed to be
collected under applicable law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Promissory Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1017888.02
<PAGE>
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee November 1, 1996
FOR VALUE RECEIVED, on or before the Termination Date, as defined in
the hereinafter described Credit Agreement, the undersigned, GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"), promises to pay to the order
of SOUTHTRUST BANK OF ALABAMA, N.A. ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter referred to collectively as "Holder"), the
principal sum of SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100THS DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced here against pursuant to that certain Amended and Restated Credit
Agreement dated November 1, 1996, by and among Maker, First Tennessee Bank
National Association, a national banking association, as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith (together with any amendments thereto and/or modifications
thereof, herein referred to as the "Credit Agreement"; capitalized terms used
but not otherwise defined herein shall have the same meanings as in the Credit
Agreement), together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event shall the interest and loan charges payable in respect of the
indebtedness evidenced hereby exceed the maximum amounts from time to time
allowed to be collected under applicable law.
Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and payable at the times and in the manner specified
in the Credit Agreement.
Holder hereby is authorized to record and endorse the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on a
schedule annexed to and constituting a part of this Note, which recordation and
endorsement shall constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder, absent manifest error;
provided, however, that (a) Holder's failure to make any such recordation or
endorsement shall not in any way limit or otherwise affect the obligations of
Maker or the rights and remedies of Holder under this Note or the Credit
Agreement and (b) payments to Holder of the principal of and interest on the
Loans evidenced hereby shall not be affected by the failure to make any such
recordation or endorsement thereof. In lieu of making recordation or
endorsement, Holder hereby is authorized, at its option, to record the date and
principal amount of each Loan made by it, and the amount of each payment of
principal and interest made to such Holder with respect to such Loans, on its
books and records in accordance with its usual and customary practice, which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect thereof made by Maker to Holder, absent manifest
error.
Upon the occurrence of an Event of Default, the entire outstanding
principal balance of the indebtedness evidenced hereby, together with all
accrued and unpaid interest thereon, may be declared, and immediately shall
become, due and payable in full, all as provided in the Credit Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties hereto, except
as provided in the Credit Agreement.
This Note is one of the "Notes" in the aggregate principal amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement, and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.
It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note, the Credit Agreement or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans or the Letters of Credit, acceleration of the maturity of
the unpaid balance of any of the Obligations or otherwise, shall the interest
and loan charges agreed to be paid to any of the Lenders for the use of the
money advanced or to be advanced under the Credit Agreement exceed the maximum
amounts collectible pursuant to applicable law. Pursuant to the Credit
Agreement, Maker and the Lenders have agreed that:
(a) if for any reason whatsoever the interest or loan charges
paid or contracted to be paid by Maker to any of the Lenders in respect
of the Loans shall exceed the maximum amount collectible under the law
applicable to such Lender, then, in that event, and notwithstanding
anything to the contrary in the Credit Agreement, the Notes or any
other Loan Document (i) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such
Lender that is contracted for, taken, reserved, charged or received
under the Credit Agreement, the Notes or any other Loan Document or
otherwise in connection with the Obligations under no circumstances
shall exceed the maximum amounts allowed by such applicable law, and
any excess paid to any Lender shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal
amount outstanding under the Credit Agreement, the Notes and the other
Loan Documents has been or thereby would be paid in full, refunded to
Maker), and (ii) in the event that the maturity of any or all of the
Obligations is accelerated by reason of an election of the Lenders
resulting from any Default under the Credit Agreement or otherwise, or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum
amounts allowed by the law applicable to such Lender, and any excess
interest or loan charges provided for in the Credit Agreement or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited
by such Lender on the principal amount of the Obligations (or, to the
extent the principal amount of the Obligations has been or thereby
would be paid in full, refunded by such Lender to Maker);
(b) all sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of sums due under the Credit Agreement
shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until
payment in full so that the rate or amount of interest and loan charges
on account of the Obligations will not exceed any applicable legal
limitation; and
(c) the right to accelerate the maturity of the Obligations
does not include the right to accelerate the maturity of any interest
or loan charges not otherwise accrued on the date of such acceleration,
and the Lenders do not intend to charge or collect any unearned
interest or loan charges in the event of any such acceleration.
This Note has been negotiated, executed and delivered in the State of
Tennessee, and is intended as a contract under and shall be construed and
enforceable in accordance with the laws of said state, without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.
This Note amends and restates that certain Amended and Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.
IN WITNESS WHEREOF, the undersigned Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.
MAKER:
GOODY'S FAMILY CLOTHING, INC.
By:
Title:
Attest:
Title:
1017889.02
- --------
1 Letter of Credit Request Number.
2 Date of Letter of Credit Request (at least one Business Day prior to the
Date of Issuance).
3 Name of Issuing Bank.
4 Name of Beneficiary.
5 Date of Issuance.
6 Aggregate initial stated amount of Letter of Credit.
7 Insert last date upon which drafts may be presented.
8 Existing letter of credit number.
9
Goody's Family Clothing, Inc.
Knoxville, Tennessee
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Goody's Family Clothing, Inc. for the periods ended November 2,
1996 and October 28, 1995, as indicated in our report dated November 19, 1996;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended November 2, 1996 , is
incorporated by reference in Registration Statements Nos.
33-51210, 33-68520, 333-00052 and 333-09595 on Form S-8.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
November 19, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet as at November 2, 1996 and the related statement of operations for
the thirty-nine weeks ended on November 2, 1996 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000879123
<NAME> Goody's Family Clothing, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Feb-01-1997
<PERIOD-START> Feb-04-1996
<PERIOD-END> Nov-02-1996
<CASH> 25,321
<SECURITIES> 1,421
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 177,967
<CURRENT-ASSETS> 216,883
<PP&E> 134,470
<DEPRECIATION> 41,962
<TOTAL-ASSETS> 312,833
<CURRENT-LIABILITIES> 163,595
<BONDS> 25,110
0
0
<COMMON> 26,142
<OTHER-SE> 86,765
<TOTAL-LIABILITY-AND-EQUITY> 312,833
<SALES> 545,558
<TOTAL-REVENUES> 545,558
<CGS> 405,493
<TOTAL-COSTS> 129,471
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 513
<INCOME-PRETAX> 11,178
<INCOME-TAX> 4,248
<INCOME-CONTINUING> 6,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,930
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0
</TABLE>
