<PAGE> 1
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 May 4, 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, 16,125,212 shares outstanding as of June 12, 1996.
Index to the exhibits is on page 11.
Page 1 of 33
<PAGE> 2
GOODY'S FAMILY CLOTHING, INC.
INDEX TO FORM 10-Q
MAY 4, 1996
Part I - Financial Information:
Item 1 - Financial Statements
<TABLE>
<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 ......................................... 8-10
Part II - Other Information ............................................... 11
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 ................................................................ 12
</TABLE>
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
ITEM 1 - FINANCIAL STATEMENTS
GOODY'S FAMILY CLOTHING, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
----------------------------
4-MAY-96 29-Apr-95
--------------- -----------
(UNAUDITED) (unaudited)
<S> <C> <C>
Sales $150,766 $144,932
Cost of sales and occupancy expenses 108,121 106,394
-------- --------
Gross profit 42,645 38,538
Selling, general and administrative expenses 39,258 35,068
-------- --------
Earnings from operations 3,387 3,470
Interest expense 87 49
Investment and other income 255 204
-------- --------
Earnings before income taxes 3,555 3,625
Provision for income taxes 1,351 1,359
-------- --------
Net earnings $ 2,204 $ 2,266
======== ========
Weighted average common shares outstanding 16,125 16,117
======== ========
Earnings per common share $ 0.14 $ 0.14
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS AND INDEPENDENT ACCOUNTANTS'
REPORT.
3
<PAGE> 4
GOODY'S FAMILY CLOTHING, INC.
BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
----------- ---------- --------------
4-MAY-96 3-Feb-96 April 29, 1995
----------- ---------- --------------
(UNAUDITED) (unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 22,901 $ 32,987 $ 24,003
Investments 1,403 1,386 1,320
Inventories 111,209 78,267 93,801
Accounts receivable and other current assets 9,725 6,617 6,794
-------- -------- --------
Total current assets 145,238 119,257 125,918
Property and equipment, net 86,458 85,715 85,099
Other assets 3,438 3,471 3,512
-------- -------- --------
TOTAL ASSETS $235,134 $208,443 $214,529
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 86,303 $ 68,238 $ 77,770
Accrued expenses 26,989 21,345 19,752
Notes payable - - 7,000
Income taxes payable 2,164 1,671 1,630
Current portion of long- term debt 217 217 198
-------- -------- --------
Total current liabilities 115,673 91,471 106,350
Long-term debt 1,110 1,110 1,327
Other long-term liabilities 2,290 2,239 1,988
Deferred income taxes 7,982 7,748 7,038
-------- -------- --------
Total liabilities 127,055 102,568 116,703
-------- -------- --------
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 - 16,325,212, 16,325,212 and 16,324,012 shares
Outstanding - 16,125,212, 16,125,212 and 16,124,012 shares 26,040 26,040 26,028
Paid-in capital 3,135 3,135 3,296
Retained earnings 82,006 79,802 71,604
Treasury stock, at cost - 200,000 shares (3,102) (3,102) (3,102)
-------- -------- --------
Total shareholders' equity 108,079 105,875 97,826
-------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $235,134 $208,443 $214,529
======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS AND INDEPENDENT ACCOUNTANTS'
REPORT.
4
<PAGE> 5
GOODY'S FAMILY CLOTHING, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-----------------------------------------
4-MAY-96 April 29, 1995
------------ --------------
(UNAUDITED) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,204 $ 2,266
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 2,290 2,017
Net loss on asset disposals and write-down 42 131
Changes in assets and liabilities:
Investments (17) (38)
Inventories (32,942) (29,393)
Accounts payable 21,373 31,552
Income taxes 709 (1,900)
Other assets & liabilities 2,767 703
-------- -------
Cash provided by (used in) operating activities (3,574) 5,338
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (3,133) (2,694)
Proceeds from sale of property and equipment 58 46
-------- -------
Cash used in investing activities (3,075) (2,648)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on notes payable - (3,000)
Issuance of common stock - 191
Changes in cash management accounts (3,437) 991
-------- -------
Cash used in financing activities (3,437) (1,818)
-------- -------
CASH AND CASH EQUIVALENTS :
Net increase (decrease) for the period (10,086) 872
Balance, beginning of period 32,987 23,131
-------- -------
Balance, end of period $ 22,901 $24,003
======== =======
SUPPLEMENTAL DISCLOSURES:
Interest payments $ 50 $ 15
Income tax payments $ 868 $ 3,767
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS AND INDEPENDENT ACCOUNTANTS'
REPORT.
