Exhibit
10 (ii)


 


 FIRST AMENDMENT TO CREDIT AGREEMENT


 


THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the
“Amendment”) is made as of the 29th day of May, 2003 by and among FAMILY DOLLAR
STORES, INC., FAMILY DOLLAR, INC. (collectively, the “Borrowers”), and WACHOVIA
BANK, NATIONAL ASSOCIATION (formerly known as First Union National Bank) (the
“Bank”).


 


RECITALS:


 


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 letter
amendment dated May 1, 2002, 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 amended as
set forth in this Section 2.


 


SECTION 2.1 Amendments
to Definitions. The definitions set forth in Section 1.01 of the Credit
Agreement are hereby amended by amending and restating in their entirety as set
forth below the following defined terms:


 


“Tranche A
Commitment” means the obligation of the Bank to make Tranche A Loans
hereunder in an aggregate principal amount up to but not exceeding Fifty
Million Dollars ($50,000,000.00), as the same may be reduced pursuant to
Sections 2.01(c) and 2.12 or terminated pursuant to Section 2.12.


 


“Tranche A
Termination Date” means May 31, 2005 except to the extent extended pursuant
to Section 2.01(c), or such earlier date as the Tranche A Commitment is
terminated pursuant to this Agreement.


 


“Tranche B
Commitment” means the obligation of the Bank to make Tranche B Loans
hereunder in an aggregate principal amount up to but not exceeding Fifty
Million Dollars ($50,000,000.00), as the same may be reduced or terminated
pursuant to Section 2.12.


 


“Tranche B
Termination Date” means May 27, 2004, or such earlier date as the Tranche B
Commitment is terminated pursuant to this Agreement.


 


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SECTION 2.2  Amendment to Section 2.01(c).  The reference in the first sentence of
Section 2.01(c) to “or seven (7) years” shall be deleted.


 


SECTION 2.3  Amendment to Section 2.03(c)(i).  Section 2.03(c)(i) is hereby deleted in its
entirety and replaced with the following:


 


(i)  installments
of principal each in an amount equal to one-fifth of the original principal
amount of such Term Loan shall be payable on the First Anniversary and Second
Anniversary of such Term Loan, and (B) thereafter (x) if the Borrower has
notified the Bank pursuant to Section 2.01(c) that after the Second Anniversary
installments of principal will be payable quarterly, installments of principal
shall be payable in twelve (12) equal, consecutive quarterly installments each
in a principal amount equal to one twelfth (1/12th) of the then outstanding
principal amount of such Term Loan on the Second Anniversary after giving
effect to the scheduled payment of principal on such date, with the first such
quarterly installment being payable on the date occurring three (3) months
after the Second Anniversary and subsequent like installments being payable
every three (3) months thereafter, or (y) if the Borrower has notified the Bank
pursuant to Section 2.01(c) that after the Second Anniversary installments of
principal will be payable semiannually, installments of principal shall be
payable in six (6) equal, consecutive semiannual installments each in a
principal amount equal to one sixth (1/6th) of the then outstanding principal
amount of such Term Loan after giving effect to the scheduled payment of
principal on such date, with the first such semiannual installment being
payable on the date occurring six (6) months after the Second Anniversary and
subsequent like installments being payable every six (6) months thereafter.


 


SECTION 2.4  Amendment to Section 2.03(c)(ii).  Section 2.03(c)(ii) is hereby deleted in its
entirety.


 


SECTION 3.   Conditions to Effectiveness.  The effectiveness of this Amendment and the
obligations of the Bank hereunder are subject to the satisfaction of the
following conditions:


 


(a)                 the
Bank shall have received (i) from each of the Borrowers and each of the
Guarantors a counterpart hereof signed by such party; (ii) from each of the
Borrowers, a duly executed Trache A Note in the amount of the Tranche A
Commitment, which Tranche A Notes shall replace and supercede any prior Tranche
A Notes; and (iii) from each of the Borrowers, a duly executed Trache B Note in
the amount of the Tranche B Commitment, which Tranche B Notes shall replace and
supercede any prior Tranche B Notes; 
and


 


(b)                the
Bank shall have received corporate borrowing resolutions duly adopted by the
board of directors (or the executive committee of the board of directors) of
each Borrower and Guarantor authorizing the borrowings contemplated hereunder
(and the obligations of the Guarantors pursuant to the Guaranty with respect
thereto) and the execution, delivery, and performance of this Amendment.


 


SECTION 4.  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


 


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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 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 promise and agree to perform all of the requirements,
conditions, agreement and obligations under the terms of the Credit Agreement,
as hereby amended, the Credit Agreement, as amended, being hereby ratified and
affirmed.  The Borrowers hereby
expressly agree that the Credit Agreement, as amended, and each of the other Loan
Documents, is in full force and effect.


 


SECTION 5.  Representations and Warranties.  Each of the Borrowers 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 (as amended hereby) shall be true on and as of the date
hereof.


 


(c)                 Each
of the Borrowers 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 constitutes a legal, valid and
binding obligation of each of the Borrowers, enforceable against each of the
Borrowers in accordance with its terms, provided that such enforceability is
subject to general principles of equity.


 


(e)                 The
execution and delivery of this Amendment and the performance hereunder by each
of the Borrowers does not and will not require the consent or approval of any
regulatory authority or governmental authority or agency having jurisdiction
over any Borrower, nor be in contravention of or in conflict with the
certificate of incorporation or bylaws of any Borrower, or the provision of any
statute, or any judgement, order, indenture, instrument, agreement or undertaking,
to which any Borrower is party or by which the assets or properties of any
Borrower are or may become bound.


 


SECTION 6.  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.


 


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SECTION 7.  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.


 


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.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
          /s/
  C. Martin Sowers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  C. MARTIN SOWERS

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Sr. Vice President -
  Finance

  
	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  	
  FAMILY DOLLAR, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
          /s/
  C. Martin Sowers

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  C. MARTIN SOWERS

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Sr. Vice President -
  Finance

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Bank:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
          /s/
  Denis Waltrich

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  DENIS WALTRICH

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Associate

  
							



 


 


ACKNOWLEDGED AND AGREED
BY GUARANTORS:


 


 


	
  FAMILY DOLLAR SERVICES,
  INC.

  	
  [CORPORATE SEAL]

  
	
   

  
	
  By:

  	
          /s/
  C. Martin Sowers

  	
   

  
	
   

  	
  Name:

  	
  C. MARTIN SOWERS

  
	
   

  	
  Title:

  	
  Sr. Vice President -
  Finance

  
					



 


[SIGNATURES
CONTINUE ON FOLLOWING PAGE]


 


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  FAMILY DOLLAR
  OPERATIONS, INC.

  	
  [CORPORATE SEAL]

  
	
   

  
	
  By:

  	
          /s/
  C. Martin Sowers

  	
   

  
	
   

  	
  Name:

  	
  C. MARTIN SOWERS

  
	
   

  	
  Title:

  	
  Sr. Vice President -
  Finance

  
					



 


	
  FAMILY DOLLAR TRUCKING,
  INC.

  	
  [CORPORATE SEAL]

  
	
   

  
	
  By:

  	
          /s/
  C. Martin Sowers

  	
   

  
	
   

  	
  Name:

  	
  C. MARTIN SOWERS

  
	
   

  	
  Title:

  	
  Sr. Vice President -
  Finance

  
					



 


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