Exhibit 10.12

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of
September [ ] , 2015 (the “Amendment Date”), by and among (A) FRED’S, INC., a
Tennessee corporation (“Parent”); the Subsidiaries of Parent identified on the
signature pages hereto as Borrowers (each of such Subsidiaries, together with
Parent,  jointly and severally, the “Borrowers” and, each, a “Borrower”); (C)
the Subsidiaries of Parent identified as Guarantors on the signature pages
hereto; (D) the Lenders party to the Credit Agreement defined below; (E) REGIONS
BANK, an Alabama bank, in its capacities as Swingline Lender and LC Issuer under
the Credit Agreement defined below; and (E) REGIONS BANK, in its capacities as
administrative agent and collateral agent for the Lenders,  Swingline Lender and
LC Issuer under the Credit Agreement defined below (in such capacities,
“Administrative Agent” or “Agent”).

W I T N E S S E T H :

WHEREAS, Borrowers, Guarantors, Lenders, Swingline Lender, LC Issuer and
Administrative Agent have executed and delivered that certain Credit Agreement
dated as of April 9, 2015 (as the same has been or may be amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”);
and

WHEREAS, the Borrowers have requested that Administrative Agent and Lenders
party hereto amend certain provisions of the Credit Agreement as set forth
herein, and Administrative Agent and the Lenders party hereto have agreed to
such amendments, subject to the terms and conditions hereof.

NOW, THEREFORE, for and in consideration of the above premises and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, the Borrowers, the Administrative Agent, and
the Lenders party hereto hereby covenant and agree as follows:

SECTION 1.Definitions. Unless otherwise specifically defined herein, each term
used herein (and in the recitals above) which is defined in the Credit Agreement
shall have the meaning assigned to such term in the Credit Agreement. Each
reference to “hereof,” “hereunder,” “herein,” and “hereby” and each other
similar reference and each reference to “this Amendment” and each other similar
reference contained in the Credit Agreement shall from and after the date hereof
refer to the Credit Agreement as amended hereby.

SECTION 2.Amendments to Credit Agreement.

(a)Addition of New Definitions. Section 1.1 of the Loan Amendment is hereby
amended by adding each of the following new definitions in appropriate
alphabetical order:

“First Amendment” means that certain First Amendment to Credit Agreement, dated
as of September __, 2015, made among Borrowers,  Guarantors, Administrative
Agent and Lenders party thereto (among others), amending this Agreement.

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“First Amendment Effective Date” means the date on which the First Amendment
becomes effective in accordance with its terms as set forth in Section 3
thereof.

(b)Amendment to Section 7.6 (Asset Dispositions). Section 7.6 of the Credit
Agreement is amended by (a) deleting the word ”or” after clause (i) thereof, (b)
adding the word “or” after clause (k) thereof and (c) adding a new clause (l)
thereto, to read as follows:

(l)A sale or other disposition of any Real Estate which, in the reasonable
judgment of Borrowers, is no longer economically practicable to maintain or
useful in the conduct of the Loan Parties’ and Subsidiaries’ business.  

 

SECTION 3.Conditions Precedent. This Amendment shall become effective only upon
satisfaction of the following on or before the Amendment Date:

(a)execution and delivery of this Amendment by Borrowers, Guarantors,
Administrative Agent and Required Lenders; and

(b)Administrative Agent shall have received all other documents, instruments,
certificates and agreements (if any) as Administrative Agent shall have
reasonably requested in connection with the foregoing.

SECTION 4.Miscellaneous Terms.

(a)Loan Document. For avoidance of doubt, Borrowers and Administrative Agent
hereby acknowledge and agree that this Amendment is a Loan Document.

(b)Effect of Amendment. All amendments set forth herein shall become effective
as of the First Amendment Effective Date. Except as otherwise may be set forth
expressly hereinabove, all terms of the Credit Agreement and the other Loan
Documents shall be and remain in full force and effect, and shall constitute the
legal, valid, binding, and enforceable obligations of the Borrowers. Except to
the extent otherwise expressly set forth herein, the amendments set forth herein
shall have prospective application only from and after the date of this
Amendment.

(c)No Novation or Mutual Departure. The Borrowers expressly acknowledge and
agree that (i) there has not been, and this Amendment does not constitute or
establish, a novation with respect to the Credit Agreement or any of the other
Loan Documents, or a mutual departure from the strict terms, provisions, and
conditions thereof, other than with respect to the limited amendments contained
in Section 2 above and (ii) nothing in this Amendment shall affect or limit the
Administrative Agent’s or Lenders’ right to demand payment of liabilities owing
from the Borrowers to the Administrative Agent or the Lender under, or to demand
strict performance of the terms, provisions and conditions of, the Credit

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Agreement and the other Loan Documents, to exercise any and all rights, powers,
and remedies under the Credit Agreement or the other Loan Documents or at law or
in equity, or to do any and all of the foregoing, immediately at any time after
the occurrence of a Default or an Event of Default under the Credit Agreement or
the other Loan Documents.

