Exhibit
10(b)


 


 SECOND AMENDMENT TO CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the
“Amendment”) is made as of the 27th day of May, 2004 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 (a)
letter amendment dated May 1, 2002, and (b) the First Amendment to Credit
Agreement dated as of May 29, 2003, 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.


 


A.              Each of the following
definitions contained in Section 1.01 of the Credit Agreement is hereby deleted
in its entirety:


 


(i)                                     “First
Anniversary”;


(ii)                                  “Second
Anniversary”;


(iii)                               “Term
Loan”;


(iv)                              “Term
Loan Conversion Date”; and


(v)                                 “Term
Note”


 


B.                Each of the
following definitions contained in Section 1.01 of the Credit Agreement is
hereby amended and restated it in its entirety as set forth below:


 


“‘Maturity Date’
means (i) in the case of Tranche A Loans, the Tranche A Termination Date, and
(ii) in the case of Tranche B Loans, the Tranche B Termination Date.”


 


“‘Notes’ means the
Tranche A Note and the Tranche B Note.”


 


“‘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 or terminated
pursuant to Section 2.12.”


 


1

















 


“‘Tranche A
Termination Date’ means May 31, 2009, or such earlier date as the Tranche A
Commitment is terminated pursuant to this Agreement.”


 


“‘Tranche B
Termination Date’ means May 26, 2005, or such earlier date as the Tranche B
Commitment is terminated pursuant to this Agreement.”


 


SECTION 2.2                                 Amendment
of Other Sections.


 


A.  Section 1.03 is hereby amended by deleting
the reference to “Term Loan” in the second sentence thereof.


 


B.  Section 2.01(c) is hereby deleted in its
entirety.


 


C.  Section 2.02(c) is hereby deleted in its
entirety.


 


D. Section
2.03(c)(i) is hereby deleted in its entirety.


 


E.  Section 2.04(b) is hereby deleted in its
entirety and replaced with the following:


 


“[DELIBERATELY OMITTED].”


 


F.  Section 2.04(d)(iii) is hereby deleted in
its entirety and replaced with the following:


 


“[DELIBERATELY
OMITTED];”


 


G.  Section 2.04(d)(iv) is hereby amended by
deleting therefrom the phrase  “any Term
Loan or”.


 


H.  Section 2.06 shall be amended by deleting
therefrom the following language:


 


“Prepayments of any Term
Loan shall, at the election of the Borrower (with notice to the Bank), be applied
either (i) to installments of principal of such Loan in inverse order of
maturity, or (ii) to the then remaining installments of principal of such Loan
pro rata.  Principal of the Term Loans
paid or prepaid may not be reborrowed.”


 


I.   Section 2.10 shall be amended as follows:


 


(i)                                     by
deleting the reference to “0.0575%” and replacing it with “0.0400%”; and


(ii)                                  by
deleting the phrase “Section 2.01(c) and/or”.


 


J. Section 2.14 is
hereby deleted in its entirety and replaced with the following:


 


“SECTION 2.14.           Extension of Tranche
A Termination Date.  No later than
February 28 of each year during the tenor of the Tranche A Commitment, the
Borrower may submit a written request to the Bank for an extension of the
Tranche A Termination Date for an additional period of one year.  Within thirty (30) days after receipt by the
Bank of such notice, the Bank shall give written notice to the Borrower of its
agreement or refusal to extend the Tranche A Termination Date; provided,
however, that any failure by the Bank to respond to


 


2

















 


any such request in a
timely manner shall be deemed to be a refusal by the Bank to extend the Tranche
A Termination Date.”


 


K. Section 4.03 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 condition:


 


(a)                 the Bank shall
have received from each of the Borrowers and each of the Guarantors a counterpart
hereof signed by such party.


 


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 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
applicable Debtor Relief Laws and 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.


 


3

















 


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.


 


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:

  	
  Senior Vice
  President-Finance

  
	
   

  	
   

  	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
  FAMILY DOLLAR, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/  C. Martin Sowers

  	
   

  
	
   

  	
   

  	
  Name:

  	
  C. Martin Sowers

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President-Finance

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Bank:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Doug Boothe

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Doug Boothe

  
	
   

  	
   

  	
  Title:

  	
  Director

  
							



 


 


	
  ACKNOWLEDGED AND AGREED
  BY GUARANTORS:

  
	
   

  
	
   

  
	
  FAMILY DOLLAR SERVICES, INC.

  	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
  /s/ C. Martin Sowers

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  C. Martin Sowers

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President-Finance

  	
   

  	
   

  
							



 


4

















 


	
  FAMILY DOLLAR OPERATIONS, INC.

  	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
  /s/ C. Martin Sowers

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  C. Martin Sowers

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President-Finance

  	
   

  	
   

  
							



 


	
  FAMILY DOLLAR TRUCKING, INC.

  	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
  /s/ C. Martin Sowers

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  C. Martin Sowers

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President-Finance

  	
   

  	
   

  
							



 


5