Exhibit 10.15
THIRD MODIFICATION AGREEMENT
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OF THE REVOLVING LOAN AND CREDIT AGREEMENT
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THIS THIRD MODIFICATION AGREEMENT OF THE REVOLVING LOAN AND CREDIT
AGREEMENT (hereafter the "Third Modification") made and entered into this 31st
day of July, 2003, to be effective as of the 1st day of August, 2003, by and
between UNION PLANTERS BANK NATIONAL ASSOCIATION, a national banking association
with its principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ("Lender"),
SUNTRUST BANK, a Georgia banking corporation with its principal office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the "Documentation Agent"), and
FRED'S, INC., a Tennessee corporation having its principal offices at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the "Borrower").
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)
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);
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; and
WHEREAS, Borrower and Lender desire to amend the Credit Agreement and
Note, to extend the Maturity Date of the Note, to extend the Maturity Date, as
defined in Section 2.1 of the Credit Agreement, and to amend several financial
provisions of the Credit 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 hereto agree as follows:
1. Modification of Credit Facility: Borrower, Lender and
Documentation Agent each agree that
(a) "`Maturity Date' means March 31, 2004" is hereby stricken
from the Credit Agreement and the Credit Agreement is hereby
amended and restated to insert in place of the above stricken
phrase the following: "`Maturity Date' means July 31, 2006."
(b) The definition of "LIBOR Change Date", as contained in
Section 2.1 of the Credit Agreement shall be deleted and
restated, as follows:
"LIBOR Change Date" shall mean, with respect to any
Advance or other segregated portion of the outstanding
indebtedness collectively bearing interest at a rate based
upon LIBOR, upon any pre-selected time period, including 1,
7, 30, 60 or 90 days after the date on which the then
current LIBOR rate was selected, as appropriate. On the
LIBOR Change Date, the interest rate chargeable with respect
to any Advance or other such segregated portion of the
outstanding indebtedness, shall revert to the rate
identified in Section 4.3.2, unless the Borrower has
affirmatively selected another LIBOR based rate with respect
to such Advance or other such segregated portion of the
outstanding indebtedness.
(c) The definition of "LIBOR Period", as contained in Section
2.1 of the Credit Agreement shall be deleted and restated, as
follows:
"LIBOR Period" shall mean, with respect to any
Advance or other segregated portion of the outstanding
indebtedness collectively accruing interest at a rate based on
the LIBOR rate, any applicable period selected (ie. 30, 60, or
90 days) as the term for which LIBOR Quotes are to be
selected. With respect to any Advance or other such segregated
portion of the outstanding indebtedness, the interest rate
chargeable under this agreement shall remain fixed during its
applicable LIBOR Period, changing only upon a LIBOR Change
Date."
(d) Section 4.3.1 of the Credit Agreement shall be deleted
and restated as follows:
"A rate fixed for a LIBOR Period by the Borrower's
selection of 1, 7, 30, 60, or 90 day LIBOR in effect on the
date of such selection and adding to such annual rate .65
percentage points. Such rate shall remain in effect for the
remainder of the applicable LIBOR Period and shall, at the
LIBOR Change Date revert to Prime Rate unless instructions to
the contrary are given the Bank by the Borrower; or"
(e) Section 4.9 of the Credit Agreement shall be deleted and
restated as follows:
Reserve/Unused Fee. In addition to the Interest Rate
charged the Borrower, the Borrower shall pay to the Lender
fifteen one-hundredths percent (15/100%) on an annualized
basis, applied to the average daily difference between the
Commitment (unreduced by any ratio requirement or other
condition) and the aggregate of all Advances outstanding on
each day, payable monthly.
(f) Section 6.4.4 of the Credit Agreement shall be deleted and
restated as follows:
"The Borrower shall maintain a Tangible Net Worth no
less than $225,000,000 plus fifty percent (50%) of annual Net
Income for calendar year 2003 and following, plus the net
proceeds of any equity offering."
(g) Section 5.2.4 of the Credit Agreement shall be amended to
include the phrase "other than those matters identified on
Schedule A", at the end of the sentence. Schedule A shall be
incorporated by reference into the Credit Agreement and is
attached to this Third Modification as "Schedule "A".
2. Modification of Note: Borrower, Lender and Documentation Agent
each agree that the outstanding principal balance of the Note and
accrued but unpaid interest shall be due and payable on July 31,
2006. Interest on the outstanding principal balance shall accrue
and be payable as provided in the Credit Agreement.
3. 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.
4. Continuation of Terms. All of the terms, covenants and conditions
of the Note, as modified by the First Modification, the Second
Modification and Third 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 Third 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, remains in full force and effect, and
shall terminate on March 31, 2004. 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.
5. Incorporation by Reference. The parties hereby incorporate by
reference the Credit Agreement, First Modification, Second
Modification, and Participation Agreement, all attached hereto as
Exhibits "A", "B", "C" and "D", respectively, as though each
agreement was set forth in its entirety. The parties further
incorporate by reference Schedule A to the Credit Agreement as
though it set forth in its entirety.
6. No Discharge. The execution and delivery of this Third
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.
7. Successors in Interest. This Third Modification shall be binding
upon and inure to the benefit of the parties hereto, their
respective successors and assigns, transferees and grantees.
8. Governing Law: This Third 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.
9. Undefined Terms: All capitalized terms not defined herein shall
have the same definitions as set forth in the Credit Agreement.
IN WITNESS WHEREOF, the parties have executed this Third 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/ ▇▇▇▇▇ ▇ ▇▇▇▇▇
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Name: Fred's Inc.
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Title: Executive Vice President
& Chief Financial Officer
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LENDER:
UNION PLANTERS BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President
DOCUMENTATION AGENT:
SUNTRUST BANK, a Georgia banking corporation
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Director