Document:

pcti-ex101_7.htm

EXHIBIT 10.1

SePARATION aGREEMENT AND RELEASE 

This Separation Agreement and Release (“Agreement”) is made by and between Jeffrey A. Miller of 1194 Falcon Ridge Drive, Elgin, Illinois 60124 (“Employee”) and PCTEL, Inc., a Delaware corporation, including its employees, directors, officers, shareholders, successors and assigns (“Company” or “PCTEL”). Employee and PCTEL may collectively sometimes be referred to as the “Parties”.

 

WHEREAS, Employee and PCTEL have previously entered into the Jeffrey A. Miller Employment Agreement amended and restated on December 11, 2008 (“Employment Agreement”); 

 

WHEREAS, PCTEL and Employee have also previously entered into one or more restricted stock and stock option award agreements, subject to the terms and conditions of PCTEL’s Stock Plan, as amended and restated (the “Stock Plan”);

 

WHEREAS, Employee’s employment with PCTEL will end on October 1, 2018 (the “Separation Date”); and

 

WHEREAS, the Parties desire to effect a final settlement of all claims and issues;

 

NOW, THEREFORE, in consideration of the execution hereof and the promises made herein, the Parties hereby agree as follows:

 

1.In lieu of the payment described in Section 7(a)(i) of the Employment Agreement, PCTEL agrees to pay Employee an amount equivalent to six months of Employee’s current base salary (One Hundred Forty Thousand Dollars ($140,000)), less applicable withholding, as a lump sum on the Separation Date so long as five (5) business days have elapsed beyond the expiration of the revocation period for the release and waiver referred to in Section 15(f) below (the “Payment Date”).  

 

2.In lieu of the payment described in Section 7(a)(iii) of the Employment Agreement, PCTEL agrees to accelerate the vesting of an aggregate of 44,000 restricted shares of PCTEL common stock previously awarded to Employee, as follows: 

(i) 5,000 from the grant identified as 4219, 14,000 from the grant identified as 4528, and 6,666 from the grant identified as 4596, all of which would have vested on February 11, 2019; 

(ii) 5,000 from the grant identified as 4219, and 6,667 from the grant identified 4596, both of which would have vested on February 11, 2020; and 

(iii) 6,667 from the grant identified 4596 which would have vested on February 11, 2021.  

All such restricted shares will vest on the Payment Date.

 

3.In addition, on the Separation Date the Employee may have vested options for PCTEL common stock (the “Options”) remaining from the grants identified as number 3655 and 3741.  In accordance with the Stock Plan, Employee has a period of ninety (90) days from the Separation Date within which to exercise the Options.

 

4.Employee’s health insurance benefits will cease as of October 31, 2018.  Subject to Employee’s right to continue health insurance under COBRA, should Employee elect COBRA within the required period, in lieu of the payment described in Section 7(a)(ii) of the Employment Agreement, PCTEL agrees to pay the entire cost of the COBRA premiums for a period of twelve (12) months for continued health coverage (i.e., medical, dental and vision as currently offered by Company) for Employee and Employee’s eligible dependents who received health care coverage under Company health care plans as of August 1, 2018.  Employee will be responsible for any and all COBRA payments thereafter.

 

5.On the next regular pay date following the Separation Date, Employee will be paid a lump sum (less applicable withholding) equivalent to earned but unused paid time off (PTO), if any, through the Separation Date. 

 

6.On the next regular pay date following the Separation Date, Employee will receive a refund from the Employee Stock Purchase Program (ESPP), if applicable.

 

7.Employee will receive all retirement benefits for which Employee is eligible, if any, in accordance with the applicable benefit plan documents.  Employee will cease and no longer accrue employee benefits, including but not limited to PTO, as of the Separation Date, and Employee’s participation in all other benefits and incidents of employment shall cease on the Separation Date.  

 

 

Confidential

 

 

8.Employee agrees that he will not take any action, or make any statement, whether orally or in writing (including through social media), which in any manner disparages or impugns the reputation or goodwill of PCTEL and that to do so will constitute a breach of this Agreement.  

 

9.Employee is to direct all requests for job references to PCTEL's Vice President, Corporate Resources and Chief Risk Officer, at 471 Brighton Drive, Bloomingdale, Illinois 60108, who will respond only to written reference inquiries with the following information: dates of employment, position held, and confirmation of last salary. To the extent that Employee directs reference requests to persons at PCTEL other than PCTEL's Vice President, Corporate Resources and Chief Risk Officer, PCTEL will not be liable for any statements made by such non-designated individuals regarding Employee.  Further, the Parties stipulate and agree that PCTEL has no liability for any statements made regarding Employee by persons not employed by PCTEL at the time such statements are made.  

 

10.Employee represents and warrants that he will return to PCTEL on the Separation Date all PCTEL equipment and/or other property, including but not limited to the following:

 

Laptop computer (#2294) and peripherals;

Disks, computer files, thumb or other drives; 

Company information; 

PCTEL apartment key;

AmEx Card (as defined below);

Employee identification badge; and

Other materials which he had in his possession or subject to his control relating to PCTEL and/or any of its customers, vendors and/or employees (“Materials”).  

 

Employee further warrants and acknowledges that he has not retained any such Materials (including any copies or duplicates thereof).  

 

11.Employee agrees to submit an expense report to PCTEL for all unpaid legitimate business expenses incurred in connection with his employment with PCTEL no later than October 31, 2018.  Further, Employee covenants and agrees to pay the entire outstanding balance of the American Express credit card received under PCTEL’s credit card program (“AmEx Card”) as soon as reasonably practicable after receipt of payment from PCTEL of the legitimate expenses indicated on his expense report.  Employee acknowledges that the AmEx Card has been, or will soon be, cancelled and that he may no longer use it after the Separation Date.  Employee further acknowledges that pursuant to the terms of the AmEx Card, he has personal liability for all amounts now due and that become due on the AmEx Card.

 

12.Employee acknowledges that, during his employment, he may have become aware of trade secrets and other confidential, proprietary business information involving PCTEL or its customers.  Employee further acknowledges that he is not to disclose any trade secrets, privileged or confidential information learned in the course of Employee's employment with PCTEL, and that pursuant to Section 10 above Employee is required to return to PCTEL any such trade secrets, privileged or confidential materials currently in his possession, whether in hard copy, or electronic format.  If Employee has turned over such trade secret, privileged or confidential PCTEL information and/or documents, whether in hard copy or electronic format, to any third party, Employee is required, as a condition of this Agreement, to take all necessary efforts to retrieve such information and return it to PCTEL as well as to inform PCTEL's General Counsel of the identity of all such third parties so that PCTEL may take whatever action is necessary to retrieve its information.

 

13.In exchange for the payments and benefits set forth in this Agreement, Employee agrees to the following post-employment covenants:

(a)Non-Compete.  Employee acknowledges that the nature of the Company’s business is such that if Employee were to become employed by, or substantially involved in, a Restricted Business (as defined below) during the twelve (12) months following the Separation Date (the “Restricted Period”), it would be very difficult for Employee not to rely on or use the Company’s trade secrets and confidential information.  Thus, to avoid the inevitable disclosure of the Company’s trade secrets and confidential information, Employee agrees and acknowledges that Employee’s right to receive the payments and benefits set forth in this Agreement (to the extent Employee is otherwise entitled to such payments and benefits) shall be conditioned upon Employee not directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), nor having any ownership interest in or participating in the financing, operation, management or control of, any person, firm, corporation or business that is a Restricted Business; provided, however, that nothing in this Section 13(a) shall prevent Employee from owning as a passive investment less than one percent (1%) of the outstanding shares of the capital stock of a publicly-held company if (A) such shares are 

 

	

	
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actively traded on the New York Stock Exchange or the Nasdaq Global Market and (B) Employee is not otherwise associated with such company or any of its affiliates.  A “Restricted Business” is a business which is engaged in the design, development, manufacture, production, marketing, sale, licensing or servicing of any products, or the provision of any services, that are the same as or substantially similar to those of the Company, or a business which is otherwise one of the top competitors of the Company as listed on Exhibit A.  Upon any breach of this section, all severance payments and benefits pursuant to this Agreement shall immediately cease.  

(b)Non-Solicitation.  During the twelve (12) months following the Separation Date, Employee agrees and acknowledges that Employee’s right to receive the payments and benefits set forth in this Agreement shall be conditioned upon Employee not either directly or indirectly soliciting, inducing, attempting to hire, recruiting, encouraging, taking away, hiring any employee of the Company or causing an employee to leave his or her employment either for Employee or for any other entity or person.

