JO-ANN STORES INC
EX-10.10
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>4
<FILENAME>l23915aexv10w10.txt
<DESCRIPTION>EX-10.10
<TEXT>
<PAGE>
                                                                   Exhibit 10.10

                       FIRST AMENDMENT TO CREDIT AGREEMENT
                       -----------------------------------

         This First Amendment to Credit Agreement is made as of this ___ day of
May, 2001 by and among

         JO-ANN STORES, INC., an Ohio corporation, having a principal place of
         business at 5555 Darrow Road, Hudson, Ohio 44236, as Lead Borrower for
         the Borrowers, being

                  said JO-ANN STORES, INC., and

                  FCA of Ohio, Inc., an Ohio corporation, having a principal
                  place of business at 5555 Darrow Road, Hudson, Ohio 44236, and

                  House of Fabrics, Inc., a Delaware corporation, having a
                  principal place of business at 5555 Darrow Road, Hudson, Ohio
                  44236, and

                  Jo-Ann Stores Supply Chain Management, Inc., an Ohio
                  corporation, having a principal place of business at 5555
                  Darrow Road, Hudson, Ohio 44236

         each of the Lenders party to the Credit Agreement (defined below)
         (together with each of their successors and assigns, referred to
         individually as a "Lender" and collectively as the "Lenders"), and

         FLEET NATIONAL BANK, as Issuing Bank, a national banking association
         having a place of business at 100 Federal Street, Boston, Massachusetts
         02110; and

         FLEET RETAIL FINANCE INC., as Administrative Agent and Collateral Agent
         for the Lenders, a Delaware corporation, having its principal place of
         business at 40 Broad Street, Boston, Massachusetts 02109; and

         CONGRESS FINANCIAL CORPORATION, as Documentation Agent; and

         GMAC COMMERCIAL CREDIT, LLC, NATIONAL CITY COMMERCIAL FINANCE, INC. AND
         THE CIT GROUP/BUSINESS CREDIT, INC., as Co-Agents

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

                               W I T N E S S E T H

         A. Reference is made to the Credit Agreement (the "Credit Agreement")
dated as of April 24, 2001 by and among the Lead Borrower, the Borrowers, the
Lenders, the Issuing Bank, the Agents, the Documentation Agent and the
Co-Agents.

         B. The parties to the Credit Agreement desire to modify and amend
certain


<PAGE>

provisions of the Credit Agreement, as povided herein.
         Accordingly, the parties hereto agree as follows:

         1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

         2. AMENDMENTS TO ARTICLE I OF THE CREDIT AGREEMENT. The provisions of
Article I of the Credit Agreement are hereby amended as follows:

                  (a) The definition of "Covenant Compliance Event" is hereby
                  amended by deleting the reference to "Section 6.12" appearing
                  therein and substituting "Section 6.11" in its stead.

                  (b) The definition of "Eligible L/C Inventory" is hereby
                  amended by deleting subparagraph (b) thereof and substituting
                  the following in its stead:

                           (b) the purchase of which is supported by a
                           Commercial Letter of Credit or Banker's Acceptance
                           having an expiry within sixty (60) days of such date
                           of determination

                  (c) The definition of "Letter of Credit" is hereby amended to
                  add the following sentence:

                           "Letter of Credit" shall also mean and include all
                           Banker's Acceptances.

                  (d) The definition of "Obligations" is hereby amended to add
                  the words, "including Banker's Acceptances" after the words
                  "Letters of Credit" in clause (ii) thereof.

                  (e) The following new definitions are hereby added to
                  Article I:

                           "BANKERS ACCEPTANCE": A time draft on a Commercial
                           Letter of Credit which has been accepted by the
                           Issuing Bank.

                           "RELATED FUND": With respect to any Lender which is a
                           fund that invests in loans, any other fund that
                           invests in loans that is managed by the same
                           investment advisor as the Lender or by an Affiliate
                           of such Lender or investment advisor.

         3. AMENDMENTS TO ARTICLE II OF THE CREDIT AGREEMENT. The provisions of
Article II of the Credit Agreement are hereby amended as follows:

                  (a) By deleting the provisions of Section 2.06(c) in their
                  entirety and substituting the following in their stead:


<PAGE>

                           (c) Each Commercial Letter of Credit and Banker's
                           Acceptance shall expire at or prior to the close of
                           business on the earlier of (i) the date 210 days
                           after the date of the issuance of such Commercial
                           Letter of Credit and (ii) the date that is five
                           Business Days prior to the Maturity Date.

                  (b) By deleting the provisions of Section 2.13(a)(ii) in their
                  entirety and substituting the following in their stead:

                           (ii) Commercial Letters of Credit (including Banker's
                           Acceptances): The Applicable Margin for Eurodollar
                           Loans minus .50%.

                  (c) By adding the following new subsection to Section 2.13:

                           (c) The Borrowers shall also pay to the
                           Administrative Agent, for the account of the Issuing
                           Bank, and in addition to all Letter of Credit Fees
                           otherwise provided for hereunder, such commissions,
                           drawing fees, and other fees and charges in
                           connection with the issuance, negotiation,
                           settlement, amendment and processing of each Banker's
                           Acceptance issued by the Issuing Bank as are
                           customarily imposed by the Issuing Bank from time to
                           time in connection with Banker's Acceptance
                           transactions.


