EXHIBIT 10.3
EXECUTION COPY
AMENDMENT NO. 4 TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 4, 2000
AMENDMENT NO. 4 (this "Amendment") to the Credit Agreement (as defined
herein) among Quality Stores, Inc., a Delaware corporation (formerly known as
"Central Tractor Farm & Country, Inc.") (the "Borrower"), QSI Holdings, Inc., a
Delaware corporation (formerly known as "CT Holding, Inc.") ("Holding"), certain
of the banks, financial institutions and other institutional lenders listed on
the signature pages hereof the "Lenders"), and Fleet National Bank ("Fleet"), as
administrative agent (the "Administrative Agent") for the Lender Parties (as
defined in the Credit Agreement).
PRELIMINARY STATEMENTS
(1) The Borrower, Holding, the Initial Lenders, the Initial Issuing
Bank, the Swing Line Bank and the Agents have entered into a Second Amended and
Restated Credit Agreement dated as of May 7, 1999, as amended by Amendment No. 1
dated as of March 31, 2000, Amendment No. 2 dated as of September 22, 2000 and
Amendment No. 3 dated as of September 27, 2000 (as so amended, the "Credit
Agreement"). Capitalized terms defined in the Credit Agreement and not otherwise
defined in this Amendment are used herein as therein defined.
(2) The Borrower has requested that the Lenders amend the "clean up"
requirement applicable to the Revolving Credit Advances as set forth in Section
5.04(d) of the Credit Agreement.
(3) The Lenders have agreed to amend the Credit Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. Amendment of the Credit Agreement. The Credit Agreement is,
upon the Effective Date (as hereinafter defined), hereby amended as follows:
(a) Section 5.03(p) of the Credit Agreement is hereby amended
by deleting the word "alternate".
(b) Section 5.04(d) of the Credit Agreement is hereby amended
(1) by replacing the words "Revolving Credit Advances" with the words
"the aggregate amount of the Revolving Credit Advances and the Swing
Line Advances" and (2) by deleting the lines:
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Period Amount
------ ------
"November 1, 2000-December 3, 2000 $143,000,000
December 4, 2000-January 1, 2000 $126,000,000
January 2, 2001-January 30, 2001 $96,000,000"
and replacing each of them with the following:
Period Amount
------ ------
"November 1, 2000-December 21, 2000 $143,000,000
December 22, 2000-December 25, 2000 $134,000,000
December 26, 2000-January 11, 2001 $126,000,000
January 12, 2001-January 15, 2001 $121,000,000
January 16, 2001-January 30, 2001 $96,000,000"
(c) Section 6.01 of the Credit Agreement is hereby amended by
adding immediately before the paragraph commencing "then" the following
subsection:
"(q) Holding shall have failed to receive (after the date of
Amendment No. 4) cash proceeds of at least $2,500,000 from the
sale of common stock or convertible preferred stock (not
subject to mandatory redemption) of Holding on or before
December 26, 2000."
(d) Section 7.07 of the Credit Agreement is hereby amended by
inserting at the end thereof the following sentence:
"Notwithstanding anything to the contrary in this Section, the
Administrative Agent and any Lender appointed to a steering
committee by the Administrative Agent, shall have the right
from time to time, upon prior written notice to the Borrower,
to conduct inventory appraisals, field examinations and related
examinations of the inventory, equipment, real property and
leases and any reasonable out-of-pocket expenses incurred in
connection therewith by the Administrative Agent or any such
Lender shall be reimbursed by the Borrower upon written request
by the Administrative Agent or such Lender."
(e) For the period commencing on the date hereof and ending on
January 22, 2001, the Borrower hereby agrees that the aggregate amount
of Letters of Credit issued and outstanding under the Letter of Credit
Facility shall not exceed an amount equal to the aggregate amount of
Letters of Credit issued and outstanding as of the date of this
Agreement (whether drawn or undrawn) (the "December 4 Outstanding
Amount"), and the Issuing Bank shall not be obligated to issue any
Letters of Credit which, together with issued and outstanding Letters
of Credit (whether drawn or undrawn), would exceed the December 4
Outstanding Amount.
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SECTION 2. Conditions of Effectiveness of this Amendment. This
Amendment shall become effective as of the date first above written on the
Business Day when, and only when, the following conditions shall have been
satisfied (such date being, for purposes hereof, the "Effective Date"):
(a) The Administrative Agent shall have received counterparts
of (i) this Amendment executed by the Borrower, Holding and the
Required Lenders or, as to any of the Lender Parties, advice
satisfactory to the Administrative Agent that such Lender Party has
executed this Amendment and (ii) the consent dated as of the date
hereof (a copy of which is attached hereto) (the "Consent", together
with this Amendment, the "Amendment Documents"), executed by each of
the Loan Parties.