(c)Understanding of Covenants.  Employee represents that he (i) is familiar with the foregoing covenants not to compete and not to solicit, and (ii) is fully aware of his obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.

(d)Notification of Subsequent Employer.  Employee agrees that during the one (1) year period following the Separation Date, he will give written notice to his new employers of his obligations under this Agreement, including but not limited to this Section 13.  Further, during such period Employee agrees to promptly inform the Company, in writing, of the name and address of his subsequent employers.  Finally, Employee consents to the Company providing his subsequent employers with information, including a copy of this Agreement, regarding ongoing obligations under this Agreement.

 

The foregoing agreements are intended to supersede the obligations of Employee under paragraphs 5(g) and (h) of that certain Proprietary Information and Inventions Agreement effective November 12, 2001 (“PIIA”).

 

14.In exchange for the foregoing benefits and payments, Employee, for himself, his heirs, executors and administrators will release and forever discharge PCTEL from any and all legally waivable claims, demands, sums of money, contracts, controversies, agreements, promises, damages, costs, causes of action and liabilities of any kind or character whatsoever, from the beginning of time to the date Employee signs this Agreement, relating to his employment at PCTEL, including the termination of such employment, except insofar as it may be necessary to take action with respect to the enforcement of this Agreement or as specified in Section 15(d).  This release includes but is not limited to, all claims which could have been raised under any local, state or federal statute (including specifically under the Worker Adjustment and Retraining Act (WARN) or any similar state statute, if applicable), ordinance, regulation and/or under any express or implied contract and/or under common law.

 

15.With respect to the foregoing release and waiver, Employee acknowledges the following:

 

(a)The foregoing release and waiver is entered into knowingly, voluntarily and with the opportunity for advice by Employee's personal attorney.

 

(b)The entitlements set forth in this Agreement are in lieu of those in Section 7(a) of the Employment Agreement to which he would otherwise be eligible to receive.

 

(c)Nothing contained in this Agreement purports to release any of Employee's rights or claims that may arise after the date of execution of this Agreement.

 

(d)Nothing contained in this Agreement prohibits Employee from reporting possible violations of federal law or regulation to any governmental agency or regulatory authority, including but not limited to the Securities and Exchange Commission, or from making other disclosures that are protected under the whistleblower provisions of federal law or regulation.

 

(e)This Agreement shall not give rise to any legal rights or obligations with respect to any waiver of claims until Employee is afforded a period of forty-five (45) calendar days within which to consider the terms of this Agreement.

 

(f)Employee shall be afforded seven (7) calendar days following the execution of this Agreement within which Employee may revoke the Agreement insofar as it relates to the Age Discrimination in Employment Act, if applicable, and none of the terms and provisions of this Agreement shall become effective or enforceable with respect to any waiver of claims under the Age Discrimination in Employment Act until such revocation period has expired.  Any such revocation must be in writing, including email, and directed to Shelley J. Bacastow, Vice 

 

	

	
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President and General Counsel, PCTEL, Inc., 471 Brighton Drive Bloomingdale, Illinois 60108.  Ms. Bacastow's email address is: shelley.bacastow@pctel.com and her telephone number is 630.339.2115.  Although such revocation must be in writing, Ms. Bacastow must also be informed by telephone of the revocation on or before the last day of the revocation period.

 

16.Employee acknowledges and agrees that if he breaches any of the terms of this Agreement, then PCTEL may (a) stop the payment of any benefits pursuant to this Agreement not yet paid; (b) seek recovery of any payments already made pursuant to this Agreement, and (c) seek the payment of all damages, costs and expenses (including reasonable attorneys' fees) incurred by PCTEL in connection with such suit, action or breach.

 

17.The Parties hereby stipulate and agree that nothing contained in this Agreement shall be construed as an admission of liability, culpability or wrongdoing by either Party.  

 

18.The Parties agree that this Agreement shall be construed and enforced in accordance with the laws of the State of Illinois without regard to choice of law or conflict of law principles.  The Parties further agree that any legal proceedings relating to this Agreement will be handled in accordance with paragraph 12(c) of the Employment Agreement (Arbitration and Equitable Relief); provided, however, if the provisions of such paragraph are disallowed, the Parties agree that any legal proceedings relating to this Agreement shall be instituted in federal or state court in Cook County, Illinois, and the Parties consent to the jurisdiction of such courts for such actions. The Parties agree to waive the right to a jury trial of any dispute or claim.    

 

19.Should any provision of this Agreement, in whole or in part, be held invalid or unenforceable by operation of law or otherwise, all other provisions shall remain in full force and effect and the Parties agree that a court may modify any provision to make it valid or enforceable in whole or in part.

 

20.In addition to the specific portions of the Employment Agreement and PIIA expressly superseded in various provisions of this Agreement, this Agreement is also intended to supersede the Amended and Restated Management Retention Agreement dated April 8, 2013 between the Parties.  It is not, however, intended to supersede the Indemnification Agreement dated November 19, 2009 between the Parties or the portions of the Employment Agreement and PIIA not expressly superseded.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

 

	

	
PCTEL, Inc.

 

 

	
Dated:  August 27, 2018
	
By   /s/ David A. Neumann

	

	
Chief Executive Officer 

 

	

	
Jeffrey A. Miller

 

	

	
 

	
Dated:  August 27, 2018
	
/s/ Jeffrey A. Miller

 

	

	
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EXHIBIT A

 

PROHIBITED COMPANIES

 

 

The following are the entities referenced in section 13(c):

Airgain Inc.

Epiq Solutions

Laird Technologies

Mobile Mark, Inc.

Panorama Antennas Ltd.

Rohde & Schwarz GmbH & Co KG 

Venture Corporation Limited

 

	

	
-5-Exhibit 10.1

 

SEVENTH
AMENDMENT TO CREDIT AGREEMENT,

SECOND AMENDMENT TO AMENDED AND RESTATED ADDENDUM TO

CREDIT AGREEMENT, SECOND AMENDMENT TO SECURITY AGREEMENT, AND

RATIFICATION,
REAFFIRMATION AND ASSUMPTION

 

THIS
SEVENTH AMENDMENT TO CREDIT AGREEMENT, SECOND AMENDMENT TO AMENDED AND RESTATED ADDENDUM TO CREDIT AGREEMENT, SECOND AMENDMENT
TO SECURITY AGREEMENT, AND RATIFICATION, REAFFIRMATION AND ASSUMPTION (this “Amendment”) is dated as of August
23, 2018, by and among (A) FRED’S, INC., a Tennessee corporation (“Parent”); (B) the Subsidiaries
of Parent identified on the signature pages hereto as Borrowers (each of such Subsidiaries, together with Parent, jointly and
severally, “Borrowers” and, each, a “Borrower”); (C) the Subsidiaries of Parent identified
as Guarantors on the signature pages hereto (each of such Subsidiaries, jointly and severally, “Guarantors”
and, each, a “Guarantor”; it being understood that, as of the date hereof, there are no Guarantors); (D) the
Lenders party to the Credit Agreement defined below; and (E) REGIONS BANK, an Alabama bank, in its capacity as administrative
agent for Lenders, LC Issuers and other Secured Parties (as defined in the Credit Agreement) (in such capacity, “Administrative
Agent” or “Agent”).