         4. AMENDMENTS TO ARTICLE VI OF THE CREDIT AGREEMENT. The provisions of
Article VI of the Credit Agreement are hereby amended by deleting clause (ii) of
Section 6.06 and substituting the following in its stead:

                           (ii) the wholly owned Subsidiaries of the Lead
                           Borrower may declare and pay dividends ratably with
                           respect to their capital stock, and

         5. AMENDMENTS TO ARTICLE IX OF THE CREDIT AGREEMENT. The provisions of
Article IX of the Credit Agreement are hereby amended as follows:

                  (a) by deleting the provisions of Section 9.05(b)(i) and
                  substituting the following in its stead:

                           (i) except in the case of an assignment to a Lender
                           or an Affiliate of a Lender or to a Related Fund,
                           each of the Lead Borrower (but only after the
                           completion of the initial syndication and if no
                           Default then exists), the Agents and the Issuing Bank
                           must give their prior written consent to such
                           assignment (which consent shall not be unreasonably
                           withheld or delayed),

                  (b) by deleting the provisions of Section 9.05(b)(iv) and
                  substituting the


<PAGE>

                  following in its stead:

                           (iv) the parties to each assignment shall execute and
                           deliver to the Administrative Agent an Assignment and
                           Acceptance, and, after completion of the syndication
                           of the Loans, together with a processing and
                           recordation fee of $3,500, provided that no such fee
                           shall be payable in the case of an assignment to a
                           Lender or an Affiliate of a Lender or to a Related
                           Fund.

                  (c) by deleting the provisions of Section 9.05(g) and
                  substituting the following in its stead:

                           (g) Any Lender may at any time pledge or assign a
                           security interest in all or any portion of its rights
                           under this Agreement to secure obligations of such
                           Lender, including (i) any pledge or assignment to
                           secure obligations to a Federal Reserve Bank, and
                           (ii) in the case of a Lender which is a fund, any
                           pledge or assignment of all or any portion of such
                           Lender's rights under this Agreement to any holders
                           of obligations owed, or securities issued, by such
                           Lender as security for such obligations or
                           securities, or to any trustee for, or any other
                           representative of, such holders and this Section
                           shall not apply to any such pledge or assignment of a
                           security interest, PROVIDED that no such pledge or
                           assignment of a security interest shall release a
                           Lender from any of its obligations hereunder or
                           substitute any such pledgee or assignee for such
                           Lender as a party hereto.

         6. CONDITIONS PRECEDENT TO EFFECTIVENESS. This First Amendment shall
not be effective until each of the following conditions precedent have been
fulfilled to the satisfaction of the Administrative Agent:

         a.       This First Amendment shall have been duly executed and
                  delivered by the respective parties hereto and, shall be in
                  full force and effect and shall be in form and substance
                  satisfactory to the Administrative Agent and the Lenders.

         b.       All action on the part of the Borrowers necessary for the
                  valid execution, delivery and performance by the Borrowers of
                  this First Amendment shall have been duly and effectively
                  taken and evidence thereof satisfactory to the Administrative
                  Agent shall have been provided to the Administrative Agent.

         c.       The Borrowers shall have provided such additional instruments
                  and documents to the Administrative Agent as the
                  Administrative Agent and Administrative Agent's counsel may
                  have reasonably requested.

         7.   MISCELLANEOUS.

<PAGE>

         a.       This First Amendment may be executed in several counterparts
                  and by each party on a separate counterpart, each of which
                  when so executed and delivered shall be an original, and all
                  of which together shall constitute one instrument.

         b.       This First Amendment expresses the entire understanding of the
                  parties with respect to the transactions contemplated hereby.
                  No prior negotiations or discussions shall limit, modify, or
                  otherwise affect the provisions hereof.

         c.       Any determination that any provision of this First Amendment
                  or any application hereof is invalid, illegal or unenforceable
                  in any respect and in any instance shall not effect the
                  validity, legality, or enforceability of such provision in any
                  other instance, or the validity, legality or enforceability of
                  any other provisions of this First Amendment.

         d.       The Borrowers shall pay on demand all costs and expenses of
                  the Agents, including, without limitation, reasonable
                  attorneys' fees in connection with the preparation,
                  negotiation, execution and delivery of this First Amendment.

         e.       The Borrowers warrant and represent that the Borrowers have
                  consulted with independent legal counsel of the Borrowers'
                  selection in connection with this First Amendment and is not
                  relying on any representations or warranties of the Agents,
                  the Lenders or their counsel in entering into this First
                  Amendment.

<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this First Amendment
as of the day and year first above written.

                      JO-ANN STORES, INC.
                               as Lead Borrower and Borrower


                               by
                                  ------------------------------
                               Name:
                               Title:

                               FCA OF OHIO, INC.
                               as Borrower


                               by
                                  ------------------------------
                               Name:
                               Title:

                               HOUSE OF FABRICS, INC.
                               as Borrower


                               by
                                  ------------------------------
                               Name:
                               Title:

                               JO-ANN STORES SUPPLY CHAIN MANAGEMENT, INC.
                               as Borrower


                               by
                                  ------------------------------
                               Name:
                               Title:

<PAGE>

                               FLEET RETAIL FINANCE INC.,
                               as Administrative Agent, as Collateral
                               Agent, as Swingline Lender, and as Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------

                      FLEET NATIONAL BANK,
                               as Issuing Bank


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------

<PAGE>

                      CONGRESS FINANCIAL
                      CORPORATION, as Documentation Agent
                      and Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------


                      GMAC COMMERCIAL CREDIT, LLC
                               as Co-Agent and Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------


                      NATIONAL CITY COMMERCIAL FINANCE, INC.
                               as Co-Agent and Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------

<PAGE>

                      THE CIT GROUP/BUSINESS CREDIT, INC.
                               as Co-Agent and Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------


                               FOOTHILL CAPITAL CORPORATION
                               as Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------


                               THE PROVIDENT BANK
                               as Lender


                               By:
                                  ------------------------------
                               Name:
                                    ----------------------------
                               Title:
                                     ---------------------------




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