FRED’S, INC. (NASDAQ:FRED) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
on Form 8-K with respect to the Third Amendment and the Addendum
(as each are defined herein) is hereby incorporated into this
Item 1.01 by reference.
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A
REGISTRANT.
subsidiaries entered into (i) that certain Third Amendment (the
Third Amendment) to that certain Credit Agreement, dated as of
April 19, 2015, by and among the Company and certain of its
subsidiaries, Regions Bank, in its capacity as administrative
agent, collateral agent and lender (Regions), and Bank of
America, N.A., in its capacity as lender (as amended, the Credit
Agreement); and (ii) that certain Amended and Restated Addendum
to Credit Agreement (the Addendum and, together with the Third
Amendment, the Amendment).
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Increases the revolving loan commitment from $150 million
to $225 million, subject to a $30 million sublimit on letters of credit; |
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Limits the amount that can be drawn on the revolving loan
facility to percentages of the Companys credit card receivables, pharmacy receivables, inventory and pharmacy scripts, less reserves; |
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Establishes a financial covenant requiring the Company to
maintain excess availability of at least the greater of $22.5 million and 10% of the aggregate revolving commitments; |
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Revises the definitions of Applicable Margin and Excluded
Subsidiary, among other definitions; |
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Revises the excess availability requirements for certain
acquisitions; |
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Revises the limitation on dividends paid during any four
consecutive quarters to $12.5 million from $20 million; |
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Authorizes Regions to take control of certain accounts of
the Company upon certain conditions being satisfied for the purpose of directing payments to Regions; and |
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Revises certain financial reporting obligations of the
Company to the lenders. |
to $15 million of borrowings under the revolving loan facility
may be used in connection with the acquisition of up to 10 Rite
Aid stores to the terms of that certain Asset Purchase Agreement,
dated as of December 19, 2016, by and among the Company, AFAE,
LLC, Rite Aid Corporation and Walgreens Boots Alliance, Inc.
under the Credit Agreement have in the past provided, or may in
the future provide, investment banking, underwriting, lending,
commercial banking, trust and other advisory services to the
Company, its subsidiaries or affiliates. These parties have
received, and may in the future receive, customary compensation
from the Company, its subsidiaries or affiliates, for such
services.
Addendum are qualified in their entirety by reference to copies
of the Third Amendment and the Addendum, which are filed as
Exhibit 10.1 and Exhibit 10.2, respectively, to this Current
Report on Form 8-K and incorporated herein by reference.
| 10.1 |
Third Amendment to Credit Agreement, dated as of January
27, 2017, by and among Freds, Inc. and certain of its subsidiaries, Regions Bank, in its capacity as administrative agent, collateral agent and lender, and Bank of America, N.A., in its capacity as lender. |
| 10.2 |
Amended and Restated Addendum to Credit Agreement, dated
as of January 27, 2017, by and among Freds, Inc. and certain of its subsidiaries, Regions Bank, in its capacity as administrative agent, collateral agent and lender, and Bank of America, N.A., in its capacity as lender. |
About FRED’S, INC. (NASDAQ:FRED)
Fred’s, Inc. (Fred’s) is engaged in the sale of general merchandise through its retail discount stores and full service pharmacies. The Company sells general merchandise to its over 20 franchisees. The Company has approximately 660 retail stores, over 370 pharmacies, and approximately three specialty pharmacy facilities located in over 15 states mainly in the Southeastern United States. The Company is licensed to dispense pharmaceuticals in approximately 50 states. The Company operates approximately 640 company-owned stores, including over 60 express stores (or Xpress stores). Fred’s is a combination of pharmacy, dollar store and mass merchant strategically located in smaller markets. It offers various product categories, including consumables, such as tobacco, food and beverage, prescription pharmaceuticals, paper and cleaning supplies, pet supplies, health and beauty aids, and discretionary products, such as home decor, seasonal merchandise, auto and hardware, and lawn and garden. FRED’S, INC. (NASDAQ:FRED) Recent Trading Information
FRED’S, INC. (NASDAQ:FRED) closed its last trading session up +0.04 at 14.09 with 667,644 shares trading hands.
