On May 15, 2019, Fred’s, Inc. and certain of its subsidiaries entered into that certain Forbearance Agreement, Eighth Amendment to Credit Agreement and Fourth Amendment to Amended and Restated Addendum to Credit Agreement, by and among the Company and certain of its subsidiaries, Regions Bank, in its capacity as administrative agent, and co-collateral agent Bank of America, N.A., in its capacity as co-collateral agent and Regions Bank and Bank of America, N.A., as lenders.  The Amendment amends the Company’s existing Credit Agreement, dated as of April 9, 2015, as amended as of October 23, 2015, December 28, 2016, January 27, 2017, July 31, 2017, August 22, 2017, April 5, 2018 and August 23, 2018, and Amended and Restated Addendum to Credit Agreement, dated as of January 27, 2017, as amended as of July 31, 2017, August 23, 2018 and October 15, 2018. Among other things, the Amendment provides for the following: The Company and certain of its subsidiaries’ stipulation of the occurrence of certain events of default under the Credit Agreement and the Addendum, including as the result of the commencement of 159 store closures, issues with timing and accuracy of a borrowing base certificate and the failure to deliver an annual audit report without a “going concern” or similar qualification; Agents’ and Lenders’ agreement to forbear from exercising remedies under the Credit Agreement with respect to the stipulated events of default and the additional planned closure of 104 stores, in each case, until July 22, 2019, subject to the satisfaction of certain conditions; Requirements for the Company and certain of its subsidiaries to comply with certain conditions, including working with a turnaround consultant; providing certain deliverables including weekly cash flow forecasts and inventory reports; requiring that collections, disbursements and inventory receipts are within 15% of forecasted amounts for any two week period; maintaining certain levels of inventory at certain continuing stores; and obtaining a signed commitment letter or letters by June 21, 2019 for a refinancing of all loans under the Credit Agreement by July 22, 2019, with the failure to comply with such conditions resulting in the early termination of the forbearance period; Agents’ and Lenders’ agreement to release certain reserves upon receipt of such commitment letter or letters; A reduction of commitments from $210 million to $150 million, and additional reductions to $125 million on June 15, 2019 and to $100 million on July 6, 2019; A change in the availability requirements to 10% of commitments, allowing availability requirements to decrease with the commitment reductions; An increase of the interest rate by 200 basis points; and Agents’ and Lenders’ consent to the sale of certain real estate. The Lenders (and their respective subsidiaries or affiliates) have in the past provided, or may in the future provide, investment banking, underwriting, lending, commercial banking, trust and other advisory services to the Company, its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company, its subsidiaries or affiliates, for such services.