W
I T N E S S E T H :

WHEREAS,
(a) Borrowers, Guarantors, Lenders, Swingline Lender, LC Issuers, Co-Collateral Agents and Administrative Agent are parties to
that certain Credit Agreement dated as of April 9, 2015, as amended by that certain First Amendment to Credit Agreement dated
as of October 23, 2015; that certain Second Amendment to Credit Agreement dated as of December 28, 2016; that certain Third Amendment
to Credit Agreement dated as of January 27, 2017; that certain Fourth Amendment to Credit Agreement, First Amendment to Amended
and Restated Addendum to Credit Agreement, and First Amendment to Security Agreement dated as of July 31, 2017; that certain Fifth
Amendment to Credit Agreement dated as of August 22, 2017; and that certain Sixth Amendment to Credit Agreement and Ratification,
Reaffirmation and Assumption dated as of April 5, 2018 (as so amended, and as the same may be further amended, restated, supplemented,
or otherwise modified from time to time, the “Credit Agreement”), (b) Borrowers, Guarantors, Lenders, Administrative
Agent and certain other parties are parties to that certain Amended and Restated Addendum to Credit Agreement dated as of January
27, 2017, as amended by that certain Fourth Amendment to Credit Agreement, First Amendment to Amended and Restated Addendum to
Credit Agreement, and First Amendment to Security Agreement dated as of July 31, 2017 (as so amended, and as the same may be further
amended, restated, supplemented, or otherwise modified from time to time, the “Addendum”), and (c) Borrowers,
Guarantors and Administrative Agent are parties to that certain Security Agreement dated as of April 9, 2015, as amended by that
certain Fourth Amendment to Credit Agreement, First Amendment to Amended and Restated Addendum to Credit Agreement, and First
Amendment to Security Agreement dated as of July 31, 2017 (as so amended, and as the same may be further amended, restated, supplemented,
or otherwise modified from time to time, the “Security Agreement”);

WHEREAS,
Borrowers have advised Administrative Agent and Lenders that Borrowers and their Subsidiaries intend to consummate certain entity
dissolutions and mergers in connection with an internal corporate reorganization, as described on Annex I hereto, which
is hereby incorporated by reference into this Amendment and made an integral part hereof (collectively, the “Corporate
Reorganization”);

WHEREAS,
Borrowers have advised Administrative Agent and Lenders that the Corporate Reorganization is permitted pursuant to Sections 5.2
and 7.3 of the Credit Agreement, so long as, at the time thereof and immediately after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing;

     

     

    

WHEREAS,
Borrowers have further requested that Administrative Agent and Lenders amend certain provisions of the Credit Agreement, the Addendum
and the Security Agreement as set forth herein; and

WHEREAS,
Administrative Agent and Lenders 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 are hereby acknowledged by the parties hereto, Borrowers, Administrative Agent and Lenders 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 Agreement” and each other similar reference contained in
the Credit Agreement, the Addendum and the Security Agreement shall from and after the date hereof refer to the Credit Agreement,
the Addendum and the Security Agreement, respectively, as amended hereby.

SECTION
2.       Ratification, Reaffirmation and Assumption. Each Borrower (including the Surviving
Borrower (as defined in Annex I hereto)) hereby:

(a)          acknowledges,
stipulates, and agrees that:

(i)         the
documents necessary to consummate the Corporate Reorganization have been executed and submitted for filing with the Secretary
of State or its equivalent in the appropriate jurisdictions effective as of the date hereof and the Corporate Reorganization will
be consummated in accordance with Applicable Law, and Borrowers have complied with all of the requirements of Sections 5.2 and
7.3 of the Credit Agreement with respect thereto;

(ii)        upon
the effectiveness of the Dollar Store Merger (as defined in Annex I hereto), (x) the Surviving Borrower, without further
act, deed or other transfer, shall have assumed and succeeded to all debts, liabilities, obligations and duties of the Predecessor
Borrower under the Credit Agreement and the other Loan Documents, including, without limitation, the Obligations, and all such
debts, liabilities, obligations and duties of the Predecessor Borrower shall thereafter be deemed to be held by the Surviving
Borrower without further act, deed or other transfer, and (y) all of the rights of Administrative Agent, Lenders and the other
Secured Parties as creditors of the Predecessor Borrower shall be preserved unimpaired, and shall continue as rights of each such
Person as creditors of the Surviving Borrower, to the same extent and may be enforced against it to the same extent as if all
of such Obligations had been incurred or contracted by it, and all Liens upon the Collateral of the Predecessor Borrower granted
to Administrative Agent, for the benefit of Secured Parties, shall be preserved unimpaired and shall continue as Liens granted
upon such Collateral by the Surviving Borrower and may be enforced against it to the same extent as if all of such Liens had been
granted by it, and all Obligations of the Predecessor Borrower shall thenceforth remain with the Surviving Borrower and may be
enforced against it to the same extent as if all of such Obligations had been incurred or contracted by it;

(iii)       the
Credit Agreement and the other Loan Documents executed by such Borrower (including, in the case of the Surviving Borrower, as
successor to the Predecessor Borrower) are legal, valid and binding obligations of such Borrower that are enforceable against
such Borrower in accordance with the terms thereof, except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;

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(iv)      neither
the Credit Agreement nor any of the other Loan Documents executed by such Borrower (including, in the case of the Surviving Borrower,
as successor to the Predecessor Borrower) shall be impaired in any way by the Corporate Reorganization, and Administrative Agent’s
Liens in all of the Collateral, for the benefit of Secured Parties, shall continue uninterrupted notwithstanding the consummation
of the Corporate Reorganization;

(v)       all
of the Obligations are absolutely owing and payable by Borrowers (including the Surviving Borrower) to Administrative Agent and
the other Secured Parties as of the date hereof without any right of offset, defense, deduction, counterclaim, claim, or objection
in favor of any Borrower (and, to the extent any Borrower has any right of offset, defense, deduction, counterclaim, claim or
objection on the date hereof, the same is hereby waived by such Borrower);

(vi)      as
of the date hereof, and immediately after giving effect to the Corporate Reorganization, no Default or Event of Default has occurred
and is continuing;

(vii)     in
the case of the Surviving Borrower, all representations, warranties, terms, covenants, conditions, agreements, waivers and consents
set forth in the Credit Agreement and the other Loan Documents executed by the Predecessor Borrower shall apply to the Surviving
Borrower with the same force and effect as if such Loan Documents had been originally executed in the name of the Surviving Borrower;

(viii)    each
reference in the Loan Documents to the Predecessor Borrower shall hereafter be deemed to be a reference to the Surviving Borrower
as successor in interest thereto after giving effect to the Dollar Store Merger; and

(ix)       Annex
II hereto sets forth the legal name, the jurisdiction of incorporation or organization, and the percentage ownership of each
Subsidiary of Parent and whether such Subsidiary is a Loan Party or an Excluded Subsidiary, in each case as of the Seventh Amendment
Effective Date and after giving effect to the Corporate Reorganization;

(b)       (i)
restates, ratifies and reaffirms the Obligations, the Credit Agreement and the other Loan Documents executed by such Borrower
(including, in the case of the Surviving Borrower, as successor to the Predecessor Borrower), and each and every term, covenant,
and condition of such Borrower (including, in the case of the Surviving Borrower, as successor to the Predecessor Borrower) set
forth in the Credit Agreement and the other Loan Documents, effective as of the date hereof; (ii) restates each and every representation
and warranty (including, in the case of the Surviving Borrower, as successor to the Predecessor Borrower) in the Credit Agreement
and the other Loan Documents in all material respects (other than those representations and warranties that are expressly qualified
by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct
in all respects) as fully as if made on the date hereof, after giving effect to the Corporate Reorganization, 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 in all material respects (or in all respects, as applicable) as of such date); and (iii) ratifies and reaffirms the grant
by such Borrower (including, in the case of the Surviving Borrower, as successor to the Predecessor Borrower) of, and hereby renews
and continues, a continuing security interest in and to, and Lien upon, all right, title, and interest in all of the Collateral
in favor of Administrative Agent, for the benefit of Secured Parties, and acknowledges and stipulates that such security interests
and Liens are duly perfected, first priority security interests and Liens, subject to Liens permitted by Section 7.2 of the Credit
Agreement, and that all of the Obligations continue to be secured, without interruption, by such security interests and Liens;
and

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(c)       represents
and warrants that (i) the consummation of the Corporate Reorganization has not required Governmental Approvals, or any other consent
or approval of, registration or filing with, or any action by, any Governmental Authority or any other Person, except those as
have been obtained or made and are in full force and effect; (ii) the execution, delivery and performance by such Borrower of
this Amendment and the consummation of the transactions contemplated hereby (w) are within such Borrower’s organizational
powers and have been duly authorized by all necessary organizational action, (x) to such Borrower’s knowledge, do not require
Governmental Approvals, or any other consent or approval of, registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect, (y) will not violate any Organizational Document
of such Borrower or any of its Subsidiaries, any law, treaty, rule or regulation, or determination of a Governmental Authority,
in each case applicable to or binding upon such Borrower or any of its Subsidiaries or any of such Person’s Property or
to which such Borrower or any of its Subsidiaries or any of such Person’s Property is subject, or any judgment, order or
ruling of any Governmental Authority, and (z) will not violate or result in a default under any Material Contract of such Borrower
or any of its Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be made by such Borrower
or any of its Subsidiaries; and (iii) this Amendment has been duly executed and delivered by such Borrower and constitutes the
valid and binding obligation of such Borrower, enforceable against it in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity.

SECTION
3.       Amendments to Credit Agreement.