5
<PAGE> 6
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.
(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, which provides for cash borrowings for general
corporate purposes as well as for the issuance 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. 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.
6
<PAGE> 7
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 May 4, 1996 and April 29, 1995, and the related statements of
operations and cash flows for the thirteen-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
May 17, 1996
7
<PAGE> 8
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
During the first quarter of fiscal 1996, the Company opened nine new stores and
relocated one store, bringing the total number of stores in operation at
quarter end to 193, compared with 174 at the end of the first quarter of fiscal
1995. In the corresponding period of the previous fiscal year, two new stores
were opened, one store was relocated and one clearence store was opened with an
existing lease from a previously relocated store.
Net earnings for the first quarter of fiscal 1996 were $2,204,000, or 1.5% of
sales, compared with $2,266,000, or 1.6% of sales, for the first quarter of
fiscal 1995.
RESULTS OF OPERATIONS
The following table sets forth unaudited results of operations as a percent of
sales for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------------
May 4, 1996 April 29, 1995
----------- --------------
<S> <C> <C>
Sales 100.0% 100.0%
Cost of sales and occupancy expenses 71.7 73.4
----- -----
Gross profit 28.3 26.6
Selling, general and administrative expenses 26.0 24.2
----- -----
Earnings from operations 2.3 2.4
Interest expense 0.1 -
Investment and other income 0.2 0.1
----- -----
Earnings before income taxes 2.4 2.5
Provision for income taxes 0.9 0.9
----- -----
Net earnings 1.5% 1.6%
===== =====
</TABLE>
Sales - Sales for the first quarter of fiscal 1996 were $150,766,000, a 4.0%
increase over the $144,932,000 for the first quarter of the previous fiscal
year. Of this $5,834,000 increase, new store sales contributed $13,510,000
which was primarily offset by a decrease in comparable store sales of 5.7%, or
$8,292,000. Although sales for the first quarter of fiscal 1996 showed an
increase over the first quarter of the previous fiscal year, they were
negatively effected by the poor weather conditions in most of the Company's
markets and were below the Company's expectations.
At the beginning of fiscal 1996, the Company adopted a new method of reporting
comparable store sales. Comparable store sales are now based on stores which
are currently operating (including relocated, remodeled, and expanded stores)
and which were in operation the entire prior fiscal year. Previously, new
stores became comparable the first full month following the anniversary of its
opening. This change was made to reduce the possible distortions related to
new store grand openings and had no material effect on sales comparisons for
the quarter.
Gross Profit - Gross profit for the first quarter of fiscal 1996 was
$42,645,000, or 28.3% of sales, a $4,107,000 increase over the $38,538,000, or
26.6% of sales, in gross profit for the first quarter of the previous fiscal
year. The 1.7% increase in gross profit, as a percent of sales, consists of (i)
a decrease in cost of sales by 1.8% as a result of well-positioned inventories
at the beginning of fiscal 1996 which allowed the Company to realize higher
gross margins and (ii) an increase in occupancy costs by 0.1% resulting from
higher lease costs.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the first quarter of fiscal 1996 were $39,258,000,
or 26.0% of sales, an increase of $4,190,000 from $35,068,000, or 24.2% of
sales, for the first quarter of the previous fiscal year. Selling, general and
administrative expenses increased by 1.8%, as a percent of sales, for the first
quarter of fiscal 1996 compared with the first quarter of the previous fiscal
year and is comprised of (i) a 0.6% increase in payroll expenses, (ii) a 0.8%
increase in advertisement and promotion expenses, (iii) a 0.3% increase in
other selling, general and administrative expenses and (iv) a 0.1%
8
<PAGE> 9
increase in depreciation and amortization expenses. Included in the selling,
general and administrative expenses are pre-opening costs of approximately
$1,000,000, or 0.7% as a percent of sales, associated with the six Atlanta,
Georgia metropolitan area stores that opened on May 2, 1996.
Interest Expense - Interest expense for the first quarter of fiscal 1996
increased by $38,000 over the first quarter 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 on May
25, 1995.
Investment and Other Income - Investment and other income for the first quarter
of fiscal 1996 was $255,000 compared with $204,000 for the first quarter of the
previous fiscal year. The increase is primarily due to an increase in invested
funds during the period.
