Exhibit 10(b)
FOURTH AMENDMENT TO CREDIT AGREEMENT
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THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is made as of
the 21st day of March, 2006 by and among FAMILY DOLLAR STORES, INC., a Delaware
corporation ("FDSI"), FAMILY DOLLAR, INC., a North Carolina corporation ("FDI"
and, together with FDSI, the "Borrowers"), and WACHOVIA BANK, NATIONAL
ASSOCIATION (formerly known as First Union National Bank) (the "Bank").
RECITALS:
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The Borrowers and the Bank entered into a certain Credit Agreement dated as
of August 7, 2001 (as amended, modified or supplemented prior to the date
hereof, including by (a) letter amendment dated May 1, 2002, (b) the First
Amendment to Credit Agreement dated as of May 29, 2003, (c) the Second Amendment
to Credit Agreement dated as of May 27, 2004 and (d) the Third Amendment to
Credit Agreement dated as of May 16, 2005, the "Credit Agreement"). Capitalized
terms used in this Amendment, which are not otherwise defined in this Amendment,
shall have the respective meanings assigned to them in the Credit Agreement.
The Borrowers and the Bank wish to amend the Credit Agreement in certain
respects, as hereinafter provided.
NOW, THEREFORE, in consideration of the Recitals and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers and the Bank,
intending to be legally bound hereby, agree as follows:
SECTION 1. Recitals. The Recitals are incorporated herein by reference and
shall be deemed to be a part of this Amendment.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is
hereby modified as follows:
(a) Amendment to Add New Definitions. Section 1.01 of the Credit Agreement
is hereby amended by inserting the following defined terms in appropriate
alphabetical order:
(i) ""Alabama Lawsuit" means the case of Xxxxxx, et al. v. Family
Dollar Stores, Inc. brought in U.S. District Court for the Northern
District of Alabama alleging that FDSI violated the Fair Labor Standards
Act by classifying the named plaintiffs and other similarly situated
current and former store managers as "exempt" employees who are not
entitled to overtime compensation."
(ii) ""Alabama Lawsuit Charges" means any and all damages,
settlements, expenses, losses, charges and other costs incurred by the
Borrowers in connection with the Alabama Lawsuit except to the extent that
such losses, expenses and other charges exceed $50,000,000."
(b) Amendment to Existing Definitions. Section 1.01 of the Credit Agreement
is hereby amended by amending and restating the following existing defined terms
as follows:
(i) ""Consolidated EBITR" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount
of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income, and (d) total Lease Rentals;
provided that, for the purpose of this definition, Consolidated Net Income
shall be calculated without giving effect to the Alabama Lawsuit Charges."
(ii) ""Leverage Ratio" means, as of any date of determination, the
ratio of (a) Consolidated Debt as of such date, to (b) the sum of
Consolidated Debt and Consolidated Net Worth. The parties hereto hereby
agree that the Alabama Lawsuit Charges (including any reimbursement
obligation in respect of a surety bond or letter of credit issued in
connection therewith) shall not be considered Consolidated Debt for the
purpose of the calculation of the Leverage Ratio."
(c) Amendment to Section 6.03. Section 6.03(k) of the Credit Agreement is
hereby amended and restated in its entirety as follows:
"(k) (i) Liens (other than Liens of the type permitted in Subparagaphs
(a) through (j) above (collectively, "Permitted Liens")) securing Debt and
(ii) Liens of the type permitted in Subparagraph (h) above in connection
with the Alabama Lawsuit to the extent that the $25,000,000 basket set
forth in Subparagraph (h) above is not sufficient, which do not in the
aggregate exceed 15.0% of Consolidated Net Worth (minus outstanding
Permitted Liens under Subparagraph (h) above) at any time."
SECTION 3. Conditions to Effectiveness. The effectiveness of this Amendment
and the obligations of the Bank hereunder are subject to the receipt by the Bank
from each Borrower and each Guarantor of a counterpart hereof signed by such
party.