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

“Anti-Corruption
Laws” shall mean the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq, the UK Bribery Act of 2010
and all other laws, rules, and regulations of any jurisdiction applicable to any Loan Party or any of its Affiliates from time
to time concerning or relating to bribery or corruption.

“Bail-In
Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in
respect of any liability of an EEA Financial Institution.

“Bail-In
Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the
European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time
which is described in the EU Bail-In Legislation Schedule.

“Beneficial
Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership
Regulation, and otherwise to be in form and substance satisfactory to Administrative Agent. 

“Beneficial
Ownership Regulation” shall mean 31 CFR Section 1010.230.

    -4- 

     

    

“Distribution
Centers” shall mean Parent’s distribution centers located at (i) 4300 New Getwell Road, Memphis, Tennessee 38118
and (ii) 2815 GA Highway 257, Dublin, Georgia 31021.

“EEA
Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country
which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which
is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA
Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated
supervision with its parent.

“EEA
Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA
Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative
authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“EU
Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association
(or any successor person), as in effect from time to time.

“Mortgage
Financing Subsidiary” shall mean any Subsidiary that is not a Loan Party as of the Seventh Amendment Effective Date,
does not own any Property other than Real Estate purchased from, contributed by or otherwise transferred from a Loan Party, and
does not engage in any business other than the ownership, leasing, financing, marketing or sale of such Real Estate.

“Permitted
Mortgage Financing” shall mean Indebtedness incurred by any Mortgage Financing Subsidiary that is secured by a mortgage
on any Real Estate, so long as each of the following conditions is satisfied as determined by Co-Collateral Agents in their reasonable
discretion: 

(i)
       at the time of incurring such Indebtedness, no Default or Event of Default shall exist
or would result therefrom; 

(ii)      the
terms and conditions (including interest and fees) of such Indebtedness shall be on then-current market terms;

(iii)     Administrative
Agent shall have received notice not less than 10 days in advance of the incurrence of such Indebtedness;

(iv)      no
Loan Party shall guaranty such Indebtedness or grant any Lien in any of its Property to secure such Indebtedness; 

(v)       in
the case of any such Indebtedness secured by the Real Estate of any Distribution Center, the mortgagee of such Real Estate shall
deliver (x) to Administrative Agent a Third Party Agreement, in form and substance reasonably satisfactory to Administrative Agent,
and (y) to the applicable Loan Party a non-disturbance agreement, in form and substance reasonably satisfactory to Administrative
Agent; and

    -5- 

     

    

(vi)       the
aggregate principal amount of all Permitted Mortgage Financings shall not exceed $25,000,000 at any time outstanding.

“Permitted
Sale-Leaseback Transaction” shall mean a sale and leaseback transaction by any Loan Party related to Real Estate, including
any arrangement whereby such Loan Party shall, directly or indirectly, sell or transfer any Real Estate to another Person and,
as part of such transaction, such Loan Party shall then or thereafter rent or lease as lessee from such other Person such Real
Estate or any part thereof or other Real Estate which such Loan Party intends to use for substantially the same purpose or purposes
as the Real Estate sold or transferred, so long as each of the following conditions is satisfied as determined by Co-Collateral
Agents in their reasonable discretion:

(i)
        at the time of such transaction, no Default or Event of Default shall exist or
would result therefrom; 

(ii)        the
terms and conditions (including sale price and lease payments) of such transaction shall be on then-current market terms;

(iii)      Administrative
Agent shall have received notice not less than 10 days in advance of the consummation of such transaction;

(iv)       such
Loan Party shall receive at least fair market value for such Real Estate sold or transferred in such transaction; 

(v)        100%
of the consideration for such sale or transfer of Real Estate shall be in the form of cash, and all net proceeds of such transaction
shall be remitted by the purchaser directly to a Controlled Account; 

(vi)       in
the case of any such transaction with respect to any Distribution Center, the landlord of such Real Estate shall deliver to Administrative
Agent a Third Party Agreement, in form and substance reasonably satisfactory to Administrative Agent; 

(vii)      in
the case of any such transaction with respect to any Distribution Center, any mortgagee of such Real Estate shall deliver (x)
to Administrative Agent a Third Party Agreement, in form and substance reasonably satisfactory to Administrative Agent, and (y)
to the applicable Loan Party a non-disturbance agreement, in form and substance reasonably satisfactory to Administrative Agent;
and

(viii)       any
Capital Lease Obligations incurred in connection with such transaction shall be permitted under Section 7.1.

“Sanctioned
Country” shall mean (a) a country or territory or a government of a country or territory, (b) an agency of the government
of a country or territory, or (c) an organization directly or indirectly owned or controlled by a country or territory or its
government, in each case, that is subject to Sanctions. 

    -6- 

     

    

“Sanctions”
shall mean economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S.
government, including those administered by OFAC or the U.S. Department of State, (b) the United Nations Security Council, (c)
the European Union, (d) any European Union member state, (e) Her Majesty’s Treasury of the United Kingdom or (f) any other
relevant sanctions authority.

“Security
Documents” shall mean, collectively, the Security Agreement, together with any financing statements, each Deposit Account
Control Agreement, each intellectual property security agreement, any other security agreements and notices of security interests
filed or to be filed with any applicable filing office or registry, any pledge agreement and all other documents, instruments,
and agreements now or hereafter executed or delivered by a Loan Party to any Secured Party for purposes of securing (or intending
to secure), or perfecting (or intending to perfect) Liens securing, any Obligations.

“Seventh
Amendment” shall mean that certain Seventh Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum
to Credit Agreement, and Second Amendment to Security Agreement dated as of the Seventh Amendment Effective Date, by and among
Borrowers, Administrative Agent and Lenders, which amends this Agreement. 

“Seventh
Amendment Effective Date” shall mean August 23, 2018.

“Write-Down
and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers
of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which
write-down and conversion powers are described in the EU Bail-In Legislation Schedule. 

(b)           Amendments
to Existing Definitions.

(i)       Section
1.1 of the Credit Agreement is hereby amended by deleting the following definitions therein in their entirety and substituting
the following in lieu thereof, respectively:

“Aggregate
Revolving Commitments” shall mean, collectively, the Revolving Commitments of all Lenders. As of the Seventh Amendment
Effective Date, the amount of the Aggregate Revolving Commitments is $210,000,000.

“Anti-Terrorism
Laws” shall mean any laws relating to the prevention of terrorism or money laundering, including the PATRIOT Act and
all OFAC rules and regulations, including Executive Order 13224.

“Asset
Disposition” shall mean, with respect to any Person, a sale, issuance, assignment, lease, license, Consignment, transfer,
abandonment, or other disposition of such Person’s Property, including a disposition of Property (i) in connection with
a sale-leaseback transaction, synthetic lease, or similar arrangement or (ii) arising out of or relating to any division of such
Person pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any analogous action taken pursuant to Applicable
Law with respect to any corporation, limited liability company, partnership or other entity).

    -7- 

     

    

“Availability
Conditions” shall mean, at any time of determination in respect of any Acquisition pursuant to Section 7.4(d),
that, on a pro forma basis after giving effect to such Acquisition, either (a) Excess Availability, tested for each of the 180
days immediately preceding the date of such Acquisition, on the date of such Acquisition, and for each of the 180 days immediately
following such Acquisition, shall not be less than the greater of 20% of the Aggregate Revolving Commitments and $42,000,000 or
(b) both (i) Excess Availability, tested for each of the 180 days immediately preceding the date of such Acquisition, on the date
of such Acquisition, and for each of the 180 days immediately following such Acquisition, shall not be less than the greater of
15% of the Aggregate Revolving Commitments and $31,500,000 and (ii) the Fixed Charge Coverage Ratio, tested as of the end of the
Fiscal Month ending most recently before the date of such Acquisition for which financial statements are required to have been
delivered in accordance with Section 5.1, shall be at least 1.00 to 1.00.

“Collateral”
shall mean all Property described in any Security Documents as security for any Obligations, and all other Property which now
or hereafter secures (or is intended to secure) any Obligations.

“Excluded
Subsidiary” shall mean, after the Seventh Amendment Effective Date, (a) National Equipment Management and Leasing, Inc.,
a Tennessee corporation, (b) Summit Properties – Bridgeport, LLC, an Arkansas limited liability company, and Summit Properties
– Jacksboro, LLC, an Arkansas limited liability company, in each case, so long as such Person does not own any Property
that would constitute Credit Card Receivables (as defined in the Security Agreement), Inventory (as defined in the Security Agreement),
Pharmacy Receivables (as defined in the Security Agreement) or Pharmacy Scripts (as defined in the Security Agreement) or any
Proceeds thereof, and (c) any Mortgage Financing Subsidiary.