Income Taxes - The provision for income taxes for the first quarter of fiscal
1996 was $1,351,000, for an effective tax rate of 38.0% of earnings before
income taxes, compared with $1,359,000, for an effective tax rate of 37.5% of
earnings before income taxes, for the first quarter of the previous fiscal
year. The increase in effective tax rate is primarily due to a decrease in
tax-free investment income.
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 May 4, 1996, the Company's
working capital was $29,565,000 compared with $19,568,000 at April 29, 1995, an
improvement of 6.8% in the working capital ratio from the previous fiscal year.
At the end of the first quarter of fiscal 1996 compared with the first quarter
of the previous year, (i) cash, cash equivalents and investment securities have
decreased by $1,019,000 and property and equipment have increased by $1,359,000
and (ii) inventories and accounts payable have increased by $17,408,000 and
$8,533,000, respectively, in anticipation of the summer selling season and an
increase in the number of stores. Trade payables, as a percent of inventories,
decreased from 82.9% at April 29, 1995 to 77.6% at May 4, 1996.
At May 4, 1996, the Company has an unsecured $100,000,000 revolving line of
credit from a consortium of banks, of which no amount was in use for cash
borrowings and $24,163,000 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 $15,884,000 during the first quarter
of fiscal 1996, with the highest balance for the quarter of $24,316,000 in May
1996. On May 20, 1996, the Company amended its credit agreement to extend the
expiration date to May 31, 1998. See Note 3 to Notes to Financial Statements.
Cash Flows - Operating activities used cash of $3,574,000 in the first quarter
of fiscal 1996 compared with cash provided by operating activities of
$5,338,000 in the first quarter of the previous fiscal year. Cash used in
operating activities during the first quarter of fiscal 1996 for seasonal
inventory increases was $32,942,000 compared with $29,393,000 for the first
quarter of the previous fiscal year. Accounts payable provided cash of
$21,373,000 in the first quarter of fiscal 1996 compared with $31,552,000 for
the first quarter of the previous fiscal year. Depreciation and amortization
amounted to $2,290,000 in the first quarter of fiscal 1996 compared with
$2,017,000 for the first quarter of the previous fiscal year.
Cash flows from investing activities for the first quarter of fiscal 1996
reflected a net use of cash amounting to $3,075,000, compared with $2,648,000
for the first quarter of the previous fiscal year. The cash was used to fund
capital expenditures incurred relating to new stores opened during the first
quarters of fiscal 1996 and 1995.
Cash used by financing activities for the first quarter of fiscal 1996 was
$3,437,000, compared with $1,818,000 for the first quarter of the previous
fiscal year. The cash management program used by the Company used cash of
$3,437,000 in the first quarter of fiscal 1996 compared with cash provided of
$991,000 for the first quarter of the previous fiscal year. During the first
quarter of fiscal 1995, the Company repaid advances on previous revolving lines
of credit amounting to $3,000,000 and received $191,000 from the issuance of
common stock on the exercise of stock options.
9
<PAGE> 10
Outlook - The Company plans to open nine new stores and relocate/remodel six
stores during the remainder of fiscal 1996, bringing the total number of stores
in operation at the end of fiscal 1996 to 202. Management estimates that
capital expenditures of approximately $16,800,000 will be required to open new
stores, upgrade existing stores, purchase 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. Additional information on factors that could potentially
affect the Company's financial results may be found in the Company's filings
with the Securities and Exchange Commission.
SEASONALITY AND INFLATION
The Company's business is seasonal by nature. The Christmas season (beginning
on the Sunday before Thanksgiving and ending on the first Saturday after
Christmas), the back-to-school period (beginning approximately the first week
of August and continuing through the first 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.
