FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "First Amendment")
dated as of February 9, 1998 relates to that certain Credit Agreement dated
as of February 27, 1997 (the "Credit Agreement") among The Southland
Corporation, a Texas corporation ("Southland"), the financial institutions
party thereto as "Senior Lenders" or "Issuing Banks", Citibank, N.A., as
administrative agent for the Senior Lenders and Issuing Banks (in such
capacity, together with any successor administrative agent appointed
pursuant to SECTION 11.07 of the Credit Agreement, 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 have the meanings
assigned to them in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Upon the "First Amendment
Effective Date" (as defined in Section 4 below), the Credit Agreement is
hereby amended as follows:
2.1 AMENDMENTS TO SECTION 1.01. Section 1.01 of the Credit
Agreement is hereby amended as follows:
(a) The definitions of "QUIDS SUBORDINATED NOTES" and "SENIOR
SUBORDINATED DEBENTURE REPURCHASE" are hereby amended and restated in their
entirety to read as follows:
"QUIDS SUBORDINATED NOTES" shall mean (i) the Quarterly Income Debt
Security Due 2010 dated November 22, 1995 issued by Southland to Ito-Yokado
in the principal amount of $153,000,000, (ii) the Quarterly Income Debt
Security Due 2010 dated November 22, 1995 issued by Southland to Seven-
Eleven Japan Co., Ltd., in the principal amount of $147,000,000 (and
together with the promissory note described in CLAUSE (i) above, the
"Original QUIDS Subordinated Notes"), (iii) Quarterly Income Debt
Securities Due 2013 in an aggregate principal amount not to exceed
$80,000,000 issued to Ito-Yokado and Seven-Eleven Japan Co., Ltd.. the terms
and provisions of which shall be no less favorable to the Senior Lenders
than the terms and provisions of the Original QUIDS Subordinated
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Notes, PROVIDED that prior to the issuance thereof, the Administrative Agent
shall have received such legal opinions as the Administrative Agent shall
reasonably request, each of which shall be in form and substance
satisfactory to the Administrative Agent, and (iii) any promissory notes
issued pursuant to an indenture, in substantially the form of the indenture
attached as Exhibit A to each of the Original QUIDS Subordinated Notes (the
terms and provisions of which are no less favorable to the Senior Lenders
than the terms and provisions of the Original QUIDS Subordinated Notes),
upon the exercise by any holder of QUIDS Subordinated Notes of its rights
under that certain Registration Rights Agreement dated as of November 22,
1995 among Southland, Ito-Yokado and Seven-Eleven Japan Co., Ltd. or under
any subsequent registration rights agreement entered into in connection with
the QUIDS Subordinated Notes described in CLAUSE (iii) above
"SENIOR SUBORDINATED DEBENTURE REPURCHASE" shall mean (i) the issuance
by Southland to Ito-Yokado and Seven-Eleven Japan Co., Ltd., of QUIDS
Subordinated Notes described in CLAUSE (iii) of the definition of "QUIDS
Subordinated Notes", (ii) the redemption on or before July 1, 1998 with the
proceeds of such QUIDS Subordinated Notes of the outstanding 12% Second
Priority Senior Subordinated Debentures (Series C) of Southland and (iii)
the repurchase and cancellation on or before March 31, 1999 with the
proceeds of such QUIDS Subordinated Notes of an aggregate principal amount
of Senior Subordinated Debentures which, taken together with the aggregate
principal amount of Senior Subordinated Debentures redeemed pursuant to
CLAUSE (ii) above, is at least $65,000,000; PROVIDED that until the proceeds
of such QUIDS Subordinated Notes are applied to the redemption or repurchase
of the minimum amount of Senior Subordinated Debentures specified in this
definition, at least $65,000,000 of such proceeds (LESS any amounts applied
by Southland to repurchase or redeem Senior Subordinated Debentures) shall
be deposited and held by Southland in a separate deposit account and not
commingled with any other cash or other assets.