SECTION 4. Acknowledgement of each Guarantor. By their execution hereof,
each Guarantor hereby expressly (i) consents to the amendments set forth in this
Amendment, (ii) reaffirms all of its respective covenants, representations,
warranties and other obligations set forth in the Guaranty and each of the other
Loan Documents to which it is a party and (iii) acknowledges, represents and
agrees that its respective covenants, representations, warranties and other
obligations set forth in the Guaranty and each of the other Loan Documents to
which it is a party remain in full force and effect.
SECTION 5. No Other Amendment. Except for the amendments set forth above,
the text of the Credit Agreement and each of the other Loan Documents,
including, without limitation, the Guaranty, shall remain unchanged and in full
force and effect. This Amendment is not intended to effect, nor shall it be
construed as, a novation. The Credit Agreement and this Amendment shall be
construed together as a single agreement. Nothing herein contained shall waive,
annul, vary or affect any provision, condition, covenant or agreement contained
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in the Credit Agreement, except as herein amended, nor affect or impair any
rights, powers or remedies under the Credit Agreement as hereby amended. The
Borrowers and the Guarantors promise and agree to perform all of the
requirements, conditions, agreement and obligations under the terms of the
Credit Agreement, as hereby amended, and each of the other Loan Documents (the
Credit Agreement, as amended, and each of the other Loan Documents being hereby
ratified and affirmed). The Borrowers and the Guarantors hereby expressly agree
that the Credit Agreement, as amended, and each of the other Loan Documents, is
in full force and effect.
SECTION 6. Representations and Warranties. Each Borrower and each Guarantor
hereby represents and warrants to the Bank as follows:
(a) No Default or Event of Default under the Credit Agreement or any
other Loan Document has occurred and is continuing unwaived by the Bank on
the date hereof;
(b) The representations and warranties of the Borrowers set forth in
Article V of the Credit Agreement shall be true on and as of the date
hereof.
(c) Each Borrower and each Guarantor has the power and authority to
enter into this Amendment and to do all acts and things as are required or
contemplated hereunder, or thereunder, to be done, observed and performed
by it.
(d) This Amendment has been duly authorized, validly executed and
delivered by one or more authorized officers of each Borrower and each
Guarantor and constitutes a legal, valid and binding obligation of each
Borrower and each Guarantor, enforceable against each Borrower and each
Guarantor in accordance with its terms, provided that such enforceability
is subject to applicable Debtor Relief Laws and general principles of
equity.
(e) The execution and delivery of this Amendment and the performance
hereunder by each Borrower and each Guarantor does not and will not require
the consent or approval of any regulatory authority or governmental
authority or agency having jurisdiction over any Borrower or any Guarantor,
nor be in contravention of or in conflict with the certificate of
incorporation or bylaws of any Borrower or any Guarantor, or the provision
of any statute, or any judgment, order, indenture, instrument, agreement or
undertaking, to which any Borrower or any Guarantor is party or by which
the assets or properties of any Borrower or any Guarantor are or may become
bound.
SECTION 7. Counterparts. This Amendment may be executed in multiple
counterparts each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.
SECTION 8. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of North Carolina, without reference to
the conflicts or choice of law principles thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, under seal, by their respective authorized officers as of the day
and year first above written.
BORROWERS:
[CORPORATE SEAL] FAMILY DOLLAR STORES, INC., as Borrower
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
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Title: Senior Vice President - Finance
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[CORPORATE SEAL] FAMILY DOLLAR, INC., as Borrower
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
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Title: Senior Vice President - Finance
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BANK:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Bank
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Managing Director
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[Guarantor Acknowledgement Follows]
ACKNOWLEDGED AND
AGREED BY GUARANTORS:
[CORPORATE SEAL] FAMILY DOLLAR SERVICES, INC., as Guarantor
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
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Title: Senior Vice President - Finance
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[CORPORATE SEAL] FAMILY DOLLAR OPERATIONS, INC., as
Guarantor
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
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Title: Senior Vice President - Finance
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[CORPORATE SEAL] FAMILY DOLLAR TRUCKING, INC., as
Guarantor
By: /s/ C. Xxxxxx Xxxxxx
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Name: C. Xxxxxx Xxxxxx
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Title: Senior Vice President - Finance
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