10
<PAGE> 11
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
<TABLE>
<CAPTION>
Page number of
sequentially numbered
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K originals
- -------------------------------------------- ---------------------
a) Exhibits -
<S> <C> <C>
10.42 Amended Credit Agreement between the Registrant, Lenders as
identified therein and First Tennessee Bank National
Association as Administrative Agent 13-31
15 - Accountants' Awareness Letter 32
27 - Financial Data Schedule 33
</TABLE>
b) Reports on Form 8-K - None
11
<PAGE> 12
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: June 12, 1996 /s/ Harry M. Call
------------- ---------------------------------------------------
Harry M. Call
Director, President and
Chief Operating Officer
Date: June 12, 1996 /s/ Edward R. Carlin
------------- ---------------------------------------------------
Edward R. Carlin
Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
12
<PAGE> 1
EXHIBIT 10.42
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT ("Agreement") is entered into as of the 20th day
of May, 1996 by and between GOODY'S FAMILY CLOTHING, INC., a Tennessee
corporation (the "Borrower"), those several lenders who are or become parties
to the Credit Agreement (as hereinafter defined) (collectively, the "Lenders"
and, individually, a "Lender"), and FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
a national banking association with offices in Knoxville, Tennessee, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated May 25, 1995
between Borrower, Lenders and the Administrative Agent (the "Credit
Agreement"), Lenders made a loan to Borrower in the principal amount of
$100,000,000 (the "Loan") pursuant to the terms and provisions thereof;
WHEREAS, pursuant to the Credit Agreement, the Borrower delivered a
Promissory Note dated May 25, 1995 to each Lender (collectively, the "Notes")
in the amount of such Lender's Commitment (as defined in the Credit Agreement);
WHEREAS, the parties wish to revise and modify certain obligations of the
parties specified in the Credit Agreement and to extend the Termination Date of
the Credit Agreement from May 31, 1997 until May 31, 1998; and
WHEREAS, all terms capitalized herein and not otherwise defined shall have
the meanings ascribed to them in the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Commitments. The Commitment and Percentage of each Lender as set forth
on the signature pages to the Credit Agreement are hereby amended to be as
follows:
<TABLE>
<CAPTION>
Lender Commitment Percentage
-------------------- ----------- -----------
<S> <C> <C>
First Tennessee Bank $20,000,000 20.00%
National Association
First American $15,000,000 15.00%
National Bank
AmSouth Bank of $17,500,000 17.50%
Alabama
Southtrust Bank of $17,500,000 17.50%
Alabama, N.A.
First Union National $17,500,000 17.50%
Bank of Tennessee
Wachovia Bank of $12,500,000 12.50%
Georgia, N.A.
</TABLE>
2. Termination Date. The definition of Termination Date in the Credit
Agreement is hereby amended in its entirety to state as follows:
"Termination Date" shall mean May 31, 1998.
13
<PAGE> 2
All indebtedness of the Borrower incurred under the Credit Agreement shall
be due and payable as of the Termination Date set forth above.
3. New Notes. The Borrower shall deliver to AmSouth Bank of Alabama,
Southtrust Bank of Alabama, N.A., First Union National Bank of Tennessee and
Wachovia Bank of Georgia, N.A. an Amended and Restated Promissory Note
substantially in the form attached to the Credit Agreement as Exhibit 2.8 (the
"New Notes") reflecting the amount of each such Lender's Commitment as set
forth above. Upon the execution and delivery of the New Notes to the above
listed Lenders, those Lenders shall return their original Notes marked
"cancelled".
4. Financial Covenants. Sections 8.1.2, 8.1.3 and 8.1.4 of the Credit
Agreement are hereby amended to state as follows:
8.1.2. Debt to Worth Ratio. Permit the ratio of
Total Liabilities to Shareholders Equity as of the
end of any Fiscal Year to exceed 1.10 to 1.00.
8.1.3. Shareholders Equity. Permit the
Shareholders Equity (a) to be less than $104,000,000
as of February 3, 1996, (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.
8.1.4. Capital Expenditures. Permit Capital
Expenditures made by Borrower in the aggregate to
exceed (a) $16,500,000 during the Fiscal Year ending
February 3, 1996, (b) $35,500,000 in the aggregate
during the Fiscal Year ending February 3, 1996 and
the Fiscal Year ending February 1, 1997, and (c)
$27,500,000 for the Fiscal Year ending January 31,
1998.
5. Continuing Effect of Documents. Except as expressly modified by or
provided for in this Agreement, the terms and provisions of the Credit
Agreement and all other documents relating to the Loan shall remain in full
force and effect as originally executed.
6. Representations and Warranties. The representations and warranties of
the Borrower in the Credit Agreement are true and correct on and as of the date
hereof as though made on this date.
7. No Default. As of the date hereof, the Borrower is in full compliance
with all of the terms and provisions set forth in the Credit Agreement as
amended hereby, including without limitation the covenants and agreements set
forth in Articles 6, 7 and 8 of the Credit Agreement, and all of the
instruments and documents executed in connection therewith, and no Event of
Default, as defined in Article 9 of the Credit Agreement, nor any event which,
upon notice, lapse of time or both, would constitute an Event of Default, has
occurred or is continuing.
