Exhibit 9
PRENTICE CAPITAL MANAGEMENT, LP GMM CAPITAL LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
October 23, 2005
GF Goods Inc.
c/o GMM Capital LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Gentlemen and Ladies:
Reference is made to that certain Acquisition Agreement and Agreement
and Plan of Merger Agreement (the "Agreement"), to be entered into among
Goody's Family Clothing, Inc. (the "Company"), GF Goods Inc. ("AqcuisitionCo")
and GF Acquisition Corp. ("Merger Sub"). Terms used but not defined herein
shall have the meanings set forth in the Agreement.
This letter will confirm the commitment of Prentice Capital
Management, LP, on behalf of one or more of its affiliated funds or managed
accounts ("Prentice") and GMM Capital LLC ("GMM"), to provide equity and debt
financing (the "Financing") to AcquisitionCo in an amount in cash sufficient
for the payment of the aggregate Offer Price, at or prior to the Offer Payment
Date (the "Offer Contribution Obligation"), and the aggregate Merger
Consideration and Option Consideration, at or prior to the Effective Time (the
"Merger Contribution Obligation"). The proceeds to AcquisitionCo from this
financing will be used to provide the financing for the acquisition of the
Company pursuant to the Agreement (the "Acquisition").
As of the date hereof, Prentice has committed capital of not less than
$1.2 billion and GMM has net assets of not less than $100 million.
Prentice's and GMM's commitment is subject to (i) the satisfaction, or
waiver by AcquisitionCo, of all of the conditions to AcquisitionCo's
obligations (x) in the case of the Offer Contribution Obligation, to consummate
the Offer as set forth in Annex A of the Agreement, and (y) in the case of the
Merger Contribution Obligation, to consummate the Merger as set forth in
Article 7 of the Agreement, and (ii) there having been no termination of the
Agreement pursuant to Article 8 of the Agreement. Prentice and GMM further
agree to be liable for the failure by AcquisitionCo to consummate the
transactions contemplated by the Agreement, provided that all of the conditions
to AcquisitionCo's obligations contained in the Agreement are satisfied, or
waived by AcquisitionCo.
In the event that the transactions contemplated by the Agreement,
including the Offer and the Merger, are not consummated due to a breach of a
representation, warranty or covenant by AcquisitionCo or Merger Sub, Prentice
and GMM shall contribute to AcquisitionCo, upon the final and non-appealable
determination of such breach, all damages awarded therefor with respect to
AcquisitionCo's and Merger Sub's liability to the Company under Section 8.05 of
the Agreement, in an aggregate amount (the "Damages Amount") not to exceed (a)
the amount of the Company Break Up Fee plus (b) the lesser of the aggregate
amount of the Company's Expenses and $3,000,000. Notwithstanding the foregoing
sentence, neither Prentice nor GMM will be liable for any punitive damages nor
do they guarantee any liability of AcquisitionCo or Merger Sub for any punitive
damages. This letter agreement relates solely to the obligation of Prentice and
GMM to provide the Financing or the Damages Amount, as appropriate, to
AcquisitionCo as set forth above and is not a guaranty of collection or the
performance of any other obligations of AcquisitionCo, Merger Sub, Prentice or
GMM or any other Person.
Prentice and GMM hereby acknowledge that this letter agreement is
being delivered and accepted as a material inducement to the Company to enter
into the Agreement, that the Company is an intended third party beneficiary of
this letter agreement, and that this letter agreement may not be amended or
waived without the prior written consent of the Company. Except as specifically
provided in the preceding sentence, nothing contained in this letter agreement
is intended, nor shall anything herein be construed, to confer any rights,
legal or equitable, in any person other than AcquisitionCo, Prentice and GMM.
This commitment will be effective upon AcquisitionCo's acceptance of
the terms and conditions of this letter agreement and will expire on the
earliest to occur of (i) the closing of the Acquisition or (ii) the termination
of the Agreement pursuant to its terms. Any claim against Prentice or GMM
arising under this letter agreement shall be barred if not brought in a court
of competent jurisdiction on or before the earlier of (a) 60 days following
termination of the Agreement or (b) February 28, 2006.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to
the conflict of laws principles thereof). Each party to this letter agreement
and the Company hereby irrevocably and unconditionally agree that any action,
suit or proceeding, at law or equity, arising out of or relating to this letter
agreement or any agreements or transactions contemplated hereby shall only be
brought in any federal court of the Southern District of New York or any state
court located in New York County, State of New York, and hereby irrevocably and
unconditionally expressly submit to the personal jurisdiction and venue of such
courts for the purposes thereof and hereby irrevocably and unconditionally
waive (by way of motion, as a defense or otherwise) any and all jurisdictional,
venue and convenience objections or defenses that such party may have in such
action, suit or proceeding. Each party and the Company hereby irrevocably and
unconditionally consent to the service of process of any of the aforementioned
courts. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this section.
Sincerely,
PRENTICE CAPITAL MANAGEMENT, LP
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
GMM CAPITAL LLC
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: Director
Accepted as of the date
first above written:
GF GOODS INC.
By: /s/ Xxxxx Xxxxx
--------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
