EXHIBIT 10.2
EXECUTION COPY
AMENDMENT NO. 3 TO THE SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
Dated as of September 27, 2000
AMENDMENT NO. 3 (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, 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. 1"), and by Amendment No. 2 and
Waiver dated as of September 22, 2000 ("Amendment No. 2") (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 agree to modify certain
of the provisions of the Credit Agreement in order to facilitate the disposition
of inventory of Permitted Closed Stores in accordance with Section 5.02(e)(i)(B)
of the Credit Agreement and to maximize the value to be realized from such
disposition by various of the Loan Parties.
(3) The Borrower has further requested that the Lenders agree to modify
certain of the provisions of the Credit Agreement in order to permit the
issuance of letters of credit by Comerica Bank, a Lender Party, as an Issuing
Bank under the Credit Agreement.
(4) The Lenders have agreed to amend and waive 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. Amendments of Certain Provisions of the Credit Agreement.
The Credit Agreement is, upon the Effective Date (as hereinafter defined),
hereby amended as follows:
(a) Section 1.01 of the Credit Agreement is hereby amended as follows:
The definition of "Issuing Bank" is amended in full to read as
follows:
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"'Issuing Bank' means, as the context may require, either (a)
the Initial Issuing Bank, or (b) Comerica Bank, and each
Eligible Assignee to which the Letter of Credit Commitment
hereunder has been assigned pursuant to Section 9.07."
(b) Section 1.01 of the Credit Agreement is further amended by adding
the following definition thereto:
"Permitted Closed Store Inventory" means all Inventory of any
Permitted Closed Store that is permitted to be sold in
accordance with Section 5.02(e)(i)(B).
(c) The references in the Credit Agreement to "Issuing Bank" are
amended by:
(i) replacing the word "the" with the word "any" immediately
preceding "Issuing Bank" in the following places:
o the definitions of "Appropriate Lender", "Lender
Party", "Letter of Credit Advance", and "Required
Lenders;
o the first and third references to "Issuing Bank" in the
definition of "Defaulted Amount";
o the first and third references to "Issuing Bank" in the
definition of "Letter of Credit Commitment";
o the first reference to "Issuing Bank" in Section
2.03(a);
o the first reference to "Issuing Bank" in the first,
second and fifth sentences of Section 2.03(c);
o Section 2.04(e)(ii)(C), (E) and (G);
o the first reference to "Issuing Bank" in Section 3.02;
o the first and third references to "Issuing Bank" in
Section 6.01;
o Section 7.01;
o Section 7.05(a);
o the first reference to "Issuing Bank" in Section 9.09;
(ii) replacing the word "the" with the word "such" immediately
preceding "Issuing Bank" in the following places:
o the second, fourth and fifth references to "Issuing
Bank" in the definition of "Defaulted Amount"
o the second, fourth and fifth references to "Issuing
Bank" in the definition of "Letter of Credit
Commitment";
o each reference to "Issuing Bank" in Section 2.01(e)
after the first such reference;
o each reference to "Issuing Bank" in Section 2.03(a)
after the first such reference;
o each reference to "Issuing Bank" in Section 2.03(c)
other than the first reference in the first, second and
fifth sentences;
o the second reference to "Issuing Bank" in Section
2.08(b)(ii);
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o each reference to "Issuing Bank" in Section 7.05(b)
after the first such reference;
o the second reference to "Issuing Bank" in Section 9.01;
o each reference to "Issuing Bank" in Section 9.09 after
the first such reference;
(iii) replacing the word "the" with the word "each" immediately
preceding "Issuing Bank" in the following places:
o the definition of "Unused Revolving Credit Commitment";
o the first reference to "Issuing Bank" in Section
2.01(e);
o Section 2.04(e)(i);
o the first reference to "Issuing Bank" in Section
2.08(b)(ii);
o the second reference to "Issuing Bank" in Section 3.02;
o the second and fourth references to "Issuing Bank" in
Section 6.01;
o the first reference to "Issuing Bank" in Section
7.05(b);
o the first reference to "Issuing Bank" in Section 9.01;
(iv) replacing the word "The" with the word "Each" immediately
preceding "Issuing Bank" in the following places:
o Section 2.03(b);
(d) Section 5.02(a) of the Credit Agreement is amended by inserting at
the end thereof the following new clause (vi) as follows:
"(vi) Liens in favor of a non-affiliated Person that has been
retained to liquidate Permitted Closed Store Inventory,
provided that such Person shall have agreed prior to the
granting of any such Liens to advance a portion of the
anticipated proceeds from such disposition to the Borrower or
the relevant Loan Party, and the Administrative Agent, upon the
written request of the Borrower or the applicable Loan party,
is authorized to subordinate the security interests in such
Inventory created under the Loan Documents."