“Loan
Documents” shall mean, collectively, this Agreement, the Addendum, the Security Agreement, the Notes, the Fee Letter,
the Third Amendment Fee Letter, the Fourth Amendment Fee Letter, any other fee letter executed in connection with this Agreement,
the Cardinal Intercreditor Agreement, the Co-Collateral Agent Rights Agreement, each LC Document, each Deposit Account Control
Agreement, each intellectual property security agreement, each other Security Document, and any and all other instruments, agreements,
documents and writings executed or delivered in connection with any of the foregoing.

“Restricted
Payment” shall mean (a) any payment of (or declaration to pay) a dividend or other distribution (whether in cash, securities,
or other Property), whether direct or indirect, on account of any Capital Stock issued by any Loan Party or any of its Subsidiaries,
as the case may be, whether now or hereafter outstanding (including any such payment, or declaration of payment, made in connection
with any merger or consolidation or otherwise as part of any Acquisition); (b) any return of capital, redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Capital Stock issued by any
Loan Party or any of its Subsidiaries, whether now or hereafter outstanding (including any such payment, or declaration of payment,
made in connection with any merger or consolidation or otherwise as part of any Acquisition), except for any redemption, retirement,
sinking fund or similar payment made solely in such other shares or units of the same class of Capital Stock; or (c) any cash
payment made to redeem, purchase, repurchase, or retire, or obtain the surrender of, any outstanding warrants, options, or other
rights to acquire any Capital Stock issued by any Loan Party or any of its Subsidiaries, whether now or hereafter outstanding.

    -8- 

     

    

“Revolving
Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans to Borrowers
as set forth in Section 2.2 and the commitment of such Lender to participate in Swingline Loans as set forth in Section
2.4 and to participate in LC Obligations as set forth in Section 2.22, in an aggregate principal amount not exceeding
the amount set forth with respect to such Lender on Schedule 1, or, in the case of a Person becoming a Lender after the
Seventh Amendment Effective Date, the amount of the assigned “Revolving Commitment” as provided in the Assignment
and Acceptance executed by such Person as an assignee, or the joinder executed by such Person, in each case as such commitment
may subsequently be increased or decreased pursuant to the terms hereof.

“Sanctioned
Person” shall mean (a) a Person named on the list of “Specially Designated Nationals” or any other Sanctions
related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the
European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or
(c) any Person owned or controlled by any such Person or Persons described in the foregoing clause (a) or (b).

(ii)       The
definition of “Defaulting Lender” in Section 1.1 of the Credit Agreement is hereby amended by deleting clause (d)
thereof in its entirety and substituting the following in lieu thereof:

(d)
has, or has a direct or indirect parent company that has, (i) become the subject of any Insolvency Proceeding, (ii) had appointed
for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other
state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action

(c)        Deletion
of Existing Definition. Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Sanctioned
Entity” therein in its entirety.

(d)       Amendment
to Section 4.6 (Compliance with Laws and Agreements). Section 4.6 of the Credit Agreement is hereby amended by deleting such
section in its entirety and substituting the following in lieu thereof:

Section
4.6        Compliance with Laws and Agreements. Such Loan Party and
each of its Subsidiaries is in compliance with (a) all Anti-Terrorism Laws and all Anti-Corruption Laws, (b) all other Applicable
Laws and all judgments, decrees and orders of any Governmental Authority, and (c) all indentures, agreements or other instruments
binding upon it or its properties, except, in each case of clauses (b) and (c), where non-compliance could not reasonably be expected
to result in a Material Adverse Effect.

(e)          Amendment
to Section 4.16 (OFAC). Section 4.16 of the Credit Agreement is hereby amended by deleting such section in its entirety and
substituting the following in lieu thereof:

    -9- 

     

    

Section
4.16.         OFAC; Sanctions; Anti-Corruption Laws. 

(a)       Each
Loan Party and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance
by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Sanctions,
and such Loan Party and its Subsidiaries and, to the knowledge of such Loan Party, their respective directors, officers, employees
and agents are in compliance with applicable Sanctions and are not engaged in any activity that would reasonably be expected to
result in any Loan Party being designated as a Sanctioned Person. None of the Loan Parties, their Subsidiaries or their respective
Affiliates is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC
that are described or referenced at http://www.ustreas.gov/offices/enforcement/ofac/ or as otherwise published from time to time.

(b)       None
of the Loan Parties or their Subsidiaries or, to the knowledge of any Loan Party or its Subsidiaries, any of their respective
directors, officers, employees or Affiliates (i) is a Sanctioned Person, (ii) has any of its assets located in a Sanctioned Country,
or (iii) derives any of its operating income from investments in, or transactions with, Sanctioned Persons. The proceeds of any
Loan, Letter of Credit, credit extension or other transaction contemplated by this Agreement or any other Loan Document have not
been used (x) in violation of any Sanctions, (y) to fund any operations in, finance any investments or activities in, or make
any payments to, a Sanctioned Person or a Sanctioned Country or (z) in any other manner that would result in a violation of Sanctions
by any Person (including Administrative Agent, LC Issuer, Lenders or any other Person making, issuing or participating in such
Loans, Letters of Credit, other credit extensions or other transactions whether as an underwriter, advisor, investor or otherwise).

(c)       Each
Loan Party and its Subsidiaries and, to the knowledge of any Loan Party or its Subsidiaries, each of their respective directors,
officers, employees and Affiliates, is in compliance with Anti-Corruption Laws. Each Loan Party and its Subsidiaries has implemented
and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective
directors, officers, employees and agents with Anti-Corruption Laws. None of the Loan Parties or their Subsidiaries has made a
payment, offering, or promise to pay, or authorized the payment, of money or anything of value (i) in order to assist in obtaining
or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or
candidate for foreign political office, (ii) to a foreign official, foreign political party or party official or any candidate
for foreign political office, or (iii) with the intent to induce the recipient to misuse his or her official position to direct
business wrongfully to such Loan Party or any of its Subsidiaries or to any other Person, in each case, in violation of any Anti-Corruption
Law. No part of the proceeds of any Loans, Letters of Credit, other credit extension or other transaction contemplated by this
Agreement or any other Loan Document will violate Anti-Corruption Laws.

(f)       Amendment
to Section 4.17 (Anti-Terrorism Laws). Section 4.17 of the Credit Agreement is hereby amended by deleting such section in
its entirety and substituting the following in lieu thereof:

    -10- 

     

    

Section
4.17.         Anti-Terrorism Laws.

(a)       No
Loan Party nor any of its Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of Section
2 of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended. To its
knowledge, no Loan Party or any of its Subsidiaries is in violation of (a) the Trading with the Enemy Act, as amended, (b) any
of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
or any enabling legislation or executive order relating thereto or (c) the PATRIOT Act. No Loan Party or any of its Subsidiaries
(i) is a Sanctioned Person or (ii) to its knowledge, engages in any dealings or transactions with any Sanctioned Person. 

(b)       To
the extent applicable, each Loan Party and its Subsidiaries are in compliance with the PATRIOT Act. Without limitation of the
foregoing, all information set forth in each Beneficial Ownership Certificate (if any) is true and correct as of the Seventh Amendment
Effective Date.

(g)       Amendment
to Article 4 (Representations and Warranties). Article 4 of the Credit Agreement is hereby amended by adding the following
new Section 4.24 immediately after Section 4.23 thereof:

Section
4.24        EEA. No Loan Party is an EEA Financial Institution.

