EXHIBIT 10.15
THIRD MODIFICATION AGREEMENT
This THIRD MODIFICATION AGREEMENT made and entered into as of
the 28th day of February, 1997, by and between UNION PLANTERS
NATIONAL BANK, a national banking association with its principal
office in Memphis, Tennessee ("Lender") and FRED'S, INC., a
Tennessee corporation having its offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (referred to herein as "Borrower").
WITNESSETH:
WHEREAS, Borrower is indebted to Lender for Advances made to
Borrower pursuant to a Revolving Loan made pursuant to that certain
Revolving Loan and Credit Agreement dated May 15, 1992, as amended
and modified by a Modification Agreement dated May 31, 1995,
providing for advances up to a maximum amount of $12,000,000.00
(the "Commitment"), and as further amended by a Second Modification
Agreement dated July 1995 (said agreement as modified being
referred to herein as the "Agreement"); and,
WHEREAS, Borrower has requested and Lender has agreed to again
modify the terms of the Agreement.
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 agree as follows:
1. The Agreement is amended and modified as follows:
a. Section 2 is amended:
by deleting the definition of "LIBOR" and inserting the
following definition:
"LIBOR" shall mean the one month, two month, three
month, four month five month, or six month London
Interbank Offered Rate as published by Bloomberg
Financial Services or Telerate on the date of any
determination of an interest rate which rate is
selected by Borrower pursuant to Section 4.2 for a
chosen period.
by adding to the definition of "Interest Rate" the
following:
provided, however, the interest rate shall not be
less than the sum of one hundred basis points
(1.00%) plus the one month LIBOR rate published on
any applicable determination date; and, provided
further that the interest rate shall not exceed the
maximum rate of interest which Lender is permitted
by law to contract for and charge.
b. Section 4.2 is amended by deleting section 4.2 and by
adding the following:
4.2 Requesting Revolving Credit Loans.
If Borrower selects the Adjusted Prime Rate,
then each Advance to which such Adjusted Prime Rate
shall apply shall be made on receipt by Lender from
Borrower of one of the following: (i) Borrower's
written notice to Lender of the amount of the
Advance and selection of the Adjusted Prime Rate,
or (ii) Borrower's telephonic request specifying
the amount of the Advance and selection of the
Adjusted Prime Rate, which request shall be
followed by written notice from Borrower containing
the aforesaid information and delivered to Lender
before 11:00 A.M. of the anticipated Advance Date
or, (iii) delivery of a signed check or draft
against Borrower's account which check or draft
specifies the amount of the Advance and selection
of the Adjusted Prime Rate. Each of the foregoing
documents is referred to herein as a "Notice of
Advance". In any event, the Notice of Advance
shall be delivered to Lender not later than 11:00
A.M. on the day upon which the Advance is to be
made. A Notice of Advance received by Lender after
11:00 A.M. shall be deemed to have been received on
the next succeeding Business Day.
If Borrower selects a Chosen LIBOR Rate, then
each Advance to which such Chosen LIBOR Rate shall
apply shall be made on receipt by Lender from
Borrower at least 3 days prior to the anticipated
Advance Date of one of the following: (i)
Borrower's written notice to Lender of the amount
of the Advance, the Chosen LIBOR Period and the
selected LIBOR rate, or (ii) Borrower's telephonic
request specifying the amount of the Advance, the
Chosen LIBOR Period and the selected LIBOR rate,
which request shall be followed by written notice
from Borrower containing the aforesaid information
and delivered to Lender before 11:00 A.M. of the
anticipated Advance Date, or (iii) delivery of a
signed check or draft against Borrower's account
which check or draft specifies in writing the
amount of the Advance, the Chosen LIBOR Period and
the selected LIBOR rate. Each of the foregoing
documents is referred to herein as a "Notice of
LIBOR Advance". A Notice of LIBOR Advance received
by Lender after 11:00 A.M. shall be deemed to have
been received on the next succeeding Business Day.