(e) Schedule I to the Credit Agreement is amended by (a) deleting the
figure "$20,000,000" under the heading "Letter of Credit Commitment" in the
row listing "Fleet National Bank" under the heading "Name of Initial
Lender" and replacing it with "$12,500,000", and (b) by inserting the
figure "$7,500,000" under the heading "Letter of Credit Commitment" in the
row listing "Comerica Bank" under the heading "Name of Initial Lender".
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
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of the Lender Parties, advice satisfactory to the Administrative Agent that
such Lender Party has executed this Amendment, and (ii) the Consent
(together with this Amendment, the "Amendment Documents") dated as of the
date hereof (a copy of which is attached hereto), executed by each of the
Loan Parties.
(b) On the Effective Date, and after giving effect to the
effectiveness of this Amendment, (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.
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 that the representations and warranties contained
in clauses (a), (b), (c), (d) and (e) of Section 6 of Amendment No. 2 are hereby
repeated in this Amendment, provided that, each reference to "Amendment
Documents" in such representations and warranties shall be taken to be a
reference to the "Amendment Documents" defined in Section 2(a) of this
Amendment.
SECTION 4. 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 5. Costs and Expenses. The Borrower hereby agrees to pay, upon
demand, all costs and expenses of the Administrative Agent (including, without
limitation, the
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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 6. 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 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 8. 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) 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver 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.)
/s/ Denny L. Starr
Title:
QSI HOLDINGS, INC. (FORMERLY KNOWN AS
CT HOLDING, INC.)
/s/ Denny L. Starr
Title:
FLEET NATIONAL BANK, as Administrative Agent
and as Lender)
By: /s/
Title: Vice President
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LENDERS
BANK OF AMERICAN. N.A.
By: /s/
Title: Principal
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ELC CAYMAN LTD. 1999-II
By: /s/
Title: S. V. P.
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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. Johannson
Title: Vice President
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HELLER FINANCIAL, INCORPORATED
By: /s/ Sheila C. Welmer
Title: Vice President
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KEY CORPORATE CAPITAL
By: /s/ Alex Strazzella
Title: Vice President
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ML OBO IV (CAYMAN) LTD.
By: Highland Capital Management, L.P.
as Collateral Manager
By: /s/ James Dondero
Title: President
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THE HUNTINGTON NATIONAL BANK
By: /s/ Mark W. DeLoof
Title: Vice President
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STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY
By: /s/ James R. Fellows
Title: Senior Vice President
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STEIN ROE & FARNHAM CLO I LTD.
By: Stein Roe & Farnham Incorporated
as Portfolio Manager
By: /s/ James R. Fellows
Title: Sr. Vice President and Portfolio Manager
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BANKERS TRUST COMPANY
By: /s/ Scottye D. Lindsey
Title: Vice President
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KZH WATERSIDE LLC
By: /s/ Kimberly Rowe
Title: Authorized Agent
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GLENEAGLES TRADING LLC
By: /s/ Ann E. Morris
Title: Asst. Vice President
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FIRST UNION NATIONAL BANK
By: /s/ Helen F. Wessling
Title: SVP/Director
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SEQUILS PILGRIM I LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By: /s/ Charles E. LeMieux
Title: Vice President
<PAGE>
PILGRIM CLO 1999-1 LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By: /s/ Charles E. LeMieux
Title: Vice President
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U.S. BANK NATIONAL ASSOCIATION
By: /s/
Title: Senior Vice President
<PAGE>
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: CypressTree Investment Management Company,
as Portfolio Manager
By: /s/ Philip C. Robbins
Title: Principal
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CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management Company,
as Portfolio Manager
By: /s/ Philip C. Robbins
Title: Principal
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By: /s/ J. William Bloore
Title: Vice President
<PAGE>
FIFTH THIRD BANK
By: /s/
Title: Assistant Vice President
<PAGE>
COMERICA BANK
By: /s/
Title: Vice President
<PAGE>
CONSENT
Reference is made to (a) Amendment No. 3 to the Second Amended and
Restated Credit Agreement dated as of May 7, 1999 (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/ Denny L. Starr
Title:
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QSI HOLDINGS, INC. (FORMERLY KNOWN AS
CT HOLDING, INC.)
By: /s/ Denny L. Starr
Title:
COUNTRY GENERAL, INC.
By: /s/ Denny L. Starr
Title:
QUALITY FARM & FLEET, INC.
By: /s/ Denny L. Starr
Title:
QUALITY INVESTMENTS, INC.
By: /s/ Denny L. Starr
Title:
QSI TRANSPORTATION, INC.
By: /s/ Denny L. Starr
Title:
VISION TRANSPORTATION, INC.
By: /s/ Denny L. Starr
Title:
QUALITY STORES SERVICES, INC.
By: /s/ James T. McKitrick
Title: Pres. & COO