(h)       Amendment
to Section 5.2 (Notices of Material Events). Section 5.2 of the Credit Agreement is hereby amended by deleting the word “or”
at the end of clause (e) thereof, relettering clause (f) thereof as clause (h), and adding the following new clauses (f) and (g)
immediately after clause (e) thereof:

(f)
       any violation or asserted violation of (i) any Anti-Terrorism Laws or Anti-Corruption
Laws or (ii) any other Applicable Laws (including ERISA, OSHA, FLSA or any securities laws) if, in the case of this clause (ii),
an adverse resolution could reasonably be expected to have a Material Adverse Effect;

(g)       any
change to the information set forth in any Beneficial Ownership Certificate that would result in a change to the list of beneficial
owners set forth therein; or 

(i)       Amendment
to Section 5.4 (Compliance with Laws). Section 5.4 of the Credit Agreement is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:

Section
5.4        Compliance with Laws. Such Loan Party will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable
to its business and properties, including, without limitation, all Environmental Laws, ERISA, OSHA, Anti-Terrorism Laws, Anti-Corruption
Laws, securities laws and laws regarding collection and payment of Taxes, except where the failure (other than failure to comply
with Anti-Terrorism Laws and Anti-Corruption Laws) to do so, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

    -11- 

     

    

(j)       Amendment
to Section 5.9 (Use of Proceeds; Margin Regulations). Section 5.9 of the Credit Agreement is hereby amended by deleting the
second sentence thereof in its entirety and substituting the following in lieu thereof:

Without
limitation of the foregoing, no portion of the proceeds of any Loan or Letter of Credit shall be used, directly or indirectly,
(i) to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock
or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock
or for any other purpose which might constitute a “purpose credit” under Regulation U, or in any manner or for any
other purpose that causes or might cause a violation of, or is inconsistent with, the provisions of Regulation T, U or X or any
other regulation of the Board of Governors of the Federal Reserve System, or violation of the Exchange Act, (ii) to finance (or
refinance) any commercial paper, including, without limitation, any issued by a Loan Party, or any other Indebtedness, except
for Indebtedness that such Loan Party incurred for general corporate or working capital purposes, if and to the extent that the
financing (and refinancing) thereof are expressly permitted herein, (iii) in furtherance of an offer, payment, promise to pay,
or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption
Laws, or (iv) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country, or, in any event, in violation of any applicable Sanctions.

(k)       Amendment
to Section 7.1 (Indebtedness). Section 7.1 of the Credit Agreement is hereby amended by re-lettering clause (g) thereof as
a new clause (h) and adding the following new clause (g) immediately after clause (f) thereof:

(g)       Permitted
Mortgage Financings of Mortgage Financing Subsidiaries; and

(l)       Amendment
to Section 7.2 (Liens). Section 7.2 of the Credit Agreement is hereby amended by deleting the word “and” at the
end of clause (g) thereof, adding the word “and” at the end of clause (h) thereof, and adding the following new clause
(i) immediately after clause (h) thereof:

(i)       Liens
solely on any Real Estate owned by any Mortgage Financing Subsidiary (and not, for the avoidance of doubt, on any Property that
would constitute Collateral or any other Property of any Loan Party) that is subject to a Permitted Mortgage Financing; 

(m)       Amendment
to Section 7.3 (Fundamental Changes). Section 7.3 of the Credit Agreement is hereby amended by adding the following new sentence
immediately after the first sentence thereof:

Such
Loan Party will not, and will not permit any of its Subsidiaries to, file a certificate of division, adopt a plan of division
or otherwise take any action to effectuate a division pursuant to Section 18-217 of the Delaware Limited Liability Company Act
(or any analogous action taken pursuant to Applicable Law with respect to any corporation, limited liability company, partnership
or other entity).

(n)       Amendment
to Section 7.4 (Investments, Loans). Section 7.4(d) of the Credit Agreement is hereby amended by deleting clause (iii) thereof
in its entirety and substituting the following in lieu thereof:

(iii)       if
the aggregate amount of cash and non-cash consideration (including all cash and Indebtedness, including contingent obligations,
incurred or assumed and the maximum amount of any earnout or similar payment in connection therewith (whether or not actually
earned)) for any individual Acquisition is less than $5,000,000, Excess Availability shall not be less than $21,000,000, on a
pro forma basis after giving effect to such Acquisition, and Borrowers shall certify thereto on the date of such acquisition;

    -12- 

     

    

(o)       Amendment
to Section 7.5 (Restricted Payments). Section 7.5 of the Credit Agreement is hereby amended by deleting clause (c) thereof
in its entirety and substituting the following in lieu thereof:

(c)        Restricted
Payments so long as (i) any such Restricted Payments during any four consecutive Fiscal Quarters do not exceed $12,500,000 in
the aggregate, (ii) no Default or Event of Default exists at the time of any such Restricted Payment or after giving effect thereto,
(iii) any such Restricted Payment is permitted by Applicable Law, (iv) Borrowers are Solvent both before and after giving effect
to any such Restricted Payment, and (v) Excess Availability, on the date of any such Restricted Payment and after giving effect
thereto, shall not be less than $21,000,000;

(p)       Amendments
to Section 7.6 (Sale of Assets).

(i)          Section
7.6 of the Credit Agreement is hereby amended by replacing the word “or” at the end of clause (k) thereof with “;”,
replacing the “.” at the end of clause (l) thereof with “;”, and adding the following new clauses (m),
(n) and (o) immediately after clause (l) thereof:

(m)       Permitted
Sale-Leaseback Transactions;

(n)       any
sale, contribution or other transfer by any Loan Party of any Real Estate to any Mortgage Financing Subsidiary in connection with
any Permitted Mortgage Financing, so long as (i) such Real Estate is leased by such Loan Party from such Mortgage Financing Subsidiary
on then-current market terms and (ii) such Mortgage Financing Subsidiary agrees to remit to such Loan Party any and all proceeds
from any sale or other disposition of such Real Estate, net of any reasonable transaction costs, within 10 days after receipt
thereof; and

(o)        any
sale or other disposition of any Real Estate (other than Real Estate of any Distribution Center) for fair market value.

(ii)         Section
7.6 of the Credit Agreement is hereby amended by adding the following new sentence immediately after clause (o) thereof:

In
no event shall any Asset Disposition arising out of or relating to any division of a Loan Party pursuant to Section 18-217 of
the Delaware Limited Liability Company Act (or any analogous action taken pursuant to Applicable Law with respect to any corporation,
limited liability company, partnership or other entity) constitute a permitted Asset Disposition under this Section 7.6
or otherwise be permitted under the Loan Documents.

(q)       Amendment
to Section 7.7 (Transactions with Affiliates). Section 7.7 of the Credit Agreement is hereby amended by deleting the word
“and” at the end of clause (c) thereof, replacing the “.” at the end of clause (d) thereof with “;
and”, and adding the following new clause (e) immediately after clause (d) thereof:

(e)
any sale, contribution or other transfer of Real Estate permitted by Section 7.6(n).

    -13- 

     

    

(r)       Amendment
to Section 7.13 (Sales and Leasebacks). Section 7.13 of the Credit Agreement is hereby amended by deleting such section in
its entirety and substituting the following in lieu thereof:

Section
7.13.        Sales and Leasebacks. Such Loan Party will not,
and will not permit any of its Subsidiaries to, enter into any arrangement whereby such Person shall, directly or indirectly,
sell or transfer any Property to another Person and, as part of such transaction, such Person shall then or thereafter rent or
lease as lessee from such other Person such Property or any part thereof or other Property which such Person intends to use for
substantially the same purpose or purposes as the Property sold or transferred, except Permitted Sale-Leaseback Transactions.

(s)       Amendments
to Section 8.1 (Events of Default).

(i)          Section
8.1 of the Credit Agreement is hereby amended by deleting clause (h) thereof in its entirety and substituting the following in
lieu thereof:

(h)       (i)
An Insolvency Proceeding shall be commenced against any Loan Party or Subsidiary and (A) such Loan Party or Subsidiary shall consent
to the institution of such Insolvency Proceeding, (B) such Loan Party or Subsidiary shall acquiesce in writing to the commencement
of such Insolvency Proceeding, or shall fail, in a timely and appropriate manner, to contest vigorously any petition commencing
such Insolvency Proceeding, (C) any such petition shall not be dismissed within 60 days after the filing thereof or (D) an order
for relief shall be entered in such Insolvency Proceeding; or (ii) any Loan Party shall become subject to a Bail-In Action; or

(ii)         Section
8.1 of the Credit Agreement is hereby amended by replacing the “.” at the end of clause (p) thereof with “;
or” and adding the following new clause (q) immediately after clause (p) thereof:

(q)        Either
(i) this Agreement or any other Loan Document, or any material provision hereof or thereof, shall cease to be in full force or
effect at any time after its execution and delivery for any reason (other than as expressly permitted hereunder or by waiver or
release thereof by Administrative Agent, LC Issuer, a Lender or the applicable Secured Bank Product Provider, as applicable, made
in accordance herewith), it being understood that the application of any Write-Down and Conversion Powers by an EFA Resolution
Authority (or the public announcement of the impending application of such powers) with respect to any liabilities of a Loan Party
hereunder or under any other Loan Document shall be deemed an Event of Default under this Section 8.1(q); (ii) any Security
Document shall for any reason fail or cease to create a valid, perfected, and, except to the extent permitted by the terms hereof
or thereof, first-priority Lien in favor of Administrative Agent, for the benefit of Secured Parties, on any material Collateral
purported to be covered thereby; or (iii) any Hedging Agreement entered into between any Loan Party or a Subsidiary, on the one
hand, and any Secured Bank Product Provider, on the other hand, shall be terminated as a result of a default or event of default
by such Loan Party or Subsidiary or revoked; or 

    -14- 

     

    

(t)       Amendment
to Article 10 (Miscellaneous). Article 10 of the Credit Agreement is hereby amended by adding the following new Section 10.18
immediately after Section 10.17 thereof:

Section
10.18.          Acknowledgement of and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement
or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial
Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion
Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by, (a) the application
of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any Lender that is an EEA Financial Institution; and (b) the effects of any Bail-in Action on any such liability,
including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all,
or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking,
or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership
will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document;
or (iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers
of any EEA Resolution Authority.

