TENTH MODIFICATION TO CREDIT AGREEMENT (RESTATED) AND PROMISSORY NOTE
Exhibit
10.23
TENTH MODIFICATION
TO
CREDIT AGREEMENT (RESTATED)
AND PROMISSORY NOTE
THIS
TENTH MODIFICATION TO CREDIT AGREEMENT (RESTATED) AND PROMISSORY NOTE (the
“Amendment”) is dated this the 27th day of September, 2010 by and among FRED’S,
INC., a Tennessee corporation (the “Borrower”), FRED’S STORES OF TENNESSEE, INC.
(the “Guarantor”), REGIONS BANK (as “Administrative Agent” and as a “Lender”)
and BANK OF AMERICA, N.A. (as a “Lender”).
RECITALS:
A. The
Borrower and the Lenders are parties to a Credit Agreement (Restated) originally
dated as of April 3, 2000 (as amended and restated from time to time, the “Credit Agreement”).
In connection with the Credit Agreement, the Borrower executed that certain
Promissory Note originally dated April 3, 2000 (as amended and restated from
time to time, the “Note”).
B. The
Borrower and the Lender previously entered into: (i) a Modification Agreement
(the “First Modification”) dated May 26, 2000; (ii) a Second Modification
Agreement (the “Second Modification”) dated April 30, 2002; (iii) a Third
Modification Agreement (the “Third Modification”) dated July 31, 2003; (iv) a
Fourth Modification Agreement (the “Fourth Modification”) dated June 28, 2004;
(v) a Fifth Modification Agreement (the “Fifth Modification”) dated October 19,
2004, effective October 20, 2004; (vi) a Sixth Modification Agreement (the
“Sixth Modification”) dated July 29, 2005, effective June 29, 2005; (vii) a
Seventh Modification Agreement dated September 30, 2005, effective October 10,
2005; (viii) an Eighth Modification to Credit Agreement (Restated) and
Promissory Note dated October 30, 2007, effective November 1, 2007; and (ix) a
Ninth Modification to Credit Agreement (Restated) and Promissory Note dated
September 17, 2008.
C. The
Borrower, the Administrative Agent, the Lender, and the Guarantor desire to
further amend the Credit Agreement and Note as set forth in this
Amendment.
D. Terms
not defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
1. Change in
Definitions. Section 2.1 of the Credit Agreement concerning “Definitions”
is amended to delete the prior definitions of “Commitment” and “Maturity Date”
and the following is substituted in lieu thereof:
“Commitment”
means the sum of $50,000,000. Notwithstanding the use of the term “commitment”
with respect to the calculation of fees, the actual amount which the Lender has
agreed to lend or provide credit to the Borrower shall be limited to the ratios
and conditions in this Credit Agreement.
“Maturity
Date” shall mean September 27, 2013.
2. Amendment to Interest Rate
Determination. Annex I of the Credit Agreement setting forth the
“Applicable Margin” and “Unused Fee” with respect to the determination of the
Interest Rate is deleted and the following is substituted in lieu thereof as the
new Annex I:
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ANNEX I
Applicable Margin and Unused
Fee
|
Level
|
FCCR
|
LIBOR
Margin
(bps)
|
Unused
Fee
(bps)
|
|
I
|
<2.00x
|
162.5
|
27.5
|
|
II
|
≥2.00x
|
137.5
|
25.0
|
|
III
|
≥2.25x
|
112.5
|
22.5
|
|
IV
|
≥2.50x
|
100.0
|
20.0
|
3. Amendment to Note.
The Note is amended to the extent necessary to conform to the Amendment
including the reduction in principal amount of the Commitment as set forth
herein. .
4. Other
Documents. All other documents executed and delivered in
connection with the Credit Agreement are hereby amended to the extent necessary
to conform to this Amendment.
5. Representations and
Warranties. To induce the Lenders to enter into this
Amendment, the Borrower hereby represents and warrants to the Lenders
that:
(a) Reaffirmation. As
of the date of this Amendment and after giving effect to this Amendment, the
representations and warranties set forth in Article 3 of the
Credit Agreement are true and correct in all material respects (except to the
extent that any such representation or warranty relates to a specified earlier
date, and except for changes in facts and circumstances that are not prohibited
by the terms of the Credit Agreement); and
(b) No
Default. As of the date hereof and after giving effect to this
Amendment, no Event of Default has occurred and is continuing.
6. Conditions. The
effectiveness of this Amendment is subject to the satisfaction of the following
conditions precedent:
(a) The
Administrative Agent and Lenders shall have received this Amendment duly
executed by the Borrower and the Guarantor;
(b) No
Default shall exist; and
(c) The
Borrower shall pay to the Administrative Agent an extension fee, for
payment to each of the Lenders on a pro rata basis, in an amount
equal to fifteen basis points (.15%) of the total Commitment.
7. Payment of
Expenses. The Borrower agrees to pay or reimburse the Lender
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and execution of this Amendment, not to exceed
$2,500.
8. Counterparts. This
Amendment may be executed by one or more of the parties hereto on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
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9. Severability;
Headings. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The section
and subsection headings used in this Amendment are for convenience of reference
only and are not to affect the construction hereof or to be taken into
consideration in the interpretation hereof.
10. Continuing Effect of Other
Documents. This Amendment shall not constitute an amendment or
waiver of any other provision of the Credit Agreement and Note not expressly
referred to herein and, except to the extent that the Credit Agreement and Note
has been amended hereby, shall not be construed as a waiver or consent to any
further or future action on the part of the Borrower that would require a waiver
or consent of the Lender. Except as expressly amended, modified or
supplemented hereby, the provisions of the Credit Agreement, the Note and the
Loan Documents are and shall remain in full force and effect.
11. GOVERNING
LAW. THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TENNESSEE.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Tenth Modification
to Credit Agreement (Restated) and Promissory Note as of the day and date first
set forth above.
| FRED’S, INC., the Borrower | |||
|
|
By:
|
/s/ Xxxxx X. Shore | |
| Title: | EVP and Chief Financial Officer | ||
| REGIONS BANK, as Lender and Administrative Agent | |||
|
|
By:
|
/s/ Xxxxx Xxxx | |
| Title: | Sr. VP Corporate Banking | ||
CONSENT OF
GUARANTOR
The
undersigned, as Guarantor, hereby executes this Amendment to evidence its
consent thereto, as well as the transactions contemplated thereby, and agrees
that the Guaranty Agreement dated March 27, 2000, effective April 3, 2000,
remains in full force and effect.
| FRED’S STORES OF TENNESSEE, INC. | |||
|
Date:
September 27, 2010
|
By:
|
/s/ Xxxxx X. Shore | |
| Title: | EVP and Chief Financial Officer | ||
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