Exhibit 10.20
SEVENTH MODIFICATION AGREEMENT
OF THE REVOLVING LOAN AND CREDIT AGREEMENT
THIS SEVENTH MODIFICATION AGREEMENT OF THE REVOLVING LOAN AND CREDIT
AGREEMENT (hereafter the "Seventh Modification") made and entered into this 30th
day of September, 2005, to be effective as of the 10th day of October, 2005, by
and among REGIONS BANK, successor in interest to UNION PLANTERS BANK NATIONAL
ASSOCIATION, with its principal office at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx
("Lender"); SUNTRUST BANK, a Georgia banking corporation with its principal
office at 000 Xxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000 (the
"Documentation Agent"); FRED'S, INC., a Tennessee corporation having its
principal offices at 0000 Xxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx (the "Borrower");
and FRED'S STORES OF TENNESSEE, INC. (the "Guarantor").
WHEREAS, Borrower is justly indebted to Lender for Advances made to
Borrower evidenced by that certain Promissory Note dated April 3, 2000 (the
"Note"), in the original principal amount of Forty Million Dollars
($40,000,000.00) and that certain Credit Agreement dated March 28, 2000,
effective April 3, 2000 (herein the "Credit Agreement"), providing for advances
up to a maximum of Forty Million Dollars ($40,000,000.00);
WHEREAS, Borrower and Lender entered into a Modification Agreement (the
"First Modification") dated May 26, 2000, providing, among other things, that
the Note, originally payable on demand, would mature and be due and payable on
April 3, 2003;
WHEREAS, Borrower and Lender entered into a second Modification Agreement
(the "Second Modification") dated April 30, 2002, providing, among other things,
that the Note would be due and payable on March 31, 2004;
WHEREAS, Borrower and Lender entered into a third Modification Agreement
(the "Third Modification") dated July 31, 2003, providing, among other things,
that the Note would be due and payable on July 31, 2006;
WHEREAS, Borrower and Lender entered into a fourth Modification Agreement
(the "Fourth Modification") dated June 28, 2004, providing, among other things,
that the Note would be increased to Fifty Million and 00/100 Dollars
($50,000,000.00) until December 15, 2004, at which time it will revert to
$40,000,000.00 until July 31 2006;
WHEREAS, Borrower and Lender entered into a fifth Modification Agreement
(the "Fifth Modification") dated October 19, 2004, effective October 20, 2004,
in which Lender granted Borrower an additional temporary increase in the
Commitment, in the amount of Ten Million and 00/100 Dollars ($10,000,000.00) (in
addition to and having the same maturity as the increase created by the Fourth
Modification) (the "Temporary Overline"), causing the Commitment to temporarily
increase from Forty Million and 00/100 Dollars ($40,000,000.00) to Sixty Million
and 00/100 Dollars ($60,000,000.00);
WHEREAS, Borrower and Lender entered into a sixth Modification Agreement
(the "Sixth Modification") dated July 29, 2005, effective July 29, 2005, in
which Lender (i) granted Borrower an increase in the amount of Ten Million and
00/100 Dollars ($10,000,000.00) (the "Increase"), causing the Commitment to
increase from Forty Million and 00/100 Dollars ($40,000,000.00) to Fifty Million
and No/100 ($50,000,000.00); (ii) extended the Maturity Date from September 30,
2006 to September 30, 2009; (iii) amended Section 6.1.1.2 to include a reporting
date equal to sixty (60) days after the end of the fiscal quarter; and (iv)
amended Section 7.1 to increase the other indebtedness from not exceeding Five
Million and 00/100 Dollars ($5,000,000.00) to not exceeding Twenty Million and
00/100 Dollars ($20,000,000.00).
WHEREAS, Borrower and Lender desire to amend the Credit Facility and to
grant an additional Twenty Million and 00/100 Dollars ($20,000,000.00) temporary
increase (the "Temporary Overline") in the Commitment, in addition to the
Increase created by the Sixth Modification. The maturity date of the
$50,000,000.00 Credit Facility shall continue to be September 31, 2009, and the
maturity date of this $20,000,000 Temporary Overline shall be December 15, 2005.
