[EXECUTION COPY]
SECOND AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AGREEMENT (the "Second Amendment") dated as of November
28, 1995 relates to that certain Credit Agreement dated as of
July 31, 1987, as amended and restated as of November 5, 1987, as
further amended and restated as of February 17, 1993 and as
further amended and restated as of December 16, 1994 (as so
amended and restated, and as further amended by the First
Amendment to Third Amended and Restated Credit Agreement dated as
of March 31, 1995, the "Credit Agreement") among The Southland
Corporation, a Texas corporation ("Southland"), the financial
institutions party thereto as "Senior Lenders" and "Issuing
Banks", Citicorp North America, Inc., a Delaware corporation, as
administrative agent for the Senior Lenders and the Issuing Banks
(in such capacity, together with any successor administrative
agent appointed pursuant to Section 12.07 thereof, the
"Administrative Agent") and The Sakura Bank, Limited, New York
Branch, as Co-Agent.
1 . DEFINITIONS. Capitalized terms defined in the
Credit Agreement and not otherwise defined or redefined herein are used
herein with the meanings so defined.
2 . AMENDMENTS TO THE CREDIT AGREEMENT. Upon the
"Second Amendment Effective Date" (as defined in Section 4 below), the
Credit Agreement is hereby amended as follows:
1 AMENDMENTS TO SECTION 1.01. Section 1.01 of
the Credit Agreement is hereby amended as follows:
(a) The definition of "CAPITAL EXPENDITURES" is
hereby deleted in its entirety and the following is inserted
in lieu thereof:
"CAPITAL EXPENDITURES" shall mean, for any period,
(i) the aggregate of all expenditures (whether paid in
cash or accrued as liabilities during that period but
excluding that portion deemed as Capital Leases) by
Southland and its Subsidiaries during such period that,
in conformity with GAAP, are required to be included in
or reflected by the property, plant or equipment or
similar fixed asset accounts reflected in the
consolidated balance sheet of Southland and its
Subsidiaries, MINUS (ii) the amount of expenditures
included in CLAUSE (i) which are accrued during the
then current fiscal quarter and the three (3)
immediately preceding fiscal quarters of Southland and
its Subsidiaries with respect to which the properties
relating to such expenditures are subject to sale and
leaseback transactions permitted by SECTION 8.01(v)(B)
and consummated during such current fiscal quarter.
(b) The definition of "CONSOLIDATED FIXED
CHARGES" is hereby amended by restating the second
parenthetical phrase in clause (ii) therein in its entirety
to read as follows:
(including the principal component of Capital Lease
obligations and excluding (A) prepayments of scheduled
principal payments (including principal due at
maturity) on the Senior Subordinated Debentures in
connection with the Senior Subordinated Debenture
Repurchase and (B) prepayments of Other Indebtedness of
Southland in an aggregate amount not to exceed (X)
$300,000,000, MINUS (Y) the aggregate amount paid by or
on behalf of Southland in connection with all
prepayments made pursuant to the immediately preceding
clause (A))
(c) The following definition of "SECOND
AMENDMENT" is hereby added immediately following the
definition of "SECOND AMENDED AND RESTATED CREDIT
AGREEMENT":
"SECOND AMENDMENT" shall mean the Second Amendment
to Third Amended and Restated Credit Agreement dated as
of November 28, 1995.
(d) The following definition of "SENIOR
SUBORDINATED DEBENTURE REPURCHASE" is hereby added
immediately following the definition of "SENIOR SUBORDINATED
DEBENTURE INDENTURES":
"SENIOR SUBORDINATED DEBENTURE REPURCHASE" shall
mean (i) the issuance by Southland of Subordinated
Indebtedness in an aggregate principal amount of not
less than $300,000,000 to the Purchaser pursuant to a
subordinated promissory note in substantially the form
attached as Annex A to the Second Amendment and (ii)
the repurchase for cancellation with the proceeds of
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such Subordinated Indebtedness of certain of (A)
Southland's outstanding 5% First Priority Senior
Subordinated Debentures due December 15, 2003 and (B)
Southland's 4.5% Second Priority Senior Subordinated
Debentures (Series A) due June 15, 2004.