c. Section 4.3 is amended by deleting section 4.3 and by
adding the following:
4.3 Selection of Interest Rate.
4.3.1 Borrower may select a one month, two
month, three month, four month, five month or
six month LIBOR rate to which there shall be
added 150 basis points (the sum being referred
to herein as the "Chosen LIBOR Rate"). The
Chosen LIBOR Rate shall apply for a period
equal to 30 days times the number of months
denominated in the LIBOR rate selected by
Borrower to compute the Chosen LIBOR Rate
(such period being referred to as the "Chosen
LIBOR Period"). Also, Borrower may select an
interest rate equal to one percent (1%) less
than Lender's Prime Rate, provided such
reduced rate shall not be less than one
percent (1.00%) over LIBOR (such prime rate as
reduced and as limited being referred to
herein as the "Adjusted Prime Rate") which
rate shall apply to an Advance until a Chosen
LIBOR Rate for a Chosen LIBOR Period applies
to such Advance.
4.3.2 A separate interest rate shall apply to
each individual Advance (excluding Credits
issued and not drawn upon, but including any
Advance made to honor a draft presented under
any Credit) which rate shall be the interest
rate selected by Borrower in a Notice of
Advance or in a Notice of LIBOR Advance or the
interest rate deemed selected by Borrower as
provided herein.
4.3.3 Upon the expiration of a Chosen LIBOR
Period, the interest rate applicable to all
amounts payable then subject to a Chosen LIBOR
Rate applicable during the expiring Chosen
LIBOR Period shall be the Adjusted Prime Rate
unless and until Borrower selects a Chosen
LIBOR Rate for a Chosen LIBOR Period as
provided below.
4.3.4 By notice to the Lender made at least 3
days prior to the expiration of any Chosen
LIBOR Period the Borrower may select a Chosen
LIBOR Rate with respect to all or any portion
of the outstanding Advances (not including any
Credits issued and not drawn upon) then
subject to a Chosen LIBOR Rate, such Chosen
LIBOR Rate to apply for a Chosen LIBOR Period
not extending beyond any maturity date of the
loan facility. By notice to the Lender made
at least 3 days prior to any Business Day,
Borrower may select a Chosen LIBOR Rate with
respect to all or any portion of the
outstanding Advances (not including any
Credits issued and not drawn upon) then
subject to the Adjusted Prime Rate, such
Chosen LIBOR Rate to apply for a Chosen LIBOR
Period not extending beyond any maturity date
of the loan facility.
4.3.5 Selection of an Interest Rate by the
Borrower shall result in the charging and
accrual of interest on each Advance for which
Borrower makes a selection of interest rate as
provided herein (excluding Credits issued and
not drawn upon) at the Chosen LIBOR Rate for
the Chosen LIBOR Period. With respect to any
Advance for which Borrower does not select a
Chosen LIBOR Rate or does not timely give
notice to Lender of a Chosen LIBOR Rate for a
Chosen LIBOR Period, the Borrower shall be
deemed to have selected the Adjusted Prime
Rate existing on the Advance Date, and the
Adjusted Prime Rate shall apply to each
Advance and all other amounts as to which a
Chosen LIBOR Rate does not apply.
4.3.6 If a Default shall have occurred and be
continuing, the Borrower shall not have the
right to select a Chosen LIBOR Rate
d. Section 4.4 is amended by deleting section 4.4 and by
adding the following:
4.4 Prepayments. The Borrower shall not have the
privilege to prepay without penalty any Advance or
portion thereof to which a Chosen LIBOR Rate
applies before the expiration of the Chosen LIBOR
Period applicable thereto. If Borrower prepays any
Advance or portion thereof subject to a Chosen
LIBOR Rate prior to the expiration of the
applicable Chosen LIBOR Period, Borrower shall pay
Lender an amount equal to all charges imposed upon
or incurred by Lender in liquidating its positions
in LIBOR funds to the extent of Borrower's
prepayment.