(b) The Administrative Agent shall have received:
(i) an updated list of locations (including leased
and owned stores and distribution centers) at which each
Grantor maintains Equipment and Inventory;
(ii) signed originals of proper financing statements,
to be filed on or before the Effective Date under the Uniform
Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the Collateral
described in the Security Agreement, as supplemented;
(iii) an updated list of bank accounts maintained for
each Loan Party;
(iv) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interests created under the Security Agreement, as
supplemented, has been taken, including any filings with the
U.S. Patent and Trademark Office or the United States
Copyright Office.
(c) On the Effective Date, (i) the representations and
warranties contained in each of the Loan Documents (including, without
limitation, in Section 3 of this Amendment) shall be correct in all
material respects as though made on and as of the Effective Date (other
than any such representations or warranties that, by their terms, refer
to a specific date other than the Effective Date, in which case as of
such specific date) and (ii) no event shall have occurred and be
continuing that would constitute a Default.
(d) The Administrative Agent shall have received a certificate
of the Chief Financial Officer of the Borrower confirming satisfaction
of the conditions specified in paragraph (c) above.
(e) The Administrative Agent shall have received from the
Borrower, on or before the Effective Date, an amendment fee equal to
0.075% of the Commitments of the
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Lenders who have signed this Amendment by the later of (i) 12:00 Noon
on December 4, 2000 and (ii) the date on which the Required Lenders
have signed this Amendment, payable to those Lenders who sign this
Amendment according to the pro rata share of the Commitments of each
such Lender.
(f) All of the reasonable accrued and unpaid fees and expenses
of counsel and accountants for the Administrative Agent shall have been
paid in full, including, without limitation, the fees and expenses of
FTI/Xxxxxxxx & Xxxxx, L.L.C. and Shearman & Sterling.
(g) A retainer of $125,000 shall have been paid to the
Administrative Agent of which $75,000 shall have been paid to Shearman
& Sterling and $50,000 shall have been paid to FTI/Xxxxxxxx & Xxxxx,
L.L.C. for application against future fees and expenses.
The effectiveness of this Amendment is further conditioned upon the
accuracy of all of the factual matters described herein. This Amendment is
further subject to the provisions of Section 9.01 of the Credit Agreement.
SECTION 3. Representations and Warranties. Each of Holding and the
Borrower hereby represents and warrants as follows:
(a) The execution, delivery and performance by each Loan Party
of any of the Amendment Documents and Loan Documents to which it is a
party, as amended hereby, and the consummation of the transactions
contemplated hereby and thereby, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene such Loan Party's charter or bylaws, (ii)
violate any law (including, without limitation, the Securities Exchange
Act of 1934), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award
applicable to such Loan Party, (iii) conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture (including without limitation the Indenture), mortgage, deed
of trust, lease or other instrument binding on or affecting any Loan
Party, any of its Subsidiaries or any of their properties other than as
specified in the Credit Agreement, or (iv) except for Liens created
under the Collateral Documents, as amended hereby, result in or require
the creation or imposition of any Lien upon or with respect to any of
the properties of any Loan Party or any of its Subsidiaries. No Loan
Party or any of its Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or
breach of which is reasonably expected to have a Material Adverse
Effect.
(b) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required to be obtained by the Loan Parties
in connection with the execution and delivery, or
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performance by any Loan Party of any of its obligations under, any
Amendment Document to which it is a party.
(c) Each Amendment Document has been duly executed and
delivered by each Loan Party party thereto, and is the legal, valid and
binding obligation of such Loan Party, enforceable against such Loan
Party in accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or limiting creditors' rights or by equitable principles
generally.
(d) No Loan Party has an existing claim against any Lender
Party arising out of, relating to or in connection with the Loan
Documents.
(e) No Loan Party is in breach of, or in default under, the 10
5/8 % Senior Notes due 2007 issued by the Borrower, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties, where the consequence of such
default is to confer rights upon any person against the Borrower or any
of its Subsidiaries which, if exercised, can be reasonably expected to
have a Material Adverse Effect.
(f) Set forth on Schedule A hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county
or other relevant jurisdiction, state, record owner and showing also
the Loan Parties which maintain Equipment and Inventory at such
location. Each Loan Party or such Subsidiary has good, marketable and
insurable fee simple title to such real property, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.
(g) Set forth on Schedule B hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any
of its Subsidiaries is the lessee, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, lessor,
lessee and showing also the Loan Parties which maintain Equipment and
Inventory at such location. To the best of the knowledge of the Loan
Party or Subsidiary which leases the property, each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable
in accordance with its terms.
(h) All of the Equipment and Inventory of each Grantor is
located at the places listed on Schedules A and B.