1 AMENDMENTS TO SECTION 8.01.
(a) Section 8.01(iii) of the Credit Agreement is
hereby amended by deleting provisions thereof in their
entirety and inserting in lieu thereof the following:
(iii) Subordinated Indebtedness and extensions,
renewals, replacements and refinancings thereof which
satisfy the criteria set forth in the definition of
"Subordinated Indebtedness", the aggregate principal
amount of which shall not exceed the aggregate
principal amount of Subordinated Indebtedness
outstanding as of the Second Amendment Effective Date
under (and as defined in) the Second Amendment (which
aggregate principal amount shall not exceed
$750,000,000), as certified by Southland in a written
notice delivered to the Administrative Agent within ten
(10) Business Days after such Second Amendment
Effective Date (together with, in the case of a
refinancing, interest accrued thereon and reasonable
costs incurred in connection with the refinancing);
(b) Section 8.01(v) of the Credit Agreement is
hereby amended by deleting the provisions of subclauses (A)
and (B) thereof in their entirety and inserting in lieu
thereof the following:
(A) Capital Lease obligations (other than such
obligations included in Permitted Existing
Indebtedness) and Indebtedness incurred in
connection with Capital Expenditures (and within a
reasonable period of time thereafter), if (1) such
Capital Lease obligations and Indebtedness are
incurred in connection with the acquisition of
assets at fair value after the Effective Date and
(2) such Capital Lease Obligations and
Indebtedness are either unsecured or secured by
the assets subject to such Capital Lease or
constituting such Capital Expenditure and other
assets securing Capital Lease obligations and
Indebtedness incurred in connection with Capital
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Expenditures in each case which are part of the
same transaction, (B) sale and leaseback
transactions, if (1) the obligations and
Indebtedness incurred in connection with such
transaction are either unsecured or secured only
by the assets subject to such transactions and (2)
the aggregate principal amount of such obligations
and Indebtedness (other than such obligations or
Indebtedness included in Permitted Existing
Indebtedness) does not exceed $50,000,000 at any
time outstanding;
1 AMENDMENTS TO SECTION 8.02(a). Section 8.02(a)
of the Credit Agreement is hereby amended as follows:
(a) by deleting in its entirety the reference to
"CLAUSES (i), (iii) or (iv)" therein and inserting in lieu
thereof a reference to "CLAUSES (i), (iii), (iv) or (v)";
(b) by deleting the word "or" immediately
preceding clause (iv) thereof and inserting in lieu thereof
a comma; and
(c) by deleting the period at the end of clause
(iv) thereof and inserting in lieu thereof the following:
"or (v) dispositions of assets in sale and leaseback
transactions permitted by SECTION 8.11."
1 AMENDMENTS TO SECTION 8.04. Section 8.04 of
the Credit Agreement is hereby amended as follows:
(a) by deleting the word "and" immediately
preceding clause (xv) thereof; and
(b) by deleting the period at the end of clause
(xv) thereof and inserting in lieu thereof the following:
"; and (xvi) other Accommodation Obligations in an aggregate
amount not to exceed $5,000,000 at any time outstanding."
.1 AMENDMENT TO SECTION 8.05(iii). Section
8.05(iii) of the Credit Agreement is hereby amended by
deleting in its entirety the phrase "all repurchases or
redemptions in excess of the amount required to satisfy
sinking fund payments which shall become due with respect to
such debentures prior to the Revolving Credit Termination
Date" therein and inserting in lieu thereof the following:
"to the extent that the aggregate amount of payments made by
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or on behalf of Southland with respect to all such
repurchases and redemptions exceeds $300,000,000, such
repurchases and redemptions"
.2 AMENDMENT TO SECTION 8.12(b). Section 8.12(b)
of the Credit Agreement is hereby amended by deleting the
provisions thereof in their entirety and inserting in lieu
thereof the following:
(b) NOTICES. Southland shall deliver to the
Administrative Agent (i) a copy of each notice or
other communication delivered by or on behalf of
Southland to any trustee under any Subordinated
Indebtedness indenture or to any holder (in its
capacity as such) of any Subordinated Indebtedness
not issued pursuant to an indenture, such delivery
to be made at the same time and by the same means
as such notice or other communication is delivered
to such trustee or such holder, and (ii) a copy of
each notice or other communication received by
Southland from any trustee under any Subordinated
Indebtedness indenture or from any holder (in its
capacity as such) of any Subordinated Indebtedness
not issued pursuant to an indenture, such delivery
to be made promptly after such notice or other
communication is received by Southland.
1 . REPRESENTATIONS AND WARRANTIES. Southland hereby
represents and warrants to each Senior Lender, each Issuing Bank,
the Administrative Agent and the Co-Agent that (a) each of the
statements set forth in Section 5.01 (other than the statements
set forth in Section 5.01(iii)(A)) of the Credit Agreement are
true, correct and complete on and as of the Second Amendment
Effective Date as though made to each Senior Lender, each Issuing
Bank, the Administrative Agent and the Co-Agent on and as of such
date and (b) as of the Second Amendment Effective Date, no Event
of Default or Potential Event of Default under Section 11.01(a)
of the Credit Agreement or (by reason of a breach of one or more
covenants set forth in Article IX of the Credit Agreement)
Section 11.01(b) of the Credit Agreement has occurred and is
continuing or will result from the Senior Subordinated Debenture
Repurchase.