As a result of the Temporary Overline, the Commitment shall temporarily increase
from Fifty Million and 00/100 Dollars ($50,000,000.00) to Seventy Million and
00/100 Dollars ($70,000,000.00).
NOW THEREFORE, in consideration of the premises and of other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
NOW THEREFORE, in consideration of the premises and of other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
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1. Temporary Increase of Commitment: Borrower, Lender and Documentation
Agent each agree that the Commitment shall be temporarily increased
by the amount of the Temporary Overline, effective October 10, 2005,
and that the Temporary Overline shall be immediately due and payable
as of December 15, 2005 (such period of time to be referred to as
the "Temporary Term"). The parties agree that the Temporary Overline
shall be governed by all terms, conditions and covenants currently
in place for the Note and Credit Facility, other than with respect
to the maturity date as set forth in this paragraph 1 of the Seventh
Modification.
2. Notation: Lender and Documentation Agent covenant and agree to make
a notation upon their respective records showing that the Note and
Agreement has been modified as set forth herein.
3. Origination Fee. In consideration of the grant of the Temporary
Overline by Lender, Borrower shall pay an origination fee
("Origination Fee") in an amount equal to xxx xxxxx xxxxxx (00 xx)
of the Temporary Overline, equaling the sum of Twenty Thousand and
00/100 Dollars ($20,000.00). The amount shall be pro rated based
upon the Participation and the Credit Facility. SunTrust shall
receive Thirty Seven and One Half Percent (37.5%) of the $20,000.00,
while Regions shall receive Sixty Two and One Half (62.5%) of the
$20,000.00.
4. Suspension of "Unused" Fee. For only such time as the Temporary Term
is in effect, the "unused" fee shall be suspended with respect to
the Temporary Overline. The preceding sentence shall not apply to
the original Commitment amount.
5. Continuation of Terms. All of the terms, covenants and conditions of
the Note, as modified by the First Modification, the Second
Modification, Third Modification, Fourth Modification, Fifth
Modification, Sixth Modification, and the Credit Agreement or any
other document executed in connection therewith, are, to the extent
not inconsistent with the terms herein, hereby incorporated herein
by reference. It is expressly understood and agreed that the terms,
covenants and conditions of all instruments evidencing or securing
the indebtedness evidenced by the Note shall remain in full force
and effect, and shall in no manner be affected by the execution of
this Seventh Modification except as the same are expressly modified
herein. It is further expressly understood and agreed that the
Participation Period of Documentation Agent, as set forth in that
certain Participation Agreement, by and between the parties, dated
as of March 28, 2000, shall be extended and remain in full force and
effect, and shall terminate on July 31, 2009, as modified by the
Modification to Participation Agreement dated the 29th day of July,
2005, effective the 29th day of July, 2005. Furthermore, Borrower
presently covenants, represents and warrants that it is full and
current compliance with all covenants, representations and
warranties contained in the Credit Agreement.
6. Incorporation by Reference. The parties hereby incorporate by
reference the Credit Agreement, First Modification, Second
Modification, Third Modification, Fourth Modification, Fifth
Modification, Sixth Modification, and Participation Agreement.
7. No Discharge. The execution and delivery of this Seventh
Modification does not discharge the obligors, sureties, endorsers or
guarantors of the Note, and all rights of the Lender against any and
all of same are expressly reserved.
8. Successors in Interest. This Seventh Modification shall be binding
upon and inure to the benefit of the parties hereto, their
respective successors and assigns, transferees and grantees.
9. Governing Law: This Seventh Modification shall be construed in
accordance with the laws of the State of Tennessee and the parties
hereto subject themselves to the jurisdiction of Tennessee and venue
of the Courts of Shelby County, Tennessee for the resolution of any
dispute hereunder.
10. Undefined Terms: All capitalized terms not defined herein shall have
the same definitions as set forth in the Credit Agreement.