8. Completeness and Modification. This Agreement constitutes the entire
agreement between the parties hereto as to the transactions contemplated hereby
and supersedes all prior discussions, understandings or agreements between the
parties hereto.
9. No Novation. This Agreement does not constitute a discharge or novation
of any promissory note existing prior to this Agreement or any other documents
executed in connection with the Loan, and such documents shall continue in full
force and effect and shall be fully binding upon all parties hereto.
10. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
14
<PAGE> 3
11. Counterparts. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BORROWER:
GOODY'S FAMILY CLOTHING, INC.
Name: /s/ Edward R. Carlin
-----------------------------------
Title: Exec. V.P/CFO
----------------------------------
[LENDERS' SIGNATURE PAGES FOLLOW]
15
<PAGE> 4
[Lender's Signature Page to Amendment Agreement dated May 20, 1996]
FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as
a Lender and as Administrative Agent
By: /s/ James H. 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
16
<PAGE> 5
[Lender's Signature Page to Amendment Agreement dated May 20, 1996]
FIRST AMERICAN NATIONAL BANK, as a Lender
By: /s/ Eric V. Schwarzentraub
----------------------------------
Title: V.P
----------------------
Address: 505 S. Gay Street, Mezzanine
Knoxville, Tennessee 37902
Attn: Eric V. Schwarzentraub
Telecopy No. 615-521-5352
17
<PAGE> 6
[Lender's Signature Page to Amendment Agreement dated May 20, 1996]
AMSOUTH BANK OF ALABAMA, as a Lender
By: /s/ Bob Dehaven
--------------------------------------
Title: Vice President
--------------------------
Address: 1900 5th Avenue North, 7th floor
Birmingham, Alabama 35203
Attn: Bob Dehaven
Telecopy No. 205-583-4436
18
<PAGE> 7
[Lender's Signature Page to Amendment Agreement dated May 20, 1996]
SOUTHTRUST BANK OF ALABAMA, N.A., as a
Lender
By: /s/ Mark Jones
---------------------------------
Title: AVP
------------------------
Address: 420 North 20th Street
Birmingham, Alabama 35203
Attn: Mark Jones
Telecopy No. 205-254-5022
19
<PAGE> 8
[Lender's Signature Page to Amendment Agreement dated May 20, 1996]
FIRST UNION NATIONAL BANK OF TENNESSEE,
as a Lender
By: /s/ Timothy B. Fouts
---------------------------------------
Title: VP
-----------------------------
Address: 150 Fourth Avenue North
First Union Tower, 2nd Floor
Nashville, Tennessee 37219
Attn: Ms. Carol D. Cole
Telecopy No. 615-251-0894
20
<PAGE> 9
[Lender's Signature Page to Amedment Agreement dated May 20, 1996]
WACHOVIA BANK OF GEORGIA, N.A., as a Lender
By: /s/ Nickoli Weaver
-------------------------------------------
Title: Vice President
----------------------------------
Address: 191 Peachtree Street, NE, 29th floor
Atlanta, Georgia 30303
Attn: Nickoli Weaver
Telecopy No. 404-332-5016
21
<PAGE> 10
ASSIGNMENT
THIS ASSIGNMENT (this "Assignment"), dated as of the 20th day of May,
1996, is made and entered by Union Planters National Bank (the "Transferor
Lender"), in favor of AmSouth Bank of Alabama, Southtrust Bank of Alabama,
N.A., First Union National Bank of Tennessee, and Wachovia Bank of Georgia,
N.A. (the "Purchasing Lenders").
RECITALS:
A. The Transferor Lender and Purchasing Lenders are parties to that
certain Credit Agreement dated as of May 25, 1995, as amended by that certain
Amendment Agreement of even date herewith, among Goody's Family Clothing, Inc.,
a Tennessee corporation, First Tennessee Bank National Association, as
administrative agent, and the Lenders party thereto (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).
B. 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 1. As of the date hereof, the Transferor Lender hereby
irrevocably sells, assigns and transfers to each Purchasing Lender, without
recourse, representation or warranty, twenty-five percent (25%) of (i) the
Transferor Lender's Commitment, (ii) the Loans outstanding as of the date
hereof held by the Transferor Lender, and (iii) any other amounts owing as of
the date hereof to the Transferor Lender under the Credit Agreement, the Notes
or the other Loan Documents. Such assignment effects a total assignment of the
Transferor Lender's Percentage and upon such assignment, the Transferor Lender
shall no longer be a party to the Credit Agreement.