(u)        Amendment
to Schedules. The Credit Agreement is hereby amended by deleting Schedule 1 thereto in its entirety and substituting Schedule
1 attached to this Amendment in lieu thereof.

SECTION
4.        Amendments to Addendum.

(a)         Amendments
to Existing Definitions. Section 2 of the Addendum is hereby amended by deleting the following definitions therein in their
entirety and substituting the following in lieu thereof, respectively:

“Account
Control Event” means (a) the occurrence of an Event of Default or (b) at any time of determination that Excess Availability
is less than the greater of (i) twelve and one-half percent (12.5%) of the Commitments and (ii) $26,250,000. 

“Account
Control Period” means the period beginning on the occurrence of an Account Control Event and ending on the first Business
Day on which (a) no Event of Default exists and (b) Excess Availability for the preceding sixty (60) days has been greater than
the greater of (i) twelve and one-half percent (12.5%) of the Commitments and (ii) $26,250,000.

(b)       Amendment
to Section 6 (Inspections; Appraisals). Section 6 of the Addendum is hereby amended by deleting such section in its entirety
and substituting the following in lieu thereof:

Section
6.        Inspections; Appraisals. Until Payment in Full of the Obligations,
each Loan Party shall, and shall cause each Subsidiary to, as applicable, reimburse Administrative Agent for all charges, costs,
and expenses of Administrative Agent and its agents in connection with (i) field examinations of any Borrower or Subsidiary’s
books and records or Collateral as Administrative Agent deems appropriate and (ii) appraisals of Inventory and Pharmacy Scripts,
in each case, (a) once per Loan Year, if an Event of Default has not occurred at any time during such Loan Year and Excess Availability
is not less than the greater of (x) twenty-five percent (25%) of the Aggregate Revolving Commitments and (y) $52,500,000 at any
time during such Loan Year, and (b) twice per Loan Year, if an Event of Default has not occurred at any time during such Loan
Year but Excess Availability is less than the greater of (x) twenty-five percent (25%) of the Aggregate Revolving Commitments
and (y) $52,500,000 at any time during such Loan Year; provided, however, that there shall be no limit on the frequency
of field examinations or appraisals reimbursed by Borrowers if any Event of Default exists. Subject to and without limiting the
foregoing, Borrowers specifically agree to pay the standard charges of Administrative Agent’s internal field examination
group (including Administrative Agent’s then standard per-person charges for each day that an employee or agent of Administrative
Agent or its Affiliates is engaged in any field examination activities). This Section 6 shall not be construed to limit
Administrative Agent’s right to conduct field examinations, obtain appraisals at any time in its reasonable discretion,
or use third parties for such purposes at Lenders’ expense.

    -15- 

     

    

(c)       Amendment
to Section 7 (Borrowing Base Reporting; Financial and Other Information). Section 7 of the Addendum is hereby amended by deleting
the first sentence thereof in its entirety and substituting the following in lieu thereof:

Until
Payment in Full of the Obligations, Borrowers shall deliver a fully completed and executed Borrowing Base Certificate to Administrative
Agent no later than the 20th day of each Fiscal Month, prepared as of the end of the immediately preceding Fiscal Month; provided
that, if Excess Availability is less than the greater of (x) fifteen percent (15%) of the Commitments and (y) $31,500,000
or an Event of Default exists, Administrative Agent shall be entitled to require Borrowers to deliver fully completed and executed
Borrowing Base Certificates to Administrative Agent at greater frequency and as of the end of such periods as Administrative Agent
may require from time to time. 

(d)       Amendment
to Section 10 (Financial Covenant). Section 10 of the Addendum is hereby amended by deleting such section in its entirety
and substituting the following in lieu thereof:

Section
10.        Financial Covenant. Until Payment in Full of the Obligations,
Borrowers shall maintain at all times Excess Availability of at least the greater of (i) $21,000,000 and (ii) ten percent (10%)
of the Aggregate Revolving Commitments.

SECTION
5.        Amendment to Security Agreement.

(a)       Amendment
to Section 16 (Protective Advances). Section 16 of the Security Agreement is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:

Section
16.        Protective Advances.        From
time to time, Administrative Agent may, in its discretion, make one or more Base Rate Revolving Loans to preserve, protect, or
defend any Collateral or to increase or improve the likelihood of collecting or obtaining repayment of any Obligations (in each
case, if Administrative Agent determines that doing so is necessary or desirable) (a “Protective Advance”).
Administrative Agent may make a Protective Advance without regard to Excess Availability or the satisfaction of any condition
precedent to the making of Loans, unless (A) the Required Lenders have, in writing, revoked Administrative Agent’s authority
to do so or (B) Administrative Agent would have actual knowledge that, after giving effect thereto, the aggregate outstanding
principal amount of all Loans made as Protective Advances (i) would exceed $21,000,000 or (ii) would cause the amount of the Revolving
Credit Exposure outstanding to exceed the aggregate of the Revolving Commitments at such time or any individual Lender’s
Revolving Commitment. If the terms of the foregoing clauses (A) and (B) are not applicable, Administrative Agent’s determination
that funding of a Protective Advance is appropriate shall be conclusive. Each Lender shall participate based on its Pro Rata Share
in each Protective Advance. The provisions of this Section 16 are solely for the benefit of Administrative Agent and Lenders,
and none of the Loan Parties may rely on this Section 16 or have any standing to enforce its terms.

    -16- 

     

    

SECTION
6.        Conditions Precedent. This Amendment shall become effective only upon
satisfaction of the following conditions precedent, as determined by Administrative Agent in its reasonable discretion:

(a)       Administrative
Agent shall have received this Amendment, duly executed and delivered by Borrowers and Lenders;

(b)       Administrative
Agent shall have received amended and restated Notes, duly executed and delivered by Borrowers, for each Lender that has requested
the issuance of a Note;

(c)       Administrative
Agent shall have received a certificate, in form and substance reasonably satisfactory to Administrative Agent, attaching true,
correct and complete copies of all articles of dissolution, certificates of cancellation, articles of merger, agreements and plans
of merger, and other documents submitted for filing or executed in connection with the Corporate Reorganization and shall have
approved all material terms thereof;

(d)       Administrative
Agent shall have received a certificate of a duly authorized officer of each Loan Party, certifying (i) that an attached copy
of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in
full force and effect, were duly adopted by the appropriate governing body, have not been amended, modified, or revoked, and constitute
all resolutions adopted with respect to this Amendment and the transactions contemplated hereby; and (ii) to the title, name,
and signature of each Person authorized to sign the Loan Documents on behalf of such Loan Party;

(e)       Administrative
Agent shall have received a Beneficial Ownership Certificate in relation to each Loan Party and any other Obligor that qualifies
as a “legal entity customer” under the Beneficial Ownership Regulation; and

(f)       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, each in form and substance reasonably satisfactory to Administrative
Agent.

SECTION
7.        Post-Closing Covenants.

(a)       On
or before October 19, 2018 (or such later date as agreed to by Co-Collateral Agents in writing in their respective sole discretion),
Borrowers shall deliver to Administrative Agent a duly executed Collateral Disclosure Certificate from all Borrowers, after giving
effect to the Corporate Reorganization and in form and substance satisfactory to Administrative Agent.

SECTION
8.        Miscellaneous Terms.

(a)       Loan
Document. For avoidance of doubt, the parties hereto hereby acknowledge and agree that this Amendment is a Loan Document.

    -17- 

     

    

(b)       Effect
of Amendment. All amendments set forth herein shall become effective as of the Seventh 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 Borrowers. Except
to the extent otherwise expressly set forth herein, the amendments set forth herein shall have prospective application only from
and after the Seventh Amendment Effective Date.