11. Guarantor: The undersigned Guarantor joins and agrees with the terms
of this Seventh Modification and recognizes its continued obligation
to pay the entire indebtedness as hereby amended and under the terms
of its original Guaranty.
[Remainder of page left intentionally blank.]
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IN WITNESS WHEREOF, the parties have executed this Seventh Modification
Agreement of the Revolving Loan and Credit Agreement as of the day and year
first above written.
BORROWER:
FRED'S INC., a Tennessee corporation
By: /s/ Xxxxx X. Shore
----------------------------
Name: Xxxxx X. Shore
Title: EVP & CFO
STATE OF TENNESSEE
COUNTY OF SHELBY
Before me personally appeared, Xxxxx X Xxxxx , with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who, upon
oath, acknowledged himself to be the EVP & CFO of FRED'S, INC., a Tennessee
corporation, and that he as such officer being duly authorized so to do,
executed the foregoing instrument for the purpose therein contained by signing
the name of the company by himself as such officer.
WITNESS MY HAND AND OFFICIAL SEAL, at office this 7th day of October,
2005.
Xxxxx X. XxXxxxxx
-----------------
Notary Public
My Commission Expires:
January 28, 2008
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IN WITNESS WHEREOF, the parties have executed this Seventh Modification
Agreement of the Revolving Loan and Credit Agreement as of the day and year
first above written.
GUARANTOR AND SUBSIDIARY OF BORROWER:
FRED'S STORES OF TENNESSEE, INC.,
a Tennessee corporation
By: By: /s/Xxxxx X. Shore
-----------------------------
Name: Xxxxx X. Shore
Title: Vice-President
STATE OF TENNESSEE
COUNTY OF SHELBY
Before me personally appeared, Xxxxx X. Shore, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who, upon
oath, acknowledged himself to be the Vice-President of FRED'S STORES OF
TENNESSEE, INC., a Tennessee corporation, and that he as such officer being duly
authorized so to do, executed the foregoing instrument for the purpose therein
contained by signing the name of the company by himself as such officer.
WITNESS MY HAND AND OFFICIAL SEAL, at office this 7th day of October,
2005.
Xxxxx X. XxXxxxxx
-----------------
Notary Public
My Commission Expires:
January 28, 2008
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IN WITNESS WHEREOF, the parties have executed this Seventh Modification
Agreement of the Revolving Loan and Credit Agreement as of the day and year
first above written.
LENDER:
REGIONS BANK, successor in interest
to UNION PLANTERS BANK NATIONAL
ASSOCIATION
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
Senior Vice President
STATE OF TENNESSEE
COUNTY OF SHELBY
Before me personally appeared, Xxxxx Xxxxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who, upon
oath, acknowledged himself to be a Senior Vice-President of REGIONS BANK,
successor in interest to UNION PLANTERS BANK NATIONAL ASSOCIATION, and that he
as such officer being duly authorized so to do, executed the foregoing
instrument for the purpose therein contained by signing the name of the bank by
himself as such officer.
WITNESS MY HAND AND OFFICIAL SEAL, at office this 7th day of October,
2005.
Xxxxxxxx X. Xxxxxxxx
--------------------
Notary Public
My Commission Expires:
August 8, 2007
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IN WITNESS WHEREOF, the parties have executed this Seventh Modification
Agreement of the Revolving Loan and Credit Agreement as of the day and year
first above written.
DOCUMENTATION AGENT:
SUNTRUST BANK, a Georgia banking
corporation
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
Title: Director
STATE OF TENNESSEE
COUNTY OF SHELBY
Before me personally appeared, Xxxxx X. Xxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who, upon
oath, acknowledged himself to be a Director of SUNTRUST BANK, a Georgia banking
corporation, and that he as such officer being duly authorized so to do,
executed the foregoing instrument for the purpose therein contained by signing
the name of the bank by himself as such officer.
WITNESS MY HAND AND OFFICIAL SEAL, at office this 11th day of October,
2005.
Xxxx Xxxxx Xxxxxx
-----------------
Notary Public
My Commission Expires:
August 16, 2009
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