(b) The definitions of "YEN ROYALTY FINANCING AGREEMENT", "YEN
ROYALTY FINANCING COLLATERAL", "YEN ROYALTY FINANCING INDEBTEDNESS" and "YEN
ROYALTY LENDER" are hereby amended and restated in their entirety to read as
follows:
"YEN ROYALTY FINANCING AGREEMENT" shall mean, collectively, (a) the
Credit Agreement dated as of March 21, 1988 among Southland, the Yen Royalty
Lender and Citicorp International Limited, and (b) a credit agreement among
Southland, the Yen Royalty Lender and Citibank, N.A. as Administrative
Agent, which credit agreement, together with all other documents,
instruments and certificates delivered pursuant thereto or entered into in
connection therewith (including without
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limitation legal opinions reasonably requested by, and addressed to, the
Administrative Agent, the Senior Lenders and the Issuing Banks), shall be no
less favorable in form and substance to the Senior Lenders than the terms
and provisions of the credit agreement described in CLAUSE (a) above and the
documents, instruments and certificates entered into in connection
therewith, in each case as any Yen Royalty Financing Agreement may be
amended, supplemented or otherwise modified from time to time, PROVIDED that
no amendment, supplement or other modification to any Yen Royalty Financing
Agreement pertaining to the Yen Royalty Financing Collateral or the recourse
of the Yen Royalty Lender (or any other creditor under a Yen Royalty
Financing Agreement) thereto shall adversely affect the Administrative
Agent, the Senior Lenders or the Issuing Banks without the prior written
consent of the Requisite Senior Lenders.
"YEN ROYALTY FINANCING COLLATERAL" shall mean, as applicable, the
"Collateral" as defined in (a) the Assignment and Security Agreement dated
as of March 21, 1988 between Southland and the Yen Royalty Lender entered
into in connection the credit agreement described in CLAUSE (a) of the
definition of "Yen Royalty Financing Agreement" and (b) the Assignment and
Security Agreement between Southland and the Yen Royalty Lender entered into
in connection with the credit agreement described in CLAUSE (b) of the
definition of "Yen Royalty Financing Agreement".
"YEN ROYALTY FINANCING INDEBTEDNESS" shall mean Indebtedness of
Southland to the Yen Royalty Lender under the Yen Royalty Financing
Agreement in an aggregate principal amount which shall not exceed Japanese
Yen 35,000,000,000 PLUS the amount of all interest and yield protection
costs capitalized in connection therewith pursuant to the terms of the Yen
Royalty Financing Agreement.
"YEN ROYALTY LENDER" shall mean, as applicable, (i) with respect to
CLAUSE (a) of the definition of Yen Financing Agreement, Citibank (Channel
Islands) Limited and (ii) with respect to CLAUSE (b) of the definition of
Yen Financing Agreement, the financial institutions from time to time party
to the agreement described in such CLAUSE (b).
2.2 AMENDMENT TO SECTION 2.03(d). Section 2.03(d) of the
Credit Agreement is hereby amended by amending and restating the first
sentence thereof in its entirety to read as follows:
Southland shall execute and deliver to each Senior Lender on or before the
Funding Date for each Borrowing of Competitive Bid Loans a promissory note,
in substantially
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the form of EXHIBIT 8 and otherwise in form and substance reasonably
satisfactory to each Senior Lender making such Competitive Bid Loans, in the
principal amount of the Competitive Bid Loan advanced by such Senior Lender
in connection with such Borrowing and executed on behalf of Southland by an
officer of Southland (each individually, a "Competitive Bid Note" and
collectively, the "Competitive Bid Notes").