SECTION 4. Waiver and Release. The Borrower and Holding hereby waive
and agree not to assert any claims or causes of action against the
Administrative Agent, the Syndication Agent, the Documentation Agent, any Lender
Party or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, whether
known or unknown, matured or contingent, including, without limitation, for
special, indirect, consequential or punitive damages, arising out of or
otherwise relating to, or in connection with, this Amendment, the Facilities,
the actual or proposed use of the proceeds of
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the Advances or the Letters of Credit, the Loan Documents or any of the
transactions entered into in connection therewith.
SECTION 5. Reference to and Effect on the Loan Documents.
(a) On and after the Effective Date, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in
the Notes and the other Loan Documents to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as
amended and otherwise modified hereby.
(b) The Credit Agreement, the Notes and each of the other Loan
Documents, except to the extent of the amendments and other
modifications specifically provided above, are and shall continue to be
in full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the
Collateral Documents and all of the Collateral described therein do and
shall continue to secure the payment of all Obligations of the Loan
Parties under and in respect of the Loan Documents, as amended and
otherwise modified by this Amendment.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender Party or any Agent
under any of the Loan Documents, nor constitute a waiver of any
provision of any of the Loan Documents.
SECTION 6. Costs and Expenses. The Borrower hereby agrees to pay, upon
demand, all costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and expenses of counsel and financial advisors
for the Administrative Agent) in connection with the preparation, execution,
delivery, administration, syndication, modification and amendment of this
Amendment and the other documents, instruments and agreements to be delivered
hereunder, all in accordance with the terms of Section 9.04 of the Credit
Agreement.
SECTION 7. Execution in 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 shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 9. Waiver of Jury Trial. Each of the Borrower, the Subsidiary
Guarantors, the Administrative Agent and the Lender Parties irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise)
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arising out of or relating to this Amendment or the actions of the
Administrative Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
QUALITY STORES, INC. (FORMERLY KNOWN
AS CENTRAL TRACTOR FARM & COUNTRY,
INC.)
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QSI HOLDINGS, INC. (FORMERLY KNOWN AS
CT HOLDING, INC.)
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
FLEET NATIONAL BANK, as Administrative Agent
and as Lender
By: ______________________________________
Title:
LENDERS
BANK OF AMERICAN. N.A.
By:
Title:
XXXXX XXX & XXXXXXX CLO I LTD.
By: Xxxxx Xxx & Farnham Incorporated
as Portfolio Manager
By: /s/ Xxxxx X. Xxxxxxx
Title: Sr. Vice President and Portfolio Manager
FIRST UNION NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxxx
Title: SVP/Director
U.S. BANK NATIONAL ASSOCIATION
By: /s/
Title: Senior Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/
Title: Senior Vice President
XXXXXX FINANCIAL, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
Title: Vice President
MONUMENT CAPITAL LTD., as Assignee
By: Allliance Capital Management L.P., as
Investment Manager
By: Alliance Capital Management Corporation, as
General Partner
By: /s/ Svarker M.M. Johansson
Title: Vice President
KZH WATERSIDE LLC
By: /s/ Xxxxxxxx Xxxx
Title: Authorized Agent
ELC (CAYMAN) LTD. 1999-III
By: /s/
Title: S. V. P.
ELC (CAYMAN) LTD. 2000-I
By: /s/
Title: S. V. P.
PILGRIM CLO 1999-1 LTD.
By: Pilgrim Investments, Inc. as its Investment
Manager
By: /s/ Xxxxxxx X. XxXxxxx
Title: Vice President
GLENEAGLES TRADING LLC.
By: /s/ Xxx X. Xxxxxx
Title: Asst. Vice President
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxxx
Title: Assistant Vice President
THE FUJI BANK, LIMITED
By:_______________________
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee for GENERAL MOTORS EMPLOYEES
GLOBAL GROUP PENSION TRUST
By:_______________________
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee for GENERAL MOTORS WELFARE
BENEFITS TRUST
By:_______________________
Title:
SEQUILS PILGRIM I LTD.
By: Pilgrim Investments, Inc. as its Investment Manager
By: /s/ Xxxxxxx X. XxXxxxx
Title: Vice President
BALANCED HIGH YIELD FUND II, LTD
By: BHF (USA) Capital Corporation, as its
attorney-in-fact
By: /s/ Xxxxxx X. Xxxxx
Title: Vice President, Portfolio Management
By: /s/ Xxxx Xxxx
Title: Associate
CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management Company,
as Portfolio Manager
By: /s/
Title: Principal
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company,
as Portfolio Manager
By: /s/
Title: Principal
Sankaty Advisors, Inc. as Collateral Manager for
XXXXX POINT CBO 1999-1, LTD., as Term Lender
By: /s/
Title:
Sankaty Advisors, Inc. as Collateral Manager for
GREAT POINT CLO 1999-1, LTD., as Term Lender
By: /s/
Title:
Sankaty Advisors, Inc. as Collateral Manager for
XXXXX POINT II CBO 2000-1, LTD., as Term Lender
By: /s/
Title:
SANKATY HIGH YIELD PARTNERS II, L.P.