(c)       No
Novation or Mutual Departure. 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 Sections
2, 3 and 4 above, and (ii) nothing in this Amendment shall affect or limit Administrative Agent’s or Lenders’
right to demand payment of liabilities owing from Borrowers to Administrative Agent or Lenders under, or to demand strict performance
of the terms, provisions and conditions of, the Credit 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)       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 this Amendment.

(e)       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, telecopy,
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.

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

(g)       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 and other agreements among the parties hereto evidenced hereby.

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

    -18- 

     

    

(i)       Governing
Law. This Amendment shall be governed by and construed and interpreted in accordance
with the laws of the State of Georgia, without giving effect to any conflict of law principles or other rule of law which would
cause the application of the law of any jurisdiction other than the laws of the State of Georgia (but giving effect to federal
laws relating to national banks).

(j)       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.

[Remainder
of page intentionally left blank;

signatures
appear on the following pages]

 

    -19- 

     

    

 

IN
WITNESS WHEREOF, each party hereto has caused this Amendment to be duly executed and delivered under seal 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/
    Joseph Anto
	 	Name:	Joseph
    Anto
	 	Title:	Interim
    Chief Executive Officer and

    Chief Financial Officer

	 	[CORPORATE
    SEAL]
	 	 
	 	FRED’S
    STORES OF TENNESSEE, INC.,

    a Delaware corporation, as a “Borrower”
    and

    the “Surviving Borrower”
	 	 	 
		By:	/s/
    Joseph Anto
	 	Name:	Joseph
    Anto
	 	Title:	Interim
    Chief Executive Officer and Chief Financial Officer

	 	[CORPORATE
    SEAL]
	 	 
	 	NATIONAL
    PHARMACEUTICAL NETWORK, INC., a Florida corporation, as a “Borrower”
	 	 	 
		By:	/s/
    Joseph Anto
	 	Name:	Joseph
    Anto
	 	Title:	Interim
    Chief Executive Officer and Chief Financial Officer
	 	 	 
	 	[CORPORATE
    SEAL]

Seventh
Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum to Credit Agreement,

Second Amendment to Security Agreement, and Ratification, Reaffirmation and Assumption (Fred’s)

 

     

     

    

 

	 	 	 
	 	REEVES-SAIN
                                         DRUG STORE, INC.,

                                         a Tennessee corporation, as a “Borrower”

	 	 	 
		By:	/s/
    Joseph Anto
	 	Name:	Joseph
    Anto
	 	Title:	Interim
    Chief Executive Officer and

    Chief Financial Officer
	 	 	 
	 	[CORPORATE
    SEAL]

 

[Signatures continue on following pages.]

 

Seventh
Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum to Credit Agreement,

Second Amendment to Security Agreement, and Ratification, Reaffirmation and Assumption (Fred’s)

     

     

    

 

	 	 	 
	 	ADMINISTRATIVE
    AGENT:
	 	 
	 	REGIONS
    BANK, as “Administrative Agent”
	 	 	 
		By:	/s/
    Daniel J. Wells
	 	Name:	Daniel
    J. Wells
	 	Title:	Director

 

[Signatures
continue on following pages.]

 

Seventh
Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum to Credit Agreement,

Second Amendment to Security Agreement, and Ratification, Reaffirmation and Assumption (Fred’s)

     

     

    

	 	 	 
	 	LENDERS:
	 	 
	 	REGIONS
    BANK 
	 	 	 
		By:	/s/
    Daniel J. Wells
	 	Name:	Daniel
    J. Wells
	 	Title:	Director

 

[Signatures
continue on following page.]

 

Seventh
Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum to Credit Agreement,

Second Amendment to Security Agreement, and Ratification, Reaffirmation and Assumption (Fred’s)

     

     

    

 

	 	 	 
	 	LENDERS:
	 	 
	 	BANK
    OF AMERICA, N.A.
	 	 	 
		By:	/s/
    Roger Malouf
	 	Name:	Roger
    Malouf
	 	Title:	Director

 

Seventh
Amendment to Credit Agreement, Second Amendment to Amended and Restated Addendum to Credit Agreement,

Second Amendment to Security Agreement, and Ratification, Reaffirmation and Assumption (Fred’s)

     

     

    

 

ANNEX
I

 

Description
of Corporate Reorganization

 

Dissolutions
of Certain Subsidiaries

 

(a)       Dublin
Aviation, Inc., a Tennessee corporation, assigned and transferred all of its assets to Fred’s, Inc., a Tennessee corporation,
and will subsequently dissolve once tax clearance from the Tennessee Department of Revenue is obtained;

 

(b)       TT
Transport, LLC, a Delaware limited liability company, assigned and transferred all of its assets to Fred’s Stores of Tennessee,
Inc., a Delaware corporation (the “Surviving Borrower”), and subsequently dissolved;

 

(c)       National
Pharmaceutical Network, Inc., a Tennessee corporation, assigned and transferred all of its assets to the Surviving Borrower and
will subsequently dissolve once tax clearance from the Tennessee Department of Revenue is obtained; and

 

(d)       Drugs
For Less, Inc., a Florida corporation, assigned and transferred all of its assets to National Pharmaceutical Network, Inc., a
Florida corporation, and subsequently dissolved.

 

The
dissolutions described in clauses (a), (b), (c) and (d) above are collectively referred to in this Amendment as the “Entity
Dissolutions”.

 

Mergers
of Certain Borrowers and Subsidiaries

 

(a)       Fred’s
Dollar Store of McComb, Inc., a Mississippi corporation and a Borrower (the “Predecessor Borrower”), merged
with and into the Surviving Borrower, with the Surviving Borrower as the surviving Person (such merger, the “Dollar Store
Merger”);

 

(b)
       each of ARI-Alabama Four, LLC and ARI-Glennville, LLC, each a Georgia limited liability
company, merged with and into the Surviving Borrower, with the Surviving Borrower as the surviving Person; and

 

(c)       each
of Summit Properties – Anderson, LLC, Summit Properties – Augusta, LLC, Summit Properties – Baldwyn, LLC, Summit
Properties – Batesville, LLC, Summit Properties – Bonifay, LLC, Summit Properties – Chatsworth, LLC, Summit
Properties – Chatsworth II, LLC, Summit Properties – Daingerfield, LLC, Summit Properties – Dumas, LLC, Summit
Properties – Harrisburg, LLC, Summit Properties – Haskell, LLC, Summit Properties – Hayti, LLC, Summit Properties
– Kilgore, LLC, Summit Properties – Malvern, LLC, Summit Properties – Manila, LLC, Summit Properties –
McGregor, LLC, Summit Properties – Osceola, LLC, Summit Properties – Shelby, LLC, Summit Properties – Sheridan,
LLC, Summit Properties – Stamps, LLC, Summit Properties – Wagoner, LLC, and Summit Properties – Yellville, LLC,
each an Arkansas limited liability company, merged with and into the Surviving Borrower, with the Surviving Borrower as the surviving
Person.

 

The
mergers described in clauses (a), (b) and (c) above are collectively referred to in this Amendment as the “Entity Mergers”.

 

     

     

    

 

ANNEX
II

 

Subsidiaries
after Corporate Reorganization

 

	Name	Jurisdiction	Parent
    Entity	Percent
    Ownership	Loan
    Party or Excluded Subsidiary
	Fred’s
    Stores of Tennessee, Inc.	Delaware	Fred’s,
    Inc.	100%	Loan
    Party
	National
    Pharmaceutical Network, Inc.	Florida	Fred’s
    Stores of Tennessee, Inc.	100%	Loan
    Party
	Reeves-Sain
    Drug Store, Inc.	Tennessee	Fred’s
    Stores of Tennessee, Inc.	100%	Loan
    Party
	Summit
    Properties – Bridgeport, LLC	Arkansas	Fred’s
    Stores of Tennessee, Inc.	100%	Excluded
    Subsidiary
	Summit
    Properties – Jacksboro, LLC	Arkansas	Fred’s
    Stores of Tennessee, Inc.	100%	Excluded
    Subsidiary
	National
    Equipment Management and Leasing, Inc.	Tennessee	Fred’s,
    Inc.	100%	Excluded
    Subsidiary

     

     

    

 

SCHEDULE
1

to
Credit Agreement

 

Commitments

 

	Lender
	Revolving
    Commitment
	 	 
	Regions
        Bank
	$105,000,000.00
	 	 
	Bank
        of America, N.A.
	$105,000,000.00
	 	 
	Aggregate
        Revolving Commitments
	$210,000,000.00

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