(d)Ratification. Each Borrower (i) hereby restates, ratifies, and reaffirms each
and every term, covenant, and condition set forth in the Credit Agreement and
the other Loan Documents to which it is a party effective as of the date hereof
and (ii) restates and renews each and every representation and warranty
heretofore made by it in the Credit Agreement and the other Loan Documents as
fully as if made on the date hereof and with specific reference to this
Amendment and any other Loan Documents executed or delivered in connection
herewith (except with respect to representations and warranties made as of an
expressed date, in which case such representations and warranties shall be true
and correct as of such date).

(e)No Default. To induce the Administrative Agent and the Lenders party hereto
to enter into this Amendment and to continue to make advances pursuant to the
Credit Agreement (subject to the terms and conditions thereof), each Borrower
hereby acknowledges and agrees that, as of the date hereof, and after giving
effect to the terms hereof, there exists (i) no Default or Event of Default and
(ii) no right of offset, defense, counterclaim, claim, or objection in favor of
any Borrower or arising out of or with respect to any of the Loans or other
obligations of the Borrowers owed to the Administrative Agent and the Lenders
party hereto under the Credit Agreement or any other Loan Document.

(f)Counterparts. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument.
This Amendment may be executed by each party on separate copies, which copies,
when combined so as to include the signatures of all parties, shall constitute a
single counterpart of the Amendment.

(g)Fax or Other Transmission.  Delivery by one or more parties hereto of an
executed counterpart of this Amendment via facsimile, telecopy, or other
electronic method of transmission pursuant to which the signature of such party
can be seen (including, without limitation, Adobe Corporation’s Portable
Document Format) shall have the same force and effect as the delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by facsimile or other electronic method
of transmission shall also deliver an original executed counterpart, but the
failure to do so shall not affect the validity, enforceability, or binding
effect of this Amendment.

(h)Recitals Incorporated Herein. The preamble and the recitals to this Amendment
are hereby incorporated herein by this reference.

(i)Section References. Section titles and references used in this Amendment
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the Amendments among the parties hereto evidenced hereby.

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(j)Further Assurances. Each Borrower agrees to take, at such Borrower’s expense,
such further actions as the Administrative Agent shall reasonably request from
time to time to evidence the amendments set forth herein and the transactions
contemplated hereby.

(k)Governing Law.  This Amendment shall be governed by and construed and
interpreted in accordance with the internal laws of the State of Georgia but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of Georgia.

(l)Severability.  Any provision of this Amendment which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.

(m)Approval. Effective as of the First Amendment Effective Date, Administrative
Agent approves the Permitted Accounts Financing Agreement as an Approved Supply
Chain Program.  

 

 

[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY].

 

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IN WITNESS WHEREOF, Borrowers, Guarantors, Administrative Agent and the Lenders
party hereto have caused this Amendment to be duly executed by its duly
authorized officer or other representative as of the day and year first above
written.

 

 

 

 

BORROWERS:

FRED'S, INC., a Tennessee corporation,

as "Borrower Agent" and a "Borrower"

By:___/s/ Jerry A. hore________________

Name:  Jerry A. Shore

Title:    Chief Executive Officer

Attest: _____/s/ Mark C. Dely___________

Name:  Mark C. Dely

Title:    Secretary

FRED'S STORES OF TENNESSEE, INC., a Tennessee corporation, as a "Borrower"

By:___/s/ Jerry A. Shore_______________

Name:  Jerry A. Shore

Title:    Chief Executive Officer

Attest: _____/s/ Mark C. Dely___________

Name:  Mark C. Dely

Title:    Secretary

FRED'S DOLLAR STORE OF MCCOMB, INC., a Mississippi corporation, as a "Borrower"

By:___/s/ Jerry A. Shore_______________

Name:  Jerry A. Shore

Title:    Chief Executive Officer

Attest: _____/s/ Mark C. Dely___________

Name:  Mark C. Dely

Title:    Secretary

[Signatures continue on following page.]

 

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FRED'S CAPITAL FINANCE INC., a Delaware corporation, as a "Borrower"

By:___/s/ Andrew T. Panaccione_________

Name:  Andrew T. Panaccione

Title:    President

Attest: __/s/ Pamela A. Jasinski_______

Name:  Pamela A. Jasinski

Title:    Secretary

FRED'S CAPITAL MANAGEMENT COMPANY, a Delaware corporation, as a "Borrower"

By:___/s/ Andrew T. Panaccione_________

Name:  Andrew T. Panaccione

Title:    President

Attest: __/s/ Pamela A. Jasinski_______

Name:  Pamela A. Jasinski

Title:    Secretary

NATIONAL PHARMACEUTICAL NETWORK, INC., a Florida corporation, as a "Borrower"

By:____/s/ Jerry A. Shore______________

Name:  Jerry A. Shore

Title:    President

Attest:______/s/ Mark C. Dely__________

Name:  Mark C. Dely

Title:    Secretary

[Signatures continue on following pages.]

Section 1.1.

 

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ADMINISTRATIVE AGENT:

 

REGIONS BANK

 

By:    /s/ Louis Alexander

Name:  Louis Alexander

Title:   SVP

 

 

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LENDERS:

 

REGIONS BANK

 

By:    /s/ Louis Alexander

Name:  Louis Alexander

Title:   SVP

 

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BANK OF AMERICA, N.A.:

 

By:  /s/ Christina M. Scott

Name: Christina M. Scott

Title:  SVP - Director