By: /s/
Title:
PERSEUS CDO I, LIMITED
By: Massachusetts Mutual Life Insurance Company
as its Collateral Manager
By: /s/ Xxxxxx X. Xxxx
Title: Second Vice President and
Associate General Counsel
XXXXX XXX FLOATING RATE LIMITED
LIABILITY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Title: Senior Vice President
SAAR HOLDINGS CDO LIMITED
By: Massachusetts Mutual Life Insurance Company
as its Collateral Manager
By: /s/ Xxxxxx X. Xxxx
Title: Second Vice President and
Associate General Counsel
KZH CYPERESSTREE - 1 LLC
By: /s/ Xxxxxxxx Xxxx
Title: Authorized Agent
ML CBO IV (CAYMAN) LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By: /s/
Title:
XXXXXX TRUST AND SAVINGS BANK
By: /s/
Title: Vice President
COMERICA BANK
By: /s/
Title: Vice President
KEY CORPORATE CAPITAL
By: /s/ Xxxx Xxxxxxxxxx
Title: Vice President
BHF (USA) CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Title: Vice President, Portfolio Management
By: /s/ Xxxx Xxxx
Title: Associate
UNION BANK OF CALIFORNIA, N.A.
By: /s/ J. Xxxxxxx Xxxxxx
Title: Vice President
FIRSTAR BANK, NATIONAL ASSOCATION
By: /s/ Xxxxx X. Xxxxxxxxx
Title: Vice President
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
FIFTH THIRD BANK
By: /s/
Title: Assistant Vice President
Schedule A
Owned Real Property
Record Owner Street Address County Loan Parties maintaining
Equipment and Inventory at
location
--------------------------------------------------------------------------------
[To be completed by Borrower]
Schedule B
Leased Real Property
Lesee Street Address County Loan Parties maintaining
Equipment and Inventory at
location
--------------------------------------------------------------------------------
CONSENT
Reference is made to (a) Amendment No. 4 to the Second Amended and
Restated Credit Agreement dated as of May 7, 1999 as amended by Amendment No. 1
dated as of March 31, 2000, Amendment No. 2 dated as of September 22, 2000 and
Amendment No. 3 dated as of September 27, 2000 (as so amended, the "Credit
Agreement") among Quality Stores, Inc., a Delaware corporation (formerly known
as "Central Tractor Farm & Country, Inc.") (the "Borrower"), QSI Holdings, Inc.,
a Delaware corporation (formerly known as "CT Holding, Inc.") ("Holding"), the
banks, financial institutions and other institutional lenders listed on the
signature pages thereof, and Fleet National Bank ("Fleet"), as administrative
agent (the "Administrative Agent") for the Lender Parties (as defined in the
Credit Agreement) and (b) the other Loan Documents referred to therein.
Capitalized terms defined in the Credit Agreement and not otherwise defined in
this Consent are used herein as therein defined.
Each of the undersigned, in its capacity as (a) a Grantor under the
Security Agreement, (b) a Pledgor under the Pledge Agreement, and/or (c) a
Subsidiary Guarantor under the Subsidiary Guaranty, as the case may be, hereby
consents to the execution and delivery of the Amendment and the performance of
the Amendment and agrees that:
(A) each of the Security Agreement, the Pledge Agreement and
the Subsidiary Guaranty to which it is a party is, and shall continue
to be, in full force and effect and is hereby in all respects ratified
and confirmed on the Effective Date, except that, on and after the
Effective Date, each reference to "the Credit Agreement", "thereunder",
"thereof", "therein" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Credit Agreement, as
amended and otherwise modified by the Amendment; and
(B) as of the Effective Date, the Security Agreement and the
Pledge Agreement to which it is a party and all of the Collateral of
such Person described therein, and the Subsidiary Guaranty and the
guaranty provided thereunder, do, and shall continue to, secure the
payment of all of the Secured Obligations.
This Consent shall be governed by, and construed in accordance with,
the laws of the State of New York.
Delivery of an executed counterpart of a signature page of this Consent
by telecopier shall be effective as the delivery of a manually executed
counterpart of this Consent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
QUALITY STORES, INC. (FORMERLY KNOWN
AS CENTRAL TRACTOR FARM & COUNTRY,
INC.)
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QSI HOLDINGS, INC. (FORMERLY KNOWN AS
CT HOLDING, INC.)
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
COUNTRY GENERAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QUALITY FARM & FLEET, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QUALITY INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QSI TRANSPORTATION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
VISION TRANSPORTATION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
QUALITY STORES SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Title: Senior Vice-President, Finance and CFO