2.3 AMENDMENT TO SECTION 8.01. Section 8.01 of the Credit
Agreement is hereby amended by amending and restating CLAUSE (iii) thereof
in its entirety to read as follows:
(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 $750,000,000 (together with, in the case of
a refinancing, interest accrued thereon and reasonable costs incurred in
connection with the refinancing) PLUS any temporary increase in Subordinated
Indebtedness directly relating to the Senior Subordinated Debenture
Repurchase;
2.4 AMENDMENT TO SECTION 8.02(b). Section 8.02(b) of the
Credit Agreement is hereby amended by amending and restating CLAUSE (x)
thereof in its entirety to read as follows:
(x) Liens on the Yen Royalty Financing Collateral securing the Yen
Royalty Financing Indebtedness and Interest Rate Contracts related thereto;
2.5 AMENDMENT TO SECTION 8.16. Section 8.16 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
8.16. INTEREST RATE CONTRACTS. Southland shall not, and shall
not permit any of its Subsidiaries to, enter into any Interest Rate Contract
(or amend any Interest Rate Contract to increase the notional amount of
Indebtedness subject thereto) if, after giving effect to the Interest Rate
Contract (or amendment, as the case may be), the aggregate notional amount
of Indebtedness subject to Interest Rate Contracts then in effect is in
excess of the then aggregate outstanding principal amount of obligations of
Southland which are either (a) bearing interest at a variable rate or (b)
incurred or to be incurred pursuant to the credit agreement described in
CLAUSE (b) of the definition of "Yen Royalty Financing Agreement".
3. REPRESENTATION 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 of the Credit Agreement are true, correct and complete on and as of the
First Amendment Effective Date as
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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 First
Amendment Effective Date, no Event of Default or Potential Event of Default
has occurred and is continuing.
4. FIRST AMENDMENT EFFECTIVE DATE. This First Amendment shall
become effective as of the date first above written (the "First Amendment
Effective Date") upon receipt by the Administrative Agent (with sufficient
copies for each Senior Lender) of counterparts hereof, executed by
Southland, the Administrative Agent and the Requisite Senior Lenders.
5. CONDITION SUBSEQUENT. The amendments described in SECTIONS
2.1(a) AND 2.3 of this First Amendment shall cease to be effective on March
31, 1998 unless, on or before that date, Southland has received gross
proceeds of at least $65,000,000 from the issuance of QUIDS Subordinated
Notes described in CLAUSE (iii) of the definition of "QUIDS Subordinated
Notes".
6. MISCELLANEOUS. This First 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, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Senior Lender or Issuing Bank
under any of the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.
7. COUNTERPARTS. This First Amendment may be executed in any
number of counterparts which together shall constitute one instrument.
8. GOVERNING LAW. THIS FIRST AMENDMENT, AND ALL ISSUES
RELATING TO THIS FIRST AMENDMENT, INCLUDING THE VALIDITY, ENFORCEABILITY,
INTERPRETATION OR CONSTRUCTION OF THIS FIRST 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.
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IN WITNESS WHEREOF, the Administrative Agent, the Requisite Senior
Lenders and Southland have caused this First Amendment to be executed by
their respective officers thereunto duly authorized as of the date first
above written.
BORROWER: THE SOUTHLAND CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Vice President and Treasurer
ADMINISTRATIVE AGENT: CITIBANK, N.A., as the Administrative Agent
By: /s/ Xxxxx Xxxxxx
-----------------
Xxxxx Xxxxxx
Vice President
SENIOR LENDERS: CITIBANK, N.A.
By: /s/ Xxxxx Xxxxxx
----------------
Xxxxx Xxxxxx
Vice President
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THE SAKURA BANK, LIMITED, NEW YORK BRANCH
By: /s/ Xxxxxxx Xxxxx
-----------------
Xxxxxxx Xxxxx
Senior Vice President
THE ASAHI BANK, LTD., NEW YORK BRANCH
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Senior Vice President
BANK OF TOKYO -- MITSUBISHI TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx
Senior Vice President
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By: /s/ Xxxxxx X. Xxxxxxxx III
--------------------------
Xxxxxx X. Xxxxxxxx III
Vice President & Manager
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THE MITSUI TRUST AND BANKING COMPANY, LIMITED, NEW
YORK BRANCH
By: /s/ Xxxxxx Xxxxx
------------------
Xxxxxx Xxxxx
Vice President Corporate Finance
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
By: THE INDUSTRIAL BANK OF JAPAN, LIMITED
HOUSTON OFFICE, Authorized Representative
By: ----------------------------
Name:
Title:
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxx Xxxxxx
--------------------
Xxxxxx Xxxxxx
Senior Vice President
BANKERS TRUST COMPANY
By: /s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx
Vice President
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CIBC Inc.
By: /s/ Xxxxxxxxx Xxxxxxx
---------------------
Xxxxxxxxx Xxxxxxx
Executive Director
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