2 . SECOND AMENDMENT EFFECTIVE DATE. This Second
Amendment shall become effective as of the date first above
written (the "Second Amendment Effective Date") upon the
satisfaction of the following conditions:
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(a) the Administrative Agent's receipt of counterparts
hereof executed by Southland, the Administrative Agent and
the Requisite Senior Lenders;
(b) an opinion of Xxxxx X. Xxxxx, general counsel to
the Borrower, dated the Second Amendment Effective Date and
addressed to the Administrative Agent, the Senior Lenders
and the Issuing Banks with respect to the Senior
Subordinated Debenture Repurchase, in form and substance
satisfactory to the Administrative Agent and the Requisite
Senior Lenders;
(c) an opinion of Shearman & Sterling, special counsel
to the Borrower, dated the Second Amendment Effective Date
and addressed to the Administrative Agent, the Senior
Lenders and the Issuing Banks with respect to the Senior
Subordinated Debenture Repurchase, in form and substance
satisfactory to the Administrative Agent and the Requisite
Senior Lenders;
(d) the tender for repurchase and cancellation by the
holders thereof of Senior Subordinated Debentures in a face
amount sufficient to cause the aggregate outstanding
principal amount of Subordinated Indebtedness of Southland
as of the Second Amendment Effective Date, together with all
other Indebtedness of Southland as of the Second Amendment
Effective Date, not to violate Section 8.01 of the Credit
Agreement (after giving effect to this Second Amendment);
and
(e) the receipt by Southland or its agent of not less
than $300,000,000 in gross proceeds of Subordinated
Indebtedness issued pursuant to a subordinated promissory
note in substantially the form attached hereto as ANNEX A
and made a part hereof.
1 . MISCELLANEOUS. This Second Amendment is a Loan
Document. The headings herein are for convenience of reference
only and shall not alter or otherwise affect the meaning hereof.
Except to the extent specifically amended or modified hereby,
the provisions of the Credit Agreement shall not be amended,
modified, impaired or otherwise affected hereby and the Credit
Agreement and all of the Obligations are hereby confirmed in full
force and effect. The execution, delivery and effectiveness of
this Second Amendment shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any
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Senior Lender or Issuing Bank under any of the Loan Documents,
nor constitute a waiver of any provision of any of the Loan
Documents.
2 . COUNTERPARTS. This Second Amendment may be
executed in any number of counterparts which together shall
constitute one instrument.
3 . GOVERNING LAW. THIS SECOND AMENDMENT, AND ALL
ISSUES RELATING TO THIS AMENDMENT, INCLUDING THE VALIDITY,
ENFORCEABILITY, INTERPRETATION OR CONSTRUCTION OF THIS AMENDMENT
OR ANY PROVISION HEREOF, SHALL BE GOVERNED BY, AND SHALL BE
DETERMINED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
IN WITNESS WHEREOF, the Administrative Agent, the
Requisite Senior Lenders and Southland have caused this Second
Amendment to be executed by their respective officers thereunto
duly authorized as of the date first above written.
BORROWER: THE SOUTHLAND CORPORATION
By: /S/
________________________________
Title:
ADMINISTRATIVE
AGENT: CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: /S/
________________________________
Title:
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SENIOR LENDERS: THE ASAHI BANK, LTD., NEW YORK
BRANCH
By: /S/
________________________________
Title:
THE BANK OF TOKYO TRUST COMPANY
By: /S/
________________________________
Title:
BANKERS TRUST COMPANY
By: /S/
________________________________
Title:
CHEMICAL BANK
By: /S/
________________________________
Title:
CIBC, INC.
By: /S/
________________________________
Title:
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CITICORP USA, INC.
By: /S/
________________________________
Title:
THE FUJI BANK, LIMITED, HOUSTON
AGENCY
By: /S/
_______________________________
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
By: /S/
________________________________
Title:
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, NEW YORK BRANCH
By: /S/
________________________________
Title:
NATIONSBANK OF TEXAS, N.A.
By: /S/
________________________________
Title:
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THE SAKURA BANK, LIMITED, NEW YORK BRANCH
By: /S/
________________________________
Title:
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ANNEX A
TO
SECOND AMENDMENT
FORM OF SUBORDINATED INDEBTEDNESS PROMISSORY NOTE
Attached.
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