SECTION 2. From and after the date hereof, 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 Purchasing Lenders in accordance with their respective
percentages as set forth in the Credit Agreement as amended on the date hereof.
SECTION 3. Concurrently with this Assignment, the Note payable to the
order of the Transferor Lender is being delivered by the Transferor Lender to
the Borrower marked "cancelled". As evidence of this Assignment, each
Purchasing Lender will receive an Amended and Restated Promissory Note as
described in the Amendment Agreement.
SECTION 4. The Transferor Lender agrees that at any time and from time to
time upon written request of the Administrative Agent, it will execute and
deliver such further documents and do such further acts and things as the
Administrative Agent reasonably may request in order to effect the purposes of
this Assignment.
22
<PAGE> 11
IN WITNESS WHEREOF, the Transferor Lender has caused this Assignment to be
executed by its duly authorized officer as of the date set forth above.
TRANSFEROR LENDER:
UNION PLANTERS NATIONAL BANK
By: /s/ Elizabeth S. Collins
---------------------------------
Title: Vice President
------------------------------
CONSENT TO ASSIGNMENT:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ James H. Atchley
-----------------------------------
Title: Vice President
--------------------------------
GOODY'S FAMILY CLOTHING, INC.
By: /s/ Edward R. Carlin
-----------------------------------
Title: Exec. V.P/CFO
-------------------------------
23
<PAGE> 12
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee May 20, 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 Credit Agreement dated May
25, 1995, 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
24
<PAGE> 13
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 cancelled 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.
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: /s/ Edward R. Carlin
---------------------------------
Title: Exec. V.P/CFO
-----------------------------
Attest: /s/ Regis J. Hebbeler
-----------------------------
Title: Asst. Sec.
-----------------------------
25
<PAGE> 14
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee May 20, 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 Credit Agreement dated May
25, 1995, 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
26
<PAGE> 15
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 cancelled 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.
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: /s/ Edward R. Carlin
--------------------------------
Title: Exec. V.P/CFO
----------------------------
Attest: /s/ Regis J. Hebbeler
----------------------------
Title: Asst. Sec.
----------------------------
27
<PAGE> 16
AMENDED AND RESTATED PROMISSORY NOTE
$17,500,000 Knoxville, Tennessee May 20, 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 Credit Agreement dated May
25, 1995, 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
28
<PAGE> 17
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 cancelled 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.
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: /s/ Edward R. Carlin
--------------------------------
Title: Exec. V.P/CFO
----------------------------
Attest: /s/ Regis J. Hebbeler
----------------------------
Title: Asst. Sec.
----------------------------
29
<PAGE> 18
AMENDED AND RESTATED PROMISSORY NOTE
$12,500,000 Knoxville, Tennessee May 20, 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 Credit Agreement dated May
25, 1995, 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
30
<PAGE> 19
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 cancelled 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.
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: /s/ Edward R. Carlin
----------------------------------
Title: Exec. V.P/CFO
------------------------------
Attest: /s/ Regis J. Hebbeler
------------------------------
Title: Asst. Sec.
------------------------------
31
<PAGE> 1
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 May 4, 1996
and April 29, 1995, as indicated in our report dated May 17, 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 was included in your
Quarterly Reports on Form 10-Q for the quarters ended May 4, 1996 and April 29,
1995, is incorporated by reference in Registration Statements Nos. 33-51210,
33-68520, and 333-00052 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
May 17, 1996
32
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS AT MAY 4, 1996 AND THE RELATED STATEMENT OF OPERATIONS FOR THE THIRTEEN
WEEKS ENDED ON MAY 4, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> MAY-04-1996
<CASH> 22,901
<SECURITIES> 1,403
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 111,209
<CURRENT-ASSETS> 145,238
<PP&E> 124,170
<DEPRECIATION> 37,712
<TOTAL-ASSETS> 235,134
<CURRENT-LIABILITIES> 115,673
<BONDS> 1,110
0
0
<COMMON> 26,040
<OTHER-SE> 82,039
<TOTAL-LIABILITY-AND-EQUITY> 235,134
<SALES> 150,766
<TOTAL-REVENUES> 150,766
<CGS> 108,121
<TOTAL-COSTS> 39,258
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> 3,555
<INCOME-TAX> 1,351
<INCOME-CONTINUING> 2,204
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,204
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0
</TABLE>