Borrower shall reimburse and indemnity Lender
for all charges imposed upon Lender to liquidate
its position in LIBOR funds with respect to any
part of the Loan as to which Borrower has selected
a Chosen LIBOR Rate if Lender accelerates payment
of the Note for any cause.
Borrower shall have the privilege to prepay
without penalty any Advance or portion thereof to
which the Adjusted Prime Rate applies.
e. Section 4.5 is amended by deleting section 4.5 and by
adding the following:
4.5 Payment of Interest and Charges. Borrower
promises to pay interest on the outstanding
principal balance of all Advances from the dates of
their respective fundings until the same are repaid
at a per annum rate equal to the Interest Rate
selected or deemed selected by Borrower.
f. Section 4.13 is added as follows:
4.13 Number of Chosen LIBOR periods at Any One
Time. Other provisions herein to the contrary
notwithstanding, the maximum number of advances at
any one time subject to a Chosen LIBOR Rate for a
Chosen LIBOR Period shall not exceed five. All
Advances made by Lender at a time when the number
of Advances then subject to a Chosen LIBOR Rate for
a Chosen LIBOR Period is five shall bear interest
at the Adjusted Prime Rate, and Borrower shall be
deemed to have chosen the Adjusted Prime Rate for
all such Advances.
g. Section 4.14 is added as follows:
4.14 Computation of Interest. Interest on all
Advances shall be calculated on the basis of a 360
day year form the actual days elapsed. Any change
in the interest rate resulting from the change from
a Chosen LIBOR Rate to the Adjusted Prime Rate
shall become effective on and as of the first day
next following the expiration of the applicable
Chosen LIBOR Period.
h. Section 4.15 is added as follows:
4.15 Limitation on Obligation to Make Advances.
Other provisions in the Agreement to the contrary
notwithstanding, Lender shall have no obligation to
make an Advance to bear interest at a rate
determined under Section 4.3 that is less than one
percent (1.00%) over LIBOR.
i. Section 9 is amended by adding the following section:
9.1.9 The occurrence of a default or event of
default under any document evidencing or securing
any present or future indebtedness of Borrower to
Lender in excess of $100,000.00.
2. Continuation of Terms. Except as amended and modified herein,
the Agreement and the Loan Documents remain in full force and
effect and enforceable according to their terms; and all Advances
made by Lender and all other actions taken by Lender pursuant to
the Agreement prior to the date hereof have been satisfactory to
Borrower and they are approved, ratified and confirmed by Borrower.
Borrower promises to pay the Revolving Credit Note according to its
terms.
3. Representations and Warranties of the Borrower. To induce
Lender to enter into this Modification Agreement and to make the
loans and extend the credit contemplated to be made pursuant to the
Agreement as modified by this Third Modification Agreement,
Borrower hereby makes the representations and warranties to Lender
set forth in sections 3.1 through 3.15 of the Agreement (as the
same have been and are modified and amended by this Third
Modification Agreement), all of which representations and
warranties are incorporated herein by reference and all of which
shall survive the execution and delivery of this Third Modification
Agreement.
4. Terms. The term "Agreement" as used in the Agreement shall
mean the Agreement as modified by this Third Modification
Agreement. The Agreement and the Loan Documents constitute the
complete and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. All terms defined
in the Agreement shall have the same meaning herein unless
otherwise specifically provided.
5. Successors in Interest. This Third Modification Agreement
shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns, transferee and
grantees.
6. Governing Law. The interpretation and performance of this
Third Modification Agreement shall be governed in all respects in
accordance with the laws of the State of Tennessee.
7. Undefined Terms. All capitalized terms not defined herein and
other terms not defined herein shall have the same definitions as
set forth in the Agreement.
IN WITNESS WHEREOF, the parties hereunto have executed this
Third Modification Agreement as of the day and year first above
written.
BORROWER:
FRED'S, INC., a Tennessee
Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President &
Treasurer
LENDER:
UNION PLANTERS NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Docaver
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Name: ▇▇▇▇▇▇▇▇ ▇. Docaver
Title: Vice President
