SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 28, 2002
FRIEDMAN'S INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22356 58-20583
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
4 WEST STATE STREET
SAVANNAH, GEORGIA 31401
(Address of principal executive offices)
912-233-9333
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On August 29, 2002, Friedman's Inc. ("Friedman's") entered into a
three-year $150 million revolving credit facility, led by Bank of America and
CIT Group, to replace its existing facility scheduled to expire September 15,
2002. In addition, on August 29, 2002, Crescent Jewelers, affiliate of
Friedman's ("Crescent"), also replaced its expiring facility with a new
three-year $50 million revolving credit facility, led by Bank of America and CIT
Group.
In conjunction with the new credit facilities, Friedman's restructured
its financial support of Crescent by terminating its guarantee of Crescent's
previous $112.5 million credit facility and making a direct investment totaling
$85.0 million. This investment consists of $50.0 million of a Series A Preferred
Stock and $35.0 million of a Senior Subordinated Note, a summary of the terms of
which is as follows:
Series A Preferred Stock -- $50.0 million.
- Floating rate dividend is equal to the all-in cost of funds under
the Friedman's credit facility, plus a pre-tax amount approximating
the 2% guarantee fee previously payable by Crescent, less the tax
benefit Friedman's receives from the dividends received deduction.
- Initial dividend rate of approximately 6.26%.
- Cumulative dividends payable semi-annually on January 15th and July
15th.
- Friedman's can request that the preferred stock be redeemed by
Crescent at any time after August 28, 2007.
- The preferred stock carries no voting rights, but does have a
preference in liquidation or upon a change of control.
Senior Subordinated Note -- $35.0 million
- Floating rate interest is equal to the all-in cost of funds under
the Friedman's credit facility, plus an amount approximating the 2%
guarantee fee previously payable by Crescent.
- Initial interest rate of approximately 7.61%.
- Interest payable semi-annually on January 15th and July 15th.
- The note is due August 28, 2007.
- All amounts due under the note are subordinate to Crescent's senior
bank facility.
Friedman's and Crescent are affiliates and Bradley J. Stinn, Chief
Executive Officer of Friedman's, is the Chairman and Chief Executive Officer of
Crescent. The purchase of both the Preferred Stock and the Subordinated Note was
approved by a Special Committee of disinterested members of the Board of
Directors of Friedman's.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits:
10.1 Amended and Restated Credit Agreement, dated as of August 28, 2002, among
Friedman's Inc. and certain of its subsidiaries party thereto, as the
Credit Parties, the lending institutions named therein, as the Lenders,
Bank of America, N.A., as Administrative Agent, and the CIT
Group/Business Credit, Inc., as Syndication Agent.
10.2 Amended and Restated Credit Agreement, dated as of August 28, 2002, among
Crescent Jewelers Inc., Crescent Jewelers, and certain of their
Subsidiaries party thereto, as the Credit Parties, the lending
institutions named therein, as the Lenders, the CIT Group/Business Credit,
Inc., as Documentation Agent, and Bank of America, N.A., as Administrative
Agent.
10.3 Series A Preferred Stock Purchase Agreement, dated as of August 28, 2002,
by and among Crescent Jewelers, Crescent Jewelers, Inc., and Friedman's
Inc.
10.4 Note Purchase Agreement, dated as of August 28, 2002, by and among
Crescent Jewelers, Crescent Jewelers, Inc., and Friedman's Inc.
10.5 Senior Subordinated Note by Crescent Jewelers due August 28, 2007.
10.6 Amended and Restated Articles of Incorporation of Crescent Jewelers.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRIEDMAN'S INC.
(Registrant)
Date: September 10, 2002 By /s/Victor M. Suglia
----------------------
Victor M. Suglia
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
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